Demystifying the Chinese Economy

Description

China was the largest and one of the most advanced economies in the world before the eighteenth century, yet declined precipitately thereafter and degenerated into one of the world's poorest economies by the late nineteenth century. Despite generations' efforts for national rejuvenation, China did not reverse its fate until it introduced market-oriented reforms in 1979. Since then it has been the most dynamic economy in the world and is likely to regain its position as the world's largest economy before 2030. Based on economic analysis and personal reflection on policy debates, Justin Yifu Lin provides insightful answers to why China was so advanced in pre-modern times, what caused it to become so poor for almost two centuries, how it grew into a market economy, where its potential is for continuing dynamic growth and what further reforms are needed to complete the transition to a well-functioning, advanced market economy.

Justin Yifu Lin is Senior Vice President and Chief Economist of the World Bank. He obtained his PhD in economics from the University of Chicago in 1986 and returned to China in 1987, the first PhD in social sciences to return from abroad after China started economic reform in 1979. He was the founding director of China Center for Economic Research at Peking University from 1994 to 2008 and is the author of seventeen books, including The China Miracle (1996), State-Owned Enterprise Reform in China (2001) and Economic Development and Transition (Cambridge, 2009).

'No one knows the Chinese economy better than Justin Lin, and there's no one better placed to describe its essential workings. A unique perspective on the Chinese miracle from a unique perch.' Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley 'Justin Lin's Demystifying the Chinese Economy is a tour de force. The book succeeds at many levels. It presents a broad historical perspective over two millennia of the rise, fall, and the dramatic resurgence of Chinese economic power. It presents an analytically informative study of the sources of Chinese economic growth and the prospects of growth for the future. Lin formalizes the successful pragmatic Chinese approach to economic development using his insightful notion of 'Comparative Advantage Following (CAF)' strategies. The book challenges many tenets of conventional neoclassical theory and shows how naive application of many of its principles had catastrophic consequences for many transition economies.' James J. Heckman, Winner of the 2000 Nobel Prize in Economics, and Henry Schultz Distinguished Service Professor of Economics, University of Chicago 'This book considers fundamental questions about the great transformation of China from a poor underdeveloped country to a global leader in modern economic growth. These are among the most important questions of our time, and Justin Lin has the best credentials to help us understand them. In this book, he offers a new and important perspective on the conditions for modern economic development in China and the world.' Roger Myerson, Winner of the 2007 Nobel Memorial Prize in Economics, and Glen A. Lloyd Distinguished Service Professor of Economics, University of Chicago 'This clear and insightful study of the origins of China's failures and, finally, its extraordinary success will be must-reading for anyone who wants to understand Chinese development. An important book and much overdue.' Edmund S. Phelps, Winner of the 2006 Nobel Prize in Economics, and McVickar Professor of Political Economy, Columbia University 'Informative and insightful ... it comes from what is a depressingly rare intellectual stance.' Martin Wolf, Financial Times 'This is the best book on China's economy that I've read ... the country's communist leaders would be wise to heed Lin's advice.' Bloomberg.com 'A better guide to the Chinese economy, both from a historic and a current aspect would be hard to find ... The scope and penetration of this relatively short book is amazing.' Financial Adviser