As much as I enjoyed my national pride during the Olympic games, this article still surprises me on how much simplification and misinterpretation this so-called “economist” put on the growth of China’s economy. Even though the author didn’t put “government-run economy” explicitly ( I noticed that he intentionally replaced “government” with “nation” at most places), the author was trying to indicate that US should take China as an example for “national investment, planning, concentrated state power, national mobilization and hard work”, basically call for a Roosevelt’s New Deal like “change” in US, which was absolutely in the opposite direction of what really happened in China.

Since late 70’s, China’s economic growth benefited from: very low tax on businesses in specified “open” regimes, mostly coastline cities including Shanghai; tax-free zones for foreign companies to attract investment and technology; and very cheap and abundant labors. On the contrary, in the vast inner land of the country, mostly rural areas and the part the author was trying to avoid discussing, where there were still high tax and all kinds of fees no stimulation for business to develop and grow, peasants were living with bare minimum necessities and couldn’t afford feeding their families sometimes. The poor in US who live on government welfare programs or “minimum wage” would never be able to imagine what “poor” living conditions really are. Those peasants have been driven out of the villages to look for jobs in coastline cities for survival, which of course added to the labor force the booming businesses there needed.

And talking about “national investment”, aka, government-run business, and planning economics, there has been a major collapse of state-owned business in China since early 90’s during a failed attempt of central government of “transforming” those companies into “share holder owned” businesses.  Why a power-savvy central government even started to try that? Because most of those companies were already in paralyzed status anyways when they started to face the competition from foreign companies and private business. It proved that any state-run business were very inefficient and corrupted and unable to face the competition from private business. Today in China’s market, stated-own companies mainly concentrated in monopoly areas like communication and energy, in consumer industries, the dominant force is foreign (or so-called multinational) companies, with bit and piece of private companies. Thanks to Obama’s future “blueprint” too, even more business will be driven there with imposed “windfall” tax, green-house gas tax and universal health care burden in US.

Were China still sunk in ““national investment, planning, concentrated state power” economically (politically I think it’s still true), we would still be mostly living hand-to-mouth and no where close we would be enjoying and celebrating the Olympics like today.

Were there any lesson US could learn from China’s economic growth, there is only a simple and classic capitalistic one: free market and low tax boom business and improve people’s living overall.  Obama might be well fit as a “leader” for China in the 60’s ( I bet Chairman Mao would have been very happy to select him as his heir with the tightly-synced ideas and his eloquent speech skills), but not for US today.