Tan Kin Lian's Blog: Socialist Market Economy

Saturday, November 21, 2009

Socialist Market Economy - China's Key to Success

Here is an interview with Wen Jiabao, Prime Minister of China. He expressed an insightful understanding of Adam Smith's theory of economics. He pointed out that Adam Smith actually wrote two books - on the invisible hand (i.e .market) and the visible hand (i.e. role of government). When economist applied only one side of Adam Smith's theory, the results are not satisfactory. It is now time for Singapore to learn from China about economics and governance. View this interview.

13 comments:

Tan Kin Lian said...: i Mr Tan,

Surprisingly, Adam Smith published "The Theory of Moral Sentiments (1759)" before publishing the worlds' famous' "The Wealth of Nations (1776)":

http://en.wikipedia.org/wiki/Adam_smith#The_Theory_of_Moral_Sentiments_.281759.29

Full in:
http://en.wikipedia.org/wiki/Adam_smith

According to wikipedia, Adam Smith continously edit "The Theory of Moral Sentiments" (up to 6th Edition) before his death and considered himself that this is far more superior than "The Wealth of Nations"...

Regards,

Giap; November 21, 2009 10:58 PM
wjsim said...: Sorry Mr Tan, I just can't stand at the side and look at this one.

http://www.commondreams.org/views06/0110-42.htm

Quote
So where are the Chinese communists? They're in government. The communist party is the only party there is. China doesn't have freedom of speech or freedom of the press. It doesn't tolerate dissent. Authorities can arrest and imprison people who threaten stability, as the party defines it. Any group that dares to protest is treated brutally. There are no civil liberties, no labor unions, no centers of political power outside the communist party.
Unquote

Singapore is already mini-China. I would think China copied Singapore. Wen is just paying lip service to Communism, like how Obama is paying lip service to Capitalism.

As usual, please do not publish my comments if you do not see fit. They're just meant for you, saves clogging up your inbox.; November 22, 2009 8:26 AM
Tan Kin Lian said...: To wjsim
Any message to me should be sent to my email kinlian@gmail.com. Do not use my blog for personal messages.; November 22, 2009 9:08 AM
Anonymous said...: Premier Wen is out of touch with ground realities!

He talks about social inequity impacting on the harmony of society. Yet, is it not a contradiction that the private wealth of China is concentrated on a few billionaires relative to the population of more than 1 billion people??

In global rankings just released, China has the 2nd most number of BILLIONAIRES, after USA.

Anecdotally, the income divide is worst in socialistic China than capitalistic USA.; November 22, 2009 9:33 AM
C H Yak said...: Perhaps certain thoughts above started from the assumption that China is a Communist Country and most of us viewing from outside China as if we were Westerners and could have misunderstood and continue to misunderstand Communism in China.

Perhaps we should view it from another perspective. As I would simply put it, I feel China is even more democratic than Singapore in various ways. The author China: Capitalism Doesn't Require Democracy (Robert B. Reich) actually said in his article: As China becomes more prosperous and integrated into the global market -- so American policy makers have thought -- China will also become more democratic... that precisely is what I feel had taken place over 2 decades of modernisation and open policy. And one actually has to be dealing with some ordinary people there to feel it.

One may equate Communism with many rules and an iron-cladded fist over it. But we in Singapore maybe having even more "rules' although we are so called democratic, but our "rule of the law" may be even firmer in thicker armour clothes. How does one explain their system may be even more "organic" in solving problems?

I do not think Premier Wen could be out of touch with ground realities too. Conversely I should say he is one who is so close to the ground, his style and personality, and more important his visits to the ground. He is even more paternistic and close to the ordinary people than our version in the SM, GCT (if one can still recalled his attempt on Potong Pasir). If we compare their welfare spending to help farmers improve their living,we will have a good laugh over our Parliament debating over whether to increase the S$200 monthly allowance for the needy destitutes here while we see few of them in the open.

China is so huge. The big income divide will certainly exist. China's interim goal is to "build a well-off society" only by 2020 and to realise the mid-century dream of achieving full-scale modernisation i.e. on the 100th N-Day. This income gap will naturally close with total GDP rising from US$2.5 trillion to US$19.1 trillion and per captia income rising from US$1,800 to US$12,300. This is their long-term strategy although growth rate is expected to fall from 8.1% to 4.3 % by 2050.

It is not a simple dream and job for Premier Wen, President Hu or whoever.

Simple statistics on counting billionaires relative to the population is not meaningful. It is just like comparing number of rich bankers here and their earnings or minister's salaries with the ordinary cleaners or construction workers.It tells a gap now, that's all.

I don't think China need to copy Singapore either. To implement on such a large scale adopting a small country's policy as "model" is certainly asking for trouble. For Premier Wen, perhaps he can politely say such things to learn from Singapore, but to "copy" perhaps not? I don't think President Hu dare too.

Singapore is so small and yet the people are so apathetic. You should see footages on how the local villagers turn against their incompetent and unyielding local authorities.{ These are only villagers, not extremists" }

The parameters are so different. To "copy" better think how to "format" first.; November 22, 2009 6:04 PM
Anonymous said...: The Visible Hand=China Communist Party

The Invisible Hand="Market" (China Socialist Market)

"..Singapore to learn from China... " ?!; November 22, 2009 11:29 PM
Anonymous said...: Unfortunately, at this point in history, China cannot be a role model for aspiring countries. The jury is still out on this one.

There is still widespread corruption and abuse of power & authority.

Many people are saying good things about China, only because it is a great source of wealth.

A very simple test would be this:
Would I give up my S'pore citizenship and be a citizen of China?; November 23, 2009 11:16 AM
C H Yak said...: No country or even an organisation can be a perfect role model. I don't the US had been one. At best it could claim to be the starting point of democracy; but not the end. If not President Obama would not have sprung up. Human being need to learn incrementally. We learn the good while stay away from the bad. Why do we need just to be such a model? If one does exist, it is only a "prototype" and not a model (or even role model). And only a prototype can be copied. A model is just a representation. From something so complex we make it simpler for undertanding.

But we learn from history. And history repeats itself and we should learn from it. We should also reject from being casted as a prototype while perhaps only aspiring to be a "role model" even though it is impossible as a country. Even a good prototype would soon become extinct because other prototypes (good and bad) are evolving.

Citizenship is acquired by birth. When Singapore or any country registered their citizens (natural or new immigrants included) and issued an IC, I don't think their Govt. issue them with a "fixed mindset chip" in their IC to maintain their status quo. We can have people clenching both fists across their heart and swearing aloud, other than being on ceremony, will a role model evolve. Things will only happen incrementally given the right set of values.

A problem might be Singapore (or just some, or even the majority) would love to be a role model but it could not. Even if it could be the "first", it can only be a prototype since others will evolve. A simple thesis statement might be to test whether "a mindset is issued with the pink IC". A good starting point might be to put 2 sets of newspapers, one from each country, side by side for a comparison.

Countries from birth are at different points in history. There are lead and lag times. There is no short-cut to learning. Maybe Singapore exams system does and is a good prototype. Maybe Singapore can be both a prototype and role model as a country at the same time "at this point in history" because it is so small, but this status quo is not going to bring other countries back to this point in history especially if they are moving and evolving faster than us. A rabbit always think it is faster than a tortise, not slower even if it needs a nap, although both are about the same size and weight and both can choose to eat only grass .....; November 23, 2009 1:37 PM
Anonymous said...: I want to give up my Singapore citizenship and be a citizen of China. The problem is that China is not as desperate as Singapore in getting new Citizens. I have enquired before and it is really really difficult to become a citizen of China. Don't believe, try it yourself. It is free to enquire.; November 23, 2009 2:00 PM
Anonymous said...: Singapore must learn this and that from China and other countries. Why then is the one who has to learn this and that be earning more than those it must learn from?; November 23, 2009 2:00 PM
Anonymous said...: China though a Communist is in many ways more democratic than Singapore. The key leaders are changed periodically, no such things like staying behind the throne in the form of Senior Ministers, etc.,and at the same time drawing high pay as a Senior Minister and fronting institutions,
positions which should be given to the public sector, away from political connections.
Completely new blood in Govt., this is what Singapore has to learn from China. Also the human right way to protest by going on the streets to right an injustice,
and not being threatened with arrest for public dosorder.
This is real democracy.; November 23, 2009 5:14 PM
wjsim said...: For those who thinks China is more "democratic" than Singapore, do you know that Facebook and Twitter are banned in China? Are you sure that "the human right way to protest by going on the streets to right an injustice,
and not being threatened with arrest for public dosorder" is true? I don't need to raise examples of Chinese police firing on protesters, it's too common. If this blog is in China about China, our friend would have been invited for a nice tea with the CCP, as with many of the blogs you see linked on the right, like TOC and Wayang Party. If it's not in China, The Great Firewall of China knows no bounds. :)

MDA in Singapore bans websites as well, those major pornography distributors. (dammit) :D

China's economy is booming for one major reason. The wage is blardy low. The figures quoted are in Yuan. 1 SGD = 4.92 Yuan. About 500 SGD/mth to hire a graduate. It is a capitalist's dream come true.

And the lack of Intellectual Property laws and enforcement keep the entrepreneurs on the edge and always coming up with new stuff as prices of products are constantly pushed down, thereby increasing real income. Shanzhai is good!

Other than the two above, I'm sure we can learn more from China. I'm not being sarcastic here. Those two are actually real factors for an economy to prosper. Is it surprising that the US is the exact opposite?

When other leaders visit their communities, it's care and concern. When our leaders visit the communities, it's wayang for elections. How?

Disclaimer: I am in no way affiliated with any political parties or societies. I just don't believe the grass is always greener on the other side and appreciate what we have here in this cosy little red dot.; November 24, 2009 1:07 PM
C H Yak said...: The right path to learning - read this posting :-

http://theonlinecitizen.com/2009/11/asia-sentinel-loses-a-singapore-correspondent/

This is first hand experience, not "hear-say" opinion.

The banned correspondent said :-
"While the governments of Burma, China and Iran tend to arrest troublesome foreign reporters or expel them without delay, Singapore’s more media-savvy government prefers a subtler approach to repression. The non-renewal of a work visa is their preferred method for getting rid of foreigners with minimal fuss or attention."

While the new media is getting more popular, I am sure this correspondent's published medium deserves a higher rating and greater respect than "Facebook and Twitter". The Online Citizen too.; November 25, 2009 4:37 PM

Saturday, November 21, 2009

Socialist Market Economy - China's Key to Success

13 comments:

Blog Archive