Deng’s own words were plastered on billboards throughout China: “Development is the only iron law”
The four reasons why the Soviet Union fell:
Exports can earn foreign exchange needed to buy the capital equipment that enables higher-value production
The East Asian development model is an adaption of the strategy advocated by German economist Friedrich List which drew inspiration from the American System created by Alexander Hamilton and Henry Clay. Bismarck’s Germany also adopted List’s program.
The average Chinese province has 45m people
In 1980, they disbanded communes and returned to family farming. By 1982, virtually all agricultural collectives were gone. By 1984 grain output was 1/3 higher than it had been 6 years before.
Rural per capita income doubled between 1979 and 1984
The lesson from Tiananmen in 1989 was that cities were where dissent was going to come from, so the party focused more on urban reforms.
By 2003 urban households had unrestricted rights to buy, sell, and mortgage real estate but rural families enjoyed no such right.
The World Bank estimated that from 1990-2010, local governments expropriated land from farmers for a total of $320b US less than it’s market value
Between 2001-2008, China’s exports grew at 27% a year, rising sixfold from $266m to $1.4t
From 2000-2014, steel production rose sevenfold, by which point they produced half the world’s steel and 7x more than the second largest producer
Most successful Chinese firms follow a model of “80% of the quality for 60% of the price”
Every country that has created a successful catch-up economy has cheaper including the US who disregarded intellectual property for much of the 19th century and maintained high tariffs until WWII
China urbanized twice as fast as the US did
To accomodate an urban population growing at 16m annually China would have to build a new city equal in size to greater New York and Boston combined
Every year for 35 years
Half of economic growth in the entire world comes from the 300 biggest metropolitan areas
According to the world Bank, the reclassification of previously rural land accounted for 42 percent of the increase in urban population from 2000-2010
Building high speed rail in China frees up much needed space for freight shipments. This increase in freight charges would ultimately pay for much of the capital cost of new passenger lines planners calculated
The nonmonopolistic nature of the state sector helps explain why China has been able to sustain such high rates of economic growth despite its continued heavy reliance on state firms which are clearly less efficient than private ones
The indispensable feature of a market economy is not private property but competition
By 2014, private industrial companies generated a return on assets about double that of their state-owned counterparts
Between 2000 and 2011, local government’s share of total government expenditure rose from 69% to 85%. To fund these ballooning programs, localities turned to the biggest asset on their books: land
By 2010, net revenues from land sales and leases accounted for about 20% or local government revenues
The IMF estimates combine debt of central and local governments at 54 percent of GDP. USA, Canada, France all have public debt loads above 90% of GDP. Moreover, the majority of China’s public debt finances infrastructure that is likely to have a positive impact on economic growth eventually, whereas much rich country debt finances redistributive welfare spending.
Income and real estate taxes are very low to non-existent in China
By 2012, China accounted for 24% of global greenhouse gas emissions, more than the US and EU combined.
After the catastrophe of the Great Leap Forward, China had a huge baby boom in 1963-1973. Population rose from 680 to 880 million. Contributing factors include tendencies toward fast population growth after wars or natural disasters, government policies to encourage large families (Mao believed a more populous country was a more powerful one), and improvements to sanitation and healthcare.
By 2050, there was be only 2 workers per retiree, same as Japan today
The main reason the one child policy endured was bureaucratic inertia: the State Family Planning Commission that enforced it has 500k employees and 6m part time workers and collected millions in fines every year. It kept the policy in place by constantly overstating fertility rate and claiming it’s services were urgently needed
China surpassed Germany as the world’s leading source of international tourist trips in 2012. By 2014, it recorded over 100m of such trips.
In the 90s, an important source of corruption was smuggling because in 1992 the weighted average tariff was 32%, duties on some popular goods like automobiles were 100% or more. Smuggling was a turning over billions of dollars a year. This showed in foreign exchange reserves grew by only $5b even though official inflows were around $90b.
The construction boom led to massive kickbacks
Zhou Yongkang, who served on the Politburo was investigated and expelled from the party, the police claimed to have confiscated assets of $14.5b which would rank Zhou as the seventh richest person in China
Economic historians estimate that for about a thousand years, ending in the early 1800s, China was the world’s largest economy
This is because, before the industrial revolution, the biggest population was probably the biggest economy.