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With the Chinese economy slowing and the stock market bubble bursting, debate is raging inside and outside the country over how to ensure the world’s most populous nation remains the biggest driver of global growth.
Probably the only thing all sides can agree is that a return to the collectivist totalitarianism of Maoist economics would be a bad idea. But according to research by a group of prominent economists, maybe Chinese policymakers should not be too quick to rule that out.
In a paper, the four economists, based at the Federal Reserve Bank of Dallas, Princeton, Yale and Sciences Po in Paris, have examined productivity and growth rates in China at the height of the Maoist period and extrapolated those to predict how China would grow between now and 2050 had the country returned to those policies.
They concluded that the abolition of the private sector in China and the return to a command economy would yield an annual average GDP growth rate of 4 to 5 per cent between now and 2050.
That was only about a percentage point less than the average growth rate they predict China will achieve if it continues with market-based reforms that began in the late 1970s and are credited with lifting hundreds of millions out of poverty in only a few decades.
“Our model is essentially an accounting exercise that allows us to uncover the key factors of growth in China during and after the Mao era,” said Aleh Tsyvinski, a professor of economics at Yale and co-author of the report. “The main point of our findings is that, contrary to common misconceptions, productivity growth under Mao, particularly in the non-agricultural sector, was actually pretty good.”
Assuming a continuation of current policies, the paper predicts the Chinese economy will expand by 7-8 per cent for the next 10 years or so, with growth slowing to 5.2 per cent on average between 2024 and 2036 and then a rate of just 3.6 per cent between 2036 and 2050.
That is actually slower than the growth rate of 3.9 per cent it predicts between 2036 and 2050 if China were to return to Maoist policies introduced in the aftermath of the disastrous Great Leap Forward...
The New Legalist editor’s note: The remaining part of the article is just parroting of anti-Mao demonization propaganda without serious studies of China in Mao era. Readers can read on at the source if they are interested. |
