How China Grows- Investment, Finance, and Reform
This is an interesting book written by James Riedel, Jing Jin, and Jian Gao. It was published in 2007 so it is fairly new and therefore pretty current with its information. The authors wrote the book offering their own analyses and interpretations of the key issues. It was also written in a broad sense so that all of its readers would be able to understand it. It was written with a variety of surveys on economic policy and performance in China since 1978.
The main focus of the book is China's economic growth. As China is the world's largest and most rapidly growing country, it is no wonder why its economic development would be an important topic to study. There are two main themes to the book; the first is that investment was the main source of growth in China. The second is that in order for China to sustain long-term growth, they must sustain financial sector liberalization and development.
The book begins with an overview of economic reforms and the outcomes beginning in 1979. China's economy has changed structurally and experienced rapid growth since this time. The authors explain that reforms occurring in China didn't cause the growth or structural change, rather they were incentives. Many debates surface around this statement and are discussed throughout the chapter.
The book goes on to talk about the source of China's growth and the role of investment. Reviews and critiques of recent studies are the main topics of this chapter. One must have an open mind while reading these because the perception of economic change in China is much different than what the economist calls reality. Saving and the financing of investment in China are another main topic in which investment is described as the driving force of technological progress, structural change, and the driving force of economic growth.
Financial sector repression is an issue because with an underdeveloped financial system there is a huge threat on the sustainability of future growth rates. Financial sector development is crucial for China's growth to remain steady in the future. China's banking sector is also weak and inefficient. If China is to succeed when liberalizing its financial system, the banking sector must be restructured and also must scale down in size. A well functioning bond market and stock market are key determinants in a well developed financial system. China's stock market has attracted much attention since it was established in Shanghai in 1990 and Shenzhen in 1991. Many different topics comprise this book and give a well rounded understanding of how China grew to where it is today.
How China Grows was a very interesting book in the sense that it covered every topic that has great importance and in great detail. However, it was hard for me to understand certain topics and concepts. Although, the authors had great analyses and brought up topics of debate in order to make me think. Overall, if you want to learn all about China's economy and how it came to where it is today, I think this would be a great book to read.