ABSTRACT
In the closing decades of the twentieth century, China defied the best predictions of development economists and Sinologists alike in compiling a stunning record of economic growth. This was accomplished in the face of formidable obstacles including inefficient state enterprises, ambiguous property rights, irrational prices, primitive transportation, outmoded banking and securities facilities, and inefficient markets. Social and political obstacles, including instability and demoralization born of the failures of the Great Leap Forward and the Cultural Revolution, deep political divisions, a legacy of rural poverty and low levels of education, constituted equally formidable challenges. Yet, whether measured in per capita GDP or Purchasing Power Parity, exports, per capita income, induction of foreign capital, urbanization, or technological gains, China’s sustained double-digit growth and rising per capita income from the late-1970s into the 1990s and on into the new millennium, was the world’s envy. As a result, China was able to join a select group, including the East Asian Newly Industrializing Economies, which significantly improved their position in the world economy. And it did so at the very time when the former socialist economies of the Soviet Union and Eastern Europe were in ruins, even continuing its advance (albeit at a slower pace) into the twenty-first century while many other economies, including several high-flying East Asian economies, stumbled or languished after 1997. In the first decade of the twenty-first century, China gained acclaim as the world’s most dynamic economy, a regional and global economic power and magnet for investment, both through its symbiotic relationship with the dynamic economies of East Asia and its special relationship to the US deficit economy.
