2 In 1984 I had my first direct contact with China2 In 1984 I had my first direct contact with China4 In 1984 I had my first direct contact with China4 In 1984 I had my first direct contact with ChinaIn 1984 I had my first direct contact with ChinaChapter 6: The Big Cycle of China and Its Currency2020-10-09Journal4 In 1984 I had my first direct contact with China2 In 1984 I had my first direct contact with ChinaBecause it was clear that the closed door was a barrier that led to two different economic levels to exist in China and in the developed world, it was clear to me that the removal of that barrier was just beginning that would naturally equalize their economic levels, like unconstrained water naturally seeking the same level.  It was easy to visualize that change happening.  I remember being on the 10th floor of CITIC’s “Chocolate Building,” giving a lecture and pointing out the window to the two-story hutongs (poor neighborhoods) and telling my audience that it would not be long before the hutongs would be gone and skyscrapers would be there in their place.  They didn’t believe me and told me, “You don’t know China,” and I told them they did not know the power of the economic arbitrages that would happen as a result of opening up.  That opening up was the biggest force behind the high rates of improvement that we saw over the last 40 years.  While the opening up created a great natural opportunity, the Chinese made the most of it and performed even beyond my highest expectations.  They did that by making and implementing Deng’s reforms, supported by uniquely Chinese cultural influences.  These reforms freed up the Chinese people to achieve the exceptional results laid out in Deng’s plan.  Globalization and the world wanting to include China in it also helped a lot.  The expressed goal at the time that I heard a lot of was to “break the iron rice bowl,” which was to not provide demotivating guaranteed employment and assured basic benefits and to replace them with more incentive-based compensation. Continue reading…