Chinas Role in Global Economic Recovery (Routledge Studies on the Chinese Economy)
Upcoming Events Past Events. Internship Scholarships. Job opportunities. She received the European Commission Gate2Growth 'European Best Paper' Award, and has conducted consultancy research for many international organisations and the Chinese government.
The Role of China in Asia's Evolution to Global Economic Prominence
As a leading China expert, she has been interviewed by many top media organisations. Dr Fu has many years of experience working in the academic and business sectors in China. I have been the Course Director of this flagship program for the past two years and will move on to direct the Doctoral Program from October. In between, I have to find time to answer emails, perhaps over a quick sandwich lunch, and connect with the outside world. Sometimes I will receive requests from international organisations or the media asking me to comment on emergent issues in my area of expertise.
A day during term time for me is super busy and very hectic. This experience made me realise how important innovation is for competitiveness and growth - it is the key field for competition amongst these developed countries. Innovation is the key area in which China needs to emphasize in order to sustain its development, upgrade its industry, transform the quality of its growth and become an advanced economy. China needs very high quality research in this field. Innovation is very important for general development study.
The Oxford Department of International Development's focus on developing countries provides me with a great environment in which to conduct this research.
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It is also a must for China if it is to transform the quality of its economic growth from one driven by input to one driven by knowledge and innovation. This would make for higher productivity, better welfare for workers and less environmental damage. Technological innovation is the only solution to the challenges of climate change and resources which will significantly constrain China's growth potential. As China is now a major economy which is highly integrated into the global economy, strong and stable growth there will no doubt provide a powerful engine for the global economic recovery through growing exports to China and increasing outward investment from China.
The proposals, in broad brushstrokes, display efforts at encouraging private sector development and innovation, but focus equally on restructuring the state-owned economy. These conversions can include movements towards mixed-ownership systems, where in some exceptional cases private interests could take controlling stakes in existing SOEs.
CRC Press Online - Series: Routledge Studies on the Chinese Economy
Several initiatives, for instance, attempt to separate infrastructure management from the actual operation of infrastructure services. The services can then be opened to private firms that can enter as service providers and create more competitive pressures. Under these conditions most SOEs have access to plentiful and cheap credit, providing them with a competitive advantage both domestically and internationally.
Building on the point blueprint, financial reforms implemented in recent years encompass fully liberalizing interest rates and opening up the banking sector to more competition. This could subject borrowing by both SOEs and private entities to a more market-driven financing environment. Already begun around , this policy attempts to extract a larger share of state sector profits into the state treasury. However, it is not clear at present if the Chinese government will be successful in exercising this aspect of its property rights.
SOEs have shown a reticence to follow central guidelines and been characterized by various governance gaps. Undoubtedly, since Xi came to power in the hallmark of his leadership and greatest source of his popularity has been the relentless anti-corruption campaign. While some aspects of state sector reform are clearly aimed at introducing competitive market pressures, others aim to reassert state authority. After implementation, such executive would again be treated as pure bureaucrats, since they have opportunities for career advancement in the party-state hierarchy.
Conversely, those executives appointed competitively from outside the party-state hierarchy, who do not carry a bureaucratic rank, and who often have generous pay packets, would see no change. Interestingly, most SOE executives with bureaucratic rank are intent on keeping it and thus taking a pay-cut. This reform proposal marks a step away from market-based pay packages and hiring in the Chinese state sector, and, consequently, looks retrograde. However, it forms part of wider SOE reforms that aim to distinguish among state firms situated in monopoly industries and in public welfare, which are to be recentralized under closer scrutiny from the government, and those in competitive fields, which face further commercialization and exposure to market forces.
A series of experimental, incremental, and seemingly fragmented steps, including several pilot-based reforms aim to gradually transform the operating environment of these three giants. For example, oil import licenses have been granted to private firms, thus enabling them to compete with state-owned refiners. The Chinese government also has approved the first privately-led mega-refinery in Zhoushan, Zhejiang, which will compete head-to-head with Sinopec in that region.
This reform pilot reflects one of the central planks of contemporary SOE reform: state-owned investment corporations are being formed and tasked with employing their financial specialists to craft market-oriented strategies that can change management behaviors and capital structures. Following the logic of Sino-capitalism, the CCP party-state wants to maintain strong control over them and only implement moderate changes after conducting experiments and localized trials. Some argue for tax cuts for private businesses and reducing the government burden on investors. This clearly echoes the tax cut and deregulation policies advocated by conservative Western leaders in the s.
But the most important thrust seems to be efforts at diminishing overcapacity in industries such as steel, cement, aluminum, coal, and others. Mines and factories in sectors producing far more than the market demands should be shut down or merged. More than three million people in the steel, coal, and similar industries could lose their jobs if proposed restructurings go through. However, no exact time frame was given for implementing this capacity reduction Yao and Meng, Annual GDP growth has declined by half since , to reach a low of 3.
Evidently, the reforms will necessitate large fiscal transfers to cushion the concentrated burdens that fall on particular regions and industries. Mega-mergers are intended to form national champions that can better compete abroad. However, they are also likely to reduce competition domestically and continue inefficiencies, especially if strong SOEs are forced to merge with weaker ones. Similarly, state sector reforms aim to give private investors bigger stakes in a wider range of SOEs, but they clearly rule out full privatization. And more generally, Xi Jinping has shown a distinct penchant for centralizing power, but simultaneously his government has put forward many reform proposals that aim to restrain the reach of the state.
They reflect the dialectical structure of Sino-capitalism: various state-centric endeavors and concerted efforts to augment state power are juxtaposed with circumscribed economic liberalization and the active encouragement of private entrepreneurship and technology innovation. Experimental, circumscribed, and cautious measures exemplify the intricate interplay of state-centric development planning with local initiatives and policy experiments.
In a recalibrated form top-down state-guided capitalism is likely to continue its dialectical relationship with capital accumulation based on private entrepreneurship and innovation, market competition, institutional learning, and global integration. Quite to the contrary, they seek to retain and strengthen state control over crucial areas of socio-economic governance.
For sure, measured steps at economic liberalization are planned. Capitalism is at base unruly. It must perpetually reinvent itself, creating ultimately disruptive change. A multiplicity of potential interactions is possible among these spheres, ranging from symbiotic, reinforcing, counterbalancing, and compensatory, to tension-ridden and contested.
Early CC approaches, especially the Variety of Capitalisms perspective Hall and Soskice, , granted little autonomy to the state. Vivien Schmidt ; pointedly suggests that the state must be treated as an autonomous political-economic actor, deviating from many other CC approaches. Rather than disaggregating the state into its historical institutional components or the strategic actions of state elites, it must be viewed as architectonic, incorporating political struggles over ideas, policies, and power that fundamentally structure each variety of capitalism cf.
Amable, ; Streeck, In practically every sphere of the economy the Chinese state remains a major force structuring national, local, and firm-level policies Szelenyi, Sino-capitalism also exemplifies the importance of state adaptability, social accommodation, and a multitude of regulatory modes ranging from dirigiste to liberal laissez-faire, creating in turn several distinct regimes of production in the Chinese political economy Luthje, These create interlocking institutional isomorphisms sustaining competitive advantages and stabilities in the Chinese accumulation regime.
Amable, This means that complementarities are characterized by constant tensions, power struggles, as well as adaptation and experimentation. As Deeg and Jackson note, many types of capitalism are characterized by tensions among different institutional spheres, since each sphere follows different logics.
Actors have diverse options and capacities that facilitate cross-fertilization, creating openings for institutional learning, tinkering, experimentation, and transformation. Hybridization and messiness may hold distinct advantages. All cases of capitalist evolution are historically indeterminate. Present political and economic dissonances in China already are an indication of increasing strains. Under the scenario of a major politico-economic crisis, Sino-capitalism could face a critical juncture at which point a new logic of capitalism supersedes it. It is therefore absolutely conceivable that Sino-capitalism could face a rupturing in coming years.
Continuous gradual reforms in the realms of economic liberalization and institution-building, especially to establish a more effective regulatory state, do not imply a fundamental change. The aspects of the logic analyzed in the foregoing expand our understanding of capitalist evolution to include state-capital dynamics and compensatory institutional complementarities. Perhaps most importantly, the dialectical evolutionary quality of Sino-capitalism contrasts with the more static comparative approaches in most of the CC literature, obliging us to recognize capitalism as in a perpetual state of disequilibrium and tension.
Aglietta, Michel, Amable, Bruno.
Becker, Uwe, Basingstoke: Palgrave Macmillan. Becker, Uwe ed Boyer, Robert. Streeck eds , London: Sage, p. Dickson, Bruce J. Evans, Peter B. Florini, Ann M. Hall, Peter A. Soskice eds , Oxford: Oxford University Press, p. Jefferson, Gary H. Lane eds , London: Routledge, p. Knight, John B. McNally, Christopher A. Clausen, eds , vol.
China's role in global economic recovery / edited by Xiaolan Fu.
Oi, Jean C. Schmidt, Vivien A. Wilson eds , Oxford: Oxford University Press, p.
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