[2/2] The Chinese model. Why China lagged behind the West and is now overtaking it (Category Economics)

Continue. story About the Chinese development model, I will tell about the six-step model of China’s development according to Popov

1Political and social stability Creating a strong central authority, national unity and basic equality (Avoiding extreme forms of inequality) What China implemented after the turmoil of the first half of the twentieth century, establishing a rigid state system and order

2Mobilization of investments Ensuring an extremely high rate of accumulation - the state withdraws and concentrates a significant part of the profits in the budget and directs them to centralized investment in development. Historically, this has been the case, for example, through collectivization and state regulation under Mao, which has allowed resources to be channelled into industrialization.

3Improving economic efficiency The introduction of market mechanisms and incentives for technological progress, so that investments begin to yield returns. This stage - Deng Xiaoping's reforms from the end 1970When a strong state remains, but competition, private enterprise, foreign investment, etc. are allowed, which has dramatically increased productivity.

4й Economic sovereignty Protection of the domestic market and development of own production through import substitution and reasonable protectionism. China has consistently grown its domestic industry – from steel and automobiles to high-tech – shielding it in its early stages from corrosive external competition.

5Entering foreign markets Export orientation and global competitiveness. Having achieved sufficient industrial potential, China bets on capturing foreign markets - thanks to cheap labor and artificially low yuan exchange rate, its goods became supercompetitive in the world market, which led to a multi-year export boom. By the way, you can read about this the history of Haier, which Popov mentions and the book about which I already have. handler

6Adaptability of policies and institutions Constant adaptation of the system to changing conditions. China’s authorities are flexible in responding to new challenges, whether global crises, trade wars or domestic social problems. Changing priorities (More emphasis on domestic consumption and innovation)State regulation in various areas is strengthened or weakened as necessary. This adaptability allows the model not to stagnate.

Countries that want to replicate China’s development model need to strike a balance between governance and market mechanisms, relying on strong institutions, investing in development, and acting strategically. According to Popov, such a comprehensive, step-by-step approach to development can become a recipe for success for other countries.

#Economics #Strategy #Processes #History #PopularScience