How China Escaped the Poverty Trap by Yuen Yuen Ang

It is also a story of fierce political struggles conducted in the form of theoretical debates. This is a story not of Western influence seeping irresistibly into Chinese minds but of Chinese leaders actively reaching out for ideas. Zhao sought advice from foreign economists, putting their ideas into practice despite opposition from a conservative faction that was understandably suspicious of Western admonitions to abandon state planning and compromise the country’s economic autonomy. He focuses especially on the boldness of Zhao Ziyang, who served as premier from 1980 to 1987. Today, China has four levels of administration below the central government, allowing wide discretion in implementing economic policy but imposing tight control over other issues, such as population planning.Īng and Chung focus on the local level Gewirtz provides a dramatic and freshly detailed account of the terrifying years from 1976 to 1993, when China’s central leaders held their breath and pushed their country into the unknown by beginning to liberalize its economy. Given China’s vastness, this process could unfold only because local officials were incentivized to innovate constantly, no matter the risk-a process Ang labels “franchised decentralization.” Chung’s book is the most complete account available of China’s unique combination of centralized policymaking and delegated implementation, a setup that emerged after years of experimentation by reform-era leaders seeking to overcome the flaws of Mao’s hypercentralized system. Market activity then generated problems that required officials to build stronger institutions, which in turn fostered the further development of markets. First, authorities allowed markets to emerge even though they were hampered by corruption, weak property rights, and underregulation. Are there lessons in the Chinese miracle for other countries that want to surge from deep poverty to advanced development in a matter of decades? Surveying the experience of three Chinese counties, Ang cuts through the usual debate about whether good governance or economic growth should come first, seeing a more cyclical process at work.

How China Escaped the Poverty Trap by Yuen Yuen Ang