Planet Money Summer School 6: China, Taiwan and how nations grow rich
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Aug 14, 2024 
Cheng Tai-xie, an expert in Asian economies at the Booth School of Business, dives into the astonishing economic transformations of China and Taiwan from the 1950s onward. He discusses the critical role of government strategies that embraced free market principles and sparked incredible growth. The narrative highlights Taiwan's semiconductor renaissance and the transformative agricultural reforms in Xiaogang, illustrating how individual incentives can drive national prosperity. Can other nations replicate this success? Discover the essential lessons learned from this remarkable journey.
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The Xiaogang Experiment
- Xiaogang farmers signed a secret contract to divide farmland and keep a share of the crops.
- This risky move, driven by starvation, boosted production and marked a turning point in China's economic history.
China's Gradual Reform
- China's economic transformation involved a gradual shift, described as "crossing the river by touching stones."
- This approach prioritized practical solutions over strict ideological adherence.
Post-1989 Economic Model
- After 1989, a new economic model emerged in China, characterized by increased Party control and local partnerships.
- Local officials facilitated business deals, acting as powerful brokers.