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Home Publications Blogs Beat the Press The World Bank's Advice to China on Growth

The World Bank's Advice to China on Growth

Tuesday, 28 February 2012 05:51

It is striking that the reporters can write about recommendations from the World Bank or International Monetary Fund to China about sustaining its growth, without any comment on the irony. These institutions have been making policy recommendations for six decades that have often not resulted in much growth at all. In some cases, most notably the situation of Argentina following its default in 2001, they have been astoundingly wrong. Therefore it is impressive that Washington Post can report on a set of recommendations from the World Bank to China, whose growth has averaged more than 8 percent annually over the last three decades, without ever noting this irony.

It is also worth noting that the graphs accompanying this article show that China's productivity growth is projected to average close to 6 percent annually over the next two decades. Many news outlets (including the Post) have argued that China will face a problem supporting a larger population of retirees as its work force ages. If this productivity growth projection proves accurate, both China's workers and retirees will be able to see their standard of living double on the next two decades, even as the ratio of workers to retirees falls sharply.

Comments (7)Add Comment
physician infect thyself
written by frankenduf, February 28, 2012 8:11
the other irony is that now European and American citizens are being coerced into drinking the kool aid of austerity measures that were historically 'prescribed' for third world countries- just goes to show how 'globalization' has concentrated power into the hands of financiers and capital movement
Planet Money
written by anon, February 28, 2012 12:40
I heard a Planet Money report on the same story, yesterday. They noted Chinese government ownership of the oil, cellphone, airline, tobacco, and television industries.

But aren't these likely candidates for at least partial public ownership? Doesn't Alaska have a dividend fund because of state ownership of its oil resources? (I realize Chinese censorship is problematic, though, with regard to television.)

I wish economists like Dean Baker would write more about the anti-competitive and irrational pricing and practices of American cellphone, cable, and internet service providers. (Also auto-insurance.)
Know nothings
written by John Puma, February 28, 2012 12:49
Knowing neither irony nor shame can be a rather potent cocktail for the ultimate success in the US: power and wealth by aggressively knowing nothing but terminal greed.

(Do I detect yet another chorus of "It just ain't gonna be your daddy's Social Security.")
Planet Money
written by anon, February 28, 2012 12:55
I forgot Planet Money also cited Chinese goverment ownership of banking.

Though, again, this seems like a likely candidate for state ownership. I believe North Dakota has a state bank.
USAID/World Bank
written by Steve, February 28, 2012 7:16
Having spent my career as an economist at USAID with frequent dealings with the World Bank, the fatuousness of personnel at both is beyond what the uninitiated could ever imagine. Trying to point out to them the general failure of their development policies in Africa, Central America, much of Latin America and generally wherever either was very active, they would routinely point to global socio-economic indicators, heavily weighted by China which of course has systematically ignored and had as little to do with the "Washington Consensus" as possible. Trying to point this out to them only fell on incomprehension, so convinced are they of their flawless perfection. Of course, once one realizes that they are meant to succeed only in exploiting and subjugating the few countries hapless enough to have no choice but to accept their presence, then one begins to understand better their remonstrances. As Gramsci or Marx might well explain, the Post is by social definition composed of those cut from the same whole cloth, so unlikely ever to shed an objective light on their success, however one looks at it. Of course, as most have never read Gramsci, and few Marx, they are not going to understand this either.
Chinese currency
written by Brianq, February 29, 2012 4:24
Why doesn't the World Bank get the Chinese to increase their currency value to a reasonable level? They have had an imbalance of trade,exports to imports for years. This has adversely affected many countries worldwide.
written by Roanman, March 01, 2012 7:39
The problems with this piece are the assumptions the the Chinese numbers reflect useful growth or are even truthful in the first place.

Much of what the Chinese call growth have been beyond huge busy work projects of real estate developments in which nobody lives or works. Vast cities have been developed which are now unoccupied and deteriorating. This misuse of China's wealth by their centrally planned government is well documented.

The second problem is every bit as real, the assumption that the numbers China circulates for public consumption are any more real than the numbers the United States government circulates for public consumption.

Which numbers particularly for inflation and unemployment are ridiculed from sea to shining sea.

While the world bank is an international laughingstock, it is largely made up of the same intellectually inbred twits that occupy government buildings from Beijing to Washington D.C.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.