How Russia Can Create a “Chinese-like” Economic Miracle
The key to China’s success in overcoming poverty and achieving record economic growth, and how that can be replicated in other countries, including Russia, was addressed by economist Sergey Glazyev, Minister for the Integration and Macroeconomics of the Eurasian Economic Commission, at a special panel discussion on April 4 of the Moscow Economic Forum. He stressed that China’s economic policy “gives priority to public interest versus private interests”.
Projects that serve the “well-being of the nation” receive beneficial loans, sometimes with zero-percent interest rates, he pointed out, while activities aimed at acquiring super-profits are repressed. The government sets the strategic priorities, and the private sector competes to carry them out.
The increase in productive investments is “the key to economic growth”, he said. “In China, the investment growth was seven fold [from 2001-2020]. The loan growth was five fold… The general loan-based growth to the productive sector allowed for a very impressive growth. The level of monetization [to the productive sector] today in China is twice as high compared to Europe and the United States. That being said, we do not see in China the same kind of bubbles, the boom and bust cycles which have long become a characteristic of the Western economies. The growth of investment [in China] necessarily entails a new technology and the lowering of inflation in the long term.”
Russia on the contrary, according to economist Glazyev, made the mistake of adoping the western model of shock therapy in the 1990s. And it went on to “implement all the regulations that were recommended by the Washington financial institutions and European Economic Commission.” The result was disastrous.
Glazyev strongly criticized the Russian Central Bank policy still today, in particular the approach of “emitting rubles to purchase foreign currencies”, or just to finance a budget, which leads to speculative bubbles. Rather, he recommends the approach taken by China of funneling the monies emitted into productive growth.
On display at the Moscow forum was Glazyev’s new book, The Chinese Economic Miracle: Lesson for Russia and the World.” A short text accompanying the book notes that iin the past 50 years, the population in China “moved from the huts to the best cities in the world in terms of the quality of the living environment. Country roads have been replaced by high-speed rail and highways.”
Sergey Glazyev Posts Strategic Alert. Academician Glazyev has seriously studied and greatly appreciates Lyndon LaRouche’s science of physical economy. In fact, he posted issue 13/23 of our Strategic Alert newsletter on his Telegram account, with the following message: “An up-to-date summary of currently important events on this and other topics in the journal founded by the noted thinker Lyndon LaRouche, who forecast the collapse of the American-European financial system a quarter of a century ago.”