Supply-side structural reforms from the perspective of global production networks – based on the theoretical logic and empirical evidence of political economy

Abstract

PurposeThis paper examines the different features of China's economic development in different stages of economic globalization. The study finds that the investment- and export-based growth model drove China's high-speed economic growth between 2000 and 2007, which came into existence around 2000 when China plugged into the global production network.Design/methodology/approachThis paper also finds that China slowed down to the New Normal because of the disruption to the socio-economic underpinnings of this growth model. As China adapts to and steers the New Normal, supply-side structural reforms can channel excess capacity to the construction of underground pipe networks in rural areas of central China and fix capital while advance rural revitalization.FindingsAt the same time, enterprises must strive to build a key component development platform for key component innovation and the standard-setting power in global manufacturing.Originality/valueThe establishment of a domestic production network integrating the integrated innovation-driven core enterprises and modular producers at different levels can satisfy the dynamic demand structure of China in which standardized demands and personalized demands coexist.