It is easy to be seduced by the idea that race has something to do with the phenomenal growth rate. It is also true that cultural habits, work ethics, acquisitive tendencies are all cultural practices that can be inculcated and turned into socially desirable behaviour. This means positive values can be transcribed onto any social set up. Thus it is not entirely correct to say that cultural habits are intrinsically constituted in one’s biological set up. In other words, success and prosperity are not unique to any one race.
Among the many factors, three can be singled out as the more important. These are the quality of human capital in china, the establishment of free market institutions and practices and finally, the advantage of being a latecomer to the technological scene. The last factor enabled china to evaluate the best technology in the world and to avoid costly mistakes. Since the last factor is universally available to all developing countries, it is by no means unique to China.
What does the quality of human capital mean? It means more than the number of schooling years. Economists are reluctant to admit the influence of the quality of human capital on economic development. They prefer the establishment of institutions and systems which are more permanent in nature. But as has been demonstrated widely elsewhere, the lack of a good system can be compensated by the high quality of human capital working on that system. On the other hand, a good system can be negated by poor human capital.
Other than the number of years schooling, the quality of human capital is greatly affected by the education instilled at homes, by society’s cultural heritage and so on. In other words, cultural factors play a very important role in augmenting human capital. By cultural factors we mean the values that are practised in society that enhances economic activities. For workers it refers to the discipline and work ethics. For entrepreneurs it means resourcefulness and energy.