Nee, V: Capitalism from Below

Chinese leader Deng Xiaoping's decision to open China to global markets is often identified as the beginning of the transition, but Victor Nee and Sonja Opper argue in their book "Capitalism From Below "that the Chinese economic miracle is based on the actions of ambitious entrepreneurs who did not wait for Beijing's sanction to launch their ventures. Nee and Opper claim, 'the emergence and robust growth of a private enterprise economy in China was neither envisioned nor anticipated by its political elite.' This bold assertion is substantiated by the findings from a meticulous study of more than 700 manufacturing firms in the Yangzi region that set up shop following the modest economic reforms of 1978. These companies decoupled from the traditional socialist system and, through informal lending, were able to finance small manufacturing outfits supported by their own networks of suppliers and distributors. While Nee and Opper do not ignore the role communist party leaders played in initiating the shift to a market economy, they ultimately credit entrepreneurs motivated by profit with China's success...Nee's and Opper's hypothesis is especially intriguing considering the current state of the Chinese economy, which in recent months has shown clear signs of a slowdown. The country has entered a new era. If China is to continue its unparalleled growth, it will have to rely on ambitious entrepreneurs to take its economy into a new phase of development. In short, it will need another ambitious wave of the type of people Nee and Opper credit with leading China's last great economic transformation.--Terrance Murray"The Financialist" (08/31/2012)