Abstract
Since the 2008 financial crisis, China has adopted a new development model of state-led supply-side reform, which is the key component of the so-called China model, i.e., China Inc. or the Beijing consensus. China Inc. differs substantially from the two earlier development models: the statist-socialist model from 1949 to 1978 and the marketization-privatization model from the 1980s to the mid 2000s. If the earlier two models operated on the condition and mechanism of “scarcity,” China Inc. runs on the mechanism of overproduction. Overproduction is both the operating principle and the consequence of China’s politico-economic system today, and its epic effect – boosting China’s GDP grow from 30 trillion RMB in 2008 to 126 trillion RMB in 2023 – makes Chinese leaders believes in the superiority of this model. Although China’s economy has shown obvious signs of slowdown and even stagnation, China Inc. as a model remains unchallenged and even gains a new-level endorsement from China’s top leadership. But a development model relies on overproduction is in no way sustainable. As long as China relies on overproduction in organizing its economic activities, the lack of demands will sooner or later lead to an economic crisis, if not a total economic-social collapse.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
Economic, Social, and Cultural Context
KEYWORDS
China Inc, Supply-Side Reform, Unsustainability
