- Hardcover: 366 pages
- Publisher: Cambridge University Press; 1 edition (September 1, 2008)
- Language: English
- ISBN-10: 0521898102
- ISBN-13: 978-0521898102
- Product Dimensions: 6 x 1 x 9 inches
- Shipping Weight: 1.3 pounds (View shipping rates and policies)
- Average Customer Review: 22 customer reviews
- Amazon Best Sellers Rank: #751,359 in Books (See Top 100 in Books)
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Capitalism with Chinese Characteristics: Entrepreneurship and the State 1st Edition
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"The development of the Chinese private sector is a key to the future shape and performance of the Chinese economy. At present, the subject is widely misunderstood. This book does more than any other to clarify the issues and point the way forward." - Christopher Howe, FBA, School of East Asian Studies, University of Sheffield
"Yasheng Huang is an insightful scholar of China's political economy. In this important book, he shows how China's rural economy took off in the 1980s, led by 'township and village enterprises' that were essentially private, only to be ignored in the 1990s by state-led development that focused on urban regions such as Shanghai. The 'Shanghai miracle,' he argues - and as any businessman who has worked there knows - was not the simple triumph of capitalism, but of a stronger and more intrusive (and effective) state. If one wants to understand the policy origins of China's growing divide between rich and poor, urban and rural, one need look no further than this book." - William Kirby, Harvard University
"Sure to generate a lively debate, Professor Huang's study provides a provocative and well-researched challenge to much current thinking on China's economic development. The widely shared gains of the 1980s have not been matched in more recent years. Danger signs include the stagnation in household incomes, growing inequality and illiteracy, and heightened governance problems. Huang argues that China will not be able to continue to grow unless the benefits of growth are widely shared through fundamental political and legal reforms." - Susan Rose-Ackerman, Yale Law School
"Most books about China's economy and their authors fall into one of two camps: those that are hypercritical and those that are hyperlaudatory. Professor Huang's book is closer to the former than the latter, for example, he characterizes China's economy as '...crony capitalism built on systemic corruption and raw political power.' Yet, his book is different from, as well as better than, others in that genre because it gives ample recognition to contrary views and empirical data supporting them. Consequently, Capitalism with Chinese Characteristics is both immensely informative and enormously provocative." - Charles Wolf, Jr., Pardee RAND Graduate School
"For years, Western economists are amazed that China's growth is obviously fueled by factor accumulation and yet her capital markets appear to be under developed. Yasheng Huang's book provides some refreshing information and analysis. He shows that in China's vast rural areas, which Western academics often cannot obtain good and detailed information, economic and financial liberalization went much further than credited by outside analysts and that the rigorous development of private entrepreneurship explained much of China's takeoff. His thesis is worthy of attention; this book will enhance our understanding of China's economy and lead us to take a more thorough look at the development process." - Bernard Yeung, University of Singapore Business School
"Original research on China is rare, largely because statistics, though plentiful, are notoriously unreliable. Mr Huang... has unearthed thousands of long-forgotten pages of memoranda and policy documents issued by bank chairmen, businessmen and state officials. In the process he has discovered two Chinas: one, from not so long ago, vibrant, entrepreneurial and rural; the other, today's China, urban and controlled by the state." - The Economist
"Written before the full force of the crisis became apparent, Yasheng Huang's Capitalism with Chinese Characteristics: Entrepreneurship and the State presciently anticipates the need for a guide to the least understood weaknesses in China's economy.... As a look at China's entrepreneurial economy in the 1980s and 1990s - and as a counterpoint to the misconception that China is steadily evolving into a more market-oriented economy - this book is unparalleled." - Mark L. Clifford, Time
"From the liberal right, Yasheng Huang's Capitalism with Chinese Characteristics is a tour de force of empirical inquiry, conceptual clarity and independence of mind. Anyone wanting to know what kind of economy, and what sort of growth, can be found in the PRC should now start here." - Perry Anderson, London Review of Books
"This is the work of a careful and deeply skeptical mind; one that excels in mining difficult to obtain and dodgy economic data and eschews received storylines.... If it is possible to come away from this impressively informed account of China's recent evolution still believing in the country's continued rise, it is well-nigh impossible to come away from exposure to Huang with one's faith in the standard narratives intact." - Howard French, chinabeat.org
"This is a book that clearly stands out from the recent China books, and it might be destined to become one of the big references in the field." - Julen Madariaga, chinayouren.com
This book presents a story of two Chinas - an entrepreneurial rural China and a state-controlled urban China. In the 1980s, rural China gained the upper hand, and the result was rapid as well as broad-based growth. In the 1990s, urban China triumphed. In the 1990s, the Chinese state reversed many of its productive rural experiments, with long-lasting damage to the economy and society.
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In Huang’s telling, Chinese policymakers made a disastrous shift away from laissez-faire in the countryside -- first as part of an ideological reaction to the Tiananmen protests and then as part of a technocratic city-centric industrial policy engineered by Jiang Zemin and Zhu Rongji. Huang treats with disdain the conventional views of China’s economic miracle, taking on big names such as Joseph Stiglitz, Jeffrey Sachs and Stephen Roach. No, he argues, state capitalism hasn’t driven China’s success. No, foreign direct investment doesn’t deliver a big payoff. (Unjustified faith in FDI, he argues, has led economists to underestimate the effectiveness of India’s economic reforms, which don’t rely much on foreigners.) No, Shanghai isn’t a model for development in emerging market economies; bustling, entrepreneurial Zhejiang Province is.
What worked for China and the Chinese people, in Huang’s view, were reforms that gave rural entrepreneurs confidence that they wouldn’t be arrested or hassled by authorities -- even though their property rights remained muddled. He assembles a lot of data to support his view and is very convincing, though I wondered what other students of Chinese economic development have to say about his arguments.
As a reading experience -- as opposed to a provocative intellectual exercise -- the book can be a chore: To press his case, Huang repeats his main themes over and over and piles on statistics that might be mandatory in an academic argument but amount to overkill for lay readers.
At the same time, somewhat surprisingly, the book is filled with passion and clearly reflects Huang’s admiration for the rural Chinese entrepreneurs who got things going back in the late ‘70s and early ‘80s. You feel like there’s another book -- a far more compelling read -- peeking out from all the stats and tables, one about the bold risk-takers who took on a statist system. For instance, Huang clearly enjoys telling the story of Nian Guangjiu, founder of the Idiot’s Seeds brand of sunflower seeds. When the state turned against rural entrepreneurs in the ‘90s, Nian was arrested on dubious charges of hooliganism. Accused of having immoral relationships with ten women, he reportedly responded, “No, twelve.’’
At the risk of some oversimplification, Huang finds that the 80's in China were characterized by vigorous growth through private enterprise. In the 90's China became a state run, top down economy, relying on foreign direct investment for the continued growth which was accomplished. Economists have come to emphasize the importance of the security of private property in promoting growth, and while nominally this did not exist in the 80's in law, it mostly did exist in fact. The 90's were a different story, with land grabs and other kinds of expropriations, as well as limits on competition with state controlled enterprises, and a stranglehold on the availability of credit.
One might think that the source of growth was not too important so long as growth was obtained, but this is not true. The "Gini" coefficient which was developed by international economists shows that Chinese society suffered from more inequality in the 90's. Education and health deteriorated, with the number of functionally illiterate actually increasing. Corruption became rampant even as civil service salaries greatly increased and there was less freedom at the village level. Moreover, because urban areas grew at the expense of rural areas, more Chinese workers had to migrate, and living in a squalid worker dormitory, separated from family, leads to a reduction in quality of life not picked up in GDP measurements (Huang does not explicitly make that point, but it is obvious).
Huang sees signs that in the 21st century, China's new leaders have been trying to move the country back in the direction of the eighties. As a stock market investor, I can point out the following: a number of Chinese companies have listed on the NASDAQ while not being allowed to list on the Shanghai stock exchange where share valuations are higher, so they are not able to raise as much capital. At the same time, however, some of these companies have received state assistance of various kinds without state control.
I believe Huang was objective in his research, although he does gloss over the evils that can result from unrestrained private enterprise - think of the industrial revolution in Europe.
the other valuable part of the book deals with urbanization and particularly Shanghai. The city's success is part historical and part policy. Huang gives us a nice window into China's early efforts to boost urbanization, something which has recently become a more established topic for discussion with the 5th generation of leadership.
Most importantly Huang dismisses the typical blind-praise for economic success, asking instead how this was achieved and what were the trade-offs? His book, coming out ~2008, is basically the first milestone in empirical skeptical literature (ignoring the bull-bear nonsense) about the China model and required reading for anyone who writes or discusses about Chinese reforms. Many commentators today are building on his arguments.