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Originally Posted by dyna mo
i hear ya, and agree. it's common knowledge that the west does not have hard #s on china and china does cook the books.
nevertheless.  your comment reinforces my curiousity, i wonder what most austrian economists have to say about china
while there's no denying china is an economic powerhouse and it is verified they have 3 trillion cash reserves, i happen to think it is all teetering on the brink of either an uprising (which are currently sweeping the globe) and/or a huge economic dump due to all the manhandling of their economy in a communist society. china can't be the only economy on the planet that is not unhealthy. |
Well, even though we don't have accurate data on the Chinese situation and the data the Chinese gov gave has been shown to be exaggerated, we can still see a lot of growth there and a lot of potential for growth. Which is not surprising given where they came from.
The myth about China is that it's "recent" (1978 and on) growth is somehow thanks to central planning. The reason for this myth is a simple mixup between correlation and causation. Yes, China has a lot of gov intervention and yes china's economy is growing, but one does not cause the other. If it rains in LA, than that does not mean the mayor of LA made it rain
If you look at it from an empirical point of view than the link between the deregulations and the growth are much more likely. If I'm not mistaken the Chinese gov had Milton Friedman (not Austrian, but pseudo-free-market Chicago School) over for tea back in the 70s and 80s and they implemented some of his advice.
If you look at it from an Austrian/praxeological point of view than yes of course: less restriction will lead to higher growth.
Personally I have not closely studied the situation in China (and all of its specifics) and I'm not ware of any Austrian publication about the current situation in China so I can't give you a more in depth analysis of their situation.
All I can say is that (like Robert Murphy recently wrote) understanding Austrian economics does not give you the ability to predict the future. It does not give you the ability to predict how much the price of x will fall and how many people in sector Y will be fired and on what date market Z will collapse.
It does however tell you what the effects of certain measures will be. If the ECB announces that it will start printing new euros to buy Spanish and Italian bonds then we know that increasing or inflating the money supply will diminish the value of the euros that are already in circulation. It's the Law of supply and demand. Logic and maths then tells us that the people who will be hurt most by that measure are the poor. The Cantillon-effect (Cantillon, proto-Austrian) tells us there will be a shift in wealth towards the point were the money was injected (gov, banks and the major corporations).