Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong

by Yukon Huang

China's rise is altering global power relations, reshaping economic debates, and commanding tremendous public attention. Despite extensive media and academic scrutiny, the conventional wisdom about China's economy is often wrong. Cracking the China Conundrum provides a holistic and contrarian view of China's major economic, political, and foreign policy issues.

Yukon Huang trenchantly addresses widely accepted yet misguided views in the analysis of China's economy. He examines arguments about the causes and effects of China's possible debt and property market bubbles, trade and investment relations with the Western world, the links between corruption and political liberalization in a growing economy and Beijing's more assertive foreign policies. Huang explains that such misconceptions arise in part because China's economic system is unprecedented in many ways-namely because it's driven by both the market and state- which complicates the task of designing accurate and adaptable analysis and research. Further, China's size, regional diversity, and uniquely decentralized administrative system poses difficulties for making generalizations and comparisons from micro to macro levels when trying to interpret China's economic state accurately.

This book not only interprets the ideologies that experts continue building misguided theories upon, but also examines the contributing factors to this puzzle. Cracking the China Conundrum provides an enlightening and corrective viewpoint on several major economic and political foreign policy concerns currently shaping China's economic environment.

Genres: China, Economics, Nonfiction

288 pages, Hardcover

Published July 21, 2017

Reviews

[Sanford Chee · Rating 4 out of 5]

A masterful and contrarian discourse on the China growth story that turns conventional wisdom on its head. Insightful.

[Josh · Rating 4 out of 5]

This book is one of the few I’ve read that actually has something novel, well researched, and insightful to say about China. I really enjoyed the thorough economic analysis highlighting the pitfalls in the thinking of most policymakers. An excellent read. The first half was a slog, so minus one star for that.

[Edward · Rating 4 out of 5]

Short succinct book that cuts through a lot of the often ideologically, emotionally driven discourse around China and its economy, backed with quantitative evidence from a variety of sources. The book largely requires an intermediate understanding of macroeconomics (not a surprise given the author's background and presumably target audience) but can be read without fully understanding China's political and economic systems.

Huang doesn't provide a prescription to solving the current issues facing China; indeed the premise of the book is that without having a full understanding of where China economically and politically, such prescriptions are meaningless. Huang proceeds to deconstruct oft-repeated phrases that are based more on populist opinion than fact, allowing one to view China in a more dispassionate manner. Must read for China watchers.

[Peter S · Rating 4 out of 5]

Excellent survey of all economic, political, social and geopolitical concerns the modern Chinese state is seeking to address. The book first examines the different ways China is perceived around the world (where you stand depends on where you sit, i.e. if you're a neighbor of China you're obviously going to have different feelings than if you are half a world away). Next, it discusses China's growth beginning with Deng Xiaoping and how the model has worked out up and through 2018. It then transitions into an analysis of China's use of debt and the problems that may be coming because of it. The last domestic chapter focuses on social and political issues in the country.

The rest of the book covers China and the world - its trade and capital flows (specifically in the US and EU), and its goals vis-a-vis the global balance of power.

The book is terse yet broad, telling the reader everything s/he needs to know and nothing more. I recommend to anyone who seeks to broaden their understanding of China.

[Roy Van Den Brande · Rating 4 out of 5]

It's written pre-Russo-Ukranian war. I think China is too big to remain true to their non-interference policy. By still allowing trade with Russia they by definition interfere with the Western sanctions.

I still hope China will get a fair seat at the table on the world stage. We have used China as a source for cheap labor for decades, and now that their economy matured and they can compete they are suddenly a threat?

Or is it because they are the most succesful example of socialism in the world? Because I for one welcome another perspective on the 'solutions' organisations as the Worldbank and IMF impose on countries exploited till near collapse.

And I certainly hope that the divide can be made smaller between the West and the East because we will need to work together to overcome the inevitable problems like climate change.

[Dennis Murphy · Rating 4 out of 5]

Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong by Yukon Huang would have been a fantastic book to read in 2017, an great book to read in 2019, and is now in a place where it is struggling to find purchase. Quite a lot has happened in the almost decade since this book was published, not the least of which is that a great many of its policy recommendations are now largely impossible. Some of the unconventional bits of wisdom in the book have become old hat by now, but there are a couple of others that were still surprising such as the shadow banking chapter or the appendix chapter on China's GDP. I would recommend this book to people who are serious sinologists with a political economy bent, but I'm not sure who else. Maybe Yukon has another book in the works?

[Lee · Rating 2 out of 5]

Granted, I did not read that much of this book, but the portions that I did read were surprisingly data-light.

If you are going to make these arguments that go against what other experts on China are saying, you need to come correct. You need to come with oodles of data, and you need to convince me that yes, those other China economists are wrong. I don't think he does.

Look at page 105, the box on China's cities being too small. I agree with him that China's cities are too small. But he does not really have that much data on the topic. He just kind of says, yea, they're too small. It is a very poor argument.

Read 9%.

[Nick · Rating 2 out of 5]

Maybe I'm just less interested in China than I thought but it's difficult to imagine a drier way to present this information. So many facts and figures bombarding me, but no idea what the author is trying to pursuade me of.

[Carol Checkler · Rating 2 out of 5]

The author repeats the same concept over and over. He makes a lot of claims that do not seem statically sound. This book reads more like a college Eco textbook, bored me to death.

[Rosie K.]

Read for Post Mao China: Change and Transformation (HIS/ANS 340L).

[Deepanshu Aggarwal · Rating 3 out of 5]

An educative book that breaks several myths around China and its journey. Presents the inaccuracies in the conventional wisdom around its political economy.

[Ben Wong · Rating 2 out of 5]

While it makes very good points, this is precisely the kind of book you should read a one page summary of