Is there still any advantage in China's economic development?

China's economic growth rate has fallen sharply in recent years, from 14% in 2007 to 7% in the second quarter of this year. Such a decline may be quite normal or cyclical to a considerable extent, but it can not help but worry about the long-term growth prospects of China's economy. Is there still any advantage in the future development of China's economy? If so, where exactly?

To answer this question, it is necessary to understand what created China's miracle of an average annual growth of 10% over the past thirty years before the global financial crisis.

Is China's economy an institutional advantage?

Many people believe that this miracle is due to China's strong government actively intervening in the development model of the market economy. But in the past seventy years since the end of the Second World War, countries with similar patterns are in fact few, but few have achieved sustained high growth rates. Only East Asia is an exception. Compared with other developing countries, I think that the East Asian countries (regions) in the system and the policy that no particular advantage - after all, Japan, East Asia, four dragons and China in their period of rapid development, the political and economic system are not the same.

Even if there is any institutional advantage, it should be easy to imitate and learn, otherwise it can not be called "model". It is hard to imagine, seventy years, more than 100 of the world only a few developing countries in East Asian countries (regions) that is most conducive to the economic development system and policy, other countries did not find that even the imitation is not, what are the chances?

The miracle of postwar economic development only appears in East Asian countries (regions). It should not be a coincidence. If it is not the reason of the system, it is not likely to be the geographical or climatic reasons, then it can only be human. As everyone knows, people in East Asia has always been advocating thrift and the importance of education and learning, and it is perhaps this Chinese originated in the common culture, the East Asian countries and regions in the material capital, especially the accumulation rate of human capital and learn the advanced science and technology, more than other developing countries.

Influence of cultural and economic point of view can be traced back to the sociology of ancestor Max Webb, although his Protestant ethic is famous in Western Europe may lead to the rise of capitalism is not entirely correct, but he emphasized the cultural value -- the industrious and thrifty, is conducive to the economic development of this point should be less controversial, but this is precisely the China (East Asia) is one of the important characteristics of culture.

Sociologists and other cultural scholars as early as 1980s that Confucian culture is an important cause of the East Asian economic miracle, but economists' occupation habits, so that they are not willing to admit that the key role of culture in economic development. After all, if Chinese culture is so good for economic development, why does China's economic take-off only take place in the past more than 30 years?

Indeed, a good culture is only a favorable condition for economic development, and no good system and policy will be of no avail. In 1978 the beginning of reform and opening up is clearly an important reason to Chinese rapid rise, but we can not ignore is that many developing countries also introduced the reform and opening up and did not achieve economic take-off!

In fact, most of the developing countries since 1980s have implemented privatization, market-oriented economic reform, however, whether it is the Latin American or African countries over the past two years, the growth rate of thirty and no faster than before the 1980s market reform, in fact more slowly.

Whether it is institutional or cultural, it ultimately affects economic growth by influencing the accumulation of material capital and human capital, as well as the speed of technological progress. The value orientation of Chinese culture directly related to economic growth is only two, one is thrifty, one is the importance of education, the former involves the accumulation of physical capital, which relates to the accumulation of human capital, but also relates to the speed of technological progress.

How industrious are the Chinese people?

It is often said that China's economic development is good because the Chinese people are particularly industrious. But industry itself only affects the level of output, not the growth rate of output. An industrious farmer can concentrate more food every year than a less industrious farmer, but if he does not have his savings, he will not grow any more. Hard work can only lead to economic growth if it is combined with thrift. In the language of economics, the role of thrift is to increase the savings rate, while savings are the premise of capital accumulation, and countries with low savings rates accumulate capital at a slower rate. Those who argue that China should switch to a consumer driven growth model need to brush up on basic economic growth theories. )

Thrifty as China traditional culture this point there should be no controversy (such as "cloud:" thrifty, virtuous altogether; extravagant, big evil "), but other cultures really as China more emphasis on thrift?

According to the results of the World Value Survey, East Asian people seem to be paying more attention to the values of thrift. One of the questions in the survey was: "do you think it's more important to train children to learn the following qualities at home?"" Five items are required in eleven qualities. In the previous survey data of sixty countries (regions) in mainland China, South Korea, Taiwan and China respondents think the proportion of children thrifty quality more important culture is one of the best (the average percentage over the years were 61%, 58% and 57%), the median ratio of only 35% of the nation's lowest. The proportion of only 12% countries of Nigeria.

The people of East Asia do not only pay lip attention to thrift, but also have higher savings rates in real life. With the exception of a small number of countries with a major oil output, the total domestic savings rate of East Asian countries, especially China and Singapore, has been among the best in the world for the past thirty years. According to the world bank, in all developing countries in East Asia and the Pacific region over the past twenty years (1993-2013) the average gross domestic savings rate reached 42%, the Middle East and North Africa region is 27%, 24% South Asian, 19.5% Latin American and Caribbean, and sub Saharan Africa is only 17%.

High savings can speed up the accumulation of material capital, but many economists believe that this is not the most important driving force for long-term economic growth, the role of human capital may be more important. Broadly speaking, human capital includes workers' knowledge, skills, health and even values, but economists usually use educational level as indicators only when measuring human capital. Human capital can not only increase output directly, but also promote the role of technological progress. The technological progress in developing countries depends mainly on the ability to learn the technology already available, which requires a certain level of human capital. Education is the most important way to improve human capital, while East Asian countries pay special attention to education, which is almost recognized by the world.

How much do Chinese people attach importance to education?

However, China (and other East Asian countries) do not stand out from the proportion of public education expenditure to GDP and the length of schooling per capita. However, although most developing countries spend more money on public education in the past few decades, the average number of education per capita has also been significantly improved, but the rate of economic growth has not accelerated. Therefore, some scholars point out that the quality of education is the key to economic development.

The United States Stanford University Hanushek (Hanushek) and the University of Munich Vosman (Woessmann) by two economists at the International (primary and secondary) scores of mathematics and science test data, construct a has more than more than 70 countries, the so-called "cognitive skills" (cognitive skill) index, through the comparison of the same age the students in the same period in education by acquiring knowledge and skills to measure the amount of national education quality (see Table 1).

Table 1, table 1

They found that a country's economic growth rate was positively related to its cognitive skills index. According to their data, all East Asian countries (regions) are among the best in the list, and far ahead of all developing countries.

This could explain why Japan is before World War II industrialization only non western countries after World War II, why in addition to a small number of Europe (including Israel) and other oil-rich Middle East countries only four East Asian economies successfully joined the ranks of developed economies, and why in the past more than 30 years Chinese become the fastest economic growth in the world the country. Table 1. cognitive skills index of some countries (regions)

In fact, not only China (East Asia) students in International Examinations outstanding achievements, that is, living in the west, the Chinese represented by the Asian students, the academic performance is particularly good. Why is that? Are Asian students more intelligent by birth, or are they more diligent?

Found an important study of the University of Michigan professor Xie Yu and his collaborators published in 2014, Asian American students than white students is not the main reason for higher IQ, but more efforts, which in turn with Asian family culture, Asian parents believe the impact of acquired efforts rather than innate intelligence on learning achievement.

From a Chinese cultural point of view, we really emphasize diligence rather than aptitude. Qinnengbuzhuo, etc., God helps those who help themselves Efficiency comes from diligence. idioms are telling the truth. Study assiduously, very studious, allusions are praise or glowworms hard character. This emphasis on hard study culture will eventually be reflected in the children's learning pressure.

According to the Pugh Research Center (Pew Research Center) in a multinational 2011 (21 countries) poll results (see Table 2), China respondents in 68% of the people think that parents give their children learn too much pressure -- the proportion of all countries participating in the survey is the highest; only 11% of people think that parents give their children learning pressure is not enough.

The United States is just the opposite, only 11% of respondents believe that parents give their children too much pressure to study, while 64% of people believe that parents give their children insufficient pressure to learn.

This is not because Chinese or developing, population competition, life stress, and other densely populated developing countries parents give their children learning pressure will be much smaller than China, such as Pakistan, Mexico, Indonesia, the proportion of only 32%, 20% and 13% is not.

Although Japan has long been a developed country, the pressure on students to learn is still great. According to a similar survey conducted by the Pugh center in 2006, respondents in Japan believe that the country is too big for students to study as much as 59%.

Table 2, table 2

Looks like there's no such thing as a free lunch! Research by Professor Xie Yu and his collaborators also found that expectations and pressures from parents, while making American Asian students work harder and do better, were not happier. In fact, Asian students are less psychologically healthy than white students and have a more distant relationship with their parents. Similarly, many students China also sacrificed young people should enjoy the happy time in studying.

In addition to Confucian culture, Jewish culture is also noted for its importance in education. In Judaism two thousand years ago that all father must send them to school when my son was six or seven years old, let the children learn to read the Hebrew Bible, the Jews became the highest literacy rate of the nation before modern times.

The Protestant Protestant culture also attached great importance to education, since Martin Ruud initiated the Protestant reform movement five hundred years ago and asked every Christian to read the Bible himself.

Confucian culture, Judaism and Protestant Protestant Culture make education and hard work a powerful social norm rather than a free choice between families and individuals. Most developing countries do not have written language before colonial rule, let alone school education and examination system, and of course there is no traditional culture that emphasizes education.

Pay attention to the Confucian culture on education and did not let the China become the birthplace of modern science, on the contrary, the imperial examination system and focus on the Confucian classics education is probably an important reason behind the modern science and technology Chinese. But once the cultural spirit of education has been applied to the study of modern science and technology, the power it has burst has made great strides in China in just a few decades.

This is quite similar to the Jewish situation. The Jewish nation is not what contribution to modern scientific revolution, but once they will learn enthusiasm from the religious classics transfer to secular science and technology, after the one or two generation began to emerge in various fields. It is expected that in a few decades, the list of world class scientists will also have a large number of Chinese names.

To praise or criticize the Chinese model overestimates the role of the system

Since Chinese economic development comparative advantage is not Chinese implementation is different from other developing countries what the system and policy, but in the traditional Chinese saving thrift and attaches great importance to education and culture, so whether it is respected or criticism China model views overestimate the role of the system.

Not formed after the reform and opening up the basic system of market economy, no stable political situation, it is not China miracle of economic growth may occur, but compared with most countries, China advantage is not entirely in the system. Of course, changes in economic policy and system may affect economic growth, but in general the normal (non extreme) system environment, compare the advantages of culture may play a more fundamental role in economic growth in Chinese.

That is to say, given the same system, policies and stages of development, China's economy will grow faster than the majority of developing countries because of its cultural advantages. After all, even 7% growth is still the world's leading growth rate - the growth rate of the world's total economy is only 1%, and the growth rate for all developing countries is only 3.5%.

Because of the culture advantage will not disappear in one or two generations, we have every reason to be optimistic about the prospects for the development of China economic future, also have reason to believe that in the foreseeable future Chinese will be like other East Asian economies as well to join the ranks of the developed countries.