Yesheng Huang's Capitalism with Chinese Characteristics: Entrepreneurship and the State offers a startling but welcome alternative analysis of China's development over the past 15 to 20 years. Huang argues that China has embraced a statist-run model that favors urban development over rural development, and offers persuasive evidence for the proposition. Even the prevailing analysis of Chinese growth acknowledges that rural China lags far behind the major cities. Indeed, you don't have to travel many miles from a major city to feel like you've been put in a time machine and transported back to either a feudal or peak-Maoist period.
I've done business with China since I was a young lawyer and the Foreign Investment Law was brand new. I have been a direct participant, albeit in a small way, in China's growth through handling many transactions and a keen observer of the many changes in China since the doors opened for foreign business in 1979. However, despite acknowledging obvious and impressive growth, I can't help but observe that there is a shallowness and hollowness to some of what China has ostensibly accomplished in the past 10 years or so. Hundreds of gleaming skyscrapers sitting empty or near empty in major cities isn't much different than the earlier large-scale production of things nobody wanted by state-owned factories operating under state-mandated production plans. Unless China takes significant (and fairly immediate) action to promote development of its vast rural sector and to improve conditions for its still vast population of rural poor, there is a substantial risk that China will spasm both economically and politically with potentially disasterous consequences for itself and the world.
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