China’s Economic Reform: Take-offs with Poverty as Solid Bases

Abstract

Structural changes in socio-economic systems may occur under different circumstances, depending on the mechanisms under which the systems are maintained and operated. A society controlled by a dictator may experience structural changes when he dies. Socio-economic structural changes of a planned economy controlled by a small group of politicians may take place after its economic systems have lost efficiency. A genuine democratic society may have to carry out dramatic reforms when the abilities of its population become mediocre. In non-linear evolutionary systems, various theoretical methods have been developed for identifying conditions and paths of structural changes, such as catastrophes, bifurcations and chaos. But in practical terms it is hard to identify the essential forces for structural changes. The well-recorded events of the French Revolution provides an example of the complexity of interpreting socio-economic structural changes. The different paths of modernisation that Japan and China had experienced in the hundred years before World War II show how multiple variables can interact with each other in a highly complicated fashion and how each variable might play different roles in determining the fate of each country. We appear to be powerless in identifying the definitive factors for bringing about structural changes and determining new structures.

By movement there is an escape from the peril. I Ching