tag:blogger.com,1999:blog-17232051.post559972008069757345..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: How China got richNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger37125tag:blogger.com,1999:blog-17232051.post-2137334183191266672015-10-29T07:37:42.125-04:002015-10-29T07:37:42.125-04:00Ignorant question, but I'm confused over the w...Ignorant question, but I'm confused over the words 'money,' 'savings' and 'capital.' I don't know the real savings rate, in terms of cash money, in China. I do know that they invested heavily in infrastructure but they don't book said expenditure as 'deficit' spending. From that point of view, capital can be accumulated without an accumulation of 'savings.' Anyway, I'm confused because I don't believe 'savings' of cash money has much to do with the accumulation of 'capital.' Maybe this is a distinction without a difference, but not from my perspective.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-88211528196299464632015-10-28T09:12:20.496-04:002015-10-28T09:12:20.496-04:00Go away Henry.Go away Henry.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-59678849766575848512015-10-26T23:20:12.608-04:002015-10-26T23:20:12.608-04:00You can save and invest and get zero returns. You ...You can save and invest and get zero returns. You can also get tremendous returns. It is not just about savings, but about how those savings are deployed. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-9465793383674079702015-10-26T18:30:12.247-04:002015-10-26T18:30:12.247-04:00Which is exactly zero practical difference, no?
P...Which is exactly zero practical difference, no?<br /><br />Putting aside China, which was obviously FDI-led catch-up, is there any practical situation where a low-capital country could build capital without importing technology? I really don't think "Solow growth" makes any practical sense if it excludes importing technology.<br />Tom Warnerhttps://www.blogger.com/profile/11247836188106712069noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-7470160348029936892015-10-26T14:06:17.002-04:002015-10-26T14:06:17.002-04:00This comment has been removed by the author.Stephen Cusuloshttps://www.blogger.com/profile/00121210450957373900noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-39762066385131020472015-10-26T14:05:30.942-04:002015-10-26T14:05:30.942-04:00This comment has been removed by the author.Stephen Cusuloshttps://www.blogger.com/profile/00121210450957373900noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-90603157015938668322015-10-26T14:02:07.174-04:002015-10-26T14:02:07.174-04:00I have looked at a chart on the level of urbanizat...I have looked at a chart on the level of urbanization for a number of Asian countries for the year 2014. Philippines 49%; Thailand 49%; Indonesia 53%; China 54%; Malaysia 74%. Malaysia stand out as the most urban society. My question is to what extent has China's urban growth rate be faster that these other countries. Stephen Cusuloshttps://www.blogger.com/profile/00121210450957373900noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-3021419349635630152015-10-26T08:26:36.981-04:002015-10-26T08:26:36.981-04:00In most growing, developing economies, far and awa...In most growing, developing economies, far and away the strongest driver of growth is the urbanization rate. China has been able to drive a faster urbanization rate than any other country in the past, largely due to a command economy structure I/T capabilities to rapidly organize work opportunities for rural immigrants. China is approaching the point where further increases in urbanization will be harder, so of course they are slowing down.Zathrashttps://www.blogger.com/profile/14916717939276205773noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-24266837172592250402015-10-26T00:03:09.763-04:002015-10-26T00:03:09.763-04:00Oops, forgot the notify me.Oops, forgot the notify me.Stephen Cusuloshttps://www.blogger.com/profile/00121210450957373900noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-17441474884012658372015-10-25T23:56:49.436-04:002015-10-25T23:56:49.436-04:00"Increasing returns to scale?...Something abo..."Increasing returns to scale?...Something about Communist Party governance which enabled the corruption to be channeled productively into building more infrastructure rather than holding up progress? Tiger Mom parenting combined with a relatively meritocratic exam system?... " So how would this applied to countries like Thailand, Vietnam, Indonesia the Filipinos and Malaysia. Malaysia in particular. Very different than China in terms of culture, ethnicity, governance, scale, natural resources, . Yet it has transformed itself into a modern society very quickly. Was the pathway to grow for these countries similar to that of China?<br />Stephen Cusuloshttps://www.blogger.com/profile/00121210450957373900noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-57825405637866141472015-10-25T21:53:42.630-04:002015-10-25T21:53:42.630-04:00So a practical policy would be something like this...So a practical policy would be something like this:<br /><br />If your company utilizes labor in another country, you must share your IP with that country.<br /><br />Obviously there's a lot of room for military IP held in the US if US labor is used to produce it.<br /><br />Somebody give me a reason this is not a good policy?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-24018575714697701292015-10-25T21:08:31.779-04:002015-10-25T21:08:31.779-04:00In other words, it isn't just about saving mon...In other words, it isn't just about saving money. It is about developing internal sustainability given the need for external inputs provided by trade.<br /><br />Domestic capital markets cannot be sustainably created without a gift of knowledge regarding current technology and external market requirements.<br /><br />China has almost all US IP in possession. We should have given most of it to them without requiring hacking.<br /><br />Most emerging economies can't compete with the US because of IP. China did it because they stole it. Give it to them.<br /><br />But in addition, the US has enormous buying power in global markets that many emerging economies don't have. Oil for one. Food is another.<br /><br />If we allow companies to profit from foreign economies we should also provide a transfer of other types of capital that allows them to develop on their own to fit in with our global economy. They shouldn't have to depend upon US companies.<br /><br />This goes against everything taught in business school, nevertheless it is the right way to do global business. It is the only ethical way to do global business given our clear advantage in technology and business knowledge.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-42354132652195021612015-10-25T21:08:00.648-04:002015-10-25T21:08:00.648-04:00It's the difference between knowing better roa...It's the difference between knowing better road construction techniques and actually building a bunch of roads using those techniques. Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-6980775125323317212015-10-25T21:07:07.920-04:002015-10-25T21:07:07.920-04:00Thanks!!Thanks!!Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-91374975292985221382015-10-25T20:50:02.174-04:002015-10-25T20:50:02.174-04:00I think this depends upon what you call capital. ...I think this depends upon what you call capital. Is financial capital the only important capital?<br /><br />Clearly foreign capitalists provide a lot more an financial capital. They provide access to markets, worker knowledge and business knowledge. None of these are easily shared.<br /><br />It isn't just financial capital that builds foreign economies. In fact, financial capital is useless without the other connections to markets, both global and domestic.<br /><br />Capital is not just about money. The main deficiency in most emerging economies is the proper ratio of intelligent capitalists vs. financial capital.<br /><br />Our current model assumes that our money is what powers foreign economies. Not true. The main power is in our knowledge and our market power to other inputs.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-30890103334335527122015-10-25T18:27:10.728-04:002015-10-25T18:27:10.728-04:00I think capital accumulation via financial repress...I think capital accumulation via financial repression is underrated as a development tool. Forcing up savings and investment. Obviously if the capital is just completely wasted it's a disaster, but even the USSR managed to find things to invest in until the 1970s. Singapore, with some slightly nepotistic government corporations driving investment, has reach a per capita GDP of $75k and is still going. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-90341020024120093862015-10-25T14:32:23.962-04:002015-10-25T14:32:23.962-04:00The usual way an undeveloped nation exploits the g...The usual way an undeveloped nation exploits the gradient between its internal conditions and the world market is by selling its labor and resources, but the profits from these are usually spent on symbolic goods. The money goes for palaces, decorative armies, art collections, and exotic financial instruments. It might show up in the national accounts as capital accumulation, and it will produce income for the elite who commerce in it, but it will not increase the productive capacity of the nation.<br /><br />Historians often note that Rome built an empire, but China built a nation. China's leadership, for all its autocracy and corruption, is nationalistic. That means that the government can plow money into infrastructure and business leaders are forced to plow money into capital plant. A businessman who starts impinging on government prerogatives will find himself slapped down, broke, in exile or worse.<br /><br />In the west, we are no longer nationalists, so we have an ideology of minimal taxation and government spending that cripples our economic development. We have a wealthy elite that trades symbolic goods which have been subject to an ongoing inflation. Look at the prices of market center apartments, fine art paintings or corporate ownership. (Twenty years ago I put my money where my mouth is on this and I've profited handsomely. I do see this inflation slowing, but not ending any time soon.)<br /><br />There is nothing racial about China's economic success. The sheer size of China and the large gradient meant that it could maintain a high rate of growth for decades. The gradient has been decreasing, so one would expect the rate of growth to decrease without some form of internally driven stimulus. China does not have an overseas empire or large chunks of land to divide, traditional stimulus techniques. However, it does print its own money. It could take the obvious next step to maintain its growth levels, but that has serious political risks.<br />Kaleberghttps://www.blogger.com/profile/05283840743310507878noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-22710476870420115092015-10-25T13:17:54.480-04:002015-10-25T13:17:54.480-04:00Seconded.Seconded.pithomhttps://www.blogger.com/profile/13997094225496018110noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-57723847313151003842015-10-25T13:00:48.998-04:002015-10-25T13:00:48.998-04:00Also I don"t understand the distinction you&#...Also I don"t understand the distinction you're trying to make between a behind country accumulating capital and importing technology. The two are always one and the same and I don't think there was any intent by Solow to distinguish.<br />Tom Warnerhttps://www.blogger.com/profile/11247836188106712069noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-7868375536927027542015-10-25T08:58:41.155-04:002015-10-25T08:58:41.155-04:00Did China decide that if China builds it, they wil...Did China decide that if China builds it, they will come; or did they come, so China decided to built it. I'm not an economist (I received an undergraduate degree in economics in 1973, when the teaching of developmental economics was devoted mostly to theory (comparative advantage, etc.), and those interested in the subject were economists like JKG), so I don't default to models for an explanation of all economic phenomenon, including the extraordinary story of China. An historian might suggest a connection to the cultural revolution: if not for the CR, China may not have changed course so radically and quickly. Or does my allusion (if they built it) an important factor? My comment at MR was that it was a perfect storm: China's capital investment coincided with western firm's (i.e., U.S.) decision to betray U.S. labor and shift production overseas and the anti-tax movement in the U.S. which allowed U.S. firms to avoid U.S. tax with schemes with little or no substance. Anyway, I'm a regular reader of MR and as everyone else who is a regular reader knows the blog posts have an ideological slant. That's not a criticism but an observation; indeed, an ideological slant can be right.raywardhttps://www.blogger.com/profile/03723450690502187828noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-89953102320534189512015-10-25T08:53:43.068-04:002015-10-25T08:53:43.068-04:00"...It is well known for instance that China&..."...It is well known for instance that China's exports are especially technologically sophisticated for the country's per capita income (see Rodrik). How did that happen?..."<br /><br /><br />[I just cannot figure what Cowen is questioning. Is it that there is too little production of technology goods under US patents being produced in China by Foxconn or that there is too much or just that Foxconn underpays Chinese workers? Then one could ask the same question about GE as Foxconn but Foxconn produces exclusively "technologically sophisticated" goods and I am not sure if GE washers and dryers qualify. Multinational firms were exporting capital to China in their offshoring initiatives. So, domestic capital accumulation was only part of the capital formation for offshoring of MNCs production. ] Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-11778336276249179962015-10-25T08:07:00.654-04:002015-10-25T08:07:00.654-04:00I don't know about mainstream economists but h...I don't know about mainstream economists but historians and development economists have long asked why have East Asian economies moved to the frontier before African and South American ones did. Cultural factors are likely to play some role. But so are other things: eg the effects of European colonialisation. (I stress European; Japanese colonisation of East Asia was very different in nature to that of the Europeans.) There is also agreement that important things happened in both China and Japan when they were closed economies, and they way they transited into the global one which are important in understanding their successful industrialisation.<br /><br />This is an area better understood by historians and area specialists - you really need good linguistic and other skills. Look at this and consult them before you think about models or neo-classical theory - that is the least important thing to get what happened.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-70170563016546357002015-10-25T01:26:56.404-04:002015-10-25T01:26:56.404-04:00This seems mostly a misunderstanding of a somewhat...This seems mostly a misunderstanding of a somewhat confusing Tyler post. But without disputing your points re 1/4 of the frontier or Japan, there's obviously something to the view that 1980 China had a store of submerged cultural economic proficiencies. Likewise there's a reason why Chinese people are on average wealthier than others in SE Asia. To start with, on average they work harder and save more.Tom Warnerhttps://www.blogger.com/profile/11247836188106712069noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-57996669694600324442015-10-24T22:56:07.335-04:002015-10-24T22:56:07.335-04:00It's the note in the essay, NBER WP21397, from...It's the note in the essay, NBER WP21397, from July, http://www.nber.org/papers/w21397. (I'm not Unknown, from above, fwiw.)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-15201632642147562262015-10-24T22:35:16.139-04:002015-10-24T22:35:16.139-04:00While transforming Japan from a feudal farmer soci...While transforming Japan from a feudal farmer society to an industrial one was impressive, the actual rates of growth of the Japanese economy in the Meiji period were lower than in the post war period. Anonymousnoreply@blogger.com