Why has the political and economic development of Russia since 1991 been so different than that of China?
Russia – political collapse of Communism and the Communist Party.
China – Communist Party keeps political control after brutally suppressing
demonstrations in Tiananmen Square.
Russia – loses Eastern Europe and much of old Russian Empire, creating
economic disruption and political enemies on borders.
China – keeps territorial boundaries.
Russia – slow to reform agriculture.
China – starts reforming agriculture in 1970s. Increases food production and
income of farmers.
Russia – tries to move quickly to democracy. Ends up with disappointment
and authoritarian government. Does not tolerate internal dissent.
China – no free elections. Does not tolerate internal dissent.
Russia – attempts quick transition to capitalism. Ends up with corrupt
combination of government bureaucrats and oligarchs.
China – phased transition to state-directed capitalism. Creates large new
entrepreneurial and professional middle class. Widespread
government corruption.
Russia – attempts to attract foreign capital. Fails.
China – attempts to attract foreign capital. Succeeds.
Russia – invades Georgia and alienates foreign countries and foreign investors.
China – does not invade other countries.
Russia – defaults on most of external debt, further alienating foreign investors.
China – increases foreign debt.
Russia – uses exports of natural gas as a political weapon against Ukraine
and Western Europe. Alienates potential European investors.
China – does not rely on exports as political weapon.
Russia – little help from Russians in other countries.
China – massive amounts of investment, technology transfer and managerial
expertise from overseas Chinese, including Taiwan and Hong Kong.
Russia – backward banking system and underdeveloped financial markets.
China – modernizing banking system and financial markets, although much of it
still under state control.
Russia – economy relies heavily on exporting raw materials and processed
metals. “Oil curse.”
China – large net raw material importer. Relies on exporting manufactured
goods and development of domestic market.
Russia – allows ruble to float with negative results.
China – fixes value of yuan. Slight appreciation because of foreign pressure.
Russia – very little importing of foreign technology.
China – large amount of foreign technology imported and diffused throughout
economy.
Russia – little use of joint ventures to import foreign technology.
China – extensive use of joint ventures to import foreign technology.
Russia – some investment in infrastructure.
China – massive investment in infrastructure.
Russia – emigration to Israel and other industrialized societies. (One of the two
founders of Google from Russia.)
China – immigration of overseas Chinese with capital and skills.
PROBLEMS
Russia – serious pollution and environmental degradation problems.
China – serious pollution and environmental degradation problems.
Russia – collapse of social welfare programs.
China – collapse of social welfare programs.
Russia – declining, unhealthy population. Declining life expectancy.
China – slowly increasing population. Far below replacement birthrate.
Rapidly aging population.
Russia – moving away from dependence on raw material exports.
China – possible contradiction between economy and government.
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