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The Chinese economy took off and without privatization

Китайская экономика взлетела и без приватизации

The fundamental difference of Chinese reforms from the Russian was not only slow and partial deregulation, but the lack of privatization

China at the beginning of economic reforms in the 1980s were ruled by very different people than postsovok. The backbone of the then Chinese leadership is a natural, guerillero, guerrilla commanders. Ie young they all really were running with a rifle in the mountains, fought with the Kuomintang and local warlord’AMI writes in FB historian Kamil Gareev.

Why did it happen? Mao we have demonized, but his repression was very different from Stalin: they are not particularly thin out the leadership of the party. Ie guerrilla commanders rejected everywhere, jail, sent to clean up the manure of pigs but mostly NOT KILLED. After his death they returned to power. So the leaders of China in 1980 – people:

1) Violent and used to violence;

2) Initiative. This is not the Akaki Akakievich, who ruled the Soviet Union, which throws the responsibility on each other and eventually not capable of giving the simplest orders;

3) Very intelligent.

They tried to build a planned economy. It turned out so-so. That means we need to try something else. May be, to consult with the Americans? In 1980 in China came Milton Friedman and began to insist on the immediate implementation of measures, later dubbed the Washington Consensus. Privatizacija, deregulation, and austerity, release prices, etc.

And then the unexpected happened: he was sent… And not so much due to differences in the macroeconomic views, but because of fear of social consequences the immediate economic liberalization. In the end, the world Bank and the IMF have changed their line of conduct in relation to China. When they realized that to push their line does not work, they adopted the demand-driven approach. I mean, we’re not going to impose, but upon request, willing to help and advise. This is RADICALLY different from the policy postsovka and the main reason for this was initially a tough reaction of the rulers of China.

The fundamental difference of Chinese reforms from the Russian was not only slow and partial deregulation, but the lack of privatization. The importance of this fact cannot be overstated. Mass privatization inevitably gives the property in the hands of thieves, bandits and corrupt officials – differently simply can not be. Received due to corrupt ties (or, in softer, lobbying resources), state property they will invest the proceeds in the expansion of those ties, to continue to monetize them and new. Ie develops a vicious circle, out of which still more than 30 years later – is not visible.


In China, where privatization was not, capitalism evolved somewhat differently. There is no doubt he is crony, no doubt – let’s take the example of Huawei, which is now raging around the scandal. Its founder Ren Zhengfei, was a big shot in the engineering building of the Chinese army: suffice it to say that he was one of the delegates to the XII Congress of the CPC (where, by the way, and adopted the word of “socialism with Chinese characteristics”). And his wife had been difficult – the daughter of the Governor of Sichuan province. We can assume that both, greatly helped Janvey in obtaining orders at first. Nevertheless, this example demonstrates the fundamental difference between China and Russia. Yes, Zhengfei is likely to receive orders via their connections, both professional and family. But these orders were placed not on bought for half a penny of state capacities, and new institutions created from scratch. You can call dozens of Chinese billionaires created something completely new that industry, what’s in IT.

Many of these names can be called in Russia, with its oligarchs, continue to parasitize on the Soviet heritage? I believe that the reason for this – birth trauma privatization, for decades corrupted the nascent capitalist class in Russia. Time big earning at the expense of ties to the state apparatus, the Russian capitalists continue to reproduce this scheme further.



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