This is probably the basic characteristic of Rostow’s economic growth theory.His strength is to see the process of economic growth, not a uniform succession of changes in the process, it will have some breathtaking jumps in the middle, there are some discontinuous changes.From crawling to standing up, a man is not continuous. He cannot stand up slowly. He stands up all at once, falls down when he is unsteady, and then stands up again.From a traditional economy to a modern one, there is a similar process – he describes it as “take-off”.
Why did The Chinese economy take off in 1978 and not 1952
In his lecture two years ago, Professor Hai Wen probably used Rostow’s framework to introduce the development and changes of Chinese economy.He came to the important conclusion that the “plane” of China was very large, so it would take a long time to take off.Second, after taking off, it takes longer to mature to a higher level.
I would like to make some further discussion on the basis of Miss Hai Wen’s argument.
For example, Rostow argues that China’s economic take-off began in 1952.By this time, China had ended wars in modern times, completed unification, and then industrialized, forming a powerful driving sector, with an investment rate (including then Soviet aid) significantly exceeding 10%.At the same time, there is a very responsible administration engaged in planned economic activities to direct the deployment of economic growth throughout the country.
According to the 1952 takeoff, China’s takeoff should be completed in the late 1970s and early 1980s in a period of 20 to 30 years.But as anyone who has studied the Chinese economy knows, in the late 1970s and early 1980s, China could not be said to have taken off.Although the investment rate at that time was higher than 5%-10% and strong leading sectors of the economy were formed, mainly heavy industry and industry, the characteristics of China’s entire economic structure were also characterized by traditional economy. 80% of the population was in the countryside, and the share of national income was only 20%-30%.The peasant class is very poor, so it lacks purchasing power to digest industrial products, and the growth of industry does not have a very solid foundation of domestic demand.At the same time, the technology, including electricity (which was in short supply) — we still had a large percentage of the population without electricity in ’78 — even if we were to take off, the basic conditions would not be in place.