China and Russia Compared

1
China and Russia Compared

• In 1978 China instituted dramatic economic (but
  not political) reforms in several special
  economic zones in which foreign investment and
  capitalism were encouraged to flourish.
• China did not adopt multi-party democracy or a
  market economy at the time other Communist
  countries did around 1990.

• Under Gorbachev in the 80s Russia adopted
  Perestroika and Glasnost--political reforms, but
  without any serious economic reforms
• Russia abolished the leading role of the
  Communist Party, opted for a multi-party
  democracy, and the market system in 1991

2
China and Russia Compared

• China focused on the East Asian trend of
  export-led growth but, through this the domestic
  market also grew.
• China--despite pressure over Tibet and the
  Western Moslems, held its territory together

• Russia ended up with no growth at all, and hardly
  any impact on world trade except in a colonial
  way exporting primary and semi-processed goods.
• Russia suffered the dislocation of the breakup of
  the USSR--which was a totally integrated economy,
  so most of it collapsed.

3
China and Russia Compared

• Chinas ongoing success has encouraged further
  investment from the West, even though relations
  with China have been difficult. China, however,
  is very dependent on the West for trade
• Almost everything seems to be Made in China and
  strong government controls crime.

• Russia is an investors nightmare with unreformed
  bureaucracy, a traditional view of profit as
  theft and a hopeless tax system. It remains an
  insignificant player in world trade (what was the
  last thing you bought that was made in Russia?).
  Still a strong criminal element.

4
China and Russia Compared

• THE FUTURE
• China interested in building regional alliance,
  including Japan and Korea to remain competitive
  and to have an alternative to exporting to the
  US. Relations with US poor, even though trade is
  large--problem over Human Rights and Taiwan

• THE FUTURE
• Who knows? But Russia torn between Europe and
  the US, and attractive to the US as a strategic
  ally and supplier of oil. Relations rather good
  and potential for links encouraging even though
  trade is minimal. Seems illogical, but so much
  foreign policy is.

5
China and Russia Compared

• The benefits of rapid economic growth resulting
  from the special zones enabled China to
  maintain a social infrastructure that looked
  after the poor, maintained some sort of hope and
  allowed things to get better every year. Meantime
  some people also got really rich and China
  prospered. Tienanmin threatened this.

• Russia allowed free expression while the economy
  collapsed and social conditions and services went
  down very rapidly. This allowed the Mafia to
  flourish, and economic reform remained bogged
  down in hopeless bureaucracy and corruption.
  People actually got a lot worse off, but they
  were free to enjoy it.

6
China asserts itself, 2005