The China Boom: Why China Will Not Rule the World by Ho-fung Hung

Abstract

Reviewed by: The China Boom: Why China Will Not Rule the World by Ho-fung Hung Kristin Stapleton Hung, Ho-fung. he China Boom: Why China Will Not Rule the World. New York: Columbia University Press, 2016. Ho-fung Hung, a sociologist with a keen interest in comparative history, aims in this study to both dash hopes and calm fears that China is transforming the capitalist world order in radical directions. China supports the status quo, he argues, and "is a key force in helping perpetuate U.S. global dominance" (173). As a concise, incisive, and provocative introduction to the history and contemporary [End Page 98] state of the Chinese economic system, this book is invaluable, particularly for students and newcomers to the field. Even those familiar with the arguments Hung presents, though, will appreciate the clarity and fairness with which he dissects debates on China's role in the global political economy. An introduction sets out Hung's twin goals of explaining the development of capitalism in China and assessing the nature and extent of its impact on the world. Hung argues that, more than simply a market economy, a capitalist system requires a cultural drive to accumulate material wealth and institutions that encourage this drive. The history of markets in China is long and rich, but the "capitalist spirit" of accumulation did not take firm hold until its political economy was transformed by the collapse of the imperial order in the twentieth century. Hung devotes the three chapters of part one ("Origins") to a survey of economic change in China from the Qing era (1644-1911) to the present. Over the course of these chapters he engages critically with works by Kenneth Pomeranz, Thomas Rawski, and many other analysts of China's political economy. He argues that the Maoist regime managed to accomplish what its nineteenth- and twentieth-century predecessors had tried but failed to do: harness the wealth of the countryside to industrialize. In Chapter Three, he analyzes the "capitalist boom" since 1980 as partly a legacy of Maoist policies that benefitted industry over consumption, but spread education and health services to the countryside. The household registration (hukou) system, put in place in the 1950s to prevent rapid migration to the cities, [End Page 99] now serves to suppress the wages of relatively well educated and disciplined migrant workers. The entrepreneurial Chinese diaspora contributed to the boom, as well, by responding enthusiastically to Deng Xiaoping's invitation to bring its organizational expertise and capital to the motherland in the 1980s and 1990s. Chapters Four through Six comprise part two ("Global Effects, Coming Demise"). The global effects of China's industrial boom are discussed efficiently and convincingly. The prediction of a coming demise of the boom is more speculative, but grounded in Hung's analysis of the cyclical nature of capitalism, the changing labor market in China, and the fragility of its political system. In Chapter Four, Hung examines whether China's growing prosperity is likely to increase or decrease inequality worldwide. Even though income inequality is increasing in China itself, he believes that the overall impact of China's development is to reduce global inequality. This effect will diminish as the Chinese economy slows. On the other hand, he argues that China's industrial dominance threatens to "lead to deindustrialization and a return to dependence on natural resources exports in the developing world" (109). In this respect, China's Asian neighbors have adjusted more successfully to China's industrial boom by shifting production to complement rather than compete with Chinese manufacturers. African and Latin American economies have not done this as effectively, Hung explains. In Chapter Five Hung argues that China depends on and supports the United States as the world's financial center: [End Page 100] China's "insurmountable addiction to U.S. Treasury bonds as the new opium" props up the U.S.-dominated international system (132). He concludes that "China needs the perpetuation of the global neoliberal order to advance its economy through the expansion of its trade and investment ties to the Global North and South" (143). Chapter Six, entitled "Global Crisis," examines the instability of the Chinese system and its relation to...