Abstract
In this article, we explore the impacts, actual and potential, of China’s development experiences upon development thinking and policies elsewhere. New Structural Economics, a theoretical innovation by Professor Justin Yifu Lin drawing on a longer tradition of pragmatic ‘learning by doing’ development strategies, provides a framework in which three agendas stand out: structural transformation as a policy priority; the return of industrial policy; and the use of Special Economic Zones. We integrate related drivers of growth in China: rapid urbanisation pulling in massive rural migration in an economic transformation process; the financing of provincial and city governments by improvised local government financing vehicles based on rising urban land values; and competition and accountability processes in China’s subnational governance system. While China’s experiences cannot be directly replicated elsewhere, we argue that lessons on why and how to achieve structural transformation are relevant for other developing countries, especially in fast urbanising and integrating Africa.
Highlights
Over the past four decades, China has achieved unprecedented economic development and poverty alleviation
The IDS Bulletin is published by Institute of Development Studies, Library Road, Brighton BN1 9RE, UK This article is part of IDS Bulletin Vol 52 No 2 November 2021 ‘China and International Development: Knowledge, Governance, and Practice’; the Introduction is recommended reading
In terms of agenda-setting, Chinese policies and experience argue that human development and poverty reduction, which have been an important part of China’s own development strategies, are not sufficient alone, and indicate very clearly that economic structural transformation is a prerequisite for sustainable and large-scale poverty reduction and human and social capabilities
Summary
Over the past four decades, China has achieved unprecedented economic development and poverty alleviation. Once the richest country in the world (Maddison 2001), China had become entrapped in poverty for several centuries. 1970s, China has eradicated extreme poverty and overtaken the United States as the world’s largest economy measured in purchasing power parity (PPP) in 2014.3. ‘Economic miracles’ such as those in China and other Asian countries have been explained by Robert Lucas as the combination of rapid urbanisation with fast human capital development, including notably learning by doing via trade (Lucas 1988, 1993; Glaeser and Lu 2018). Chinese economists debated but avoided the mainstream neoliberal programme of privatising its state-owned enterprises, liberalising its trade and capital accounts, and deregulating its economy in a sweeping manner
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