Yasheng Huang

The long history of China's relationship between stability, diversity, and prosperity, and how its current leadership threatens this delicate balance Chinese society has been shaped by the interplay of the EAST--exams, autocracy, stability, and technology--from ancient times through the present. Beginning with the Sui dynasty's introduction of the civil service exam, known as Keju, in 587 CE--and continuing through the personnel management system used by the Chinese Communist Party (CCP)--Chinese autocracies have developed exceptional tools for homogenizing ideas, norms, and practices. But this uniformity came with a huge downside: stifled creativity. Yasheng Huang shows how China transitioned from dynamism to extreme stagnation after the Keju was instituted. China's most prosperous periods, such as during the Tang dynasty (618-907) and under the reformist CCP, occurred when its emphasis on scale (the size of bureaucracy) was balanced with scope (diversity of ideas). Considering China's remarkable success over the past half-century, Huang sees signs of danger in the political and economic reversals under Xi Jinping. The CCP has again vaulted conformity above new ideas, reverting to the Keju model that eventually led to technological decline. It is a lesson from China's own history, Huang argues, that Chinese leaders would be wise to take seriously.

How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline

The Rise and Fall of the EAST

An Economist Book of the Year, 2008 This book presents a story of two Chinas - an entrepreneurial rural China and a state-controlled urban China. In the 1980s, rural China gained the upper hand, and the result was rapid as well as broad-based growth. In the 1990s, urban China triumphed. In the 1990s, the Chinese state reversed many of its productive rural experiments, with long-lasting damage to the economy and society. A weak financial sector, income disparity, rising illiteracy, productivity slowdowns, and reduced personal income growth are the product of the capitalism with Chinese characteristics of the 1990s and beyond. While GDP grew quickly in both decades, the welfare implications of growth differed substantially. The book uses the emerging Indian miracle to debunk the widespread notion that democracy is automatically anti-growth. The single biggest obstacle to sustainable growth and financial stability in China today is its poor political governance. As the country marks its 30th anniversary of reforms in 2008, China faces some of its toughest economic challenges and substantial vulnerabilities that require fundamental institutional reforms.

Entrepreneurship and the State

Capitalism with Chinese Characteristics

Presents a story of two Chinas – an entrepreneurial rural China and a state-controlled urban China. In the 1980s, rural China gained the upper hand. In the 1990s, urban China triumphed. In the 1990s, the Chinese state reversed many of its rural experiments, with long-lasting damage to the economy and society. A weak financial sector, income disparity, rising illiteracy, productivity slowdowns, and reduced personal income growth are the product of the capitalism with Chinese characteristics of the 1990s and beyond. While GDP grew quickly in both decades, the welfare implications of growth differed substantially. The book uses the emerging Indian miracle to debunk the widespread notion that democracy is automatically anti-growth. As the country marked its 30th anniversary of reforms in 2008, China faces some of its toughest economic challenges and substantial vulnerabilities that require fundamental institutional reforms.

Edward Steinfeld

Tony Saich

An edited volume consisting of an introduction by the editors and eleven additional papers on China's financial system and financial sector reform. The papers originated at a conference on financial reform in China held at the John F. Kennedy School of Government, Harvard University, in 2001. They were then thoroughly revised and updated for publication.

Financial Sector Reform in China

China is the largest recipient of foreign direct investment (FDI) among developing countries. This study compares China's FDI performance with a number of other Asian countries and focuses on the policy and institutional factors that lead to a large demand for FDI in China. The policy and institutional factors include import substitution, excess investment demand and features of China's FDI regulatory system. The study shows that there are costs associated with such a high demand for FDI, including overbidding for FDI and the associated loss of Chinese bargaining power, large import demand, and the structure of the FDI at variance with Chinese official policies. This study also briefly discusses the foreign economic policy implications of China's FDI absorption and suggests some future research possibilities.

Yasheng Huang

Books

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