Friday, February 22, 2013

The Chinese Growth Model

Fantastic (May be I use this word too much eh...?) post by Pettis.

This stands out for me:
(Regarding geographical expansion of an economy like the US moving west, Soviet Union moving into Siberia, Brazil moving West and North and now China moving West)

"What are the differences and how do they apply to China? Again, I can’t say that I can fully 


understand or explain them, but one major difference leaps out. In the US it was private individuals, 

seeking profitable opportunities, that led the move into the American West, and government 

investment followed. In Brazil and the Soviet Union, however, there was little incentive for private 

individuals to lead the process. It was the government that led, and private businesses followed only 


because government spending created great opportunities for profit. Once government spending 

stopped, so did business."

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