When China Rules the World полностью

China is in the midst of what Marx described – writing of the British Industrial Revolution – as primitive accumulation, or what we now know as economic take-off: the process in which the majority of the working population moves from the land to industry, from the countryside to the cities. Between 1952 and 2003, agriculture’s share of GDP fell from 60 per cent to 16 per cent and its share of employment from 83 per cent to 51 per cent. [445] Although it took China only 10 years to double its per capita output (1977- 87) – a measure of the speed of economic take-off – compared with 58 years for the UK, 47 for the US and 11 for South Korea, after three decades of economic growth averaging 9.5 per cent, [446] around half the people still work on the land. It is estimated that even 20 years hence around 20 per cent of the population will still live in the countryside. [447] A crucial consequence of this relatively ‘limitless’ supply of rural labour is that wages for unskilled work will remain depressed for several decades to come: in other words, for much longer than was the case with the earlier Asian tigers. [448] This does not mean that wages in the more developed regions like Guangdong will remain low: on the contrary, as we have seen, they have already risen considerably. [449] But in the poor, still largely rural, interior provinces they will continue to be much lower, which is the reason why low-end manufacturing is steadily relocating there. The rapid growth of the Chinese economy since 1978 has largely been a function of the extremely high rate of investment, in the region of 40 per cent of GDP for many years, presently edging closer to 45 per cent, and soon to approach 50 per cent. [450] Such an extremely high rate of investment has been possible because of the similarly high rate of domestic savings, running at around 40 per cent of GDP, which, together with inward investment, has provided the main funds for China ’s take-off. In 2001 the average Chinese household saved 25.3 per cent of its disposable income, compared with 6.4 per cent in the US in 2002. The huge savings made by Chinese families have played a key role in funding the country’s rise (see Figure 11). [451]

Figure 11. China’s savings rate from 1981.

It is instructive to compare the experiences of China and Russia because both were confronted with the problem of how to move from a command to a market economy. Russia relied on the preferred Western prescription of shock therapy, which in the nineties led to hyper-inflation, large-scale capital flight, currency collapse and default on foreign debt. In contrast China, by pursuing a more gradualist approach, avoided hyper-inflation, the government remained internationally creditworthy and there was no capital flight. While in Russia the state sector was sold off at knock-down prices to assorted cronies, the state sector in China, rather than being subject to wholesale privatization, was contracted by a slow process of attrition. In Forbes Magazine ’s listing of the world’s 100 richest billionaires in 2007, thirteen were in Russia and none in China. In 1990, China’s GDP was less than twice as big as Russia’s; by 2003 it was more than six times as large. The subsequent rebound in the Russian economy, prior to the global downturn, was largely a result of the increase in the price of its oil and gas exports. The Chinese leadership has displayed great patience and considerable competence at tackling a succession of difficult and elusive problems. At the end of the nineties, for example, the government was faced with three extremely difficult domestic issues: closing a very large number of loss-making state enterprises; overhauling the state banks, which were saddled with a large and rising proportion of non-performing loans, mainly to indebted state enterprises; and strengthening the weak fiscal position of central government. A decade later, the government is well on the way to overcoming these problems, having greatly reduced the problem of indebted state enterprises, transformed the condition of the banking system and improved its own finances. [452]

Figure 12. Economic performance of China and the USSR compared.