Zhang Wuchang (Âº†‰∫îÂ∏∏), (blog here) a controversial economist known as one of the founders of new system economics and modern property rights economics, said to a Southern Metropolitan Daily reporter that China doesn’t have income polarization and dismisses calculators of the “Gini Coefficient” as unworthy of being his students. The Deng Xiaoping reform admirer has a high opinion of the late Chinese leader and doubts there is real unemployment, saying it ismore common for workers to fire their bosses. [Full Text, in Chinese]
Q: This year will be the 10th anniversary of Deng’s death and 30th of the start of the reform and opening up policy. How would you grade Deng-initiated economic reform?
A: (After a little thinking, smiles) 100. The reform hasn’t been perfect, but still 100. Although he retired before he got the work done, but I would still give him an A+.
Q: In China’s reform, the leader’s will played a very important role, didn’t it?
A: This is not an issue of personal will. What Deng had done was something nobody else could have done. China hasn’t seen such a clear-thinking leader as him over more than 200 years. He doesn’t speak much, but his thoughts are clear.
Q: People used to compare China’s evolutional reform with Soviet Union’s shock therapy. It was generally believed that China was more successful than the Soviet Union. What do you think the major reason was? Is it that evolutionary reform is better than shock therapy?
A: The major reason for success is the leadership of the Chinese Communist Party. But in Soviet Union’s case, there was no Communist Party leadership. China’s reform was one that was carried out top down by the Communist Party, this is very important and a very organized reform.
Q: You mean China’s high growth over all these years was primarily because of a strong leadership and going in the right policy direction?
A: But there were times it was not so right. You look at the banking system, it’s a mess. There is restriction to withdraw US dollars and Hong Kong dollars. Policies change all the time and don’t know what they want to do. [They] suppress housing market, so that developers cannot build units over certain square meters. This tax and that tax.
Q: China has a big problem of a wealth gap, and some believe there is a tendency to go the way of Latin America.
A: This is nonsense. This is made up by the World Bank and those meddlers. There is lots of, lots of improvement for Chinese farmers, and the gap is closing up. The book, “An Investigation of Chinese Peasantry,” is also wrong. Maybe there is that in a handful of places and those are the worse cases in China. But the overall China isn’t like that. In many poor places there is no one picking tomatoes and no one farming the land, it’s because they all go out to find work. I have gone on many field trips to the countryside and have seen their rising living standards . There is change every year, of course it cannot compare with the cities and life in the countryside is still hard.
Q: China’s Gini Coefficient has shown the wealth gap is pretty huge.
A: How is this calculated? Who did it? Did these people go to a school? They don’t even qualify to be my students. Many farmers, working elsewhere, make money but don’t file for taxes, you cannot count them. If you go ask them, they will of course say they are poor. Who will say “I made a lot of money?”
Q: Don’t you think China’s unemployment is a grave challenge?
A: Not a problem at all. It’s not like many people are fired by their bosses, but they fire their bosses. One of my friends opened a software firm in Dongguan, the annual turnover of employees is 50%. Those workers choose to go to another factory themselves, not fired. You cannot count these as unemployment.
Q: During the reform, many with power reaped a lot of benefits, from privatization of state-owned enterprises, etc.
A: I know. But these things, how can we avoid them? As far as I know, China’s corruption is far less serious than that in Thailand, India and Indonesia. It’s impossible to not have these things, it takes time. If you want to kill them all, you cannot kill this many people. These things are inevitable in the process of reform. You cannot say the country is no good because of this. I am satisfied with what China has done in fighting corruption. Of course there is a lot more corruption.