Around 2003，several friends who knew China wellcomplained to me regarding the country’s ills and short-comings.I replied: “Do not tell me what is wrong.I canwrite a thick book on what is wrong by next week.Yetdespite all the problems，China has grown at such highrates and over such a long period that there is no parallelin history.Especially，do not repeat what some people believe，that corruption is good for economic develop-ment.Zhu Rongji’s efforts flatly reject that hypothesis.China must have done something supremely right to pro-duce the economic miracle we observe.What is it？That is the real question.”
I explained to my friends what had puzzled me for some years in terms of the following parable.A highjumper，in the eyes of the experts，seems not to know what to do.He stumbles around and his style is clumsy.Yet he manages to jump eight feet，a world record.The man must have done something right，more right than all jumpers before.What is it？That，in a different context,is the China question.
This paper attempts an answer.It is long andinvolved，as I have a history to relate and a theory toexplain.To do this，I must focus on what China hasdone right.It suffices here to repeat again that if need be，I could write many books detailing the wrongs.
An economic miracle China truly is，since 1980.Milton Friedman once hailed the economic miracle of Hong Kong，for though its population increased 10-foldssince the war，per-capita income still increased signifi-cantly.Yet the City of Shenzhen just north of HongKong achieved a higher growth rate，with a populationwhich went up 45 times during a similar time span.To take another example: After five years，I could recognizehardly anything when re-visiting the town of Shaoxing.Migrant workers are reported not to be able to find theirown homes when returning after a lapse of just three years.Some cities deep in the Chinese mainland resem-ble San Francisco，with sparkling night lights on high-rise buildings.Currently，more than half of the world’snewelevators are being installed in China.
Highways are constructed in China at a rate exceeding4,000 kilometers a year，long enough to span the entireUnited States.In the mid-1990’s，17% of the world’sconstruction cranes can be found in Shanghai.Sharplyfalling property prices notwithstanding，welders can beseen laboring on high rise structures at midnight，likestars in the sky.More office space was built in Shanghaiin five years than fast-growing Hong Kong managed infifty.In 2002 Shanghai planners abruptly restrictedbuilding heights，because they found the city sinkingunder the weight of real estate.The four-lane highway.
between Shanghai and Nanjing，empty when newly builtand criticized for being a waste of money，became socongested and earned so much in tolls that five yearslater work was begun to double its capacity.Becausetolls are charged according to the size of trucks，over-loading became so severe that some roads constructedaccording to world-class standards are damaged in notime.Congestion occurs at each and every seaport in the country.In 2005，the world’s longest and the secondlongest sea crossing bridges were under construction at the same time and in the same area.
A single shoe factory in Wenzhou employs 120,000workers.That city literally produces all of the world’slighters and Christmas lightings.Yiwu，where vendorssold goods on the streets 15 years ago，nowexports morethan 1,000 containers a day，with purchasing agents fromKorea and Africa jamming the city and pushing officerents through the roof.Who has ever heard of severalthousand shops selling nothing but socks？That is Yiwu:The wholesale malls there are so huge that I took onelook and sat down，for an old man like me could not han-dle the distance.The town of Lecong has a road sellingfurniture on both sides，stretching ten kilometers long.The large industrial village in Suzhou，so beautifullylandscaped and filled with manufacturers of world-classbrands and industrial structures of world-class designs,cropped up in the middle of paddy fields in five years.Hangzhou receives forty million tourists a year.Oneretail shop in that city，selling a famous brand of hand-bags，grosses US80,000 on an average day.
Similar stories can be told for toll roads and bridges，where money-losers soon turned into money-makers.A friendmourned his decision to sell a section of a highway which was soon loaded with traffic.The output of a small producer of instant noodles from Taiwan increased to 30 million packagesper day in five years.There was a period of about six years,from2000 to 2006，when the investor almost could not gowrong! Unfortunately，this bullish environment has been chang-ing for the worse，and by late 2007 it is changing rapidly.
I could go on and on describing similar phenomena,but there is no point.What one needs to add，however，isa story about Pudong，or Shanghai east of the river.Itook the Fried mans there in 1993.Nothing could be seenexcept a rowof one-story shops，reportedly built toentertain Deng Xiaoping.Milton（of course）resentedany such action，pointing out government developmentplanning would fail most of the time.Yet eight yearslater I took an American architect to downtown Pudong,and stunned，he observed that the high rises concentratedthere may well be the best in the world.The lesson isthis: For a country as big and populous as China，grow-ing at such speed，there is plenty of roomfor learning bydoing.2
