Zhejiang v. Jiangsu

choi

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(A)
(1) Yasheng Huang, Zhejiang Province: A Free-Market Success Story;
China's Zhejiang and Jiangsu provinces seem similar, but household income in
entrepreneurial Zhejiang shows an economic model to be followed.
BusinessWeek, Oct. 20, 2008.
http://www.businessweek.com/globalbiz/content/oct2008/gb20081020_124170.htm

Note: Professor Yasheng Huang's web profile
http://web.mit.edu/yshuang/www/
does not include his education (and I cannot find it in the web). But it is
certain that he was born in China, not Taiwan.

(2) Prof. Huang has eyed the two provinces for quite some time (alas, not
Gunagdong province).

His papers about the two provinces in reserse chronological order:

(a) Huang, Yasheng, Ownership Biases and FDI in China: Evidence from Two
Provinces (2007). Business and Politics: Vol. 9 : Iss. 1, Article 1.
http://www.bepress.com/bap/vol9/iss1/art1/
(abstract)

My comment: But unless you are an economy major, you probably cannot sit
tight to read this academic paper. Click "download" in the right column to
read the full text. The same applies to the next paper.

(b) "R-Squared" (a screen name),  A tale of two Chinese provinces: “Indians
” in China. Development Bank Research Bulletin (DBRB), Apr. 17, 2006.
http://www.bankresearch.org/economicpolicyblog/2006/04/a_tale_of_two_c.html
(synopsis)

introducing

Huang, Yasheng and Di, Wenhua, A Tale of Two Provinces: The Institutional
Environment and Foreign Ownership in China (April 2004). MIT Sloan Working
Paper No. 4482-04; William Davidson Institute Working Paper No. 667.
(direct electronic link provided)

(c) Yasheng Huang and Tarum Khanna, Can India Overtake China?  Foreign
Policy, July/August, 2003, pages 74-81.
http://www.hbs.edu/faculty/tkhanna/docs/fp_india-china_june2003.pdf
(subtitle: "What’s the fastest route to economic development? Welcome
foreign direct investment (FDI), says China, and most policy experts agree.
But a comparison with long-time laggard India suggests that FDI is not the
only path to prosperity. Indeed, India’s homegrown entrepreneurs may give
it a long-term advantage over a China hamstrung by inefficient banks and
capital markets.")

The article mentioned (and compared) the two provinces only at p. 80. To
save your time, that paragraph is reproduced here.

"Consider the contrasting strategies of Jiangsu
and Zhejiang, two coastal provinces that were at
similar levels of economic development when China’s
reforms began. Jiangsu has relied largely on fdi to
fuel its growth. Zhejiang, by contrast, has placed
heavier emphasis on indigenous entrepreneurs and
organic development. During the last two decades,
Zhejiang’s economy has grown at an annual rate of
about 1 percent faster than Jiangsu’s. Twenty years
ago, Zhejiang was the poorer of the two provinces;
now it is unquestionably more prosperous.

(3) My comment: What is the conclusions of Prof. Huang? This is it, I think.

(a) Yasheng Huang, Private Ownership: The Real Source of China’s Economic
Miracle. Even many Western economists think China has discovered its own
road to prosperity, dependent largely on state financing and control. They
are quite wrong. McKinsey Quarterly, December, 2008.
http://www.mckinseyquarterly.com/Private_ownership_The_real_source_of_Chinas_economic_miracle_2279

From the author (but required payment to read):  
Yasheng Huang, China and India: The race to growth. McKinsey Quarterly,
December, 2004.
http://www.mckinseyquarterly.com/China_and_India_The_race_to_growth_1487?pagenum=2

(b) He had a new book.

Yasheng Huang, Capitalism with Chinese Characteristics; Entrepreneurship and
the State. Cambridge University Press, September 2008.
http://cambridge.org/us/catalogue/catalogue.asp?isbn=9780521898102&ss=fro

Also discussing the two provinces extensively, Chapter four of the book is
titled "What Is Wrong With Shanghai?"

(i) In fact, one can read it (chapter) free online:
http://www.princeton.edu/~piirs/calendars/HuangD&Dpaper.pdf

(ii) Again, a summary is supplied in two parts at theglobalist.com. Though
the summary gives you an idea, it is jerky, not well written.
http://www.theglobalist.com/StoryId.aspx?StoryId=7406
http://www.theglobalist.com/storyid.aspx?StoryId=7407

(B) At last, I wish to say this.

(1) I left Taiwan in 1984. Under the two presidents Chiang (father and son),
China was taught in geography and history classes, as well as Chinese
literature. That is the China under Republican rule; nothing after 1949 was
incorporated. Thus, railways, highways were few (and easier for students).
The pertinent to this topic is that we were told the north of Jiangsu was
agrarian and very poor. It may still be so at present, dragging the whole
province down.

(2)
(a) Debin Ma, Industrial Revolution in the Prewar Lower Yangzi Region of
China: A Quantitative and Institutional Interpretation. Center for the Study
of Economics and Society (CSES), Working paper No. 17, January 2004.
http://www.economyandsociety.org/publications/wp16_Ma_04.pdf

The pertinent quotation comparing Lower Yangtze Delta (as a whole; not
distinguishing Zhejiang, Jiangsu and Shanghai) and Taiwan are as follows.

"The result shows that the 1933 Lower Yangzi per capita GDP, was about 60% higher than China’s national average and 40-50% higher than those of the Japanese controlled Korea and Manchuria, only ranked lower than Japan and Taiwan. Back-projection based on the Lower Yangzi 1930s benchmark estimate indicates a magnitude of structural change and per-capita income growth comparable to Japan and her colonies between the 1910s and 1930s, with an economic structure significantly removed from a traditional agrarian economy." Pages 4-5.

"Preliminary comparisons based on the 1930s exchange rates also show that per-capita income in the Lower Yangzi, were far higher than those of Korea and Manchuria, ranked third only after Japan and Taiwan. But with its population almost the size of Japan and more than 10 times that of Taiwan in the 1930s, Lower Yangzi had clearly emerged as the second largest industrial region in the entire East Asia (perhaps Asia)." Page 24.

My comment: The bottom line is under Japan's colonial rule, Taiwan had a
higher living standard than Lower Yangtze Delta. As to Taiwan's against
Shanghai's, no paper is written yet.

(b) Dr. Debin Ma is another Chinese-born economist who has done research in
Japan and, recently, England.
http://www.lse.ac.uk/collections/economicHistory/whosWho/profiles/d.ma1@lse.ac.uk.htm

(3) Do not forget that all papers and the book were all written prior to the Great Recession (maybe published after the start of the Recession). Lower Yangtze Delta is not immune. See

Zhao Hejuan, Yangtze Delta: Begins its Tough Transition. Caijing magazine, Feb. 1, 2009.
http://english.caijing.com.cn/2009-02-01/110051787.html

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