As the global economy battles recession, the Chinese economy is booming. China's GDP is expected to grow 8% this year. Western economists foresee 12% growth each of the next two years, according to the New York Times. How does China do it?
Financial analysts point to a number of factors. The Chinese government relaxed credit earlier this year. There are new pro-growth tax policies in place. The renminbi is undervalued, favoring exports. Chinese savings rates are high.
All of these factors are important, but they miss the main point. I am an American currently living in Chengdu, China. As I look around, the main explanation for Chinese economic growth is pretty obvious:
The Chinese work really hard.
That sounds banal, but it is true. Students generally are at school daily from 8 AM until 5 PM (plus half day Saturday), with several hours of homework thrown in. Most businesses are open seven days a week, often into the evenings. Construction sites buzz from six in the morning until ten at night (or later) each day. Even the post office is open on Sundays. The Chinese have witnessed the fruits of their labors over the last twenty years, and are working hard to get more.
If economic growth were reliant only on smart government policy, then all that is required is rooting for our elected officials. But it's not. To emulate Chinese economic success it is necessary to return to the basics: education, savings -- and a lot of hard work.