Demystifying China

For westerners, China's history is often reduced to a choice between timeless Confucian ideals or incomprehensible barbarisms such as footbinding or mass slaughter, fueled by generalizations such as "China has five thousand years of history," "China was a Confucian society," "Chinese women were victims," "China is a communist country," and many more. But China is now too globally important to allow such oversimplifications to continue unchallenged, and this engaging and deeply knowledgeable volume counters them vigorously. In concise and accessible style, the contributors scrutinize a range of historical misconceptions that have ramifications for the present and future of China and its relations with the rest of the world. They consider how misunderstandings have arisen and present more sophisticated and nuanced interpretations. Readers will learn how numerous popular beliefs about China's history are mistaken and what new interpretations can help build the more accurate understandings of present-day China that we so badly need. By explicitly addressing common misconceptions, the book persuades readers to reexamine their assumptions about China's history--and thus China in general--and begin to see it as a real rather than largely imagined place. Contributions by: Elif Ak etin, Bridie Andrews, Tim Barrett, Felix Boecking, Michael C. Brose, Marjorie Dryburgh, Imre Galambos, Stanley E. Henning, Christian Hess, Clara Wing-chung Ho, Judd Kinzley, Fabio Lanza, Peter Lorge, Julia Lovell, Rana Mitter, Barbara Mittler, Ruth Mostern, Peter C. Perdue, Hai Ren, Andres Rodriguez, Tansen Sen, Elliot Sperling, Naomi Standen, Wasana Wongsurawat, and Ling Zhang.

A distinguished Chinese economist offers a timely, essential exploration of China’s perspective on economy, government, society, and its position in the world. Dr. David Daokui Li has served as an advisor to senior Chinese Communist Party leaders as well as major multinational corporations and international economic institutions. Writing in response to the growing anti-Chinese sentiment and alarmed by the threat of war, Dr. Li pulls from his wealth of firsthand experience to demystify contemporary Chinese society and advocate for understanding between China and the West. In this urgently needed and fascinating book, he explains the inner workings of a rising superpower to help the world understand how it works—and how to work with it. In Li’s hands, an economic and political system that often baffles Westerners becomes coherent, sophisticated, and logical. He begins by explaining how two thousand years of history—from Confucian philosophy and ancient imperial dynasties to Communist Party chairmen from Mao to Deng Xiaoping—profoundly influence China’s leadership today. Li brings the reader into high-level meetings he attended with figures including Xi Jinping, showing China’s approach to governance. Many Westerners imagine that China’s economy and society are as rigid and ideological as Soviet Russia. In his far-reaching exploration of the Chinese economy—from state-owned enterprises, private businesses, the stock market, education, media and the internet to real estate, the environment, and much more—Li reveals that China’s economy and society are in fact diverse, dynamic, and flexible. In demystifying contemporary Chinese society, Li helps readers reconceptualize contemporary China and the implications of its growth. He asserts that China’s rise will be beneficial for the global order, holding out the hope that with shared understanding and mutual learning the Chinese and Western systems will eventually find a way to peacefully coexist.

An insightful account of the remarkable transition of the Chinese economy from impoverished backwater to economic powerhouse.

This new book examines the structural forces behind mega trends in China, refuting conventional wisdom and demystifying media and market hypes about business opportunity and policy. It uses rigorous economic research and evidence to provide a new view of mega trends in China, and expose new trends and problems that will affect China and the World.

China's extraordinary economic development is explained in large part by the way it innovates. Contrary to widely held views, China's innovation machine is not created and controlled by an all-powerful government. Instead, it is a complex, interdependent system composed of various elements, involving bottom-up innovation driven by innovators and entrepreneurs and highly pragmatic and adaptive top-down policy. Using case studies of leading firms and industries, along with statistics and policy analysis, this book argues that China's innovation machine is similar to a natural ecosystem. Innovations in technology, organization, and business models resemble genetic mutations which are initially random, self-serving, and isolated, but the best fitting are selected by the market and their impacts are amplified by the innovation machine. This machine draws on China's multitude manufacturers, supply chains, innovation clusters, and digitally literate population, connected through super-sized digital platforms. China's innovation suffers from a lack of basic research and reliance upon certain critical technologies from overseas, yet its scale (size) and scope (diversity) possess attributes that make it self-correcting and stronger in the face of challenges. China's innovation machine is most effective in a policy environment where the market prevails; policy intervention plays a significant role when market mechanisms are premature or fail. The future success of China's innovation will depend on continuing policy pragmatism, mass innovation, and entrepreneurship, and the development of the 'new infrastructures'.

China's rise is altering global power relations, reshaping economic debates, and commanding tremendous public attention. Despite extensive media and academic scrutiny, the conventional wisdom about China's economy is often wrong. Cracking the China Conundrum provides a holistic and contrarian view of China's major economic, political, and foreign policy issues. Yukon Huang trenchantly addresses widely accepted yet misguided views in the analysis of China's economy. He examines arguments about the causes and effects of China's possible debt and property market bubbles, trade and investment relations with the Western world, the links between corruption and political liberalization in a growing economy and Beijing's more assertive foreign policies. Huang explains that such misconceptions arise in part because China's economic system is unprecedented in many ways-namely because it's driven by both the market and state- which complicates the task of designing accurate and adaptable analysis and research. Further, China's size, regional diversity, and uniquely decentralized administrative system poses difficulties for making generalizations and comparisons from micro to macro levels when trying to interpret China's economic state accurately. This book not only interprets the ideologies that experts continue building misguided theories upon, but also examines the contributing factors to this puzzle. Cracking the China Conundrum provides an enlightening and corrective viewpoint on several major economic and political foreign policy concerns currently shaping China's economic environment.

This year, the NBER Macroeconomics Annual celebrates its thirtieth volume. The first two papers examine China’s macroeconomic development. “Trends and Cycles in China's Macroeconomy” by Chun Chang, Kaiji Chen, Daniel F. Waggoner, and Tao Zha outlines the key characteristics of growth and business cycles in China. “Demystifying the Chinese Housing Boom” by Hanming Fang, Quanlin Gu, Wei Xiong, and Li-An Zhou constructs a new house price index, showing that Chinese house prices have grown by ten percent per year over the past decade. The third paper, “External and Public Debt Crises” by Cristina Arellano, Andrew Atkeson, and Mark Wright, asks why there appear to be large differences across countries and subnational jurisdictions in the effect of rising public debts on economic outcomes. The fourth, “Networks and the Macroeconomy: An Empirical Exploration” by Daron Acemoglu, Ufuk Akcigit, and William Kerr, explains how the network structure of the US economy propagates the effect of gross output productivity shocks across upstream and downstream sectors. The fifth and sixth papers investigate the usefulness of surveys of household’s beliefs for understanding economic phenomena. “Expectations and Investment,” by Nicola Gennaioli, Yueran Ma, and Andrei Shleifer, demonstrates that a chief financial officer's expectations of a firm's future earnings growth is related to both the planned and actual future investment of that firm. “Declining Desire to Work and Downward Trends in Unemployment and Participation” by Regis Barnichon and Andrew Figura shows that an increasing number of prime-age Americans who are not in the labor force report no desire to work and that this decline accelerated during the second half of the 1990s.

Mainstream research has rationalized China’s stock market on the basis of paradigms such as the institutional approach, the efficient market hypothesis, and corporate valuation principles. The deviations from such paradigms have been analyzed as puzzles of China’s stock market. Girardin and Liu explore to what extent, in the perspective of Chinese cultural and historical characteristics, far from being puzzles, these 'deviations’ are rather the symptoms of a consistent strategy for the design, development and regulation of a government-dominated financial system. This book will help investors, observers and researchers understand the hidden logic of the design and functioning of China’s modern stock market, taking a political economy view.