Israeli model holds the answers to China’s quest for technology and innovation — Yasheng Huang

MIT Sloan Prof. Yasheng Huang

MIT Sloan Prof. Yasheng Huang

From South China Morning Post

It is widely understood that China needs to move from an investment-intensive growth model to one based on science, technology and innovation. But before I take up this subject, let me take a detour to tell a tale of two countries.

Both countries are small. One has a population of 5.5 million people; the other has a population of 8 million. In both countries, the dominant ethnic group is about 75 per cent of the population and minority groups make up the rest.

Both countries are rich. One country has a per capita gross domestic product of US$52,000 and the other country has a per capita GDP of US$35,000.

Both countries have faced existential security threats from the outside and armies in both countries have mandatory conscriptions. One country was actually kicked out and evicted by its now much larger neighbour, because the union would have threatened the political dominance of the main ethnic group. The second country is located in a region surrounded by hostile nations.

You may be able to guess the names of these two countries: Singapore and Israel.

Singapore is a model of using top-down political controls to achieve growth and a clean government. Photo: ReutersBut why should I write about Singapore and Israel in a piece about China’s growth model? And why these two countries, whose size and levels of economic development would presumably not offer anything useful about a country the size of China?

The answer to the second question is easy: despite the fact that China often insists on following its own unique development model, it has never shied away from its professed desire to learn from Singapore. In this case at least, Singapore’s small size has never deterred Chinese officialdom from viewing it as a model.

Read the full post at South China Morning Post.

Yasheng Huang is the International Program Professor in Chinese Economy and Business and a Professor of Global Economics and Management at the MIT Sloan School of Management.

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