Demystifying the Chinese Economy

China was the largest and one of the most advanced economies in the world before the eighteenth century, yet declined precipitately thereafter and degenerated into one of the world's poorest economies by the late nineteenth century. Despite generations' efforts for national rejuvenation, China did not reverse its fate until it introduced market-oriented reforms in 1979. Since then it has been the most dynamic economy in the world and is likely to regain its position as the world's largest economy before 2030. Based on economic analysis and personal reflection on policy debates, Justin Yifu Lin provides insightful answers to why China was so advanced in pre-modern times, what caused it to become so poor for almost two centuries, how it grew into a market economy, where its potential is for continuing dynamic growth and what further reforms are needed to complete the transition to a well-functioning, advanced market economy.

List of figures; List of tables; List of boxes; Preface; 1. Opportunities and challenges in China's economic development; 2. Why the Scientific and Industrial Revolutions bypassed China; 3. The great humiliation and the Socialist Revolution; 4. The comparative advantage-defying, catching-up strategy and the traditional economic system; 5. Enterprise viability and factor endowments; 6. The comparative advantage-following development strategy; 7. Rural reform and the three rural issues; 8. Urban reform and the remaining issues; 9. Reforming the state-owned enterprises; 10. The financial reforms; 11. Deflationary expansion and building a new socialist countryside; 12. Improving the market system and promoting fairness and efficiency for harmonious development; 13. Reflections on neoclassical theories; Appendix 1. Global imbalances, reserve currency and global economic governance; Index.

Justin Yifu Lin provides an insightful account of why China was so advanced in pre-modern times, what caused it to become so poor, how it grew into a market economy, where its potential is for growth and what reforms are needed to complete the transition to a well-functioning market economy.

Justin Yifu Lin is Senior Vice President and Chief Economist of the World Bank. He obtained his PhD in economics from the University of Chicago in 1986 and returned to China in 1987, the first PhD in social sciences to return from abroad after China started economic reform in 1979. He was the founding director of China Center for Economic Research at Peking University from 1994 to 2008 and is the author of seventeen books, including The China Miracle (1996), State-Owned Enterprise Reform in China (2001) and Economic Development and Transition (Cambridge, 2009).