The Economy of China

Discipline: Semester at Sea Seminars
Instructor: Reynolds
Credits: 3
Day: A
Start: 0925
End: 1040
Field Work: Day 6 | China Download Syllabus

For two thousand years, China had the world’s largest economy, simply because China
had the world’s largest population, and living standards varied little from one country to
the next. Then, in the 19th and 20th centuries, the Industrial Revolution transformed the
West, leaving other countries far behind and vulernable. China’s experience was typical:
invasion, political collapse and near-dismemberment.

After 1949, industrialization at last took root in China, accelerating dramatically after
1979. Within a few years, China will once more have the world’s largest GDP. Within
your lifetime, the incomes of individual Chinese will approach US levels. China’s re-
emergence as a world economic power ranks as one of the most startling and important
events of our era.

The other countries on our voyage all share this story: scrambling to catch up. So we’ll
compare each of them with China’s story. Why did Japan industrialize a full century
earlier than China? How did Hong Kong and Singapore also catch up, so quickly and
easily? Vietnam, so often impacted by her huge northern neighbor, now hopes to match
China’s growth. India, the worlds only other billion-person, continental economy, was
ahead of China after World War II. Why does it now lumber along in China’s wake?
And why does industrialization seem so out of reach for many African countries?

My goals for you in this course are to understand the core processes of “late
industrialization”; to apply that understanding to the China case; and then to deepen your
understanding as we compare China with these other countries. We’ll learn and apply
concepts such as investment, saving, technology, growth accounting and surplus labor.
We’ll also grapple with questions economists rarely ask (e.g., Where do institutions come

I aim to challenge and engage you, by closely linking what we study to where
we’ll be. I expect you to take ownership of your own learning. If you seek a passive,
undemanding academic experience, you should flee screaming from this course.

Field Work

Country: China
Day: 6

 We will spend a day talking first with members of Hong Kong’s Legislative Council and then, after lunch, some students will have small-group interactions with Chinese University of Hong Kong students while exploring some part of Hong Kong together.  Other students will visit the offices of J.P. Morgan.  Cathy Zhichen Liu will give a brief presentation of JPM’s private equity work in the PRC, followed by a discussion on the question: When Chinese firms go public on international capital markets, do the markets provide a corporate governance function? At the end of the afternoon, students, CUHK students and other participants will be welcomed to a short ship-board reception.
Academic Objectives:
  1. Students will be asked to consider the following questions:
  • How much political freedom exists today in Hong Kong?
  • How do political changes, economic integration with the rest of China, and economic growth interact in Hong Kong?
  • Can Hong Kong sustain its economic vigor if political freedoms erode?
  • For its part, can China continue to prosper economically with no significant political reforms?
  • Could Hong Kong play a role in those reforms?