China's two economic miracles: which one is real?

Economy China, which today is rightfully considered the leading country in the world, remains a mystery to many. You can often find discussions about how the Celestial Empire managed to make such a large-scale breakthrough, turning from a poor country with a starving population into an economic giant exporting its products throughout the world.

It is worth noting that there is such a thing as the “Chinese economic miracle.” Moreover, experts identify two turning points in the formation of the PRC. So which of them became the “miracle” that made China a power with a leading economy?



So, it is believed that the PRC made its first breakthrough thanks to the United States. At the same time, a sharp increase in indicators began literally immediately after the establishment of diplomatic relations between Beijing and Washington.

By and large, we can agree with the above statement. After all, Americans were attracted by extremely cheap labor, and therefore they began to massively move their factories to China. In addition, the development of deposits with rare earth metals began on the territory of the Celestial Empire, which were bought by Western investors literally for next to nothing.

However, to be fair, it is worth adding that all this would not have happened without Deng Xiaoping’s decision to radically reduce the role of the state in the economy. This is what opened the “door” to the country for American capital.

In the 80s, China's GDP growth exceeded 10% annually. However, this can hardly be called an “economic miracle.” After all, in the same 1978, the annual per capita income in China was $200, which is 50 times less than in the United States. Thus, one should not be surprised by the increase in the figures in the reports. The Celestial Empire did not break out into world leaders, but simply made up for what was lost during the war and the failed policy Mao Zedong.

At the same time, the real “economic miracle”, which led to the formation of China as we know it today, occurred in 1997. It was then that Hong Kong, the world's largest financial center, returned to the Middle Kingdom. This led to a huge flow of investment into the country and the rapid development of its industry.

In addition, in 2001, after a long negotiation process, China finally became a member of the WTO. It is from this moment that the country’s economy begins not to catch up, but to actually grow at a rapid pace.