Conversations with Tyler Yasheng Huang on the Development of the Chinese State
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Mar 8, 2023 Yasheng Huang, Professor of Management at MIT Sloan and author on Chinese economic reforms, dives deep into China's unique developmental journey. He contrasts rural entrepreneurship with state-controlled urban growth, highlights the historical impact of the civil service exam, and discusses concerns over foreign investment rather than population decline. Huang reflects on the stagnation of Chinese literacy in the 19th century, the underrepresentation of Chinese Americans in CEO roles, and his favorite historical period, the Six Dynasties, all while offering insights into China's political stability and cultural dynamics.
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Overdeveloped State, Underdeveloped Capacity
- The Chinese state was overdeveloped in its dominance but underdeveloped in administrative capacity.
- It lacked the institutional support for public services and a proper army.
China's Consumption Conundrum
- China's low consumption-to-GDP ratio is a symptom, not a cause, of economic imbalances.
- The core issue is the low household income share of GDP, reflecting power dynamics between government, corporations, and households.
Misunderstanding China's Economy
- American business elites misunderstand China's economy by overestimating innovation's role.
- China's economy is investment-driven, not productivity-driven, with declining total factor productivity contributions.
