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Old China New Economy The Conquest By a Billion Paupers
Old China New Economy The Conquest By a Billion Paupers by T K Bhaumik Published by SAGE Publications Price: Rs 350/- The first question that comes to one’s mind when you read the title is, 'How relevant is this book today in the face of a tsunami called Recession?' A read of the book reveals that the relevance is on a high note; the reason being that the author has made a very dedicated attempt to trace the transformation of Old China to modern China. He begins with a historical perspective on why China is hungry for high Growth (Chapter 1-4). In the 1970’s, China was totally isolated from world politics. It was following a path towards socialist transition. The painful repercussions of this path emerged in various forms of social catastrophes like the Great Famine of 1959—61 which left around 30 million Chinese dead. However, post 1976, after the death of Mao Zedong, the whole system underwent an overhaul and this is reflected in the New China of today. The launch of the economic reforms of 1978 put China on the path to high growth. Also, the competitive prowess of China came to the fore, much to the alarm of many big nation players. But what has really propelled China on the road to development is the intolerant attitude of the Chinese people towards poverty. This is one of the most powerful statements that the author has made in this book. His theory is that, the average Chinese, because of long periods of low conditions of life, now does not depend on the government to alleviate his/her situation. Instead, they have taken the initiative to better their material well-being. This is definitely grist for thought and could very well be the answer to the question that is often asked of China: How did it become such a phenomenal economic power? Towards the end of the book (Chapter 8) the author shifts his focus to the role of leadership in this growth path and more importantly questions the insularity of Beijing. China opened to the world economically but not politically. Somewhere along the way, this has definitely helped it to grow economically without being hindered by political alliances and ties. Since the launch of the economic reform, especially in the 1990’s, China has been the most favored country for global investors. This, in turn, has played a leading role in China’s rising growth graph. China has a role to play in the global economy also - but does China feel responsible enough? China’s rise has rekindled the possibility of an East Asian monopoly bloc. But China’s relation with Japan is a critical issue here. Similarly, on the other end of the spectrum, China’s expanding trade surplus vis-à-vis USA and the EU runs the risk of an east-west face off. The author rightly points out that the USA and the EU really cannot pressure China into coming to trade agreements as the existence of various MNC’s and their agreements have given China the firewall against trade frictions. This book signs off on a high note, predicting a sustained 10.5 % growth well beyond the Eleventh Plan. Will this figure stand the test of recession–times? Media reporting suggests it will; China is actually relatively debt-free. The government has announced a huge bail-out stimulus to stem the tide and fears of a slowdown. Also, the deficit in exports will be breached with state funds. Beijing still continues to buy U.S. Treasuries. Economists in China are divided over the growth rate % of China. Some feel that China should stop buying American treasury bonds in view of the growing fiscal deficit of the U.S. government and some feel they should sell U.S. treasury bonds in hand. Following developed countries, the economic downturn in emerging markets is also dragging down China's exports, posing a possible severe export climate for China. But the destructive adjustment of real estate could give a deadly blow to China’s economy. In other words, a year down the line, the author’s projections could well bottom out. But all said and done, this book is a must –read especially because of the sheer time frame of the story of China from the 17th century and the data analysis. This book is dense in terms of content and is not easy to read. The analysis of the key drivers in China’s economic growth through the ages is incisive. The author does tend to put China on the superpower pedestal but given their abysmal record of Human Rights, China is more an economic heavyweight than a superpower. What stays with the reader is the struggle of the Chinese people sometimes with and sometimes against the state machinery. Hence, the very telling title of the book.
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