Blog 11/12

I found Mary Gallagher’s article to have great deal of fascinating information regarding the structure of the Chinese economy. In particular, I found her comparison of the Chinese economic path and the quite disparate road to economic success taken by Taiwan and Korea to be very interesting. As Gallagher demonstrates, Foreign Investment has brought China to prominence, but the path taken by Taiwan and Korea focused on domestic business and growth stimulated from within the country. In those countries the shift from socialism involved close cooperation between the state and entrepreneurs to ensure that the country’s people benefitted. As Gallagher describes, this led to widespread independent business interests whose mere existence began to cause authoritarian regimes to be “untenable”. China’s system was far different. Because the capital to create economic growth was coming from private interests outside the country, entrepreneurship in China didn’t develop as it did in its East Asian neighbors.  As far as the Chinese Government is concerned this works perfectly. There is a great deal of economic development and the society benefits because there are lots of jobs to be had. Citizens in China have access to jobs, but not ownership in businesses that are driving the economic progress in that country. As such there isn’t the same conflict between private business interest and state control. China has brought itself economic progress while managing to delay its political progression toward democracy. It could be argued that this has been done at the expense of its citizens, since foreign nations are benefitting from the investments they make in China, rather than the citizens benefitting from the private markets in their own country as is the case in Taiwan and Korea.