The Real Secret to China's Economic Growth

As the global economy battles recession, the Chinese economy is booming. China's GDP is expected to grow 8% this year. Western economists foresee 12% growth each of the next two years, according to the New York Times. How does China do it?

Financial analysts point to a number of factors. The Chinese government relaxed credit earlier this year. There are new pro-growth tax policies in place. The renminbi is undervalued, favoring exports. Chinese savings rates are high.

All of these factors are important, but they miss the main point. I am an American currently living in Chengdu, China. As I look around, the main explanation for Chinese economic growth is pretty obvious:

The Chinese work really hard.

That sounds banal, but it is true. Students generally are at school daily from 8 AM until 5 PM (plus half day Saturday), with several hours of homework thrown in. Most businesses are open seven days a week, often into the evenings. Construction sites buzz from six in the morning until ten at night (or later) each day. Even the post office is open on Sundays. The Chinese have witnessed the fruits of their labors over the last twenty years, and are working hard to get more.

If economic growth were reliant only on smart government policy, then all that is required is rooting for our elected officials. But it's not. To emulate Chinese economic success it is necessary to return to the basics: education, savings -- and a lot of hard work.

 

Follow Jim Cashel on Twitter: www.twitter.com/Cashel

Comments

[freddint]

10:37 AM on 12/23/2009

I'm often impressed by the work ethic and long days and weeks many Chinese workers and students put in, however, I think the author needs to delve a little more deeply into the situation: Chinese work long hours, it doesn't mean they work hard. Restaurant employees sleep through the middle of the day, I routinely see my coworkers with their heads on their keyboards napping and the students spend a lot of time memorizing their textbooks. Efficiency is not a particularly prized quality here -- many jobs have way too many people assigned to them with completely ridiculous workflows that ensure the task takes longer, and more people, than it really needs. In my opinion, what Mr. Cashel is seeing, more specifically, is why China's unemployment rate isn't higher.