We can dig some useful information from history to understand China. We can know that the reason for their success is that they have adopted the correct economic policy at the right time.
From the Song Dynasty to the middle and late Qing Dynasty, China has always been the economic center of the world. China has made great progress in technological development and is in a leading position in steel production and textile production. Through the Silk Road and maritime trade, China is a major trading partner of all countries in the world.
Since modern times, western capitalist powers have stepped into the imperialist period one after another. They ravaged China in order to open up the market and grab raw materials and capital, leading to China's fragmentation. This is the darkest period in Chinese history.
After the founding of the people's Republic of China, he wisely joined the Soviet Camp, obtained great help from countries in the socialist camp, and initially established a comprehensive industrial system. However, there were many policy mistakes and detours during this period.
The positive significance of the period from 1950 to 1978 is that China has built a strong platform for the take-off of large-scale economic development in the future.
In the late 1970s, China's economic policy changed suddenly, and the form of free economy began to be licensed to allow foreign direct investment. They have established the concept of taking economic construction as the center, and emerging enterprises and foreign direct investment continue to emerge and flow in.
In this kind of economic development, inequality will increase in the initial stage, because there are a large number of cheap labor available. They have established export centers to promote trade, and they have created successful special economic zones such as Shenzhen and Zhuhai.
American and Japanese companies are allowed to build factories through large-scale foreign direct investment. At this stage, China focuses on borrowing the latest technology from these developed countries, prospering trade and setting a record high foreign exchange. They invest in infrastructure and human capital on a large scale. The one-child policy also helps to cope with the pressure of population surge.
Through export and trade, they have formulated the strategy of opening company centers overseas, which has played a dual role in promoting trade and obtaining raw materials from new regions such as Africa. Through export and trade, they have formulated the strategy of opening company centers overseas, which has played a dual role in promoting trade and obtaining raw materials from new regions such as Africa.
China's system can ensure the rapid implementation and implementation of policies. Unlike India, there are constant party disputes, so the policies are paralyzed, interrupted and lack of strong implementation.
China has once again focused its development on human capital, taking into account efficiency equality and quality control, as well as the creation of domestic needs. The five-year plan allows the country to always achieve its goals steadily.
Have you noticed China's macroeconomic fundamentals? During the global recession in 2008, the average unemployment rate rose to 29%, but China has now recovered quickly, only 4%.
Let's start with Japan.
In the 1980s, Japan's economy grew crazily, with an average annual growth rate of 10% - 15%, which was unmatched by other countries. Japan replaced the United States as the world's largest creditor country, and Japan made cars, electronic products, machine hardware and other products all over the world.
At that time, Japan had the highest per capita GDP and disposable income in the world. College graduates had countless job opportunities as soon as they left school. Ordinary white-collar workers could easily buy an apartment in Tokyo.
The economic scale of US $4.9 trillion is second only to the United States, and it is only one step away from the US $7 trillion GDP. Almost every "expert" is predicting that Japan's economy will surpass the United States in a few years
The crazy expansion of Japanese capital made Americans exclaim that "Japan will occupy the United States peacefully!"
But we all know what happened later. A piece of "Plaza Agreement" made Japan enter the "lost 20 years", and its economic development has stagnated since then. But the pressure of the United States is not the root cause of Japan's recession. What's wrong?
The root is that after the Japanese real estate bubble burst, unemployment became the norm of the society. The huge economic pressure left young people breathless. Compared with married children, Japanese young people love to be single.
About 30% of Japanese never married. Therefore, the population began to age rapidly and even began to decline sharply. The problem is that in order to achieve economic prosperity and revitalization, the society needs to continuously provide young and innovative labor force, but at that time, Japan was basically unavailable.
Therefore, in the 1990s, Japan entered a stage of great stagnation, which means that it has almost no growth in the past 30 years. Today, its economy is still hovering around $5 trillion.
In the 1980s, Japan's economic scale was 50 times that of China. Ironically, compared with today's Japan, China's economic scale was three times that of Japan. In only 40 years, many things changed.
Like Japan, every country has its weaknesses. But so far, China has done much better in economic and social development than India.
1. So far, China's economic scale is about US $17.7 trillion, while India's economic scale is US $2.9 trillion, nearly six times that of India.
2. India's foreign exchange reserves are US $631.9 billion and China's are US $3.2 trillion. China's foreign exchange reserves are five times that of India.
3. With strong infrastructure, China has become a powerful country in manufacturing and export, with a total trade volume of more than 6 trillion US dollars.
So far, China is much higher than India in any relevant economic field.
But China's population is also aging rapidly and its talent pool is shrinking, so what happens in Japan is likely to happen in China.
When my Indian compatriots said "even in a dream, India will never defeat China", I couldn't help laughing. Once upon a time, Venezuela was a developed country and Norway was a poor country. The world changed too fast. It didn't take much time to get rich from scratch.
At present, India's potential growth is severely restrained by corruption, excessive government control, pro socialist policies, hostile neighbors such as Pakistan and poor education system, but the situation is improving.
It is not impossible for India to become the third or second largest economy in the world in the next 20 years. Time will tell us whether India will leave China behind. The only thing I can say is that it is not impossible.