An economics Nobel for the Chinese Communist Party?

The awarding of the Nobel Peace Prize to the European Union has given pundits the world over a field day. One commentator even asked yesterday in the Financial Times whether any comparable grouping in Asia deserves the prize, and concluded there is none. He also joked that at least they didn't give the economics prize to the EU.

Well, what of the Nobel for economics, the poor cousin awarded to the dismal science that Alfred Nobel never intended to have on the list of prizes?

Would any individual or group deserve it in Asia? One obvious and well-deserved candidate would be the late Deng Xiaoping, except you can't award the prize posthumously. As for a grouping, I would propose the Chinese Communist (now Capitalist) Party. Our hate-China crowds in Hong Kong and around the world would object. But at least I am not claiming they deserve the peace prize! Outraged, you ask why?

According to estimates by the World Bank and Dani Rodrik, a Harvard political economist and one-time economic adviser to Barack Obama, between 1981 and 2001, there were roughly 400 million fewer people in the world living on less than US$1 a day - an oft-used definition of extreme poverty, now inflation-adjusted to US$2. During this time, about 400 million mainland Chinese were pulled out of extreme poverty. In other words, some countries had more poor people, others had fewer. But the net result was that the world saw very little poverty reduction if we take China out of the equation. Since then, China has become the world's second-largest economy.

For sure, China's economic growth model has hit a wall and must undergo radical reform; but its leaders are well aware of the problems and looking for solutions. I wish them luck, but many pundits and politicians - whose only consistency has been to always get China wrong - already predict it will crash. But the economic success of China - along with India, Vietnam and, before them, the Asian Tigers - has become a model for other poor nations to follow, from Myanmar to Rwanda.

Meanwhile, most recent economic Nobels have been given to neoliberal economists with their erudite mathematical modelling - a lot of good that did. The Western financial crisis, anyone?