00:00This week on Wu Says, we take a closer look at China's economic growth story.
00:06The question we ask is, why was China's economic rise so extraordinary?
00:11Melissa Idris discusses this with Professor Emeritus, Dr. Dr. Wu Wing Tai.
00:17So this was seen as the Chinese innovation.
00:22That was a great thing, which you are able to have production incentive without harming the previous beneficiaries.
00:35The people who had the coupon to buy at the low price.
00:38So you're saying this part of China's growth story has not been fully understood or fully appreciated by others?
00:45Yes, they see it as innovation. Why don't countries that reform, like Poland, like Russia, what did Russia and Poland do?
00:58Poland and Russia just say, okay guys, no more central planning. Everything goes to the market.
01:04And what do we know about the situation in these two countries?
01:08There was chaos. And you look at China, there was no chaos because the existing system stayed and a new system grows parallel.
01:20Prof Wu, can you talk a little bit about the line between government and business?
01:27Often when people talk about China's industrial transformation, the line between government and business gets blurred.
01:34And I talk about not just central planning and state subsidies, but also state-owned enterprises, investment R&D and all the kind of conducive national policies that allow for certain sectors to thrive.
01:48Can you talk to me whether this fusion of business and government has been a boon or has been an advantage to China or whether it's come with hidden costs?
01:57Okay. What happens is the maintenance of the state enterprises, especially at the very beginning, where the state enterprise is allowed to, the extra amount that it produces above the quota, it can sell.
02:17So there's a lot of profits. So it was seen as the preferable way to reform than in Poland and Russia.
02:25And it was seen as a superior approach. But the interesting thing is, this system has been abandoned in China.
02:34Basically, there's one price for almost every item now. You don't see that anymore.
02:41That duality could not survive because it was a recipe for corruption.
02:47Because who would get that coupon to buy the item at the lower price?
02:55And if you buy at the lower price, straight away you can sell it at the market price and make an unearned profit, basically.
03:04So it is the political elite that is able to get access to the cheap goods and reselling it on the market.
03:14Catch the full conversation of this on all Awani International social media accounts at PowerFest.
03:24That report wraps up Awani International tonight.
03:27Stay tuned for our reports on the rivalries, strategies and the shifts behind the PowerFest driving the new global order.
03:34Visit international.astroawani.com for more.
03:37Be sure to follow our social media accounts at PowerFest.
03:41That is all for now. I'm Hafiz Mazouki. Good night.
