Read "The Quest for Prosperity"

Recently, I read "The Quest for Prosperity: The New Path to Rise of Developing Economies" by Professor Justin Yifu Lin. Justin Yifu Lin was appointed as the World Bank's Chief Economist and Senior Vice President for Development Economics in 2008. He has a lot of practical experience in revitalizing the economy of backward regions, which is presented in this book.

How can a country achieve prosperity? The author first reviewed the history of many regions and found that the road of development was often not smooth. For example, the former Soviet Union, Indonesia, Egypt, and even the early days of modern China all had ambitious plans for prosperity and strength, but they often encountered major setbacks afterwards. The author believes that this is because these countries were still relatively poor and backward at the time, but they hoped to catch up with superpowers, and were guided by rapid industrialization to develop capital-intensive industries with their own weaknesses. Because they did not have a foundation, they had to pull the seedlings to encourage growth. The state favored investment and subsidized industries. There is no self-sustainability, and it will form a monopoly power, resulting in inefficiency and waste. The redundant and distorted industrial tail will not be lost. Eating without meat and abandoning it will endanger the stability of the country's political and economic structure.

Then how to break it? The author does not agree with the rapid approach of eliminating distorted industries, but proposes the theory of "new structural economics". He believes that according to the country's own endowment characteristics, it is necessary to rationally select suitable industries for development, and take advantage of potential comparative advantages and latecomer advantages. The "six-step two-track method" that speaks of growing identification and making the best use of the situation. The six steps are to choose the right target first, not to be overly ambitious, and to aim for a big country from the beginning, but to learn from fast-growing countries with similar endowment structures and double the income of the country, and their growth is long-term rather than short-term. For example, low-income countries should develop labor-intensive industries; the second is to remove all kinds of constraints for potential industries and liberate their constraints; the third is to induce and attract global investors; the fourth is to support Self-sustaining private enterprises in the industry; fifth is to set up industrial parks, improve infrastructure, and maximize economies of scale; sixth is to grant patents or economic incentives to pioneer enterprises to encourage them to carry out risky exploration or innovation. The dual-track system emphasizes the provision of temporary subsidies for previously distorted and non-viable enterprises, and the gradual internal reforms to adapt them to market mechanisms while supporting industries that are in line with the country's advantages, so as to ensure social stability and achieve economic growth. Typical examples of the six-step dual-track system are China and Vietnam, which were reformed and opened up.

In my opinion, this book fairly plainly and clearly points out the key to the rapid development of contemporary China's economy: seeking truth from facts, not blindly following, not immersed in dogma, making full use of comparative and late-mover advantages, and promoting gradual reform of state-owned enterprises , dual-track development, to ensure social stability, so as to steadily and steadily in the division of labor in the world economy, step by step, to obtain their own seats. The so-called "imitation" is easy to say, but how easy is it to imitate correctly and well? If the quality is not enough, who will pay the bill? Moreover, learning begins with imitation, and without imitation, how can innovation come from? A word of "shanzhai" can easily obliterate the blood and sweat of countless laborers and ignore their objective restrictions. This is a bit superficial. Thousands of poor families, they also have the right to pursue a better life, and it is not shameful to imitate the well-being of the whole country. Moreover, relatively speaking, the argument that China’s rapid development is only based on demographic dividends seems to be a bit rough and arbitrary, and it is not enough to explain the repeated economic development of many countries in the world (many of which have young population structures). reason for failure.