China and India–Don’t Believe Everything You Read
November 19, 2010 Leave a comment
This is a very useful review of the successes, failures, weaknesses and challenges in both economies–China and India. Can such systems survive without overcoming the deficiencies of corruption, centralization and rural poverty?
Powerful political families run many Chinese state-owned enterprises. Indeed, there is some evidence that the overwhelming majority of multi-millionaires in China are relatives of high-ranking Communist Party officials. And, thanks to the large pool of savings generated by Chinese households and state-owned companies, the Chinese economy can for the time being bear the waste and misallocation implied by such crony capitalism.
Without political reform, the long-run viability of such a system is in doubt. Premier Wen himself indicated as much in a speech in August that was widely noted abroad, but largely blacked out in Chinese media. The global media should now go further, and begin to examine the many features of the rise of China and India that depart from the simplistic narrative of the triumph of market reform.