The Very-Very-Obvious, not-Obvious-at-All Rise of China
An exercise in trying to tease apart what's foresight and what's hindsight
The Beijing Boom
An ironclad rule of living in the 21st century is that no matter where you are on the internet, you will eventually stumble across a fresh article or post about the inevitable rise of China’s economy, as well as the disaster this poses to American hegemony. It has rapidly become the largest trading partner of many different countries, and, as a result, it’s necessary for people to write post-hoc rationalizations of articles about how all of this could have been seen from a mile away. Much is typically made of phenomena like the long-term cultural precedence of meritocracy, the nationwide emphasis on filial piety, and the pegging of the Renminbi. However, it seems as if we are quickly forgetting what historical predictions of China’s future looked like.
The World in the 60s
At the start of the 60s, East Asia was seen as the part of the world least likely to develop.1 Ostensibly, in our glorious 20/20 hindsight, this may sound strange, but a closer look at ground conditions justifies the claim. Japan is the obvious outlier here, because even as early as 1960 it was experiencing growth that seemed almost ludicrous in nature, especially considering the impacts of recent conflicts. Other countries in the area were not so lucky. For instance, South Korea’s GDP in 1960 was 79 dollars a person. North Korea was doing even worse, but China by far had the worst problems at the time. As the result of the profound agricultural ignorance and active malevolence of a certain smiling tyrant, the largest famine in human history was underway. In fact, in 1960 the death rate in China outstripped the birth rate. Another contemporary example of the underdog status of China is from Kaname Akamatsu's third flying geese paradigm: in it, China is at the back of the flock, along with the Philippines and Vietnam.
Where did people at the time think the prosperous countries were? The Middle East of course. Lebanon was called the “Switzerland of the Middle East,” and Lahore was the “Paris of the Middle East.” Looking at historical data is quite revealing: in 1960, China had a much lower per capita GDP compared to Egypt, Syria, Iraq, Morocco, Algeria, Libya, and Iran. In fact, in the 60s the Middle East was so peaceful that the hippie trail, wherein groovy dudes traversed the whole of Asia, was a thing. Nowadays, if you told someone you were going on vacation to Kabul and Tehran, they’d have you sectioned.
OK, So What’s the Point?
My point is that knowing what country is going to boom in the future is not as deterministic as we might think. Sure, you can get a certain degree of accuracy by focusing on obvious country attributes such as coastline, natural resources, and recent conflicts, and, as a result, ascertain that, for instance, the Netherlands will be more prosperous than Kosovo for some time to come. However, China in many ways demonstrates how economic forecasting can be just as wobbly as weather forecasting. Consider how differently things might have gone if the famous reformer, Deng Xiaoping, was inclined to be more orthoprax than orthodox. If he had doubled down on the whole centralized economy thing and rejected reform, maybe instead of talking about the rise of the Chinese economy, we’d instead be talking about explosive growth in other places. I can easily imagine a counterfactual world where China is simply a macro-North Korea, floundering in centrally-planned mediocrity, while Iraq and Iran have peaceful states and booming economies.
Altogether, it’s far too easy to create Kiplingesque Just-So stories about the growth of a country. We as humans have trouble understanding the probability of things in the past which could have occurred but didn’t. A world where China is #1 seems formulaic to us now, but maybe if Deng Xiaoping had bonked his head too hard on a door frame2, we would talk about 2021’s China with pity instead of apprehension.
My source for this is a PDF of the conclusions of an economic conference held in 1960 which I managed to lose — if someone could help me find it that would be greatly appreciated.
Ok, technically this was statistically unlikely because the man was 5 foot 2.