It is not about Deng's ability to have gotten it done earlier. There were other leaders before him. And I believe they definitely could have balanced China's geopolitical goals with economic policies similar to those espoused by Deng.
Chinese Economics Thread
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It is not about Deng's ability to have gotten it done earlier. There were other leaders before him. And I believe they definitely could have balanced China's geopolitical goals with economic policies similar to those espoused by Deng.
You should then list the leaders before Deng and see who could have done so in their time.
Hua guofeng was the one before Deng. Hua presides the time of high tension of Soviet threat from the north and south, and hostile Taiwan from the south.
Before Hua, it was Mao. Mao faced direct threat of US at the Korean peninsular in the north east, indirect threat of US through Taiwan from the south, and Soviet from the north.
If it is not about the ability of Deng, it not about the ability of anybody before him. You are right to point out that it is not about personal ability and will, but you failed to realize that it is the time and geopolitical environments the leaders and China faced that made the "earlier doing" impossible.
Yes, it would not have been possible to achieve the level of economic growth that China saw during its reform and opening-up from the 1980s to now. However, the Great Leap Forward and Cultural Revolution could've been avoided without significant detriment to China's geopolitical policy. Across China the masses were directed to build backyard furnaces in preparation for an invasion of Taiwan. This was misguided economic policy, to say the least.
plawolf
Lieutenant General
Hindsight is always 20/20.
At least China has learnt from the mistakes of the past. Today, Chinese economic policy is driven by results oriented pragmatism instead of ideological dogma.
China allows and encourages private free enterprise, but also sees the value of SOEs and direct state guidance of economic direction. It will not and should not blindly copy and paste the West’s economic model because that model is full of problems.
What China does is only take what is proven to be effective from the western model and splice those to its own economic model to try and improve its economic performance constantly.
That is a far better and provenly effective approach than those of the western-free-market-god worshiping zealots, who are, in their own way, as blinkered and fanatical as the red guards of the cultural revolution you so despise.
The true lesson from history is that as soon as you step away from facts and reality, you are in trouble.
The Great Leap Forward was an unmitigated disaster because China forgot about economic and scientific realities and instead indulged in magical thinking.
The cultural revolution was about power plays and scapegoating to try and purge society of the ideologically ‘impure’.
When you cast your eyes around today, it’s certainly not China who is engaging in magical thinking or moving towards ideological purity tests.
Correct, which is why I prefaced my entrance into this debate with an acknowledgment that no one here is really in dispute about the value of the state in guiding China's economic transformation further. The insinuations that taxiya made about me were really unwarranted. I never meant to imply that the early PRC had some kind of regionalist, discriminatory mindset that deliberately led to the economic neglect of the coastal provinces, nor am I some kind of capitalist-roader who seeks the totally unrestricted, "shock-therapy" opening of China's markets.
This means that "who is neglected" was irrelevant, right? It is the time and circumstance that made what has happened.
The head of a family that has multiple children, some of whom are so intellectually precocious as to have the potential to become the next Einstein, fosters a culture of anti-intellectualism in favor of brawn. The physically gifted children benefit from this environment of course. On the other hand I would consider those smart children to be neglected.
Instituting a policy of rapid industrialization based on Stalinist production targets and mass mobilization came at the expense of commerce, and this disproportionately affected the provinces that had a predisposition for commercial activity. Not only was private enterprise discouraged, entrepreneurs were actively persecuted. While the basis of Chinese heavy industry was successfully reestablished in the Northeast, the government focused too much on developing industry there, which turned out to be inefficient and wasteful - otherwise, why is there a need to "Revitalize the Northeast" today?
Due to the geopolitical environment, it was indeed impossible to draw the same scale of foreign investment that China did after the 1980s, but this doesn't mean that economic policies geared toward attracting foreign investment and expertise could not have been at least moderately successful. The border between Hong Kong and the mainland was open until the Cultural Revolution, and people freely moved between HK and the mainland without having to swim. If the government focused on building infrastructure in the PRD region and adopted other favorable policies, I have no doubt that investment from Hong Kong could've jumpstarted industrial development in the PRD many years earlier.
Ok, you can use the word "neglect", or we can agree that is "prioritization" of "go heavy and military at tough time" and "go commerce and rich in more favorable time".
By now, the debate is not about the wording anymore, but strategical decisions. That can be a long talk and we may differ a lot.
The reason and therefor the focus of my argument with you since your post about "the discontent or disaffection of some southern provinces for neglect" was your and maybe Henrix's as well (as you suggested in that post) characterization of a deliberate neglect in PRC policy towards a certain group of people and region. I disagree with that characterization and on the contrary argued for the practice being strategic planning.
I hope this makes things clear.
antiterror13
Brigadier
nope, R & D is an investment and sit on the balance sheet, so your statement is totally incorrect
plawolf
Lieutenant General
Um, not in the context of what we are discussing here.
Without getting bogged down in a long technical accounting lecture that I am sure most here have no interest in (read up on IAS 38 Intangible assets if you are genuinely interested), the fundamental key element to remember is that:
A company can only recognised an asset from in-house R&D when it is probable that economic benefit will arrise from it (secondary requirement that costs can be reliably measured is easy to meet and should never be a stumbling block to asset recognition).
That means that if your R&D takes 10 years to complete, you cannot recognise a R&D asset in any of the first 9 years of development.
Instead you only recognise the expenses incurred on the R&D project in those first 9 years and charge those to your P&L, thereby reducing your annual profits for the first 9 years.
The other major problem with your statement is that balance sheet assets have little direct impact on your profits (P&L) other than to reduce it through annual amortisation costs (assets with infinite useful life are so rare as to be practically non-existent in real life).
Thus having a massive value investment asset sitting on your balance sheet is not a good thing in itself even when you can recognise it! It’s the income that such assets generates that is key.
When managers make investment decisions, it’s expected sales that they care most about, and those expected income returns are offset against both the duration of the R&D project, as well as the costs of that R&D project overall to determine if that project is worthwhile to pursue.
Because of those characteristics, private R&D overwhelmingly focuses on the highest population market segment.
If, for example out of a standardised population of 100, only 1 person is affected by the issue the R&D project in question, unless that 1% is the top 1% in terms of income, that project is just never going to be green lighted in the private sector. Risk factor is also a massive consideration, with possibility of failure also playing a critical part in whether a project is approved.
While that is ‘efficient’ at the micro level in terms of waste management; it is also incredibly slow to push out the boundaries of scientific possibilities, since that boundary tend to only get advanced at the margins.
Private R&D can also be incredibly inefficient at the macro level when you can have several; dozens or even hundreds of companies all investing to develop the same technologies. Indeed, one of the most powerful trump card arguments that can get a private R&D project funded, almost irrespective of its inherent merits, is if it is known a key rival and competitor is researching it, or has such a product already on market.