China Law Blog

There are four kinds of people:

1. Those who truly love the Financial Times and the Economist Magazine.

2. Those who claim to love the Financial Times and the Economist Magazine, but only because they want to be viewed a certain way.

3. Those who read the Financial Times and the Economist because they know they should, and

4. Those who read neither.

I fit into category 3, firmly believing category 1 people are an extremely rare breed.

I'm guessing David Dollar goes into category 1 and I say this not only because he was an Economics professor before he became the World Bank's China Country Director, but because his blog on China's economy actually conveys real enthusiasm for the subject matter. On top of that, it handles very complex subjects with amazing clarity.

I am never going to enjoy reading about China's economy (or any economy for that matter), but Dollar's blog does such a good job of it that I have become a regular reader and I am adding it to our blogroll. As a bit of an aside, does having the last name Dollar increase one's chances of becoming an economist, or did Dollar change his name after he took on the job, a la Madonna? Does naming your kid Ramond increase the chances he will be a bad speller?

Dollar's most recent post is particularly good. It is entitled, "Sustaining growth: China’s need for a new growth model," and in it, Dollar sets out the "four basic principles" that have driven China's growth since 1978, asserts they are still valid, but need "tweaking:"

First, human capital. Pre-reform China did a good job of providing basic education and health to the rural population, so that the country began reform with extraordinarily good human capital for a low-wage country. China has lived off this asset for a long time. But better public support is crucial to ensure basic education for the whole population, including the rural poor. Schooling through at least nine years and preferably 12 is essential if China is to have the labor force it needs in the near future.

A big increase in public spending on education would definitely be a great investment for the new growth model. It may be effective stimulus as well, as it puts money in the pockets of teachers, hires many of the recent college graduates, and convinces middle-class households that they do not need to save quite so much for education spending.

Go here for Dollar's analysis of the remaining three principles of "incentives for private investment," "openness," and "infrastructure.

I just added it to the blogroll.