Economic development in mainland China during the first two decades of Communist control provides a typical example for the difficult task to transform a vast underdeveloped agrarian economy into a modern industrial one. In the first half of this period, a series of massive transformations of social and economic institutions was accompanied by a drafted industrialization program; the result was an impressive speed-up in economic growth. The second decade witnessed an economic crisis (1960-62) and a political upheaval (1966-68). These disruptions marred the economic performance over the period as a whole. Consequently, the long-term growth rate appears to have been only moderate.The Economy of Communist China reviews selected aspects of the economy. After examining the development strategy, it analyzes the quantitative trends and the structural changes. The book goes on to analyze the key factors contributing to the earlier growth and the elements responsible for the later disruption and finally assesses the impact of the Cultural Revolution on the Chinese economy and the prospects of the current Third Five-Year Plan.The text includes a bibliography of selected materials on Chinese economic development.
Prior to the initiation of economic reforms and trade liberalization 36 years ago, China maintained policies that kept the economy very poor, stagnant, centrally-controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world's fastest-growing economies, with real annual gross domestic product (GDP) growth averaging nearly 10% through 2016. In recent years, China has emerged as a major global economic power. It is now the world's largest economy (on a purchasing power parity basis), manufacturer, merchandise trader, and holder of foreign exchange reserves.The global economic crisis that began in 2008 greatly affected China's economy. China's exports, imports, and foreign direct investment (FDI) inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package and loosening monetary policies to increase bank lending. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, but may have contributed to overcapacity in several industries and increased debt by Chinese firms and local government. China's economy has slowed in recent years. Real GDP growth has slowed in each of the past six years, dropping from 10.6% in 2010 to 6.7% in 2016, and is projected to slow to 5.7% by 2022.The Chinese government has attempted to steer the economy to a "new normal" of slower, but more stable and sustainable, economic growth. Yet, concerns have deepened in recent years over the health of the Chinese economy. On August 11, 2015, the Chinese government announced that the daily reference rate of the renminbi (RMB) would become more "market-oriented." Over the next three days, the RMB depreciated against the dollar and led to charges that China's goal was to boost exports to help stimulate the economy (which some suspect is in worse shape than indicated by official Chinese economic statistics). Concerns over the state of the Chinese economy appear to have often contributed to volatility in global stock indexes in recent years.The ability of China to maintain a rapidly growing economy in the long run will likely depend largely on the ability of the Chinese government to implement comprehensive economic reforms that more quickly hasten China's transition to a free market economy; rebalance the Chinese economy by making consumer demand, rather than exporting and fixed investment, the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental protection. The Chinese government has acknowledged that its current economic growth model needs to be altered and has announced several initiatives to address various economic challenges. In November 2013, the Communist Party of China held the Third Plenum of its 18th Party Congress, which outlined a number of broad policy reforms to boost competition and economic efficiency. For example, the communique stated that the market would now play a "decisive" role in allocating resources in the economy. At the same time, however, the communique emphasized the continued important role of the state sector in China's economy. In addition, many foreign firms have complained that the business climate in China has worsened in recent years. Thus, it remains unclear how committed the Chinese government is to implementing new comprehensive economic reforms.China's economic rise has significant implications for the United States and hence is of major interest to Congress. This report provides background on China's economic rise; describes its current economic structure; identifies the challenges China faces to maintain economic growth; and discusses the challenges, opportunities, and implications of China's economic rise.
Helps the United States and the rest of the world better comprehend the facts and dynamics underpinning China's rise. This book analyzes the data on China's economy, foreign and domestic policy, and national security.
The rise of China is no doubt one of the most important events in world economic history since the Industrial Revolution. Mainstream economics, especially the institutional theory of economic development based on a dichotomy of extractive vs. inclusive political institutions, is highly inadequate in explaining China's rise. This book argues that only a radical reinterpretation of the history of the Industrial Revolution and the rise of the West (as incorrectly portrayed by the institutional theory) can fully explain China's growth miracle and why the determined rise of China is unstoppable despite its current 'backward' financial system and political institutions. Conversely, China's spectacular and rapid transformation from an impoverished agrarian society to a formidable industrial superpower sheds considerable light on the fundamental shortcomings of the institutional theory and mainstream 'blackboard' economic models, and provides more-accurate reevaluations of historical episodes such as Africa's enduring poverty trap despite radical political and economic reforms, Latin America's lost decades and frequent debt crises, 19th century Europe's great escape from the Malthusian trap, and the Industrial Revolution itself.
How will China reform its economy as it aspires to become the next economic superpower? It's clear that China is the world's next economic superpower. But what isn't so clear is how China will get there by the middle of this century. It now faces tremendous challenges such as fostering innovation, dealing with ageing problem and coping with a less accommodative global environment. In this book, economists from China's leading university and America's best-known think tank offer in depth analyses of these challenges. Does China have enough talent and right policy and institutional mix to transit from input-driven to innovation-driven economy? What does ageing mean, in terms of labor supply, consumption demand and social welfare expenditure? Can China contain the environmental and climate change risks? How should the financial system be transformed in order to continuously support economic growth and keep financial risks under control? What fiscal reforms are required in order to balance between economic efficiency and social harmony? What roles should the state-owned enterprises play in the future Chinese economy? In addition, how will technological competition between the United States and China affect each country's development? Will the Chinese yuan emerge as a major reserve currency, and would this destabilize the international financial system? What will be China's role in the international economic institutions? And will the United States and other established powers accept a growing role for China and the rest of the developing world in the governance of global institutions such as the World Trade Organization and the International Monetary Fund, or will the world devolve into competing blocs? This book provides unique insights into independent analyses and policy recommendations by a group of top Chinese and American scholars. Whether China succeeds or fails in economic reform will have a large impact, not just on China's development, but also on stability and prosperity for the whole world.
Decades ago, there was no distinct middle class in the People's Republic of China. Any meaningful discussion of China's economy, politics, or society must take into account the rapid emergence and explosive growth of the Chinese middle class. This book details the origins and characteristics of this dramatic change.
To explore what extended competition between the United States and China might entail out to 2050, the authors of this report identified and characterized China’s grand strategy, analyzed its component national strategies (diplomacy, economics, science and technology, and military affairs), and assessed how successful China might be at implementing these over the next three decades.
China's future is arguably the most consequential question in global affairs. Having enjoyed unprecedented levels of growth, China is at a critical juncture in the development of its economy, society, polity, national security, and international relations. The direction the nation takes at this turning point will determine whether it stalls or continues to develop and prosper. Will China be successful in implementing a new wave of transformational reforms that could last decades and make it the world's leading superpower? Or will its leaders shy away from the drastic changes required because the regime's power is at risk? If so, will that lead to prolonged stagnation or even regime collapse? Might China move down a more liberal or even democratic path? Or will China instead emerge as a hard, authoritarian and aggressive superstate? In this new book, David Shambaugh argues that these potential pathways are all possibilities - but they depend on key decisions yet to be made by China's leaders, different pressures from within Chinese society, as well as actions taken by other nations. Assessing these scenarios and their implications, he offers a thoughtful and clear study of China's future for all those seeking to understand the country's likely trajectory over the coming decade and beyond.
