QUOTE(Made in China @ Jan 16 2009, 01:59 AM) [snapback]4087241[/snapback]
Totally agree that the government officials are pragmatic.
The reason why china can do this is because it is a one party government. Once a plan is implemented, it usually sticks with it. It also has to do with the top political party leaders' background, they are engineers who are very pragmatic and come up with a plan and design that works and is feasible. Contrast this to the u.s., where politicians are used to talking and arguing too much and majored in law, and the u.s. does not have a clear goal/plan has it is a 2 party system.
It also can get things done as well as it does not need to deal with too much arguing and talking and its is performance-based government. If you suck, if your province does not generate enough jobs, etc....you get canned. In the U.S., if you suck, you stay in office until your term ends or you get voted out and lose to another candidate.
Even by today's standards ,China is still a centrally-planned economy that is one of the most highly regulated in the world. Regulation exists at a number of different tiers, imposed by national, regional and local authorities. Foreign investment is controlled and regulated, and the judicial system is highly politicized. The state maintains tight control of the financial sector and directly or indirectly owns all banks.
I prefer to call China, controlled capitalist economy, a guided capitalist economy that is guided by the state and its economy carefully crafted and planned. Or you can call it smart, well managed central planning economy, that is centrally planned by the government but with the government with a lot of skilled technocrafts and know their economics and financial background really well and know what they are doing.
Whatever the case it works for China. China does not want to be like Russia, when Russia just switched to free fall capitalist from central planning, Russia was ruined economically and was on the brink of total economic freefall and disaster. It is better to go slow, that just shock therapy. Russia's case from central planning to capitalist was all shock and no therapy. It didn't help. Chinese don't want that.
I thought it was great that China maintains tight financial regulation. Look at what is happening at the western financial markets......they were unregulated and people came up with exotic b.s. financial products and financial engineering, that were so complicated and weird that banks and some people did not understand it at all and people came up with a lot of "new rules" that did not make sense. Derivatives and the exotic financial services and products are crap and b.s. You can't get rich with financial engineering, you need to make products and earn money the real way instead of "number fidgeting, financial forecasting and not making anything/selling anything and not making money".
Chinese officials thought what the wall street and the western financial institutions were doing did not make sense and distorted the real economy. When chinese economists explained to party leaders to deng xiaopeng and the "chinese congress" what the west was doing, they just laughed out loud. The Chinese economists said that the western institutions/wall street were doing was promoting companies and inflating its net worth/asset and values by using a whole bunch of mirrors.
Let's say the real net asset worth of a car company is 100 cars. What wall street and these financial professionals did was get a whole bunch of mirrors and sold the mirror image of these cars, or sold the mirror image of the mirror image of these cars and gave investors the false impression that instead of the company in reality having 100 cars, it had 100000 cars, overinflating and bull$hitting its value and people thought this company was doing well, had this much asset, was worth this much and invested their money.
Chinese thought it was cheating, creating fake paper wealth and all non-sense and it was ridiculed and the chinese just laughed at it. Seems like they were right. It was all a load of crap. China is affected economically a bit because western economies are doing bad right now, but not affected by the financial markets itself. China stuck with basic economic fundamentals and basic mathematics instead of made up new wall street type financial rules and mathematics.
Westerners used to laugh at chinese for having no financial market skills and used to lecture the chinese on the right way, saying chinese regulated their financial markets way too much and need deregulation. now chinese laugh at westerners. LOL!!!!
hey, i produced 10 computers, i can create a computer company, have this wall street/western financial guy do some exotic mathematics and advanced theoretical b.s. financial numbering, make it look like i made 1000 computers this month, then have the investors get confused and think my computer company is doing well, and confuse United States, Britian, or whatever country i reside in, and make them think i added 1000 computers value to the GDP and think we are doing that well.
ROFL. bunch of crap.
while westerners sit on their computers(made in china probably) messing with graphs and numbers over-inflating their GDP and wealth and not making enough manufactured goods, china is busy creating real factories, real manufactured goods, real production, real job creation and too busy to become the powerful dominant economy and upcoming superpower in the world.
hey, i have a mirror at home. maybe i can "double" my net asset worth!!
China is an authoritarian state that has liberalized its economy markedly since the early 1980s. However, the ruling Communist Party maintains tight control of private enterprise, the economy, political expression, speech, assembly, and religion.
Mexico, Thailand, South Africa are ranked higher in terms of economic freedom than China.http://www.heritage.org/index/Ranking.aspx
Just because China's rapid 10% growth per annum doesn't mean that it has a capitalist system.
If you think China has a capitalist system, you haven't done business in China or know anyone else who has done business in China... lol. It is a highly politicized process, China does not let just anyone become a millionaire. You have to be fervently pro-Beijing for them to allow you to monopolize an industry lol.
whatever the case, it is working for China. China will do it the Chinese way with an open mind.