What makes China an economic miracle? Is it about Chinese culture?

Source: by Tom McGregor at https://www.quora.com

There are variety of factors, not just cultural values but a combination of other indicators including regional prosperity, Chinese government’s reform and opening up, large population, rapid industrialization and urbanization that makes China to be an economic miracle in the past few decades.

China’s economic miracle can be attributed to a variety of factors, not just cultural values but a combination of other indicators including regional prosperity, Chinese government’s reform and opening up, large population, rapid industrialization and urbanization that had also led to strong GDP (gross domestic product) growth rates in the past few decades.

To explain in detail China’s economic success story would require me to write a book, but let’s try to answer the Quora question with a brief review over how China has risen from overwhelming poverty in the late 1970s’ to emerge as the the world’s second largest economy as of today’s date of writing – May 28, 2018.

The most crucial factor for China success story would be when the late leader Deng Xiaoping had announced opening up and reform for the nation, urging all Chinese to embark on a path of prosperity by allowing for more free market measures and building free trade zones that gave priority to constructing more factories and ports that sparked a manufacturing and exports boom.

This year, China is celebrating the 40th anniversary of the nation’s opening up and reform policies. China Plus highlights its major achievements in a link here:

According to China Plus:

“This reform process has also brought enormous benefits to China and its people. Seven hundred million people have been lifted out of poverty. China’s GDP has grown by 32.3 times in 1978-2016, ranking it the second biggest economy in the world since 2010. Its foreign trade in goods has grown by 178 times, making China the world’s biggest trader since 2013. In two days China now trades more than it did in the year of 1978. On foreign direct investment (FDI), it was not until 1980 that the first ever industrial joint venture was established in China, by Swiss company Schindler. Since 1992, the country has been the biggest investment destination among all developing countries.”

Other Asian nations had enjoyed remarkable and rapid development over the past few decades as well. In the aftermath of major wars in the 20th Century, the nations – Japan and South Korea – stood in rubble, but had risen to glory with their own economic miracles respectively.

The late South Korean leader in the 1960s and 70s – Park Chung-hee – was considered the foremost power player in igniting the nation’s economic rise. The Chosun Ilbo provides some details with a link here:

http://english.chosun.com/site/data/html_dir/2008/07/16/2008071661016.html

As reported by the Chosun Ilbo:

“Korea was then one of the poorest countries in the world, with gross national income per capita of a mere US$79 in 1960, and a trade deficit of $300 million, 16 percent of GNP. Park felt a deep-seated resentment of his country’s poverty, which he believed was due to nothing but laziness on the part of the Korean people, and made economic development his top priority.

On July 22, 1961, two months after the coup that brought him to power, Park established the Economic Planning Board and bestowed on it mighty powers to design economic development plans and policies, set the budget, and control other ministries.”

Japan’s economic prosperity should be duly noted, since the nation relied on promoting innovations in the science & hi-tech fields while the emergence of huge Japanese conglomerates instilled stability in the domestic economic structure.

The Smithsonian takes a closer look at Japan’s hi-tech big business miracle. The link is here:
https://www.smithsonianmag.com/i…

The Smithsonian reports that:

“They’re called keiretsu, monolithic conglomerates unlike any other. Unique to Japan, each keiretsu can have as many as 30 companies spread out across a huge range of industries. Food companies, paper mills, car companies, camera makers, movie studios, mining companies, real estate, pharmaceuticals, breweries, distilleries, ironworks, railways, shipping lines, retail stores, nuclear power plants, clothing makers, television broadcasters, computer parts, life insurance, construction, oil companies, video games, jet fighters and airliners, all loosely interwoven to benefit each other indefinitely. The U.S. sees keiretsu and keiretsu-like relationships within corporate Japan as obstacles to free trade between the countries.”

The economic miracles of Japan and South Korea serve as models for the success and failures of both countries. Tokyo and Seoul supported a big business model, but there were some flaws with the strategy, since major corporations were more likely to protect their own corporate assets above all else, even if that incurs slower domestic economic expansion.

Japan and South Korea are also limited in land space, where China still has large swathes of territory in the western regions that remain under-populated and under-developed. Hence, there’s still room for rapid urbanization and industrialization for the western half of China.

I had written about China’s ‘Go West’ initiatives in a 央视网 Panview article with a link here:
http://english.cntv.cn/2015/12/3…

According to 央视网 Panview:

“China’s west offers much potential for economic development, but it will take time for the region to catch up with the east. Fortunately, Beijing is seeking solutions.

Regional authorities are making plans to revamp the education system to revitalize rural areas and usher in a more optimistic spirit.

Better education would enhance the job skills of working adults. It’s also essential to develop more extensive vocational technical training programs that add impetus to the manufacturing and construction sectors.

Meanwhile, foreign companies opening up offices in western China have to recruit talent and offer incentives to retain employees. Such additional measures can help the western region bask in the benefits of economic expansion.”

We have plenty of good reasons for explaining China’s economic miracle, but we can’t ignore culture as well.

The Chinese have demonstrated close links to Confucianism that supports hard work ethic for the greater good of the community while maintaining close family ties that spur social stability.

Taoist philosophical principles seek a balance of harmony and cooperation that have inspired many Chinese to move forward together for more long-lasting and prosperous economic development.

We anticipate that China’s future will continue to shine bright on the horizon, despite obstacles that may come its way. The rise of China remains inevitable for the time being.

Posted in Business News, Company News, Culture Coach.