How did China get so rich?

[finley]

Where did you get the idea that China is rich?

As a country, China is still poor. The only reason it appears rich is that they were starting from such a rock-bottom baseline that any improvement at all was bound to be spectacular. Sure, there are a few (OK, a lot) of people who own Mercedeseses, or even just Honda Civics. But that doesn't prove anything. Money is easily printed. And the hicks out in the boondocks are still living like peasants, same as they did for all 5000 years of China's glorious history.

As HH says (with slightly less cynicism), it's all smoke-and-mirrors; without any sound underpinnings or actual social progress, it can't continue. Even in our (supposedly) advanced economies, there is a natural cycle of ups and downs (the business cycle being about a decade, and the recession cycle about a century). In China's case, the only reason the upswing has continued for longer than usual is that China is BIG. They have a lot of resources to dig up, a lot of people to exploit, and a lot of leeway for making promises they may or may not be able to keep. They're on the start of a roller-coaster ride, and there's going to be a lot of screaming when they go over the top.

[sulavaca]

I might be naive in asking this, but I live on the mainland (Xiamen), and in the course of a five minute walk I see a dozen S-class Mercs (plus the 7-series, A6s etc).

I'm not bedazzled by it, I'm just wondering. Of course the Chinese are going through an extremely healthy period, economically. I have a rich Chinese friend who says she was only buying the X6 because it gave her face.

Perhaps I am bedazzled, South Africa went through a patch where everybody was buying houses and cars because the banks were throwing loans around. Then went through a dip.

Fill me in. I'm a watcher, an observer. I'd like the dirt. I know some of ya's of quite astute. I read the rags, I trawl the net, I have a couple of rich Chinese buddies. But where does does all this money come from? Owning a factory? Being connected?

Because there are still plenty of working class people. And dirt poor people.

There are some main lines of money flow in China. One is of course the foreign investment company who has decided to move it's manufacturing plants to China, where labour is cheap and where the government is overly accommodating. Then you have the second tier Chinese businessman who has strong connections with the local government. The government offer trillions in grants and loans to local Chinese companies to help improve the local infrastructure, and local businesses benefit hugely from this.
Then you have the third tier money maker who makes his money from local property which has shot up in value because of foreign and local investment.

[tango42]

For every Mercedes there are hundreds of thousands of poor, uneducated, working class, barely making enough to eat people. Put 2 and 2 together.

[headhonchoII]

To be fair China has done a terrific job of creating a large middle class so rapidly. I travel around china and India every year and India is so far behind China economically and infrastructure wise it's not even funny. It does look like India is getting it's act together slowly though with no help from its own government.

The problem in China is more the degraded environment (air quality is terrible in 9/10 cities I visit) and lack of human rights including migrant rights and property rights for farmers.

Right now they are in an economic transition period where the easy gains have been made and where they have binged on too much credit and polluting industry.

[akikaki1]

I think everyone is being to critical of china. for just 30 years they went from eating rice everyday, to eating rice with pork. how is there economy not past ours?



serious note tho for 30 years they have exploded I think around 600-700 million people are now in the middle and upper class. With around 20-25 million joining that group each year. They well rule us and make us pay for how we treated them in the past. we well be forced to learn mando and work in big factories in the US for china. And be shocked when we see the glorius Han speaking english.

[Weinstock]

Bas, were you born yesterday? China had been the richest country in the world for thousands of years. The better question is, how did the west become rich? The answer is simple, through thievery, and genocide. I won't get too much into that because they should have taught you that in school. Mainland China was also able to rise from the ashes because it has an independent economic policy, whereas Taiwan, and Japan do not. The lesson here is that being a puppet state of the west will get you nowhere. If you want to be rich, then you have to be independent. You can't be a puppet state like the UAE and expect to get hand outs from the west, because once the west puts its hand away, then what are you left with?

[tommy525]

In a nutshell China got rich by doing what the USA did , and Japan and Taiwan and Korea. By making tons of stuff that other people buy. By selling more then she spends. Shes got 3 trillion bucks in the bank or so.

She did tricks that others couldnt or wouldnt do and now shes a rich , slighty psycho shiao chieh

[Chris]

They got rich by tossing Communism in the garbage can.

[RealityBites]

I just want to say anybody hating on any successful country is just jealous. Plain and simple. America DID NOT get rich by thievery and genocide! America got it by being smart and expanding industry just like Russia and Japan and China did. Germany pulled genocide and got crushed. America sold weapons to Europe when it was going through WWII and screwing the hell out of their own economies not to mention blowing everything useful to scrap. Its knowing the resources you have and coming up with a plan to use them to gain wealth and power and that's why America's still at the top today.

[Esc1221]

America got rich because it was the only major industrial country not bombed to hell after WWII. We still had infrastructure and a functioning economy. And we made a lot of money using that unique position to rebuild Europe. Our post WWII leaders understood this (until recently) and did the same thing by developing other countries (see saudi arabia, UAE, japan, south korea, etc). Sure we help those countries get developed and live much better, but we also make a ton of cash on the deal too.