Are you sure big government stifles economic growth?

My parents just returned from China recently and my dad wrote me an email with an overview about the trip. They had a wonderful time there.

Part of the email talked about China’s growth, At 9 percent growth, an economy quadruples in 10 years. China has had 9 percent growth for 20 years. So it’s quadrupled and quadrupled again.

Further in his note he wrote Government, by the way, has it’s hand in every major business in China. That is, it owns a part of every major and many lesser ones, and many it owns completely. Every place we stopped to shop on tour, by the way, was owned by the government and all the employees at these sites worked for the government. You would not know it unless you asked. These places looked like ordinary, well-run, attractive business places.

Then continued later about the government, many here in the U.S. think that only small government and ever lower taxes can work. Yet China has chosen the exact opposite policy option and they are thriving. This should be impossible, shouldn’t it? After all, we all know that government doesn’t work. Or does it?

Know that my father was a Republican for 40 years until recently. His main reason for changing parties was what he says was the basic takeover of the Republican party by the religious right. So, when he questions size of government it is truly something he is trying to analyze, he is not lock step with either party poltically really.

What is your opinion about the growth in China?