Managing the "Post Miracle" Economy in China: Crisis of Growth Model and Policy Responses (original) (raw)
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Sustaining China's Economic Growth in the Twenty-first Century (review)
China Review International, 2005
As is well known, the People's Republic of China has experienced rapid economic development since liberalization began almost twenty-five years ago. In fact, the broadest measure of its economy, GDP, has increased by almost 0 percent a year since 980, the fastest multi-decade rate of economic growth of any country in the last hundred years. 1 But can China's rapid pace of economic development continue? This book attempts to provide a partial answer to this question by focusing on a related question, "How should economic reforms and openings-up be further enhanced so that high economic growth could be maintained?" (p. ). Sustaining China's Economic Growth in the Twenty-first Century originated in a conference of the same name sponsored by the Chinese Economic Association (UK) in 2000. The editors are Shujie Yao, professor and chair of economics at the Middlesex University Business School as well as consultant for the World Bank, and Xiaming Liu, senior lecturer in international business at the University of Aston Business School and managing editor of the Journal of Chinese Economics and Business Studies. The twenty-three contributors are mostly academics with extensive research interests in China. The editors make it clear that the intention of the book is not to provide a complete overview of China's reforms but rather to bring together a series of studies related to the sustainability of China's economic growth. These studies are organized around three topics: general economic development; industry, agriculture, and the financial market; and openness and social issues. There are eighteen figures, sixty-six tables, and an index. The first chapter in the section on general economic development, "Confronting Restructuring and Stability" (pp. 3-40), by Wing Thye Woo of UCLA, focuses on the 996-999 downturn in the Chinese economy. The author seeks to determine not only the causes of the downturn but also the long-term implications of the policies adopted by the authorities to deal with it. This very interesting study concludes that the downturn was caused not by China's structural problems, such as the increases in SOE losses and in the nonperforming loans of the state banks, but rather by the combined effects of the government's austerity program and a collapse in export markets as a result of the Asian financial crisis. However, the author does believe that failure to correct China's structural problems will cause a slowdown in the near future. John Wong, from the National University of Singapore, compares China's development to that of the other East-Asian economies and analyzes the impact of
China's Great Economic Transformation
2008
This landmark study provides an integrated analysis of China's unexpected economic boom of the past three decades. The authors combine deep China expertise with broad disciplinary knowledge to explain China's remarkable combination of high-speed growth and deeply flawed institutions. Their work exposes the mechanisms underpinning the origin and expansion of China's great boom. Penetrating studies track the rise of Chinese capabilities in manufacturing and in research and development. The editors probe both achievements and weaknesses across many sectors, including China's fiscal, legal, and financial institutions. The book shows how an intricate minuet combining China's political system with sectorial development, globalization, resource transfers across geographic and economic space, and partial system reform delivered an astonishing and unprecedented growth spurt.
Making Sense of China’s Economic Transformation
Review of Radical Political Economics, 2010
China’s sustained rapid economic growth in the post-1978 reform era, which is also the era of capitalist globalization, is of worldwide importance. This growth experience has been based mainly on China’s internal dynamics. In the first half of the era, economic growth was driven by improvement in both allocative efficiency and productive efficiency. From the early 1990s until the present time, however, economic growth has been increasingly based on dynamic increasing returns associated with a growth path that is characterized by capital deepening. In both periods, the growth paths and their associated institutional frameworks appear to contradict principles of the free market economy: the mainstream doctrines of globalization. In the form of an analytical overview, this paper seeks to explain and interpret the dynamics and developmental implications of China’s economic transformation. The analytics draws on a range of relevant economic theories including Marxian theory of capital ac...
The Developing Economies, 2012
When the Chief Economist and Senior Vice President of the World Bank publishes a book on China's economic development based on his lectures notes for the course on China's economic development and transition at Peking University, one may rightfully be curious about how he will explain China to us. And one will not be disappointed. His economics arguments are fascinating and he is a superb storyteller: he points out a puzzle, attacks it from all sides, and argues his way to an answer. The book takes a broad historical perspective and paints a seamless picture of China's economic development since premodern times. An introductory chapter on opportunities and challenges in China's economic development is followed by chapters on the cornerstones of China's economic development: why the industrial revolution did not occur in China, the Socialist Revolution (and its failings), and three chapters on the comparativeadvantage-defying vs. comparative-advantage-following development strategy as they apply to Maoist and reform-period China. The second half of the book is devoted to individual topics of current interest: rural reform, urban reform, state-owned enterprise reform, financial sector reform, the new socialist countryside, and harmonious development. The book closes with reflections on neoclassical theory and an appendix on global imbalances. Much of the first half of the book draws on earlier publications by Justin Lin in academic journals, here revised for a broader audience and with new insights added. These are solid ideas that have become widely accepted in the study of the Chinese economy, and Justin Lin packs quite some punch. His "general theory of economic transition and development" (p. 3) begins with an explanation of why China for many centuries was the technological leader in the world but then lost out to Western powers: China was ahead when innovation was based on experience (and the widespread adoption of experience-based innovation), for the simple reason that China had such a large population, i.e., more scope for experience. The West later pulled ahead because of the scientific revolution which allowed it to overcome the limits of experience with mathematics and controlled experiments. Justin Lin advances plausible reasons for the absence of a scientific revolution in China. But as is often the case in the social sciences, Justin Lin's theory cannot be proven. To prove his point, one would need a controlled experiment with several countries that are perfectly identical except that some are randomly assigned a bias towards math, and others are randomly assigned a bias towards the Chinese classics. All he can do is argue convincingly, which he does. At the core of his theory of economic transition and development is the distinction between comparative-advantage-defying and comparative-advantage-following transition
The China Miracle in a technological and socio-political framework—The role of institutions
Journal of Chinese Economic and Business Studies, 2020
China's economy has grown at an average annual rate of around 9.5% in the past four decades, which is often hailed as the China Miracle. This paper proposes a new theoretical model to analyse the causes of China's phenomenal growth in a technological and socio-political framework. In our new framework, the contemporary technology (T) determines what an economy can achieve; the objective (O) of the society has a fundamental impact on its economic growth; the performance (P) in implementing the social objective largely determines the growth rate of the economy; and the stability (S) of the society determines the sustainability of the economic growth. China's institutions have played key roles in the TOPS framework to initiate and sustain China's rapid growth in the past four decades. Socio-political changes caused by economic growth might affect the capacity of these institutions to promote economic growth in future.
China, From Catch-up Growth to Innovation-Driven Economy
Chinese Business Review, 2015
Chinese financial system and capital allocation to strategic sectors dominated by state banks made important contributions to the country's high economic growth rates during the catch-up stage of the last three decades. High household saving rates, fixed exchange rate regime, and extensive capital controls helped this stage as well. While the structural changes in the labor market conditions by moving from primary sectors to more capital intensive heavy industry, construction, commerce, and other service sectors have been contributed to the economic growth, competition, and productivity, due to the direct state governance or intensive interventions, competition and productivity have been curtailed on certain large industries. Aiming to eliminate this unproductive economic activity, enterprise sector reforms of China targeted restructuring the state enterprise's capital, organization, and management system. Besides, the reforms on science and technology system seek to participate in global production and R&D networks by improving high-tech sectors through creating strong complementarity and collaboration between skilled human capital and educational interferences.
China: three models of development by Michael Roberts
Austrian Journal of Development Studies, 2020
In the past 40 years, China's growth has been phenomenal. And since the global financial crisis and the Great Recession in the major capitalist economies, China has continued to close the output gap with the leading capitalist economies. Will China continue to catch up in the next 40 years or will it suffer the fate of the so-called 'middle income trap' experienced by other 'emerging' economies? The paper considers three possible models of development as offered by: neoclassical growth theory; Keynesian-style forced investment; and a Marxian model based on the law of value and profitability. The neoclassical model highlights China's comparative advantage of cheap and plentiful labour; the Keynesian model concentrates on the role of China's high investment ratio; the Marxist model emphasises China's exceptional restriction of the law of value in capitalist production: or 'socialism with Chinese characteristics'.
A Contemporary View of the Economic Growth in China
The present paper concentrates on the rapid development of the Chinese economy in the last three decades on the back of the thrust in the exports with the use of one of the largest pool of labour in the world which is now gradually depleting as the economy is approaching full-employment and the aging-population which has made labour scarce and is pushing wages higher, thus making the economy lose competitiveness. The fast growth-rate of the last three decades has resulted in bloated private, public and foreign debt and is reinforcing expectations of bubble in the specific sectors such as housing and excess-capacity in others, which has turned the economy slow in the presence of low demand in the most of the developed countries. The Chinese economy is trying is gain from depreciation and higher nominal exchange-rate which might start retaliatory currency-adjustments in the trading-partners economy to lower trade-deficit, therefore China is eventually trying to reorient itself from an export-led economy to a domestic-demand driven economy which could lift imports and global-growth.
Deciphering the Chinese Economic Miracle: Lessons for the Developing World - EFE CAN GÜRCAN - BRIQ
BRIQ, 2022
Despite enormous historical, demographic, geographical, and geopolitical adversities, China has enjoyed unprecedented economic success in world history. This article aims to decipher the formula behind China’s historic economic success and distill policy lessons for developing countries in their endeavors to reach an advanced stage of economic development. Based on descriptive case study and statistics, the article suggests that the Chinese economic miracle can be explained by a four-fold formula: a) devising an autocentric economic model aspiring to improve national autonomy and cushion the impact of foreign interference, b) insisting on socialism and the leadership of the Communist Party of China (CPC), which allows for strategic coherence and long-term planning to overcome free-market anarchy, c) creating a state-driven industrial base fueled by national science and technology policies, and d) adopting a balanced approach to development centered on attaining a higher sociocultural and ecological quality of life. The findings also help to debunk the myths surrounding the Chinese miracle, particularly the “cheap labor thesis”, the “technology theft thesis”, the “foreign investment and capitalist integration theses”, the “imperialism thesis”, and the “Mao-the-monster thesis”.