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JULY 2011
 A Russian view of China’sdevelopment: An interview with thecountry’s first deputy foreign minister
 Andrey Denisov has spent much of his career studying China.The economist and diplomat discusses the keys to China’s socialand economic success.
 Yermolai Solzhenitsyn
 
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The last three decades
have brought visible changes in every aspect o Chineselie. Andrey Denisov, Russia’s frst deputy oreign minister, ormer minister-counselor o the Embassy o the Russian Federation in the People’s Republic o China, and Russianambassador to the United Nations, has spent years inside and outside China studying thecountry’s astonishing ascent. “I entered the economics department o university and beganto learn Chinese in 1969. It was the worst year in the whole history o relations betweenthe two countries,” Denisov recalled in a recent interview. “Thus, i anyone told me at thatmoment what China would become 40 years later, and that I would experience it with myown eyes, I would have reused to believe them.”In this excerpt rom an interview conducted by McKinsey’s Yermolai Solzhenitsyn, Denisovdiscusses China’s socioeconomic reorms and potential lessons or Russia. The completeinterview was published this year in the 22nd edition o 
Vestnik McKinsey 
.
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McKinsey:
 
What is the secret of China’s successful economic reforms? 
 Andrey Denisov:
In China, they have carefully studied various models of economicgrowth, various economic theories and doctrines, and examples of successfulindustrialization and modernization. But most important is that they have adapted theapproaches they select to their own realities. It is safe to say that China’s reforms owe theirsuccess to the combination of the best international practices and the national Chinese
specicity, with due consideration of local conditions.
McKinsey:
 
Can you give us an example of something that China borrowed from other countries and adapted for its own use? 
 Andrey Denisov:
China began to establish special economic zones along its coastal belt,making good use of a big, hardworking, disciplined, and unpretentious population—interms of wages and salaries—and a convenient location at the crossroads of global traderoutes. Special economic zones were not invented in China; it is an international practice.But in China, they have become a driver of reforms, while in other countries, includingRussia, they actually stagnate.
McKinsey:
 
What are some other reasons why economic reform has succeeded in China,whereas others have failed? 
 Andrey Denisov:
I have already mentioned the labor force and the benecial geographic
location with regard to the global markets. The third factor is the existence of theimmense internal market. The fourth aspect is the Chinese expatriate community, whichis committed, as they say, to “the rejuvenation of their motherland.” Chinese populations
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The full interview in Russian is available on the McKinsey & Company Web site.
 
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abroad remain Chinese. They are citizens of their country—if not in their passports,
then in their souls. They possess vast nancial resources, and these resources have been funneled to China. The country retains strong governmental power and efcient
management, which helped to build a mighty, open economy literally from scratch.Take another feature of China’s way. Amid revolutionary enthusiasm, the Chinese did notslacken managerial discipline and did not throw the baby out with the bathwater. We canargue about correctness or faultiness of this or that ideological course or political model, but it is absolutely obvious that in China the ideology was totally subordinated to theobjectives of economic performance. And this ideology has become a framework of themanagement model rather than a set of dogmas never to be questioned by anyone.Generally speaking, the Chinese mentality presumes consistent and gradual actions, thelack of haste, or, to put it simpler, no hustle and bustle when it comes to transformations.Therefore, in any aspect of China’s reform, the most important constituent is commonsense. It is the ability to take a practical view of your needs and opportunities, to act not with haste but step by step, and to pursue the decision once it is already made.
McKinsey:
What is unique about China’s experience? 
 Andrey Denisov: 
I would point out a rather interesting aspect, which is sometimesoverlooked when studying China’s reforms. The leaders of China, Deng Xiaoping in the
rst place, made good use of the purely political factors related to the world alignment of 
forces. Those were the days of the Cold War, which was rather violent, for that matter. ButChina managed to position itself in such a way that it became of interest to the Americanleadership that Chinese–American tensions relax, and the relations between the twocountries then began to normalize. The United States offered China vast opportunities,in terms of both technological resources and trade prospects. China got access to theimmense American market. And I think you will agree that in the shortest possibletime, China managed to oust everybody from this market, including the Americanmanufacturers themselves. Anything you buy in a supermarket in the United States—be itclothes, household appliances, or domestic articles—bears a label “Made in China.”
Hence, the West, and the United States in the rst place, helped China’s integration into
the global economy. Not only did they open their markets and provide technologies, butthey really helped China become a part of the world’s economy. It is quite obvious that suchfactors come together very seldom, if ever at all.That is why the Chinese experience is so unique. But most important has been China’s
ability to sustain national specicity: their nonadmittance of a purely mechanical
application of any foreign practices; their common sense; their consistent and gradual
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