China After East Asian Developmentalism

Abstract

[China's political economy was just at a critical juncture when the East Asian financial and economic crisis erupted in 1997. The acceleration of the market-oriented transformation of the Chinese economic system in the preceding years, and with it the breakdown of the regime of accumulation that had underpinned two decades of sustained rapid growth, had resulted in economic stagnation and particularly mass unemployment. Viewed from a neoliberal perspective, these economic problems might be no more than the short-term adjustment cost in the transition to a fully-fledged market economy. Yet from an alternative perspective that draws lessons from the rise and fall of the ‘East Asian miracle’, the problems imply a much more far-reaching impact of the systemic transformation - it amounts to switching to an entirely new regime of accumulation. And there is bound to be great dangers regarding the prospects for economic development under the new regime. Whether short-term or long-term, these serious economic problems, in conjunction with the worsening external environment associated with the East Asian crisis, have prompted the Chinese state leadership to at least temporarily backtrack from the market reform. A variety of policy measures of this nature have been rigorously implemented. By the beginning of the new century, with the easing of the economic problems and the improvement in the external environment, the country once again faces the uncertain future of whether to consolidate the existing regime of accumulation or to resume the switch to the market-regulated new regime., China's political economy was just at a critical juncture when the East Asian financial and economic crisis erupted in 1997. The acceleration of the market-oriented transformation of the Chinese economic system in the preceding years, and with it the breakdown of the regime of accumulation that had underpinned two decades of sustained rapid growth, had resulted in economic stagnation and particularly mass unemployment. Viewed from a neoliberal perspective, these economic problems might be no more than the short-term adjustment cost in the transition to a fully-fledged market economy. Yet from an alternative perspective that draws lessons from the rise and fall of the ‘East Asian miracle’, the problems imply a much more far-reaching impact of the systemic transformation - it amounts to switching to an entirely new regime of accumulation. And there is bound to be great dangers regarding the prospects for economic development under the new regime. Whether short-term or long-term, these serious economic problems, in conjunction with the worsening external environment associated with the East Asian crisis, have prompted the Chinese state leadership to at least temporarily backtrack from the market reform. A variety of policy measures of this nature have been rigorously implemented. By the beginning of the new century, with the easing of the economic problems and the improvement in the external environment, the country once again faces the uncertain future of whether to consolidate the existing regime of accumulation or to resume the switch to the market-regulated new regime.]