The government has set上海千花网f doubling GDP per

er capita from 2010 to 2020 and clearly will reach that goal.

上海千花网女神会所Nicholas Lardy, an often-cited Washington-based expert on the Chinese economy, argues i

n his recent book The State Strikes Back: The End of Economic Reform in China that China could have co

上海千花网ntinued to grow at 10 percent per year throughout this decade if not for policy mistakes.

His core argument is that Japan and South Korea continued high growth r

ates until they reached GDP per capita equal to 60 to 70 percent of the US, so why can’t China?上海千花网

With all due respect, I think this is a silly argument. The early growth in both Japan and South Korea was based on for

上海千花网eign demand for exports. In South Korea, these exports were manufactured largely by state-led companies.

China is a much larger economy. There is not enough potential import demand in the worl

d to continue as a main driver of the economy’s growth. It takes longer to grow organically from domestic demand.

上海千花网女神会所Japan saw very fast economic growth from the 1950s to the 1970s based on technological c

atch-up and on fast export growth to the US. The export industries of Japan – mostly cars and electronics –

are extremely competitive. But, much of the domestic economy is protected and inefficient.上海千花网

A series of trade disputes with the US in the 1970s and 1980s culminat

上海千花网女神会所ed in the Plaza Accords in 1985 that limited Japanese exports to the US and forced Jap

an to roughly double the value of the yen. So, export-led growth was no-longer an option.

Instead of opening-up and reforming its domestic economy, Japan first chose to use monetary stimulus in the late 1980s, which上海千花网

resulted in an immense real-estate bubble and led to the real-estate and stock market collapses in 1990 to 1992.

Through the 1990s and 2000s, Japan then tried to use very large infrastructure investm上海千花网女神会所

ents to stimulate the economy. This just resulted in negligible growth, ecological damage and a government-d

ebt-to-GDP ratio of more than 200 percent – by far the highest in the world. In contrast, China’s strategy of str

uctural reform, opening up, and increasing domestic competition will lead to more sustainable GDP growth.

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