I do believe that buying China in 2009 is like buying America in 1909. So it was with some trepidation that I began reading Yasheng Huang’s Capitalism with Chinese Characteristics, expecting to have my bullish beliefs shattered. Why did I expect as such? A number of fellow China enthusiasts had warned me off the book, claiming it would be nothing but anti-Sino propaganda. As far as I was concerned their claim was like a red rag to a bull – I love having my assumptions challenged. However, Huang’s detractors were simply wrong!
If anything Professor Huang has provided a subtle, intelligent and nuanced account of Chinese growth since 1978. The book’s subtitle says it all: “Entrepreneurship and the State”. Throughout his work, Huang stresses the grass roots entrepreneurial spirit of the Chinese population as one of the main drivers of Chinese economic development.
The author dispels the myth that growth and entrepreneurship can be nurtured without protection of property (and body), and ease of access to capital. He highlights the 80s as the decade in which these characteristics persisted and allowed rural entrepreneurs to grow their businesses in China, as opposed to the commonly held myth that Chinese growth was primarily driven by the mass urbanization of the 90’s, and directed from above. If anything, there is nothing ‘magical’ or unique about the framework surrounding China’s success – those years in which the state provided breathing space for individuals and their businesses together with ‘hints’ of legal protection were the most fruitful.
Huang considers China’s current leadership more likely than any since 1990 poised to foster policies and rhetoric likely to re-kindle the spirit of the 80’s grass root growth. However only time will tell.
One more thought – as a professional equity research analyst I appreciated the imaginative, innovative, and non-dogmatic approach with which Huang approaches the data and subject of Chinese market reforms. In addition, I believe one must question the impact the Government’s stimulus package is likely to have in the long-term if policies are not in place to capitalize on such spending at the grass roots.
Link to the book on amazon: