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China has emerged as an aspirant economy

Abstract

It is common for articles in the business and management field that employ China as a sample to still place that research in the stream of transition and/or emerging economies. Such a rendering was accurate 40 years ago as China’s economic reforms began. However, China no longer meets the definitional characteristics of “emerging economies” that of low income, rapid economic growth with institutional instability, and a reliance on low cost production to drive this growth. China is one of a number of upper middle-income countries seeking to move to high-income status that we define as “aspirant economies.” In this article, we discuss why China should be considered as having emerged and now aspiring, rather than emerging. We highlight how scholars still rely on a traditional view of China as an emerging economy despite its economic reality, and where research that examines China as an aspirant economy should move in the future.

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Fig. 1

Notes

  1. Calculated by the Atlas method in current US dollars.

  2. The term aspirant or emerging is not to be confused with “developing economy” or “developed economy” that have very specific definitions that relate to the WTO’s treatment of countries with different products and markets.

  3. Recent evidence examining individual and regional data has shown that Africa, particularly sub-Saharan Africa, has also started to significantly reduce extreme poverty in the past two decades and has a rapidly rising Sen welfare index (Pinkovskiy & Sala-i-Martin, 2014; Sen, 1999a).

  4. Nobel Laureate Amartya Sen defined poverty (and hence Sen welfare) more fully than just in terms of income, but rather the ability (or lack thereof) of an individual to enjoy a basic range of social opportunities such as healthcare, as well as being able to locate to productive jobs, enjoy protection from aggression and corrupt government, among other basic freedoms. Sen welfare levels focus more on maximizing what an individual can choose to achieve in life, facilitated by economic and productive institutional development in a country (Sen, 1999b).

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Acknowledgements

The first author is grateful for support from the National Natural Science Foundation of China [grant number 71620107001]

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Bruton, G.D., Ahlstrom, D. & Chen, J. China has emerged as an aspirant economy. Asia Pac J Manag 38, 1–15 (2021). https://doi.org/10.1007/s10490-018-9638-0

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Keywords

  • Emerging economy
  • Transition economy
  • Aspirant economy
  • Economic growth
  • Institutional stability
  • China
  • Economic ecosystem