Recently, Dr Qing-Ping Ma’s book “What drives China’s economy: economic, socio-political, historical and cultural factors” has been published by Routledge (a subsidiary of the Taylor & Francis group). The objective behind writing this book is to provide a comprehensive interpretation of China’s rapid growth for the past four decades, the China Miracle, and a framework for understanding economic growth in general. The book contains four chapters: 1) A brief history of China’s reform and opening; 2) Interest rate control and China’s economic growth; 3) The social planner’s problem and institutional roles in China’s growth, and 4) The future of the China Model.

Chapter 1 attempts to provide an objective account of China’s reform and opening-up process. Since epoch-making events rarely occur without a prelude, “A brief history of China’s reform and opening” traces China’s opening up back to 1972, when Mao Zedong and Zhou Enlai decided to import complete sets of chemical fibre and fertiliser producing equipment, steel rolling mills, and power stations worth a total of US$4.3 billion (the so-called 43 Plan). At that time, China’s total annual capital construction investment was RMB 41.2 billion. Mao Zedong and Hua Guofeng sent an agricultural mechanisation delegation led by Xiang Nan to the US to investigate the American agricultural experience in 1976. Although the official narratives denote the Third Plenum of the Eleventh Central Committee of the CPC during 18-22 December 1978 as the beginning of China’s reform and opening up, the leadership’s idea about reform was still to increase the efficiency of state-owned enterprises (SOEs) and collectively owned enterprises (COEs) within the framework of central planning. This might still be true until the 1990s. The true causes and drivers of China’s success are the enterprising spirit of millions of ordinary Chinese people and grassroots cadres, who persevered in breaking though the policy constraints set up by the government and CPC Central Committee. Their entrepreneurship and business innovation were supported by pragmatic and open-minded provincial leaders such as Wan Li (First Secretary of CPC Anhui Provincial Committee), Xi Zhongxun (First Secretary of CPC Guangdong Provincial Committee), Xiang Nan (First Secretary of CPC Fujian Provincial Committee) and Ren Zhongyi (First Secretary of CPC Guangdong Provincial Committee succeeding Xi Zhongxun).

Chapter 2 introduces growth theories and explains China’s rapid growth with high saving rates and interest rate control. In this chapter, Dr Ma proposes a paradigm-changing growth model to improve existing growth theories such as the Solow-Swan model. In the paradigm-changing growth model (analogous to Thomas Kuhn’s paradigm-changing scientific revolution and normal science), growth can be divided into paradigm-changing growth and normal growth. Paradigm-changing growth denotes the stage of economic growth when the dominant mode of production changes, for example, the changes brought about by the Neolithic agricultural revolution and the industrial revolutions. Normal growth is the stage after the production paradigm change has been completed and growth then depends on small incremental product innovations and process innovations, such as the growth that occurs in contemporary developed economies. Normal growth corresponds to Solow’s steady-state growth, but Solow’s steady-state does not exist in the real world, because small incremental innovations happen all the time. During paradigm-changing growth, high saving rates and high investment rates will lead to high growth rates. China’s economy before and since the beginning of the reform and opening up era is still at the stage of industrialisation, therefore, high saving rates can promote economic growth. The government keeping the interest rate lower than the market equilibrium rate is an important factor. Market equilibrium interest rate should be equal to the marginal product of capital (MPK). When interest rates are kept lower than MPK, borrowing money to invest and using your own money to invest would be the right thing to do, which leads to more investment than when interest rates are determined by the market. Higher savings imply a lower consumption rate and the need to export a large proportion of GDP, thus, exchange rate control becomes necessary to ensure a low exchange rate of RMB to keep Chinese products competitive.

Chapter 3 introduces the Ramsey problem and the Ramsey-Cass-Koopmans market solution to the problem and analyses how institutions can contribute to the social planner’s objective of maximising GDP growth. Dr Ma proposes a new framework to investigate how an economy grows: 1) technological progress path (T); 2) the objective of a society (determined by the social planner) (O); 3) performance in implementing the social objective (P); and 4) social stability (S). China grows rapidly because 1) China’s economy is at the stage of paradigm-changing growth (industrialisation); 2) China’s leadership set a high growth rate as its objective in the past (as Deng Xiaoping remarked, “development is the absolute truth”); 3) China’s institutions have ensured the rapid execution of business development plans; and 4) China’s institutions and culture have ensured social stability during an age of fast changes brought about by reduced social welfare, reduced job security and increased income inequality. The chapter also explains how the CPC’s leadership status was formed historically and how Chinese culture plays a role in maintaining social stability.

Chapter 4 analyses the future of the China Model. When China completes its industrialisation and reaches the income level of developed countries, its economy will enter the stage of normal growth with comparable growth rates. It is unlikely that China can still grow at its current rate when China’s per capita GDP reaches US$20,000.  The Soviet Union/Russia began to stagnate before its per capita GDP reached US$20,000, while the Asian Tigers still grow at lower but decent rates after reaching that level. China should prepare for the transition from paradigm-changing growth to normal growth while fully exploiting its potential during paradigm-changing growth.

Dr Qing-Ping was first trained in clinical medicine with an MB degree, and then switched to basic research by obtaining a research Master of Medicine degree in Physiology, and a PhD in Physiology/Neuroscience. He has published over 50 research papers among which there are about 40 SCI papers published while working at Beijing Medical University (Peking University Health Science Centre), University College London and Merck Sharp & Dohme Research Laboratories. He studied part-time for a Postgraduate Certificate in Economics, MSc in Economics and PhD in Economics, and then taught Mathematical Finance as a lecturer in Birkbeck, University of London. He joined Nottingham University Business School China as Lecturer of Economics in 2008 and was later appointed Acting Director of Centre for Global Finance and Director of Economics Department. He was appointed as an Associate Professor in Economics in 2010.

Furthermore, Dr Qing-Ping has published a book on the basic principles of the theory of relativity entitled The Theory of Relativity: Principles, Logic and Experimental Foundation published by Nova Science Publisher.