Deng got one thing right: that China had to reform. But he had no idea how, and he was too old. He basically just said: tried it, and chose to rely on young generations to pull it off. Hu Yaobang was part of the revolutionary generation (he was a kid on the long March), his main credit was rehabilitating old cadres and encouraging free discussion; Zhao Ziyang also belonged to this generation. He was more like a Chinese Gorbachev, looking good to the outside, but essentially not able to make the tough decision at the right moment; Li Peng, nobody liked him; Jiang Zemin, a jovial No.1, very flexibly-minded, he set the stage and delegated authority of economy to the guy, Zhu Rongji, who in my mind ranked almost at the same level as Deng in terms of historical importance, and was one of the maybe Top 5 great reformers in the long history of entire China. (Bear in mind, a successful reform is hard for this nation. Things usually ended up in violent collapses and revolutions)
The new china play book by Keju Jin, the china chapters in chip war also has some political economy on china by Chris Miller, and Arthur Kroeber's book China's economy
Thanks, that’s interesting. S Korea also borrowed from the IMF. I assume they implemented all the IMF reforms and turned out to do OK? That said, perhaps there is a legitimate issue about whether S Korea could have recovered with less pain to its most vulnerable population if they made more gradual reforms.
I think another “model” is Malaysia (where I am at now) which went against IMF and imposed capital controls. I understand even the IMF today acknowledges that Malaysia did the right thing! 😀
When Bangladesh went to the IMF in 2022/23 for a 4.5 billion dollar loan, I think Hasina has a similar strategy to Deng. Borrow money as a buffer to last till the election and then she can use the IMF to push some deregulation and tax reforms. I guess that didn't work out for her.
With the benefit of insight I she should have just let herself lose the 2024 election. Force the BNP to do the IMF reforms and come back to power in 2029 with the nostalgia for the 2010s.
1) "Interestingly, during the Deng era, there was even consideration among political elites to drop the “communist” label altogether!"
Reminds me of this quote, spoken upon being questioned about the contradictions between Marxist ideology and free market reforms: "We are the Communist Party and we will decide what communism means." - Chen Yuan, China Development Bank
The CPC kept the "communist" label and then redefined what it meant.
2) "Through a clever use of soft power in the non-Western world — giving aid to countries like Zambia & Tanzania and providing doctors to other to countries like Afghanistan, Chile, & Turkey, even when his own people were starving — Mao was able to shore up international legitimacy from most of the non-Western aligned world in Africa & Asia. "
Genius diplomatic move. Mao recognized that the UN is one country, one vote. Africa has the most countries of any continent in the world, so China recognized the value of Africa long before anyone in the West did.
Banking transactions are a fundamental part of our financial system. These transactions allow individuals, businesses, and governments to transfer money, pay bills, and manage their finances. Understanding how these transactions work is essential for anyone who uses banking services.
The basic process for a banking transaction involves two parties: the sender and the recipient. The sender initiates the transaction by providing the bank with instructions on how to transfer the funds, such as the recipient's name, account number, and the amount to be transferred. The bank then verifies the sender's identity and confirms that there are sufficient funds in the sender's account to complete the transaction.
Once the transaction is authorized, the bank deducts the funds from the sender's account and transfers them to the recipient's account. This process is typically done electronically, through the bank's internal systems or through a network of financial institutions.
There are several types of banking transactions, including:
Deposits: When an individual or business places money into their bank account. The bank records the deposit and updates the account balance accordingly.
Withdrawals: When an individual or business takes money out of their bank account. The bank deducts the amount of the withdrawal from the account balance.
Transfers: When an individual or business sends money from their account to another account within the same bank or a different bank.
Payments: When an individual or business pays a bill or makes a purchase using a debit or credit card. The bank deducts the amount of the payment from the account balance.
Loan disbursements: When a bank disburses a loan to a borrower. The bank transfers the loan funds to the borrower's account or issues a check.
Loan repayments: When a borrower repays a loan to the bank. The bank records the repayment and updates the loan balance accordingly.
To ensure the safety and security of banking transactions, banks use various security measures, such as encryption, two-factor authentication, and fraud detection systems. These measures are designed to protect against unauthorized access and fraudulent transactions.
In addition, banks are subject to strict regulations and oversight by government agencies to ensure that they follow sound banking practices and comply with all relevant laws and regulations.
In summary, banking transactions involve the transfer of funds from one account to another. The process involves two parties, the sender and the recipient, and can include various types of transactions, such as deposits, withdrawals, transfers, payments, loan disbursements, and loan repayments. To ensure the safety and security of these transactions, banks use various security measures and are subject to strict regulations and oversight.
Rather than "socialist market economy" I always refer to and think of China as a fascist economy, as the parallels with the overall structural dynamics of the German economy in the 30s are often very close.
China's rise and rise after Mao's (welcome) death proves once again: their communists are a lot smarter than our communists!
Great work. I also recommend a deep reading of Zhu Rongji. If Deng was the “architect” of gaige kaifang, the Zhu was its true engineer.
I am glad you approve! Thanks for the tip, I'll definitely read on Zhu Rongji!
Deng got one thing right: that China had to reform. But he had no idea how, and he was too old. He basically just said: tried it, and chose to rely on young generations to pull it off. Hu Yaobang was part of the revolutionary generation (he was a kid on the long March), his main credit was rehabilitating old cadres and encouraging free discussion; Zhao Ziyang also belonged to this generation. He was more like a Chinese Gorbachev, looking good to the outside, but essentially not able to make the tough decision at the right moment; Li Peng, nobody liked him; Jiang Zemin, a jovial No.1, very flexibly-minded, he set the stage and delegated authority of economy to the guy, Zhu Rongji, who in my mind ranked almost at the same level as Deng in terms of historical importance, and was one of the maybe Top 5 great reformers in the long history of entire China. (Bear in mind, a successful reform is hard for this nation. Things usually ended up in violent collapses and revolutions)
What books would you recommend on Chinese political economy apart from Deng biography?
The new china play book by Keju Jin, the china chapters in chip war also has some political economy on china by Chris Miller, and Arthur Kroeber's book China's economy
Thanks, that’s interesting. S Korea also borrowed from the IMF. I assume they implemented all the IMF reforms and turned out to do OK? That said, perhaps there is a legitimate issue about whether S Korea could have recovered with less pain to its most vulnerable population if they made more gradual reforms.
I think another “model” is Malaysia (where I am at now) which went against IMF and imposed capital controls. I understand even the IMF today acknowledges that Malaysia did the right thing! 😀
South korea has been borrowing from the imf for a while.
Here's a history of their loans
https://www.imf.org/external/np/fin/tad/extarr2.aspx?memberKey1=550&date1key=2020-04-30
The last loan they borrowed was during the Asian financial crisis.
The south Korean imf history Iis very unique and deserves its own article@
When Bangladesh went to the IMF in 2022/23 for a 4.5 billion dollar loan, I think Hasina has a similar strategy to Deng. Borrow money as a buffer to last till the election and then she can use the IMF to push some deregulation and tax reforms. I guess that didn't work out for her.
With the benefit of insight I she should have just let herself lose the 2024 election. Force the BNP to do the IMF reforms and come back to power in 2029 with the nostalgia for the 2010s.
1) "Interestingly, during the Deng era, there was even consideration among political elites to drop the “communist” label altogether!"
Reminds me of this quote, spoken upon being questioned about the contradictions between Marxist ideology and free market reforms: "We are the Communist Party and we will decide what communism means." - Chen Yuan, China Development Bank
The CPC kept the "communist" label and then redefined what it meant.
2) "Through a clever use of soft power in the non-Western world — giving aid to countries like Zambia & Tanzania and providing doctors to other to countries like Afghanistan, Chile, & Turkey, even when his own people were starving — Mao was able to shore up international legitimacy from most of the non-Western aligned world in Africa & Asia. "
Genius diplomatic move. Mao recognized that the UN is one country, one vote. Africa has the most countries of any continent in the world, so China recognized the value of Africa long before anyone in the West did.
Thanks for this great piece and to Robert for the additional comments.
How do banking transactions work?
Banking transactions are a fundamental part of our financial system. These transactions allow individuals, businesses, and governments to transfer money, pay bills, and manage their finances. Understanding how these transactions work is essential for anyone who uses banking services.
The basic process for a banking transaction involves two parties: the sender and the recipient. The sender initiates the transaction by providing the bank with instructions on how to transfer the funds, such as the recipient's name, account number, and the amount to be transferred. The bank then verifies the sender's identity and confirms that there are sufficient funds in the sender's account to complete the transaction.
Once the transaction is authorized, the bank deducts the funds from the sender's account and transfers them to the recipient's account. This process is typically done electronically, through the bank's internal systems or through a network of financial institutions.
There are several types of banking transactions, including:
Deposits: When an individual or business places money into their bank account. The bank records the deposit and updates the account balance accordingly.
Withdrawals: When an individual or business takes money out of their bank account. The bank deducts the amount of the withdrawal from the account balance.
Transfers: When an individual or business sends money from their account to another account within the same bank or a different bank.
Payments: When an individual or business pays a bill or makes a purchase using a debit or credit card. The bank deducts the amount of the payment from the account balance.
Loan disbursements: When a bank disburses a loan to a borrower. The bank transfers the loan funds to the borrower's account or issues a check.
Loan repayments: When a borrower repays a loan to the bank. The bank records the repayment and updates the loan balance accordingly.
To ensure the safety and security of banking transactions, banks use various security measures, such as encryption, two-factor authentication, and fraud detection systems. These measures are designed to protect against unauthorized access and fraudulent transactions.
In addition, banks are subject to strict regulations and oversight by government agencies to ensure that they follow sound banking practices and comply with all relevant laws and regulations.
In summary, banking transactions involve the transfer of funds from one account to another. The process involves two parties, the sender and the recipient, and can include various types of transactions, such as deposits, withdrawals, transfers, payments, loan disbursements, and loan repayments. To ensure the safety and security of these transactions, banks use various security measures and are subject to strict regulations and oversight.
What a great article.
Rather than "socialist market economy" I always refer to and think of China as a fascist economy, as the parallels with the overall structural dynamics of the German economy in the 30s are often very close.
China's rise and rise after Mao's (welcome) death proves once again: their communists are a lot smarter than our communists!