Executive Roundtable Series with Hongbin Li
VIEW EVENT DETAILS(President's Circle Event)
The China Model
China’s economic success due to the centralized state's control of the economy has become a popular theory in both China and the United States. From the Chinese perspective, the party is strengthening control of the economy and from the American lens, people worry about an ever-growing power state of a non-market economy.
Hongbin's claim is the opposite. China has had strong state control since the early 1950s, but China’s economic growth only started to take off in the late 1970s - a key reason is that China’s economic success has been driven by economic liberalization since 1978. Unlike in most other countries, local officials were the drivers of China’s growth because of the loosening of central state control. The party decentralized decision-making powers to local officials and incentivized them to promote local economic growth. Essentially, the country was run like a corporation, with Beijing functioning as the headquarters and localities (provinces, cities, or counties) functioning as profit centers competing against each other. The decentralization, incentives and competition, not state control, are the explanations for China’s thirty-plus years of miraculous economic growth.
This same economic model can also explain China’s recent slowdown. With decision-making re-centralized and profit/growth incentives for local officials removed due to the anti-corruption movement, government officials no longer care about growth. At the same time, they still control many resources but have little incentive to use them efficiently. In addition, Hongbin's model helps us to understand why there are so many social issues associated with China’s growth. The Chinese government, which is supposed to provide public goods, has been acting like a private firm. For decades, officials have focused almost exclusively on growth, ignoring social issues such as education, health, inequality, pollution, and corruption. Now, with China enriched, these issues are finally coming to light.
So, where should China go? There are three main economic models in the world: the planned economy, the state-run market economy (described above), and a true market economy. China has already tried to implement the first two during the past seventy years. The planning model has completely failed, and the state-run market economy is currently having serious trouble. Thus, from a purely economic point of view, the best choice seems be obvious.
Agenda
11:00 - 11:30 AM Registration
11:30 - 1:00 PM Event and Q&A Discussion
RSVP: Please email James Gale at [email protected] if you are interested in attending. For more about our President's Circle membership, please email Palarp Jumpasut at [email protected].
About Hongbin Li
Hongbin Li is the James Liang Director of the China Program at the Stanford Center on Global Poverty and Development. He obtained a PhD in economics from Stanford University in 2001 and joined the economics department of the Chinese University of Hong Kong, where he became a full professor in 2007. He was also one of the two founding directors of the Institute of Economics and Finance at the Chinese University of Hong Kong. He taught at Tsinghua University in Beijing from 2007 to 2016 and was C.V. Starr Chair Professor of Economics in the School of Economics and Management. He also founded and served as the executive associate director of the China Data Center.
Li’s research has been focused on China and is concerned with two general themes: i) the behaviors of governments, firms and banks in the context of economic transition; and ii) human capital and labor markets in the context of economic development. Research results have been published in journals such as PNAS, Journal of Political Economy, American Economic Review Papers and Proceedings, Journal of Economic Perspectives, Economic Journal, Review of Economics and Statistics, Journal of Labor Economics, Journal of Development Economics, Journal of Public Economics, Journal of Comparative Economics, Journal of International Economics, and Demography¸ among others. His research has been widely covered by media around the world and well read by top policy makers in China.
He is the current editor of the Journal of Comparative Economics (2017), an associate editor of Economic Development and Cultural Change, and is on the editorial board of the Journal of Comparative Economics and China Economic Review, as well as on the editorial advisory board for the Journal of Economic Perspectives and China Agricultural Economic Review. He received the Changjiang Scholarship in 2009, the National Award for Distinguished Young Scientists in China in 2010, and the McKinsey Young Economist Research Paper Award in 2012. He is a Research Fellow at the Institute of Labor Economics in Germany and a senior research fellow at the J. Mirrlees Institute of Economic Policy Research.
Asia Society Northern California hosts private Executive Roundtable Briefings with industry leaders every month in San Francisco and Silicon Valley. Program topics are around headline news, business analysis, and critical issues coming out of Asia. These monthly briefings, launched in September 2017, have grown in popularity to generate wait-lists quickly. Most events are off-the-record to encourage open debate and discussion.