New China Playbook by Keyu Jin
ISBN: 9781984878281Date read: 2025-06-16
How strongly I recommend it: 6/10
(See my list of 360+ books, for more.)
Go to the Amazon page for details and reviews.
Look into China’s economy and government as of 2023. Good explanations and insights, but quite financially focused. For a broader perspective, read “China’s World View” by David Daokui Li.
my notes
China’s economic system has begun to morph gradually into a unique form.
Whether it is called “managed capitalism,” the “mayor economy,” or, more officially, “socialism with Chinese characteristics,” its model does not neatly fit into any category.
Instead, it embodies a unique blend of the state and the market economy, striking a balance between state and industry, coordination and market incentives, communalism and individualism.
China’s political centralization is paired with economic decentralization.
The central government sets the strategic direction, but local officials deliver on the ground.
This unique marriage of local officials and intrepid entrepreneurs is how China reformed, industrialized, urbanized, and now innovates.
Local officials are more likely to lend a helping hand than to extend a grabbing hand.
Western economic thought is based on the premise that individuals seek to maximize their own welfare.
Consumers, entrepreneurs, and the state: in China none of them behaves like a conventional economic agent.
Chinese households tend to make decisions on a collective rather than individual basis, choices that take into account a rich network of intergenerational relationships and duties.
Entrepreneurs decide not only what is optimal for their firm’s profits, but also how to balance delicate relationships with local officials, align their goals with national policy directives, and manage symbolic and political responses to regulations that affect their business.
93 percent of Chinese value security over freedom.
95 percent of Chinese participants had significant confidence in their government, compared to 33 percent in the US.
In China, an interventionist state is rooted in paternalism, a hallmark of government in China since Confucian times, more than 2,500 years ago.
It is based on the conviction that intervention by a senior person is justified if it benefits a junior person.
The Chinese government disciplining children and making decisions on their behalf is taken for granted by the Chinese people.
The short-and-fast approach, with its rush to boost GDP, is becoming a thing of the past as the Chinese economy comes of age.
China’s new playbook is based on innovation and technology, meant to be attained through self-reliance and mastery.
It’s marked by an unparalleled sense of national urgency and pride.
China’s relentless pursuit of economic growth has been replaced with a burgeoning emphasis on improving the softer metrics of development — a cleaner environment, greater food security, and a higher quality of life.
There is a growing consciousness that what is economically efficient may not be socially desirable.
Between 1978 and 2016 life expectancy increased by nearly ten years and infant mortality dropped by more than 80 percent.
The government formally introduced a dual system of pricing in the early 1980s, replacing collective farming with a system that allowed farmers to work individual tracts of land and claim some of the fruits of their own labors: after turning over a portion to the government at state-level prices, farmers could then sell the rest at market prices and keep the profit.
Effects were dramatic.
Between 1978 and 1984, grain yield per unit of land increased by 43 percent, and real agricultural output increased by more than 50 percent, despite an overall reduction in the agricultural workforce as people moved to urban areas.
Productivity in agriculture grew so quickly that many fieldworkers who remained in the countryside were freed up to engage in activities unrelated to farming.
In the mid-1980s, the government implemented a second wave of reforms, creating special economic zones (SEZs) that mimicked the effects of open, export-oriented market economies.
Privileges extended to SEZs included tax exemptions, reduced custom duties, cheaper land prices, and greater flexibility to negotiate labor and financial contracts.
This experiment with SEZs turned out to be a huge success.
Foreign firms brought in technology, equipment, and know-how while benefiting from China’s cheap labor, business-friendly environment, sound infrastructure, and huge domestic market.
Foreign investment poured into China.
Deng Xiaoping doubled down on his commitment to boost the momentum of reforms in his 1992 Southern Tour.
He encouraged local officials to be enterprising and entrepreneurial, and to continue to open up markets.
By 1994, only a decade after the term “privatization” was taboo, the private sector was generating 40 percent of China’s urban employment.
Today, the private sector employs around 80 percent.
The last high tide of economic reforms came with China’s entrance into the World Trade Organization (WTO) in 2001, flinging open its doors to global trade.
The government aggressively liberalized exports, removing major barriers to trade and slashing tariffs in half.
Of China’s 160 service sectors, 100 were opened to foreigners
Between 2000 and 2007, China’s real GDP per capita nearly doubled.
Total factor productivity (TFP) — the measure of how efficiently inputs like labor and capital are used — played an even more significant role in GDP growth.
With a rising level of total TFP, the same number of machines and workers can continue to generate greater and greater output.
Growth can overcome the curse of diminishing returns so long as it can count on continual rises in TFP.
More effective allocation of resources and technological advances:
This way of improving TFP — reducing the misallocation of resources — is far more relevant.
When resources are used ineffectively — they’re wasted or misallocated — in such a way that the economy is kept below its potential.
There are lots of examples of misallocation in real life:
it is not always the best firms that get the best workers
despite merit exams, it is not necessarily the best students who get the best jobs
nor do the most productive farmers get the largest pieces of land.
Private entrepreneurs struggle to find financing for their innovative companies, while behemoth State-Owned Enterprisess flush with funds buy soccer clubs.
In post-reform China, the biggest and most important source of growth was reaching its own potential.
Four hundred million workers moved out of low-productivity pockets of the economy into high-productivity ones.
Policy changes would not have been so effective were it not for the heavy hand of the state.
The state mobilized resources, connected and coordinated different actors into a nationwide network, and pushed through tough reforms that would have been met with resistance or taken much longer to implement elsewhere.
Of course, not all countries have strong states, and not all citizens are happy to have an outsize government.
The effects of the Confucian tradition, with its emphasis on communalism, social order, and respect for government leadership, have rippled throughout Chinese society for more than two thousand years.
In contemporary China, people have gotten used to omnipresent state intervention and simply assume it.
For a country that had suffered half a century of humiliation for its “backwardness,” modernization was an absolute objective.
Latin American countries such as Mexico and Peru, and Asian economies such as Malaysia, Indonesia, and Thailand, have all experienced rapid growth, but as of this moment none of these developing nations has graduated into the ranks of high-income countries.
Data shows that the main reason is that they suffered from a significant slowdown in productivity.
What economists call “the middle-income trap”: Since 1960, only 13 out of 101 middle-income economies have managed to escape it.
South Korea and Israel made it, but can a gargantuan country like China do it?
This is perhaps the single biggest question concerning its economic future.
If China gets stuck in the middle-income trap, it may follow in the footsteps of Japan, which experienced a lost decade of no growth in the 1990s.
China’s productivity level is currently only a fraction of the US level.
China’s share of labor force with a college degree is even smaller than that in South Africa and Brazil, and way below rich countries.
Reforming the hukou system (the household registration system), which tethers a person’s labor to their birthplace, would allow the flow of talent across regions and improve the allocation of labor as well as reduce regional disparities.
One theme from Confucianism that runs most prominently through the veins of the Chinese people, it would be this: “To be a credit to one’s ancestors.”
The achievements in a career should serve as a way to honor one’s ancestry.
The “influencer economy” in China has doubled every year and has become as large as the restaurant industry.
Parents with more children have a weaker motive for saving than those with just one child.
The fewer children there were, the bigger the education investment per child.
Chinese households spend a lot on their children’s education.
On average they devote 25 percent of their annual spending to educating one child.
The average American household earmarks about 5 percent.
The one-child policy led to a noteworthy increase in human capital investment, which hiked the cost of education, and in turned weakened the inclination to have more children.
Financial returns on education are also higher for women than for men.
For the years between 2000 and 2009, economists estimate an 11–12 percent return per year of schooling for women, compared to 6–7 percent for men.
Ironically, now that girls have so many more options, urban families are becoming more interested in having daughters than in having sons.
A bachelor’s eligibility is firmly tied to the sum of his material possessions.
In 2022, the highly educated youth had a record-high unemployment rate of 20 percent.
A story that caught the nation’s attention is that a cigarette manufacturing company’s new production line workers in 2021 consisted of one third master’s graduates, and two thirds undergraduates from high-ranking universities.
What was once an “American dream” the Chinese people only fantasized about can now be materialized in China.
This generation has vaulted into consumerism with surprising ease.
A taste for pleasure, a creative sartorial sensibility, and a high degree of comfort with spending have made them both targets and subjects of advertisements and news stories.
Optimistic about China’s economic prospects, they are not nearly as risk averse as their parents.
The haunting memory of economic depression and expropriation so firmly embedded in the minds of previous generations play no part in their consciousness.
Their outlook on the economy and their own prospects is a rosy one, which makes them different from millennials around the world.
They are also a socially conscious group — indignant about societal injustice, passionate about environmental sustainability, and sensitive to things as remote and far-flung as African wildlife protection.
They have purpose, drive, and an appetite for hard work that goes beyond material pursuit and personal gain.
They are the first generation in China to seek happiness more than wealth.
They are proud of their nation’s growing power and influence, a sentiment that is only accentuated by alarm from the West over China’s rise.
All this draws them closer to things Chinese, to events that take place internally rather than externally.
Previous generations that once looked up to Western standards, foreign brands, American jobs, and foreign ways of being are giving way to a new generation convinced that their own education, goods, and services are as good as any, if not better.
More than 82 percent of young people born in the 1990s or later would choose a job different to the one they now have if they could.
As a popular saying goes, “Can’t die! Can’t travel far! Really want to make money because my parents have only me.”
For all their new sense of empowerment, this generation’s “onliness” has become a shackle both mental and physical, and from which they may never break free.
They carry a heavy burden of expectation, from both their parents and their society.
Twenty million private firms have sprung up within just thirty years.
Deng’s decision to permit Fool’s Melon Seeds to exceed the eight-employee limit signaled that Marxist ideology would no longer suppress the growth of private firms.
80 percent of the state-owned firms operating in 1998 were shut down or privatized by 2007, particularly the smaller and less efficient ones.
As a consequence, the overall performance of state enterprises improved.
Larger State-Owned Enterprisess were becoming more profitable and productive.
In 2018, half of China’s central State-Owned Enterprisess were listed among the five hundred largest companies in the world.
This transformation also rendered obsolete the conventional wisdom that all-out privatization was the inevitable future.
We have a dual-track system where State-Owned Enterprisess and the private sector coexist.
In the wake of the economic crisis of 2009, State-Owned Enterprisess were called on to salvage the economy.
Nio, the electric car company.
In April 2020, its share price had fallen 62 percent from its initial public offering in 2018, and the company teetered on the brink of bankruptcy, with its financing cut off.
At this point, the Hefei government of Anhui Province, succeeded in persuading Nio to locate its headquarters there.
It injected cash in return for a stake in the company, provided it with cheap land, and offered all kinds of services to ease Nio’s journey.
Successfully outbidding its competitors with an offer of RMB 7 billion (the equivalent of about US$1 billion) in exchange for a 25 percent stake in the company.
Nio moved its headquarters to Hefei, where the local government helped it secure loans from six large state banks, in addition to helping create, organize, and coordinate a supply chain for batteries, engines, and control systems (encouraging other productive businesses to establish themselves in the region).
Over the next year, Nio’s car production grew by 81 percent.
Its total valuation, which had been roughly US$3 billion in April 2020, increased to about US$100 billion eight months later.
By being a stakeholder, the local government benefited handsomely in many ways: it was able to attract a high-quality enterprise to its high-tech park, create employment and a name for itself, and make a handsome profit from owning Nio stock.
Not only did Nio, as a global company listed on the New York Stock Exchange, earn the Hefei government a great reputation and a huge financial payoff as its stock price soared, it also fostered a thriving local industry.
The local government of Guangzhou is playing a similar role for another private EV company, XPeng.
This logic behind the alternative scenario helps explain why local governments were motivated to break with China’s history of antagonism toward private enterprises and encourage productive private firms in their region.
Local governments can give out licenses, contracts, cheap land, and direct loans from local banks to the firms they preferred.
They can make new laws or sidestep the old, give out permits, and lobby the central government for exemptions.
Private-state collaboration is successful only when the state is a minority shareholder — letting managers and entrepreneurs make key business decisions free of political interference.
The number of active firms doing business in China increased ninefold in between 2000 and 2019.
But a more striking fact is that private owners with state connections owned about a third of the capital registered by these companies,
In 2019, sixty-three out of the one hundred largest corporate owners (measured by registered capital) are state players.
But the surprise lies in the fact that every single one of these state owners has a joint venture with a private company.
The same is true in reverse for the largest private owners — the majority of them have a joint venture with a state owner.
Government participation can be both a blessing and a nuisance.
Local leaders who succeed often leave their districts to pursue bigger political opportunities elsewhere.
When their successors take over, they have their own visions to pursue.
They may stop implementing their predecessor’s plans simply to differentiate themselves.
The largest Chinese firms are only a decision away from also incurring the government’s wrath.
A popular business motto in China is “Jie di qi” — keep your feet on the ground, or stay embedded in local conditions.
Local governments busily commission landmark bridges, skyscrapers, opera houses, and gymnasiums with the latest avant-garde architecture.
In Shanghai alone, a visitor would need to visit more than one new exhibition every day in order to see them all in any given year.
In China, the mayor economy rivals the market economy in importance.
Political centralization paired with economic decentralization, which makes room for creative local business activity under central guidance.
In China, the Communist Party and the government each function according to its respective mandate, but instead of working in parallel, they are intertwined.
They function like a double helix, stabilized by cross-links between the two systems.
Unlike the classic structure of DNA, however, the two systems merge at the top.
China is a socialist republic run by a single political party, the Communist Party of China, or CPC.
Its Politburo stands at the zenith of power and is directed by the Standing Committee, which makes decisions about major policies, legislation, and other important matters.
At the next level down, power splits into two branches, with the party on one side, and the legislature and government on the other.
The chairman of the National People’s Congress heads up the legislature, while the premier directs the government; both are members of the Standing Committee, where the two strands of China’s double helix converge.
The secretary general of the party serves both as head of the state and as chairman of the Central Military Committee, assuring that the party maintains control over the military.
On the government side, there are a number of ministries under the State Council and provincial governments.
The same parallel party/government structure is at work here.
The highest-ranked leader in any organization at any level is invariably the party secretary.
Likewise, in a municipal government, the municipal party secretary ranks above the mayor.
One represents the party and the other represents the government, and both work closely together.
In China the central government takes care of domestic and international politics and sets overall economic policy, while local governments tend to the economy itself.
The Politburo’s Standing Committee, which consists of the most important officials in the country, functions much like the senior management team of a giant corporation, with executives like a chief operating officer, head of human resources, and chief marketing officer, each in charge of a particular domain.
Local government officials work much like department managers, finding ways to meet objectives set out by the central leadership.
The Organizational Ministry of the Central Committee is responsible for screening cadres for promotion to senior positions in the party, the government, and major State-Owned Enterprises.
Those who can deliver economic growth in their region have a greater chance to be promoted in the party hierarchy.
Competition among local governments to accelerate GDP growth in their respective regions: a phenomenon often referred to as GDP worship.
Local government can spend the funds on building a subway system, the hallmark of a prestigious city.
They can improve the environment, which has recently taken on more significance in the metrics of performance evaluation, cleaning up lakes and rivers and tackling air pollution and waste.
Deng Xiaoping’s local chiefs were encouraged to try out bold ideas.
Importantly, there were few penalties meted out for trying and failing.
Successful plans were lauded and emulated around the nation, their sponsors showered with recognition and praise.
This high-risk, high-reward environment led to the development of an entrepreneurial state within a highly centralized one.
Officials were encouraged to bend or even break rules and traditions, to come up with even the most outlandish original ideas, and to make creative or intuitive decisions even when the outcome was uncertain.
They were both emboldened and empowered.
Removing internal trade barriers can result in much higher gains to productivity than boosting external trade via globalization.
No government official holding an important position is allowed to stay in any one place for too long.
Cadre rotation is important because it limits the possibility of local officials building their own independent fiefdoms, where loyalty goes to the local boss rather than to the party’s Central Committee.
After most party secretaries and governors serve a five-year term, they move on to a new posting.
Provincial bosses are brought in from other regions to prevent long-term consolidation of power.
Massaging GDP figures is a minor problem compared with the creation of empty GDP — that is, GDP with no intrinsic value.
Building bridges boosts GDP.
Excessive urban reconfiguration, an overkill of industrial parks and science parks, exhibition centers, steel factories, and coal mines.
China has woken up to the urgent need to shiftto a new developmental paradigm — from maximizing output to improving quality, education, healthcare, and other public services.
As income rises, pollution first increases and then falls.
After their income reaches a certain level, they prefer cleaner ways to grow, even though they are costlier.
A decade ago, foreigners visiting China were struck by “the spitting habit.”
People loudly hawked and spat, or blew their noses right onto the street, wherever they might be.
Littering seemed to be the national sport.
Streets, rivers, lakes, and other public places were used as wastebaskets.
Empty bottles, cans, and other trash were jettisoned by cars flashing by.
Today, the streets of Beijing and Shanghai are spick-and-span, and residents have significantly changed their behavior.
The government recently issued an elaborate trash-sorting ordinance, and the fact that there was more compliance than complaint speaks to the convergence of people’s growing expectations and social norms.
Local officials are sacked summarily should they fail to respond to natural disasters or to outbreaks of epidemics, through accountability and responsiveness.
The common assumption that social media is completely censored is incorrect.
Top leaders are aware of the value of letting people express their opinions.
Tuning in to this information also allows the government to respond swiftly to negative public opinion before it gives rise to social unrest.
So long as postings do not touch the third rail — subversive views of the party itself or attacks on very senior party officials — a wide range of politically and socially sensitive issues are tolerated.
It is also useful to have social media whistleblowers helping the government monitor the party’s cadres.
Amateur civilian paparazzi use their telephoto lenses to catch corrupt officials.
Official’s wrist gleaming with a variety of luxury watches; posting the images online led to an official investigation and charges of corruption, sneaking out of a luxury mansion at night.
A broader set of social indicators — one that is inherently much harder to measure than GDP growth — has come to dominate the all-important process of performance evaluation.
Inequality has become a critically important issue.
Local governments to tackle it have been given targets for the number of people who need to be lifted out of poverty each year in their jurisdictions.
As a result of this program, the number of very poor rural residents declined from nearly 100 million in late 2012 to 16.6 million by the end of 2018.
By the end of 2020, the target of eliminating extreme poverty altogether was achieved when the last cohort of 40 million people in rural areas were lifted out of abject destitution.
Between 2000 and 2018, China’s economy quadrupled in size.
Yet a Chinese citizen who invested $1.00 in a diversified portfolio of domestic Chinese stocks in 2000 still would have had just that $1.00 eighteen years later, after adjusting for inflation.
Investing in Chinese stocks listed in international exchanges would have returned $3.50.
A Chinese citizen with access only to the domestic financial system would have fared better by stashing the cash in a savings account.
Bank credit is the main source of financing in China and stood at around 165 percent of GDP in 2019.
In the US, by comparison, bank credit accounts for only 52 percent of GDP.
China’s domestic financial landscape has a notable shortage of such typical financial players as investment funds, insurance companies, ratings agencies, and international investment banks.
Policies dictated by the central government are often mercurial.
Not long ago, for instance, shortly after having encouraged homeowners to sell in order to avoid a sharp upturn in housing prices, the government prohibited Chinese households from selling homes in order to avoid a big drop in housing prices.
Not long thereafter, the government started to clamp down on housing investment, which caused nationwide panic in 2022.
Citizens justifiably complained about not being able to sell on the way up or buy on the way down.
Between 2003 and 2013, the average price of housing in major Chinese cities quadrupled.
As of 2022, the market value of housing in China is almost twice that of the US.
This is reminiscent of Japan leading up to its housing bust in the late 1980s and early 1990s, when the market value of its real estate was more than twice that of the US, but less than a third three decades later.
Everyone in China wants to own a house.
The home ownership rate there is the highest in the world — more than 90 percent for the 276 million urban households, compared with 65 percent in the US or 42 percent in Switzerland.
Why don’t people in China just choose to rent apartments, given the low cost relative to buying?
The housing price–to–rental ratio is 70 in Beijing or Shenzhen, compared to less than 20 in New York or San Francisco.
You could choose to continue to rent, put your savings in the bank, and earn an annual deposit rate of about 2 percent.
Given an average inflation rate of about 2 percent, your real return would be about zero.
You could also elect to put those savings in the stock market and earn a low rate of return coupled with a high degree of risk.
A third alternative would be to buy a place to live and earn a real rate of return of about 20 percent per year as your equity in the property grows in value.
Why were there so many empty housing units in China?
The most prominent ghost towns were all in the same region, Inner Mongolia.
Districts once dubbed ghost cities are now thriving new urban centers.
Pudong in Shanghai was one of the earliest ghost districts, but is now one of the most thriving parts of the city.
In China, property development by local governments has been described by the homily “Poor kids wear oversized clothes.”
Growing into loose-fitting garments makes as much sense for urban development policy as it does for children.
Time takes care of the rest.
Every financial crisis is a crisis of confidence.
Productivity isn’t everything, but in the long run it is almost everything.
When outside firms wanted to operate in China and take advantage of its lower costs and vast market, they were required to form joint ventures with Chinese companies, which often entailed sharing proprietary technology.
In recent disputes over trade, the West has referred to this policy as “forced technology transfer.”
Foreign companies shared only the technology necessary for those products — or parts of products — manufactured locally in China.
They withheld the master blueprint, or critical information needed for fully independent production.
Ford and Toyota invested in Chinese EV companies so that their technologies could be brought to the American, Japanese, and European markets.
Because tech companies are based on data, they become capable of harnessing what economists refer to as “increasing returns to scale,” which means that if you double the inputs, you more than double the output.
On a given day, Chinese digital payments exceed US digital payments for a given year.
China’s obsession with digital services means that many aspects of daily life are transformed into digital data.
Chinese people don’t mind sharing their data if it means that there will be less crime, better social behavior.
The biggest barrier to creating something truly great is having something already good enough.
Uber took the model that had proved so successful in the US and tried to replicate it in other countries.
Didi’s strategy focused on adapting their model to accommodate demographic conditions, cultural norms, and other national characteristics.
In Brazil, for instance, where many drivers live from hand to mouth, Didi paid them on a daily rather than monthly basis, which Brazilian drivers vastly preferred.
Most didn’t have a bank account, so Didi created a one-click bank account application button inside its app for drivers, which also allowed Didi to apply for an account on the drivers’ behalf, guaranteeing quick approval and allowing new drivers to receive a bank card within just a few days.
Didi is the most popular ride-sharing app in Latin America.
Grunt work: The colloquial term for this is “eat bitter.”
A category called ke jiao xing guo, which means bolstering the nation through science, technology, and education.
The Chinese government is invoking a juguoapproach, or an “integrated whole-nation scheme,” concentrating all sorts of national resources in an attempt to achieve breakthroughs in key technologies, or as the Chinese call it, “throat choking” technologies.
This campaign is now in full swing.
When a strategic objective has been given a juguo designation, cost considerations are set aside.
Waste will be tolerated.
The essence of the juguo system is that the whole nation mobilizes to achieve a strategic goal; it casts the net wide for a big catch.
Duan, ping, kuai, or “short, flat, fast.”
This was originally used to describe a winning strategy in volleyball, but now it serves as a popular prescription for investors.
Make short-term investments, keep them simple, and look for rapid returns.
It also reflects a more general attitude in society at large.
One of the most significant shifts over the past forty years has been the way the Chinese view their own country.
In the 1960s and 1970s, students who landed an opportunity to go to school in the West usually stayed there.
In the early 2000s, Chinese students had started moving closer to home, parking themselves in cosmopolitan cities like Hong Kong or Singapore, benefiting from opportunities that originated in mainland China but were still a comfortable distance away.
By 2013 the mainland had become their prime destination.
Of the five million students who completed their studies abroad between 2000 and 2019, around 86 percent returned to China.
The unusual power of the Chinese state is rooted in its ancient bureaucratic structure of tiaotiao kuaikuai (lines and blocks) — an elaborate administrative system that makes it possible for authorities at the top to convey instructions all the way down to the smallest administrative unit.
Vertical lines of command are combined with horizontal jurisdictions, or blocks, in a network whose reach extends to every corner of the country.
This structure, which traces back to imperial times, is still essential to China’s ability to build new infrastructure with startling speed.
For all its effectiveness, the system does not grant China’s central authority total control.
Power delegated to provinces and municipalities incentivizes local governments to grow their economies, achieve social progress, and maintain order.
It’s a dynamic balance that sometimes shifts in the direction of the central authority and at other times tilts toward local government, but the central government never fully relinquishes control, and every external shock or crisis tends to shift power back to top leadership.
It’s not easy to understand why the state takes such an active role in the stock market, the housing market, education, the number of births in a family, and even how much time children can spend playing video games.
But this tendency to guide and manage the Chinese people stems from the nation’s deep history and culture of paternalism.
The track record so far is that the government has done a good job of maintaining stability and safety even as the nation undergoes a sea change.
The top priority of China’s fatherly government is stability.
We should always be wary of wholly attributing economic patterns and behaviors to culture, as an explanation for why things “work differently in our country.”
Often, lurking behind these patterns are policies or economic conditions responsible for nudging people to act in certain ways.
A glorious history does not necessarily confer upon a nation leadership in the modern world, as countries like Greece, Italy, Portugal, Spain, Britain, and others can testify.
China’s push for common prosperity mandates that Chinese firms be hefa, heli, and heqing — “lawful, reasonable, and empathetic.”
It is no longer enough to be a big contributor to the mayor economy.
In China’s changing economic environment, companies have to be disciplined, environmentally conscious, and considerate to their customers.
Increasingly they must respect rules and regulations and protect consumer privacy.
China is moving away from low-end, mass-produced goods and toward more specialized and sophisticated products.
After years of prolonged debate over regulating the likes of Facebook and Amazon, the US still has little to show for it.
In China, the government stepped in with immediate effect.
In less than a year beginning in 2020, social media and gaming giant Tencent was forced to sell off holdings to reduce its concentration of market power.
Meituan was fined huge sums for not adequately protecting workers’ rights and benefits, and a series of antitrust probes across all sectors targeted the likes of Alibaba and Didi.
A sea of regulations swept across the nation, and at the tail end of 2021 the state refused to bail out its deeply indebted real estate giants.
Some dramatic undertakings are intended to have a “big bang” effect — to arouse awareness and to enforce change.
They are often dialed back once the message gets across or if ramifications start to bite.
Su Shi, a famous poet from the Song dynasty, described the difficulty of conveying the haunting beauty of Mount Lushan in Jiangxi Province this way:
“Why can’t I tell the true shape of Lushan? Because I myself am in the mountain.”
CHINESE SAYINGS: (unrelated, author quoted these throughout book)
One thrives in adversity and perishes in prosperity.
Trees wither from uprooting whereas humans thrive by moving.
The emperor regards his people as heaven. People regard food as their heaven.
Reforms start with breaking rules.
Humans should avoid getting famous. Pigs should avoid getting chubby.
Tall trees bear the brunt of high winds.
No fish can survive in water that is too pure.