by Paul Wallis

Created on: March 01, 2007   Last Updated: November 26, 2010

THE CHINESE ECONOMY; SUPERDRAGON

There's a logic to China that would make a fiction writer cringe. The huge advances of the last decade have come against the most appalling history. Chinese economic history since the fall of the Qing Dynasty until recently has been one of the great horror stories of all time. After Dr. Sun's revolution, the nation fragmented so badly that the economy, outside the foreign concessions, fell to pieces. The Kuomintang, the supposed "successors" to Dr. Sun, were even worse managers. By the time of the Japanese invasion China had made even Germany's maimed economy during the Depression look healthy. During the war and before the Communist takeover, China's economic strength consisted largely of American loans, and related corrupt incomes.

The next phase was another exercise in human misery. The Great Leap Forward Over The Nearest Available Cliff was arguably the single greatest collection of the worst economic policies of human history, futile in a sense the word was never intended to describe. The scatterbrained, ideologically perverted economics virtually ruined China, yet again. The only good thing that came out of this socioeconomic dance of death was the recognition of total failure, long overdue, but convincing.

Ironically, the original intention of the revolution which overthrew the Qing had been to modernize China, and restore some dignity and credibility to Asia's biggest geriatric case. This underlying theme, buried under the cynical politics and endless corruption of the following seventy years, had never really gone away. Even those so enthusiastically destroying China had spouted the doctrine. The Japanese had done it, why not China? The Chinese had a terrible economic legacy from the decades of suffering and neglect. Ridiculously out of date industries, technologies, infrastructure, virtually the entire inventory of a modern economic state, were missing. While Japan boomed, China's murderously heavy load of problems was being dealt with.

Fortunately for China, its most useful and reliable resource is historically its people. Offshore, Taiwan rested in its doze of Kuomintang senility. Its industries were too small to compete with Japan on the same scale, but they were modern and highly productive. Costs were tough and competing with the super efficient Japanese boiled down to cost. Simple solution: they could produce far more cheaply in China and bring their modern methods with them. For once, politics wasn't an obstacle.

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