Skip to main content

China Confronts the Great Recession: ‘Rebalancing’ Neoliberalism, or Else?

  • Chapter
Emerging Economies During and After the Great Recession

Part of the book series: International Papers in Political Economy Series ((IPPE))

Abstract

This paper posits that China’s economic transformation since the turn of the century has tended to converge to what can be called the Golden Age Model. Characteristic of the model is rapid growth in productive investment, and therefore productivity and wage growth, underpinned by the institutional nexus of ‘Big Business, Big Labour, and Big Government’. The convergence to the Golden Age Model has been seriously hindered by neoliberal-oriented policies over the past few years, so much so that there is a real danger of the Chinese economy being subject to the full rigour of the Great Recession. The prospects for the future depend, thus, on the rivalry between the political-economic forces behind the two models. And the outcome of the rivalry will be of fundamental importance given the fact that China has already become a globally significant centre of production, holder of financial resources, and carrier of outward direct investment.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Similar content being viewed by others

References

  • Akyüz, Y. (2010) ‘Export Dependence and Sustainability of Growth in China and the East Asian Production Network’, Research Paper no. 27, Geneva: South Centre.

    Google Scholar 

  • Amsden, A.H. (1989) Asia’s Next Giant: South Korea and Late Industrialization, New York: Oxford University Press.

    Google Scholar 

  • Arrighi, G. (2007) Adam Smith in Beijing: Lineages of the Twenty-First Century, London: Verso.

    Google Scholar 

  • Bhagwati, J. (2004) In Defense of Globalization, Oxford: Oxford University Press.

    Google Scholar 

  • Bowles, S., D. Gordon and T. Weisskopf (1985) Beyond the Wasteland: A Democratic Alternative to Economic Decline, London: Verso.

    Google Scholar 

  • Cairncross, F. and A. Cairncross (1992) The Legacy of the Golden Age: The 1960s and Their Economic Consequences, London: Routledge.

    Book  Google Scholar 

  • Chang, H.-J. (1994) The Political Economy of Industrial Policy, London and Basingstoke: Macmillan

    Google Scholar 

  • Chang, H.-J. (2009) ‘Industrial Policy: Can We Go Beyond an Unproductive Confrontation?’, Annual World Bank Conference on Development Economics, Wsahington, DC: World Bank.

    Google Scholar 

  • Dorrucci, E., G. Pula, and D. Santabárbara (2013) ‘China’s Economic Growth and Rebalancing’, Occasional Paper Series no. 142, Frankfurt am Main: European Central Bank.

    Google Scholar 

  • Dutt, A.K. (1990) Growth, Distribution, and Uneven Development, Cambridge: Cambridge University Press.

    Google Scholar 

  • Easterly, W. (2001) ‘The Lost Decades: Developing Countries’ Stagnation in Spite of Policy Reform 1980–1998’, Working Paper no. 27272, The World Bank. www.worldbank.org.

    Google Scholar 

  • Felipe, J., U. Kumar, N. Usui, and A. Abdon (2010) ‘Why China Has Succeeded — and Why It Will Continue to Do So’, Working Paper no. 611, The Levy Economics Institute.

    Google Scholar 

  • Fine, B., and E. van Waeyenberge (2013) ‘A Paradigm Shift That Never Will Be? Justin Lin’s New Structural Economics’, Competition and Change, 17(4), 355–71.

    Article  Google Scholar 

  • Fransman, M. (1986) ‘Machinery and Economic Development’, in M. Fransman (ed.), Machinery and Economic Development, Basingstoke and London: Macmillan.

    Chapter  Google Scholar 

  • Gabriele, A. (2010) ‘The Role of the State in China’s Industrial Development: a Reassessment’, Comparative Economic Studies, 52, 325–50.

    Article  Google Scholar 

  • Garnaut, R., L. Song, and Cai F. (2014) ‘Reform and China’s Long-term Growth and Development’, in L. Song, R. Garnaut and F. Cai (eds), Deepening Reform for China’s Long-term Growth and Development, Canberra: Australian National University Press.

    Google Scholar 

  • Gaulard, M. (2013) ‘Changes in the Chinese Property Market: an Indicator of the Difficulties Faced by Local Authorities’, China Perspectives, 2, 3–14.

    Google Scholar 

  • Glyn, A. (2006) Capitalism Unleased: Finance Globalization and Welfare, Oxford: Oxford University Press.

    Google Scholar 

  • Glyn, A., A. Hughes, A. Lipietz and A. Singh (1990) ‘The Rise and Fall of the Golden Age’, in S. Marglin and J. Schor (eds), The Golden Age of Capitalism: Reinterpreting the Postwar Experience, Oxford: Clarendon Press.

    Google Scholar 

  • Hart-Landsberg, M., and P. Burkett (2004) ‘China and Socialism: Market Reforms and Class Struggle’, a special issue of Monthly Review, July–August.

    Google Scholar 

  • Harvey, D. (2005) A Brief History of Neoliberalism, Oxford: Oxford University Press.

    Google Scholar 

  • Harvey, D. (2010) The Enigma of Capital and the Crises of Capitalism, London: Profile Books.

    Google Scholar 

  • Heilmann, S. (2009) ‘Maximum Tinkering Under Uncertainty: Unorthodox Lessons from China’, Modern China, 35(4), 450–62.

    Article  Google Scholar 

  • Hung, H.-F. (2009) ‘American’s Head Servant? The PRC’s Dilemma in the Global Crisis’, New Left Review, 60, 5–25.

    Google Scholar 

  • IMF (2007) World Economic Outlook, April, Washington, DC: IMF.

    Google Scholar 

  • IMF (2014) ‘People’s Republic of China: 2014 Article IV Consultation — Staff Report’, IMF Country Report No. 14/235, Washington DC: IMF. Available at http://www.imf.org/external/pubs/ft/scr/2014/cr14235.pdf.

    Google Scholar 

  • IMF (2015) Regional Economic Outlook: Asia and Pacific — Stabilizing and Outperforming Other Regions, May, Washington DC: IMF.

    Google Scholar 

  • Kotz, D.M. (2005) ‘The Role of the State in Economic Transformation: Comparing the Transition Experiences of Russia and China’, Working Paper 2005–04, Department of Economics, University of Massachusetts, Amherst.

    Google Scholar 

  • Lazonick, W. (2004) ‘Indigenous Innovation and Economic Development: Lessons from China’s Leap into the Information Age’, Industry and Innovation, 11(4), 273–94.

    Google Scholar 

  • Lazonick, W. (2009) Sustainable Prosperity in the New Economy?, Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.

    Google Scholar 

  • Li, M. (2008) The Rise of China and the Demise of the Capitalist World Economy, London: Pluto.

    Google Scholar 

  • Lin, J.Y. (2010) ‘New Structural Economics: a Framework for Rethinking Development’, World Bank Policy Research Working Paper series, no. 5197.

    Book  Google Scholar 

  • Lin, J.Y. (2013) Against the Consensus: Reflections on the Great Recession, Cambridge: CUP.

    Book  Google Scholar 

  • Lin, J.Y. and H.-J. Chang (2009) ‘Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy It? A Debate between Justin Lin and Ha-Joon Chang’, Development Policy Review, 27(5), 483–502.

    Article  Google Scholar 

  • Lo, D. (2001) ‘China alter East Asian Developmentalism’, Historical Materialism, 8, 251–62.

    Article  Google Scholar 

  • Lo, D. (2012) Alternatives to Neoliberal Globalization: Studies in the Political Economy of Institutions and Late Development, Basingstoke and London: Palgrave Macmillan.

    Google Scholar 

  • Lo, D., G. Li, and Y. Jiang (2011) ‘Financial Governance and Economic Development: Making Sense of the Chinese Experience’, PSL Quarterly Review, 64(258), 267–86.

    Google Scholar 

  • Lo, D., and M. Wu (2014) ‘The State and Industrial Policy in Chinese Economic Development’, in J.M. Salazar-Xirinachs, I. Nübler, and R. Kozul-Wright (eds), Transforming Economies: Making Industrial Policy Work for Growth, fobs and Development, Geneva: International Labour Office.

    Google Scholar 

  • Lu, Y., and F. Cai (2014) ‘China’s Shift from the Demographic Dividend to the Reform Dividend’, in L. Song, R. Garnaut, and F. Cai (eds), Deepening Reform for China’s Long-term Growth and Development, Canberra: Australian National University Press.

    Google Scholar 

  • McKinley, T. (2009) ‘Will Pinning the Blame on China Help Correct Global Imbalances?’, CDPR Policy Brief, no. 2, Centre for Development Policy and Research, School of Oriental and African Studies, University of London.

    Google Scholar 

  • OECD (2013) ‘The People’s Republic of China — Avoiding the Middle-income Trap: Policies for Sustained and Inclusive Growth’, Paris: Organisation for Economic Cooperation and Development.

    Book  Google Scholar 

  • OECD (2014) ‘Interim Global Economic Assessment’, Paris: Organisation for Economic Cooperation and Development. Available at http://www.oecd.org/eco/economicoutlook.htm.

    Google Scholar 

  • Palley, T.I. (2006) ‘External Contradictions of the Chinese Development Model: Export-led Growth and the Danger of Global Economic Contradiction’, Journal of Contemporary China, 15(46), 69–88.

    Article  Google Scholar 

  • Petras, J. (2009) ‘“Global Imbalances” Versus “Internal Inequalities” (Understanding the World Economy)’, unpublished paper. Available at http://petras.lahaine.org.

    Google Scholar 

  • Piovani, C. (2014) ‘Class Power and China’s Productivity Miracle: Applying the Labor Extraction Model to China’s Industrial Sector, 1980–2007’, Review of Radical Political Economics, 46(3), 331–54.

    Article  Google Scholar 

  • Poon, D. (2009) ‘China’s Evolving Industrial Policy Strategies and Instruments: Lessons for Development’, Working Paper series 2009–02, Trade and Industrial Policy Strategies, Pretoria, South Africa.

    Google Scholar 

  • Simarro, R.M. (2011) ‘Functional Distribution of Income and Economic Growth in the Chinese Economy, 1978–2007’, working paper number 168, Department of Economics, SOAS, University of London. Available at http://www.soas.ac.uk/economics/research/workingpapers/.

    Google Scholar 

  • Stiglitz, J.E. (1996) ‘Some Lessons from the East Asian Miracle’, The World Bank Research Observer, 11(2), 151–77.

    Article  Google Scholar 

  • Stiglitz, J.E. (1998) ‘More Instruments and Broader Goals: Moving Toward the Post-Washington Consensus’, WIDER Annual Lectures 2, Helsinki: UNU/WIDER.

    Google Scholar 

  • Stiglitz, J.E. (2010) Freefall: America, Free Markets, and the Sinking of the World Economy, New York: W.W. Norton.

    Google Scholar 

  • Wade, R.H. (1990) Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization, Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Wade, R.H. (2006) ‘Choking the South’, New Left Review, 38, 115–27.

    Google Scholar 

  • Wade, R.H. (2008) ‘Financial Regime Change?’, New Left Review, 53, 5–21.

    Google Scholar 

  • Woo, W.-T. (2012) ‘China Meets the Middle-income trap: the Large Potholes in the Road to Catching-up’, Journal of Chinese Economic and Business Studies, 10(4), 313–36.

    Article  Google Scholar 

  • World Bank (2012) China 2030: Building a Modern, Harmonious, and Creative Society, Washington, DC: World Bank.

    Google Scholar 

  • Xie, F., A. Li and Z. Li (2012) ‘Guo jin min tui: a New Round of Debate in China on State Versus Private Ownership’, Science and Society, 76(3), 291–318.

    Article  Google Scholar 

  • Zhu, A. and D.M. Kotz (2011) ‘The Dependence of China’s Economic Growth on Exports and Investment’, Review of Radical Political Economics, 43(1), 9–32.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Copyright information

© 2016 Dic Lo

About this chapter

Cite this chapter

Lo, D. (2016). China Confronts the Great Recession: ‘Rebalancing’ Neoliberalism, or Else?. In: Arestis, P., Sawyer, M. (eds) Emerging Economies During and After the Great Recession. International Papers in Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137485557_7

Download citation

Publish with us

Policies and ethics