Chinese Economics Thread

[taxiya]

Had the central government not suppressed the commercial culture of China during the 1950s and 1960s, we would not be having this discussion. As you noted, the south has a propensity for commercial achievement due to its relatively advanced level of economic development since the Southern Song. This is a low-hanging fruit that was not picked until the 1980s. A great shame. The Republican-era government during the Nanjing decade did a better job of allowing the south to prosper than Maoist China.

You assume that PRC did not want to develop the south during a time when the south was very vulnerable to military attack from across the sea? For security reasons, PRC moved the industrial base from North-east China to deep west, for preference of west and neglecting northeast? Or for the reason of security in the deep heartland?
And somehow the ROC did a better job allowing the south to prosper when they does not even control the north (being controlled by various warlord and Communist)?

The point is, neither PRC before the 1960s and ROC in its whole existence had the luxury of peace and security to develop the country, regardless which part. PRC did not have regional preference. Jiang Jieshi of ROC did allow his cronies to gain personal wealth, but as a national leader, I believe he also wanted to develop north if he had the control.

 

[taxiya]

It should've been obvious from the context that I was only referring to the economic history of the PRC.

The majority of the south was economically neglected until the 1980s. I stand by the "economic backwaters" statement. Shanghai contributed a large portion of national tax revenue for the PRC, yet received little in the way of favorable development policies until the 1990s. Yes, the inland provinces are still largely backwaters today, but this does not negate the fact that the coastal provinces were as well until the 1990s.

If that is the "neglect" that you resent, then you don't understand what is China. Regions have to serve the purpose of the whole country, meaning at some time sacrifice without crying. Shanghai and any other richer region has to pay for the uplifting of others, just like east has to pay for the west, Han has to pay for Tibetans and Uyghurs and Mongols, while in return, west has to provide cheap oil, gas to the east, ethnic minorities have to defend the frontiers.

Let me show you what is Chinese and being a Chinese leader. Mao Zedong was from Hunan, a backwater south province, it was his policy that you are blaming. He "neglected" his southern home province. Xi Jingpin is from Shaanxi, he did not prioritize Shaanxi over other backwaters in the west. They are the leader of China, not their province and village. That reflect the idea of China.

 

[Icmer]

You assume that PRC did not want to develop the south during a time when the south was very vulnerable to military attack from across the sea?
And somehow the ROC did a better job allowing the south to prosper when they does not even control the north (being controlled by various warlord and Communist)?

The point is, neither PRC before the 1960s and ROC in its whole existence had the luxury of peace and security to develop the country, regardless which part. PRC did not have regional preference. Jiang Jieshi of ROC did allow his cronies to gain personal wealth, but as a national leader, I believe he also wanted to develop north if he had the control.

I believe that the PRC had the means to institute effective economic policy even as it faced various geopolitical threats. I find it problematic that they insisted on central planning and hyper-focused on the development of SOE-run heavy industries in Hebei and the Northeast while neglecting (and even persecuting) private commerce - which had the disproportionate impact of blunting the south's economic potential.

 

[Icmer]

If that is the "neglect" that you resent, then you don't understand what is China. Regions have to serve the purpose of the whole country, meaning at some time sacrifice without crying. Shanghai and any other richer region has to pay for the uplifting of others, just like east has to pay for the west, Han has to pay for Tibetans and Uyghurs and Mongols, while in return, west has to provide cheap oil, gas to the east, ethnic minorities have to defend the frontiers.

Let me show you what is Chinese and being a Chinese leader. Mao Zedong was from Hunan, a backwater south province, it was his policy that you are blaming. He "neglected" his southern home province. Xi Jingpin is from Shaanxi, he did not prioritize Shaanxi over other backwaters in the west. They are the leader of China, not their province and village. That reflect the idea of China.

All those regional roles would have been more effectively filled had the coastal provinces been allowed to get rich first earlier. Today the economic wealth generated by coastal provinces is used to subsidize the development of inland provinces. There is no reason why this could not have occurred earlier.

Look at the Northeast today. Many of its factories have shuttered since they were inefficient, shattering millions of iron rice bowls. Today China is much stronger economically. Did it really make sense to subsidize those industries as heavily as the early PRC did?

 

[taxiya]

I believe that the PRC had the means to institute effective economic policy even as it faced various geopolitical threats. I find it problematic that they insisted on central planning and hyper-focused on the development of SOE-run heavy industries in Hebei and the Northeast while neglecting (and even persecuting) private commerce - which had the disproportionate impact of blunting the south's economic potential.

Now we are coming the bottom of the debate, the fundamentals of every difference between you, Henrik and me. Beyond this point there is nothing more to say. So I make this the last words of mine.

The reason of PRC insisting on strong state planning (not exactly central planning as in the pre-1980 and former USSR) is because CCP found PRC as a Socialist state. So long as CCP remains loyal (Xi's word 不忘初心, remember of commitment) to their commitment to their idea established in 1925 (founding of CCP), the state control of economy will stay. If you find that problematic, you will find the existence of CCP being problematic. That is pretty much the same in your country (whichever) that private ownership is a fundamental that is not to be questioned. I think you now should realize why I said this is the end of meaningful discussion.

 

[taxiya]

All those regional roles would have been more effectively filled had the coastal provinces been allowed to get rich first earlier. Today the economic wealth generated by coastal provinces is used to subsidize the development of inland provinces. There is no reason why this could not have occurred earlier.

Are you trying to justify regional preference of South, therefor neglecting the north? I thought your whole argument is against "neglecting the south".

The base of the decision should never be around "somewhere can be richer because it can", it should be based on "how to make the whole China richer and stronger". A fundamental difference between Individualism of west and Collectivism of China. A unreconcilable difference stem from our different upbringing environments.

 

[Icmer]

Are you trying to justify regional preference of South, therefor neglecting the north? I thought your whole argument is against "neglecting the south".

Think of what Deng Xiaoping said, "some areas must get rich before others". This is what I am referring to.

Where shall we begin in developing China's economy? A Japanese friend has made two
suggestions: first, that we begin with transport and communications, which are the
starting points of economic development; second, that we encourage high wages and high
consumption. Being in a different situation from other countries, we are not in a position
to adopt the second suggestion as our policy nationwide. However, as we develop the
coastal areas successfully, we shall be able to increase people's incomes, which
accordingly will lead to higher consumption. This is in conformity with the laws of
development. We shall allow some areas to become rich first; egalitarianism will not
work. This is a cardinal policy, and I hope all of you will give it some thought.

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[taxiya]

Think of what Deng Xiaoping said, "some areas must get rich before others". This is what I am referring to.

He said "can" not "must". Can means the purpose of getting rich earlier is to help others later. The help is a duty, so is the getting rich earlier a duty. It is not a right.

Deng let some region to develop earlier is exactly the same idea of Mao developing heavy industry in the north before Deng. All decisions based on grand strategy for the whole, only difference is the priority of what, not where.

 

[Icmer]

He said "can" not "must". Can means the purpose of getting rich earlier is to help others later. The help is a duty, so is the getting rich earlier a duty. It is not a right.

It is indeed a misquote; however, the message of his statement is largely unchanged and the policy shift behind it is one I believe should've been implemented earlier.

 

[taxiya]

It is indeed a misquote; however, the message of his statement is largely unchanged and the policy shift behind it is one I agree should've been implemented earlier.

Well, his shift can not be done before he secured the foundation of heavy industry and military industry centered in the north and west, kept Vietnam/USSR aggression at bay in the southwest, secured a unwritten ceasefire with Taiwan to the southeast. Can he? All these were only achieved in the 1980s. How could he shift the policy to develop coastal regions before that?