On the (Non-)sustainability of China’s Development Strategies¹

Abstract

This paper summarizes the main characteristics of the two major Chinese growth strategies since 1978, namely the Deng strategy (named after Deng Xiaoping) between 1978 and 2011 and the Xi strategy (named after Xi Jinping) since 2012/13. After a brief description of both strategies, I analyze in depth whether the respective reforms of the two strategies have caused sustainable or unsustainable growth and economic development. Furthermore, I derive some implications concerning the danger of a Chinese middle-income trap and propose some policy recommendations (also against the background of the Korean experience). I finally develop a growth-theoretic systematization of the arguments elaborated previously.

United States, China and The Dispute For Global Hegemony: a Comparative Analysis

“…the main objective is to reduce dependence on foreign technology and turn the Asian country into a technological superpower, as part of the change of growth model. This has materialised in various projects, such as "Made in China 2025" (Wagner, 2019), which have been criticised by the US authorities, as competition in the production of high value-added goods is perceived as a threat to US hegemony (Xuetong, 2020). Source: OECD China 's strategy is reflected in the progress in research and development investment (Figure 5).…”

“…Furthermore, in relation to trade links and the creation of a new parallel institutionality of both rules and agreements, China launched the Belt and Road Initiative in 2013 (Wagner, 2019). This macro-project consists of infrastructure investments in third countries to create maritime, land and digital connections, enabling China to increase its trade and diplomatic ties with the rest of the world (Wagner, 2019). Although this project was initially intended to be launched in Eurasia, China has reached agreements with countries on other continents, opposed by the United States (Wagner, 2019).…”

“…Over the past thirty years, China has managed to integrate into the global economy and US-led frameworks, achieving growth figures that have led it to become the world's leading economy in terms of GDP in purchasing power parity (Li, 2017). Furthermore, in the last decade, Beijing has developed various projects to change its production model to have a more active presence abroad, through plans as diverse as Made in China 2025, which aims to turn the Asian country into a technological superpower (Wagner, 2019) and the Belt and Road Initiative, an investment project in maritime, land and digital infrastructure with more than 100 countries (Lai, 2020). All of this raises the debate of whether China can succeed the United States as a hegemonic power (Arrighi, 2007;Li, 2017;Cooley andNexon, 2020 andXuetong, 2020).…”

China’s “Political-Economy Trilemma”: (How) Can it be Solved?

“…Major imbalances triggered by the Deng-development strategy that ultimately prompted China to change course and initiate the transition to another, namely the Xi-development strategy were: Environmental destruction Overcapacity Income disparities Political and cultural instability ("historical nihilism"; and infiltration by other non-socialist ("Western") values) Corruption (see Wagner, 2017Wagner, , 2019a. These growing imbalances eventually threatened the stability of the overall system and led the Communist Party of China (CPC) after 2010 to accept the need for rebalancing, i.e.…”

China’s AI experience: industrial digitalization

“…Особое значение для успеха США имеет наличие более зрелого ИИ-бизнеса и инновационной экосистемы. Свыше 50 % американских специалистов по ИИ обладают более чем десятилетним опытом работы, в то время как китайских исследователей с аналогичным опытом только 25 % (Wagner, 2019).…”