Transitional Economy

China shifted from a Soviet style economy to a market-style economy.

Why is China different?

• more gradual, via family outlets
• no simultaneous political transition
• began at a lower-level of economic development
• thus, China started in agriculture

East Asian Development Model

We see this in Singapore, HK, Japan, Korea, Taiwan, China.

• land to the tiller: moving land away from landlords and giving it to producers
• export orientation: moving from low-end products to high end export
• financial repression: low interest rates (promote exports + make imports more expensive + allow lending), undervalue currency, capital controls on cross-border flows

Unlike Japan, etc., China had to import technology + expertise because their work is way behind; therefore they were interested in foreign direct investment

Why did China/Viet do better than, say, i.e., USSR?

• The State didn’t collapse!
• …rule of law + ability to enforce private ownership

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