What does the development of China depend on?

Since the founding of New China 70 years ago, especially since the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, China has become the second largest economy in the world. The gross domestic product (GDP) has exceeded 90 trillion yuan from less than 50 billion yuan 70 years ago to 20 18, and its scale has increased by more than 1800 times. The proportion of global GDP has jumped from insignificant 70 years ago to 20 18. To scientifically explain the miracle of China's economic development, we must adhere to the Marxist stand, viewpoint and method, not only study the own factors of economic development, but also sum up experience from specific links such as ideological weapon, political guarantee, institutional guarantee, development motive force, development motive force and development mode.

There are three important basic driving forces behind China's rapid economic development, which are the same as the reasons for the Japanese economic rise after World War II and the economic take-off of the "Four Little Dragons of Asia" (China, Hongkong, Singapore, Taiwan Province Province of China and South Korea) in the 1960s and 1980s. They are high-quality human capital, well-functioning market mechanism, and economic development is in the primary stage, which gives the economy more room to rise.

These developments are detailed in turn as follows:

First, the meaning of human capital is people's ability in society, including the technical and professional ethics level of workers, as well as the innovative spirit of entrepreneurs and the ability to integrate resources. The quality of human capital is a part of social history and cultural tradition, which cannot be shaped by 10 or 20 years. Economists are used to measuring China of human capital by the time of education, but this method is not accurate, because it does not take into account professional ethics and people's creative wisdom, which are the results of cultural traditions. These characteristics are inherited and perfected from generation to generation, and some of them are passed down through family education. We can see the skills of China workers through ancient bronzes, silk embroidery, porcelain and Ming dynasty furniture, not to mention the exquisite terracotta warriors and horses in Xi 'an. There is no doubt that China has quite high-quality human capital. Other countries such as Japan, Germany, South Korea, Singapore and the United States also have high-quality human capital, but in different forms. One of the main reasons why some countries fail to achieve rapid economic development is the shortage of human capital.

Secondly, the second driving force is a well-functioning market mechanism. Before the reform and opening up in 1999, China also had high-quality human capital, but there was no market mechanism, so it failed to develop rapidly. The market mechanism enables outstanding talents to better realize their own value through hard work, thus creating wealth for themselves and society. The market mechanism fully stimulates economic activities because of paid labor, and resources are effectively allocated according to the principle of market supply and demand.

China government has gradually transformed its economic system from a planned economy to a market economy, and has made outstanding achievements in this respect. I recorded this change in detail in the book Economic Transformation of China (Renmin University of China Press, 2005). However, without China's human capital, the market mechanism could not achieve such rapid economic development. Some people have pointed out many shortcomings of China's market mechanism, such as banking system and legal system, but these systems are constantly improving. It must be pointed out that under the condition of imperfect market mechanism, the economy can also develop rapidly, which has been fully reflected in the historical experience of China in the past 30 years. In addition, even if the government does not take action, the economic system itself can be improved and developed in the market economy environment. A typical example is the growth process of township enterprises that rose in response to the needs of the national economy in the 1980s. The market economy system can also produce other market mechanisms. Today's NYSE and Shanghai Stock Exchange in 1930s were born without government participation.

What is worth mentioning is the interaction between human capital and market mechanism. If everyone has an equal opportunity to participate in market competition under the conditions of market economy, then the market mechanism can operate well. However, in a mature market economy, equality of opportunity is often impossible, because the children of successful people must have better opportunities. In China, when the reform of 1999 began, most citizens had almost equal opportunities. Everyone can start from scratch, and no one can inherit wealth and get venture capital. All students have equal opportunities to go to college or graduate school, and those who are more capable and hardworking will be selected to go to college or graduate school. In the 1990s, I helped some excellent graduate students to enter graduate schools in North America, many of whom came from poor families and rural areas.

Third, the third factor leading to rapid economic growth is the technological difference between developing countries and the most developed countries. This enables developing countries to develop rapidly by adopting advanced technology.

To sum up, China's economy will continue to grow, because these three economic engines will continue to exert their strength. With the narrowing of the technology gap, the growth rate of China will gradually slow down, but at least in the next 10- 15 years or even longer, the annual economic growth rate will still be higher than%.