Russia's economic advance is put to shame by China's

With Moscow coming across as the quintessence of capitalism unbridled, I was unprepared for the cities of Siberia. Here the Soviet era seemed to be alive and well, complete with tour guides straight out of central casting: “On the right you see car park number three. It measures 330 metres by 84 metres and can take a maximum of 330 cars. It replaced car park number two in 1984.” After 20 minutes of this stuff you start to lose the will to live.

In one Siberian town we were taken to see its claim to fame – the world’s largest bust of Lenin, still glaring out across a windswept, decrepit central square - lucky us. Interestingly, we saw no statues of Stalin anywhere – except in Mongolia, where tradesmen were selling a trio of busts of what they construed as notable world leaders: the inevitable Genghis Khan, Stalin and Hitler.

One favourable legacy from the Stalin era in Russia is the apartment blocks built during his reign and still referred to as Stalin flats, which are much sought after today. They looked to be well built, elegant in style and evidently spacious within – in contrast to the so-called Khrushchev flats which looked ghastly. Was this an instance of falling building standards everywhere, I asked myself. Or did it reflect something specifically Soviet? Whatever the answer, there are clearly large parts of the country that have been little touched by the prosperity that is evident in Moscow. The need to spend money on infrastructure and residential construction is simply immense.

As we left Siberia, I mused on the economic significance of space. In the UK we are used to the idea that the lack of space is a major economic drawback. But an abundance of space can be a problem too. It creates significant communication and transport problems and it also makes it difficult to enjoy the benefits of agglomeration, including economies of scale and specialisation. Despite its vast array of natural wealth, over and above its extreme climate, Siberia suffers from huge disadvantages because of its size.

In some ways, arriving in China left me with the opposite impressions. After I returned from my first trip to Beijing 30 years ago, I wrote in this very newspaper that two things struck me forcibly about the city – cabbages and bicycles: cabbages piled 10ft high on the pavements of the streets and bicycles in swarms, ridden by anonymous characters in grey or brown Mao suits. Thirty years on there wasn’t a single cabbage or Mao suit to be seen – although Mao himself is still venerated. There were a few bicycles but far more motor scooters and hugely impressive, city blocking, volumes of traffic.

As well as the bustle of the city I was impressed by the quality of the building and the apparent prosperity of the people. Given that on average, China is still a poor country, there must be oodles of severe rural poverty to offset the prosperity visible in Beijing and many other cities.

Interestingly, China is not a country blessed with endowments of natural resources; despite its vast size it does not even have a massive surplus of land. For large parts of the country are largely uninhabited desert. In those parts of the country that are inhabited, the population density is high. Interestingly, China’s surge in GDP and living standards of the past 30 years has been intimately bound up with urbanisation.

I was as conscious of the state on this visit as I had been 30 years ago: lots of uniformed people on the streets: soldiers, police, and officers of all kinds. When entering the country, for heaven knows what reason, there were uniformed border officers taking photographs of people as they waited to go through the immigration procedures.

It is difficult not to be bowled over by what China has achieved - especially when contrasted with Russia. Average Russian living standards are still higher than China’s. But whereas Russia’s have doubled since the early 1990s, China’s have increased 10-fold. As I left the country, I found myself wondering whether this has been despite the continuation of communist dictatorship or because of it.

Roger Bootle is managing director of Capital Economics. His latest book, The Trouble with Europe, has just been published by Nicholas Brealey Publishing.

roger.bootle@capitaleconomics.com

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