How China Escaped The Poverty Trap

By Phar Kim Beng
Founder/Chair
Strategic Pan Indo-Pacific Arena
Strategicpipa.info
Twitter: @indo_pan
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All studies of social-political phenomena, including economic ones, tend to ask which comes first? Good governance, or, economic growth that produces the need for good governance? Ang Yuen Yuen used a “coevolutionary narrative,” which is a novel analytical method, certainly fresher than the normal focus on independent and dependent variables, to unlock the mystery of China. Ang argued, not without justification, that the policymakers and bureaucrats, deployed “direct innovation,” to get the Chinese economic reforms going.

This is a compelling explanation, as after more than a decade of excesses caused by the Cultural Revolution, China had set itself back by several generations. All the intellectuals and intelligentsia had either been wiped out, or, cowed from speaking up. Had it not for the demise of Chairman Mao, who was soon replaced by Deng Xiao Ping, an indefatigable pragmatist who shared the same worldview of Lee Kuan Yew, China would not have grown so fast at all. But under the spell of Lee, and driven by the will to make China an economic juggernaut, China plowed on. By the 1990s, it was clear that China had begun to make it.

At the very least, its growth trajectory and pattern had confirmed with the general outlines of the East Asian Economic Miracle, a term coined by the World Bank. In more ways than one, it wasn’t the officials in Beijing who made the reforms possible, but the crafty businessmen and leaders on the ground; especially those who hailed from the south.

Chinese coming from the coastal areas of China had always been predisposed to international trade. When the opportunities availed themselves, they jump into the pool without so much as a second look. The rest as they say is history; though having reached the status of middle income, questions abound how China can lift itself up from the boot-strap again? The book does not answer the latter. But, as a kaleidoscope of previous local reforms, the book was impressive in its breadth.