Deeper

MIT Economist Cracks Big Puzzle of China's Rise: Andy Mukherjee

2008-04-29T23:03:00.000+02:00

From Bloomberg.com

MIT Economist Cracks Big Puzzle of China's Rise: Andy Mukherjee
Commentary by Andy Mukherjee

April 30 (Bloomberg) -- One of the enduring mysteries of our times is how China has created capitalism out of thin air.

Throughout history, countries have needed to secure private- property rights and impose limits on state power in order for entrepreneurs to take risks, for bankers to lend money to people other than the king's cousin and for economies to grow.
Not communist China.

The spectacular success of the Chinese economy in the past two decades seems to suggest to many analysts that good institutions may not really be as fundamentally important to a country as they are cracked up to be.

This isn't an idle, academic debate.

Our perception of what makes China successful has serious implications for how we analyze the prospects for the rest of the developing world.

Most of us may believe that Robert Mugabe's undermining of democracy is bad news for Zimbabwe's economy.

But if we conclude that China created material prosperity and spawned wildly successful entrepreneurial ventures such as computer maker Lenovo Group Ltd. without constitutional democracy and its appurtenances, then we can't -- at least on purely economic grounds -- argue that Zimbabwe needs them.

Equally useless then would be the heaps of empirical evidence that economists have uncovered suggesting a causal relationship between property rights and growth.
If the most fascinating economic miracle of our times can soar in an institutional vacuum, then surely others can, too.

Stuck Needle

Now, that may only sound right to Mugabe and his cronies. So what's missing here?
The answer, according to Massachusetts Institute of Technology economist Yasheng Huang, is simple: The conventional view of China is deeply flawed.

Institutions, as Huang argues in his forthcoming book, titled "Capitalism With Chinese Characteristics,'' have mattered as much in China as elsewhere, only their effect doesn't show up as neatly.

Part of the problem lies in measuring changes in the policy environment facing entrepreneurs on the ground. The ``authority trends'' for China, according to the widely used Polity IV database, moved toward totalitarianism at the start of Mao Zedong's Cultural Revolution in 1966, followed by a two-step return toward a slightly more free society in the 1970s. And there the needle stops.

"If the Chinese peasants had relied on the Polity IV to judge their property rights security, none of them would have gone into entrepreneurship,'' Huang says.
Millions of Entrepreneurs

But they did -- millions of them.

Huang has dug into China's Ministry of Agriculture data to show that in 1985, out of the 12 million businesses classified as ``town and village enterprises,'' more than 10 million were privately owned. The conventional view that Chinese TVEs were controlled by local governments is a myth.

So what exactly changed in the relationship between the government and the people to cause this extraordinary surge in rural capitalism? And that, too, just a few years after Mao's Cultural Revolution, when private possession of a book -- let alone a business -- could get a person arrested.

"China then and now does not have well-specified property rights security,'' Huang says. ``But China in the early 1980s moved very far and fast toward establishing security of the proprietor. One should never underestimate the incentive effect of not getting arrested.''

Deng Xiaoping

Something about Deng Xiaoping, who led China after Mao's death in 1976, convinced the peasants that changes introduced by him were for real and that life wouldn't revert to being the drag that it was under Mao. ``He was purged three times by Mao and one of his sons was crippled by Mao's red guards,'' Huang writes. ``No other Chinese leader commanded the kind of automatic credibility that he did.''

Some of this is pure speculation. But the theory isn't implausible. Huang's hypothesis may help us better understand contemporary China than reams of analysis of official gross domestic product data churned out by economists.

One of the more shocking conclusions from Huang's analysis is that less than a quarter of the corporate profits in the world's fourth-biggest economy came from domestic private enterprise in 2005. So what happened to Deng's legacy?

Following the 1989 Tiananmen protests, political support for genuine entrepreneurship disappeared in the China of the 1990s. Jiang Zemin and Zhu Rongji preferred growth that was led by foreign capital and occurred in urban centers. For businessmen away from large cities, access to finance dried up just as it was promising to become more liberal.
New Challenges

The current leadership of President Hu Jintao and Premier Wen Jiabao is aware of the challenge that faces them: The gap between rural and urban wages has widened alarmingly; the share of labor in national income has fallen; inequalities between rich coastal provinces and poor landlocked regions have risen.

In the early 1980s, freedom from the fear of incarceration was enough to prompt millions of people to start their own businesses. The institutional changes that are needed now will have to be much more substantive.

As a Chinese company, Lenovo couldn't secure the license to make computers in China, Huang says. It had to come in as a Hong Kong-domiciled ``foreign-invested enterprise.''
Lenovo's success was Chinese entrepreneurship supplemented by the institutional credibility of Hong Kong, where the company, then known as Legend Holdings, raised $29 million in 1994.
Even now, when China has a $3.3 trillion domestic stock market, entrepreneurial Chinese companies are forced to seek finance in Hong Kong and Singapore.
The true capitalist miracle in China is one that's yet to happen.

(Andy Mukherjee is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Andy Mukherjee in Singapore at amukherjee@bloomberg.net

The celebration of Chinese New Year

2008-02-09T10:38:00.001+01:00

Couple Gives $1 Million to UCLA

2008-02-02T13:17:00.001+01:00

AP
Saturday February 2 2008

LOS ANGELES (AP) - A Bel-Air couple say they will donate $1 million to the University of California, Los Angeles, to set up the nation's first endowed academic chair on U.S.-China relations and Chinese American studies.

Walter and Shirley Wang, who own a plastic piping firm, said Friday they want to promote understanding of China in the U.S., particularly in light of recent stories criticizing dangerous toys and other products from China. They said they wondered why headlines weren't highlighting that some problems have been caused by American design flaws.

"We're not saying we want people to be biased for China,'' Shirley Wang told the Los Angeles Times. "But in every situation there are different views. We just want more understanding.''

The donation also would fund a media program and establish a Web site, a handbook, and a database of experts about Chinese American issues.

The gift is the latest donation from the Wangs, who in 2000 gave $1.5 million to help finance the PBS series ``Becoming American: The Chinese Experience.''

Walter Wang, a 42-year-old Taiwan native, and his wife, a 39-year old New York native raised in Taiwan, have also given a $1.5-million donation to establish an endowed chair in pediatric surgery at Cedars-Sinai Medical Center.

The challenge to Beijingoism

2007-12-27T20:29:00.001+01:00

Dec 26th 2007 | BEIJING

from economist.com

IN READINESS for the Olympic games, Beijing is putting the finishing touches to a colossal makeover: the world’s biggest airport terminal, skyscrapers, subway lines and lavish stadiums. It is guaranteed to impress the world. But the leadership is nervous. The games will be a magnet for China’s critics. At a time of growing unease around the world about everything from the safety of China’s products to its policies in Africa, there are plenty of them.

See the full story, go here

Comment: the Taiwan and Tibet issues is China's internal political affaire, they have nothing to do with the Olympic Games in 2008. Besides, Why do people believe that Chinese people will live better if they have democracy? Promoting democracy in a immature condition will only cause chaos, take a look at African countries, most of them have parliament, universal suffrage elected president, but what can you inside this "democracy"? Corruptions, political nasty fights, and their economy, not better.

But I can also say that I'm totally wrong just 'cause I've never been to Africa, as well as most of these journalists have never been to China. One of my friend told me yesterday that in his English class when two french students made a presentation about the human rights in China, he asked only one question when they had finished : "Have you been to China, do you speak Chinese?" Then nobody can say one more word. I think I'll ask the same question if I were there.

Finally, come to China if you really want to know what's happening. Chinese people are nice, so am I.

China falls for Christmas, at least in its stores

2007-12-24T12:27:00.001+01:00

Mon Dec 24, 2007 11:01am GMT

By Simon Rabinovitch

BEIJING (Reuters) - China's shopping malls in late December leave little doubt that the country has been smitten by Christmas, if not in quite the way devout Christians might hope.

Christmas has secured a spot on the Chinese calendar as a cherished excuse to buy, buy, buy. And while Christianity is indeed spreading in the officially atheist country, many shoppers have only a faint idea of the holiday's religious connection.

But their manner of celebration is sure to win the blessing of at least one group: economists.

"It's not really a real holiday," said Benny Zhang, 29, a computer programmer outside a Beijing mall with his wife. "It's just a nice atmosphere for shopping and a chance to swap gifts with each other."

Economists long despaired that the Chinese propensity to save, not spend, was storing up trouble should China's exports falter and hurting the world economy because it was not buying enough from abroad.

Even as China has become wealthier, the savings culture has been reinforced by the dismantling of the social security system, which forced ordinary people to keep enough money on hand for education, medicine and old age.

But Christmas reveals that Chinese consumers, buoyed by fast rising incomes, have now burst on the scene with a fervour for shopping that someday might rival their American counterparts.

"It is hard to get away from cultural norms," said Anna Kalifa, head of research in Beijing for Jones Lang LaSalle, a real estate management firm.

Full Story at Reuters UK

Beautiful Girl

2007-12-24T04:16:00.000+01:00

I found an interesting song named Beautiful Girl
writte and sang by Sean Kingston, I like this guy, and his music is just great
The melody and rythm is simple, and this song is suitble for days like right now, Christmas days.

Dave's Lounge

2007-12-23T18:33:00.001+01:00

My preference of music is trip-pop, lounge, and I've been listening to Dave's lounge for about two years, a podcast provided par independent producer collecting the songs found on the Internet, and it's base on the Creative Commons Licence.

If you like the same kind of music, you'll get crazy for this podcast, and their 100th program is really really awesome.

The end of this year is approaching, and I've started to think about the whole year. I mean, a kind of conclusion that I used to write every year since 2002, it's pretty a good habit because it helps me to know what I've achieved during this pasting year, what I was supposed to do but didn't been finished or even been mentioned, and what I am going to do next year. The birth of the notion "year" was firstly based on the agricultural timetable, but then people started, as what I do, making a revision every year. This is why man has progressed so rapidly, this is why I don't feel like getting lost when time has passed away.

This week's Christmas double issue of The Economist chose a picture of Mao wearing Santa Claus' hat as their cover, and talked about Mao and his art of management, including "A powerful,mendacious slogan"," Ruthless media manipulation" and "Sacrifice of friends and colleagues" . I agree with their opinion even if I still consider Mao as the world's greatest man,what I have been taught since my childhood. I think his slogan like "Serving for the people" is really what we should know in a modern society,and this is what I cannot find in France.

Recently I can't help thinking about someone, no matter what kind of sentiment it is,in contrast of the title of this blog, I don't think I need to get deeper, let it happen or let it go, it is out of my control.

La defense, dust

2007-12-23T18:02:00.001+01:00

Some photos of La défense

2007-12-22T12:52:00.001+01:00

I took a few photos yesterday. I was a little late so I didn't get much light, today I'll take some more photos if I have time.

Update here some photos, if you want to see more, you can go to my picasa album,or go to my homepage on facebook

My picasa album link

http://picasaweb.google.com/NickYXiao

Camera

2007-12-18T21:16:00.001+01:00

As you know, I am a fan of photograph.

I recently bought a little digital camera, Benq DC C640, it has a 6m pixels CCD, 3x zoom Pentax lens, it's the cheapest one I found in the supermarket.

I have a DSLR and a SLR camera, but I am not mad. I bought this one because it's really small, and I can put it in my bag every day. I'm getting interested in Lomo-style photos,especially the natural emotion of the people. Instead of buying a original Lomo camera I prefer to buy a little dc and with softwares I can also made some Lomo-alike pictures.

This little has aperture mode, this is the main reason why I bought it. But now I still did not found the way to master this little gadget. Using for too long time DSLR,ironically I need some adaptation to use a simpler dc.

Just for fun, some pictures of my cameras here

Can you tell the difference between photos taken by a DSLR and a DC?

CHINESE ALLOWED TO BUY SHARES IN LONDON

2007-12-18T12:34:00.001+01:00

By Richard McGregor in Beijing and Neil Hume in London

Tuesday, December 18, 2007

Chinese citizens will soon be able to buy shares and mutual funds in London and New York through their local banks after a regulatory reform that marks a further step in the export of Chinese capital into global markets.

A scheme under which Chinese can now legally buy shares in Hong Kong will be extended to include London under an agreement between the China Banking Regulatory Commission and British regulators.

China is also negotiating a similar agreement with US regulators to further extend the scheme to the New York markets, a CBRC statement said.

From ftchinese.com

Read the full story, click here(English article)

What's news?

2007-12-18T11:36:00.001+01:00

Yesterday's most important news was certainly the new climate-change pact approved by nearly 190 countries at the end of the Bali conference. This pact has planned a new treaty in two years in order to replace the Kyoto protocols,which expires in 2012.

This pact,supported by the Bush Administration, has pointed out the responsibility of the developing countries- China , India, etc.- on the climate change issues. The United States claimed to differentiate between poorer,smaller developing countries and big emerging economic powers that can afford pollution-reduction powers, which means countries like China, can not ever concentrate on economic growth, you must considerate the environment now.

I think it's a good idea to remind China of its responsibility for environmental protection. China's economy is growing super rapidly and more and more concerns, both from the central government and the normal people, about the over heating and a eventual crash down appeared. In forcing companies to transform their expansion ways to a environmental friendly one, China could avoid the threat of the hard landing of its economy ,also could build a better image in the world, for the concerns about a emerging China is growing all over the world.

Actually this is what the Chinese government is trying to do. The problem lies in the difference between the central government and the local government. Since at the beginning of 1980s, Deng Xiaoping proposed the " Let a part of Chinese get rich firstly, then the others" policy, now there exist a big gap between the rich coastal regions and the poor western provinces. Seeing others getting richer, every local government has to focus on economic growth in order to calm down people's dissatisfaction of their life level in comparison of habitant in the richer provinces. Furthermore, the GDP growth rate has been considered for long time as a crucial element in the merit system of functionaries. So even if the central government calls for more restriction on polluting companies , it is hard for local government to apply it.

Now the Chinese central government led by the Chinese Communist Party must overcome these difficulties, as it's becoming urgent to fight against the global warming crisis. And this is the only way for China to act really as friendly as it used to be.

Slam Dunk

2007-12-17T20:48:00.000+01:00

I updated one of the four endings of the tv show of Slam Dunk here, this is my favourite song.

Test

2007-12-17T10:31:00.001+01:00

This is a test, I'm using Windows Live Writer to upload my blog.

Sometimes I really can not imagine that Microsoft could support something developed by Google. These two rivals, provide the same service in every domain. But today I use Outlook to check my Gmail, use Windows Live Write to update my blog on blogger.com, this is just great.

But I still have a problem here, I've installed the french version of Outlook on my Chinese Windows, System language setting is ZH-CN, and sometimes when I receive e-mails in French, its become some text incomprehensible. I really don't know why. Does anyone know here?

This week's The Economist didn't write any article about China, just a article about the border dispute in South China sea, a regional problem. Of course last week's focus is Russia and its nasty parliament election. When you're a journalist working in a very liberal magazine like The Economist, what you should do is criticize all the countries no-democratic. But have people thought that the democracy is just something born less than 100 years? I agree with the principal points of democracy, but not all of them. Everything has their negative side, for example, the democracy is always together with the violent. This is what I think of democracy.

Finally, I can sleep till 10 o'clock every Monday morning, this is totally awesome.

Slam Dunk

2007-12-16T15:08:00.000+01:00

Recently I restarted to watch anime series of Slam Dunk(スラムダンク), a manga written by Takehiko Inoue in 1990s about a basketball team from Shohoku (Shōhoku) High School.

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You may never hear of that, but it was so popular in Japan so that lots of Japanese teenagers began playing basketball team after it was published. The anime series was introduced to China around 1998 and had a great success. I saw it for the first time when I was in junior high school, and by watching this anime series I got to know the basketball game, the rules, the different positions, among others. It was so popular that we went playing basketball almost everyday. You may be asking why we were so crazy about this manga and this game, well, it was because this is not only about a game, it was a manga talking about the daily life of a teenager, you know, about your studies, your dream, and your first love.

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Have you ever been fighting for your dream when you were a child? Probably these dreams seem sometimes absurd today, but at that moment you just thought the world is yours, and you can do everything to realize your dream. This kind of dream, in Slam Dunk ,is described as winning the champion of Japan. The team of Shohoku High School, used to be weak, but as new comers like Hanamichi Sakuragi and Kaede Rukawa joined the team, this dreams became possible, and everyone tried their best to realize that. I had many dreams when I was a child, and finally few of them have been realized, or even just been mentioned. I understand well that now as a adult, I will never have this kind of dreams again just because my experience have taught me to be more realistic, but I find life have become much less colorful, and sometimes I just get easily bored of what I'm doing. Someone told this was very normal 'cause you have grown and you must get used of living in such a world, a world that is not as beautiful as what you could see during your childhood. I agree with that, but this do not stop me getting a little disappoint. I don't know whether others in my age have the same question, but I'm a guy that easily get confused about questions about the life, the love, or other questions like that.

Slum Dunk also talked about the love stories in high school, which is in my opinion your only chance to fully get involved yourself in a relationship. Well, for me ,this was a little special. Yes I know people always think their story is special , but my story is really special. Of course I won't talk about that here, But I miss a little that kind of feeling.

I stop here 'cause I think the personal story is sometimes boring for the readers.Then I have a funny question , How to seduce a french girl? Being occupied by mathematical analysis, I just need sometimes think about these funny questions.

7 days,7 hours

2007-12-16T11:24:00.000+01:00

God spent 6 days to build the world, the 7th day he had a rest.

I spent 6 hours to build this blog, the 7th hour I went to bed.

The first hour I came to blogger.com, logged on with my account of Google, registered a blog with the name of bedeeper.blogspot.com

The second hour I chose a template, and I modified some details of the temple, the color, the title, the fonts, etc.

The third hour I started writing my first article, a article about everything that I wanna talk about, China, Internet, Mathematical analysis, etc.

The fourth hour I changed the temple, I thought I found a better one because the first one was not very clear, for its colors is not very convenient for reading.

The fifth hour, I added some interesting gadgets to my blog, such as the Uniqlock, Feedjit,and the Creative Commons License.

The sixth hour, I linked deeper to my another blog in Chinese and to my facebook page, then I finished my second article, about alibaba.com, a Chinese E-business company.

The seventh hour was 2 o'clock in the morning, Dec. 16 2007, All works have been done, I went to sleep, and a new blog was born.

An Ad. on Facebook

2007-12-15T23:53:00.000+01:00

Today I found this when I was on facebook .com, a social relation website.

This picture is not very clear, but you can click on it to get a full size.

The text is in French, its meaning is contact millions of supplier ,24 hours / 24, 7 days / 7, and this Ad. belongs to alibaba.com, a Chinese Internet firm.

You may never heard of this firm. Actually it's currently the leader of the B2B e-commerce market, its founder, Ma Yun, was a famous person in China.

Alibaba.com is founded with other e-business websites like 8848.net, joyo.com,eachnet.com during the Internet bubble in 1999, now the original 8848.net has disappeared and now it has been transformed as a alibaba-like website, joyo.com and eachnet.com have been bought respectively by Amazon.com and ebay.com, the two American giant who want to get into the Chinese market rapidly. But Alibaba.com, with its well chosen strategy on the B2B market,survived through ths Internet crisis in 2000, and now as the importance of Chines market is increasing, alibaba.com is becoming a star among the IT companies, Yahoo! has became its biggest shareholder, and on its first day of IPO on the Hong Kong Stock Exchange, its shares has soared 192.6%. In China, alibaba.com 's Ad.is placed after the very famous News of 7 o'clock on CCTV, the central television station, it's CEO, Ma Yun, is being invited everywhere for interview.

But why did alibaba.com make such a success? In my opinion, it's because it's genius strategy of aiming the B2B market. China is known for its enormous manufacturing industry, and lots of manufacturing firms lack information, especially in the inland area, so that it is difficult for them to find a international buyer. Now as the appearance of services proposed by the firms like alibaba.com, they can get contact with the buyers all around world, and these Chinese companies are willing to pay for that. Of course this is not all of the reason of alibaba.com's success, but for me it is the most important one. Not as another star of China's IT firms, baidu.com, which has been criticized for copying its American competitor Google's ideas, alibaba.com is leading the market with its own way, and it has the incomparable advantage in the face of overseas competitor, the proximity of Chinese market. Now it's trying to enter the American and European markets, as you see, this Ad. on facebook.com, so just don't be too surprised if someday you found yourself around by Chinese companies.

Mathematical Analysis

2007-12-15T20:07:00.000+01:00

So this is it, my first blog in English. Actually I was always thinking about writing something in English, you know, just for knowing more people and sometimes because of Internet control of the Chinese government, you can't write too many critics in Chinese, and if you 're living in China and you do that, you 're in a dangerous situation even if you don't realize that. But it seems that the government is not very concerned about the English websites, as they consider that not "massive", which means just a small part of the people could read it, spread it ,and exchange their ideas within themselves. I am, unfortunately, one of this "elite" people.

Those a few words above could be considered as the start. I really don't like critizing the Chinese government, and I didn't expect that I would start my english blog with the kind of complain of the media control. I mean, I was educated as a loyal supporter of the Chinese Communist Party, and so far I still am. Even if from as soon as I start living in France I read lots of critics on the newspapers, I really doubt their credibility and accoutancy. For exemple, about the media control, honestly I think it is reasonable according to the current situation of the society, of course it's a quesion about eggs and chickens,but I think it's doing well in China(I'll stop here ,but I'll give more details of this question).

The title of this article is Mathematical Anlysis, yes, what I am working on. I could tell you guys I passed all the afternoon at desk but finally I did nothing. This is not unusual so I am not worrying, just take it easy and it's gonna be ok. I'll let this be the end of my first article, for reminding me of revision, lol, everyone needs working.

Finally, if there is any Chinese reader here,please please don't consider me a guy admiring the outside but have forgot his home country, I write this blog just for myself, and I don't expect much, thank you for your comprehension.