Martian2
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When you put the Rise of China into its proper historical context, you will realize this is the third time in recent history (relatively speaking) that you've seen the accelerated economic and technological development of a country.
American Civil War Reconstruction (1865-1877)
Let's begin with the American Civil War Reconstruction. The Union (or northern United States) devastated the Confederacy (or southern United States). Sherman's March to the Sea in 1864 through Georgia was particularly destructive. General Sherman destroyed railroads, telegraph poles, civilian property, etc.
"Reconstruction" began in 1865 and officially ended in 1877, but it was just the beginning of the economic recovery for the American South. It would take another 100 years for the American South to fully recover, when the per-capita Southern income was 90% of the US national average.
The lesson from the American effort by the North (Union) to economically redevelop the South (former Confederacy) is that it takes a massive downpayment (or Reconstruction 1865-1877) and another 100 years to fully recover from the economic devastation caused by the American Civil War (1861-1865).
Three things are needed for economic development on a grand scale.
1. massive amounts of money (e.g. official Reconstruction from 1865-1877)
2. lots of time (official Reconstruction was 12 years, but total redevelopment/recovery time was actually 100 years for Southern per-capita income to reach 90% of US national average)
3. the benefactor has to be a technologically-advanced country (the goal is to bring a backwards economic region to the forefront of modern technology and economy)
US Marshall Plan 1948-1951 ("approximately $132 billion in current dollar value as of October 2017")
To achieve victory against Nazi Germany, the United States bombed Europe back to the Stone Age during World War II (1941-1945).
After World War II, the United States wanted to strengthen Western Europe against the encroaching Soviet Union and Soviet Eastern European Allies (or Warsaw Pact). The United States launched a massive reconstruction of Western Europe. The Marshall Plan provided the equivalent of $132 billion in today's money to rebuild Western Europe's industries.
Though the Marshall Plan ended in 1951, it took fifty more years for German per-capita income to approach the US national average (see chart in bottom left-hand corner below).
Nominal GDP per capita | International Monetary Fund
Rise of China (1978-2017)
After World War II, China was an economically devastated country. The Japanese aggressors had bombed China from 1937-1945.
After 1945, China was in the same position as war-devastated Europe. The story gets worse for China. China entered into a civil war between the Nationalists and Communists from 1945 to 1949. The Communists won and the Nationalists fled to Taiwan.
Things get worse for China again. China had to fight the US in the Korean War from 1950-1953 to prevent the US Army from camping out on the Yalu River, which is on China's doorstep.
China just can't catch a break. In 1962, American military advisers enter South Vietnam. Another major war breaks out next to China. The US-Vietnam War lasted from 1962-1975. China is economically exhausted from diverting Chinese economic production to supply the North Vietnamese army with military equipment and economic supplies.
After the death of Mao Zedong, Deng Xiaoping comes to power in 1976. In 1978, Deng Xiaoping instituted an Open Door policy and welcomed foreign investment.
However, China's infrastructure was in really bad shape. Only the Taiwanese were willing to invest in the Pearl River Delta (Shenzhen) and Yangtze River Delta (Shanghai) regions in the 1980s.
The Taiwanese investment in mainland China totals US$200-$400 billion (references: Investing in Cross-Strait Relations - WSJ and ‘Lost years’ showcase Taiwan’s true story | Taipei Times).
The sum of Taiwanese investment in mainland China surpasses the value of the Marshall Plan (US$132 billion in current dollars). However, China is a much larger country geographically and population-wise than western Europe. Thus, the overall effect is a comparable level of redevelopment.
No one should be surprised by the Rise of China. It is the third time in the last 150 years that we have seen a major economic redevelopment.
For the American South (former Confederacy), the Union/American North provided the technology, "Reconstruction" redevelopment fund, and open markets for the rejuvenation of the American South.
For western Europe, the United States provided the technology, Marshall Plan redevelopment fund, and open markets for the rejuvenation of western Europe.
For mainland China, Taiwan provided the technology, US$200-$400 billion redevelopment capital, and open markets (Taiwan served as a conduit to the worldwide market) for the rejuvenation of mainland China.
The Rise of China is a surprise to people today, because they have forgotten about the redevelopment of the American South and Western Europe. When you place the Rise of China in its proper historical context, the outcome is expected. The Marshall Plan was approximately $132 billion in current dollars. Taiwan probably invested about $400 billion in mainland China. Taiwan funded the equivalent of THREE MARSHALL PLANS for mainland China. The result is an expected modernized China, which you see today.
American Civil War Reconstruction (1865-1877)
Let's begin with the American Civil War Reconstruction. The Union (or northern United States) devastated the Confederacy (or southern United States). Sherman's March to the Sea in 1864 through Georgia was particularly destructive. General Sherman destroyed railroads, telegraph poles, civilian property, etc.
"Reconstruction" began in 1865 and officially ended in 1877, but it was just the beginning of the economic recovery for the American South. It would take another 100 years for the American South to fully recover, when the per-capita Southern income was 90% of the US national average.
The lesson from the American effort by the North (Union) to economically redevelop the South (former Confederacy) is that it takes a massive downpayment (or Reconstruction 1865-1877) and another 100 years to fully recover from the economic devastation caused by the American Civil War (1861-1865).
Three things are needed for economic development on a grand scale.
1. massive amounts of money (e.g. official Reconstruction from 1865-1877)
2. lots of time (official Reconstruction was 12 years, but total redevelopment/recovery time was actually 100 years for Southern per-capita income to reach 90% of US national average)
3. the benefactor has to be a technologically-advanced country (the goal is to bring a backwards economic region to the forefront of modern technology and economy)
US Marshall Plan 1948-1951 ("approximately $132 billion in current dollar value as of October 2017")
To achieve victory against Nazi Germany, the United States bombed Europe back to the Stone Age during World War II (1941-1945).
After World War II, the United States wanted to strengthen Western Europe against the encroaching Soviet Union and Soviet Eastern European Allies (or Warsaw Pact). The United States launched a massive reconstruction of Western Europe. The Marshall Plan provided the equivalent of $132 billion in today's money to rebuild Western Europe's industries.
Though the Marshall Plan ended in 1951, it took fifty more years for German per-capita income to approach the US national average (see chart in bottom left-hand corner below).
Nominal GDP per capita | International Monetary Fund
Rise of China (1978-2017)
After World War II, China was an economically devastated country. The Japanese aggressors had bombed China from 1937-1945.
After 1945, China was in the same position as war-devastated Europe. The story gets worse for China. China entered into a civil war between the Nationalists and Communists from 1945 to 1949. The Communists won and the Nationalists fled to Taiwan.
Things get worse for China again. China had to fight the US in the Korean War from 1950-1953 to prevent the US Army from camping out on the Yalu River, which is on China's doorstep.
China just can't catch a break. In 1962, American military advisers enter South Vietnam. Another major war breaks out next to China. The US-Vietnam War lasted from 1962-1975. China is economically exhausted from diverting Chinese economic production to supply the North Vietnamese army with military equipment and economic supplies.
After the death of Mao Zedong, Deng Xiaoping comes to power in 1976. In 1978, Deng Xiaoping instituted an Open Door policy and welcomed foreign investment.
However, China's infrastructure was in really bad shape. Only the Taiwanese were willing to invest in the Pearl River Delta (Shenzhen) and Yangtze River Delta (Shanghai) regions in the 1980s.
The Taiwanese investment in mainland China totals US$200-$400 billion (references: Investing in Cross-Strait Relations - WSJ and ‘Lost years’ showcase Taiwan’s true story | Taipei Times).
The sum of Taiwanese investment in mainland China surpasses the value of the Marshall Plan (US$132 billion in current dollars). However, China is a much larger country geographically and population-wise than western Europe. Thus, the overall effect is a comparable level of redevelopment.
No one should be surprised by the Rise of China. It is the third time in the last 150 years that we have seen a major economic redevelopment.
For the American South (former Confederacy), the Union/American North provided the technology, "Reconstruction" redevelopment fund, and open markets for the rejuvenation of the American South.
For western Europe, the United States provided the technology, Marshall Plan redevelopment fund, and open markets for the rejuvenation of western Europe.
For mainland China, Taiwan provided the technology, US$200-$400 billion redevelopment capital, and open markets (Taiwan served as a conduit to the worldwide market) for the rejuvenation of mainland China.
The Rise of China is a surprise to people today, because they have forgotten about the redevelopment of the American South and Western Europe. When you place the Rise of China in its proper historical context, the outcome is expected. The Marshall Plan was approximately $132 billion in current dollars. Taiwan probably invested about $400 billion in mainland China. Taiwan funded the equivalent of THREE MARSHALL PLANS for mainland China. The result is an expected modernized China, which you see today.
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