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Political Science
Joseph Wong

Chengqiu Wu Lecture Developmental State and China Prototypical developmental state: the Japanese Model (Def’n by Chalmers Johnson)  The existence of a small, inexpensive, but elite bureaucracy staffed by the best managerial talent available in the system  a political system in which the bureaucracy is given sufficient scope to take initiative and operate effectively-- political legitimacy  the perfection of market-conforming methods of state intervention in the economy  pilot organization like Ministry of Int’l Trade and Industry (MITI) Developmental State st  setting development as the State’s 1 priority  state and market: the state’s market-conforming methods of intervention—direct resources to industries of strategic value  state and industry: a cooperative relationship, but based on a transformative goal  Institutions of the state: small, inexpensive, but elite state bureaucracy given sufficient scope to perfect the market- confirming methods of state intervention  Strategic economic policy: industrial rationalization policy and industrial structure policy  Political legitimacy: comes from devotion to a widely believed-in revolutionary project (modernization) China compared to developmental state  State playing a guiding/ planning/ controlling role: 5-year plan set by guidelines and priority areas supported by gov’t  Large investment projects have to be approved by the state bureaucratic system  market-monitoring, price management (e.g. interest rate, gasoline prices)  State still keeps ultimate control over strategic sectors of the economy and a large range of core industries—utilities, transportation, telecommunications, finance, media th China’s 12 5-year plan (2011-2015) : economic targets  GDP to grow by 7% annually on avg  More than 45 m jobs be created in urban areas  Prices to be kept generally stable  Urban registered unemployment no higher than 5% Economic restructuring  rise in domestic consumption  breakthrough in emerging strategic industries  service sector value added output account for 47% of GDP  Urbanization rate, R&D Pilot organization: the State Council (esp. National Development and Reform Commission/ Small State Council) Political logic of China’s development  legitimacy comes from economic development/ history China’s differences from the developmental state  State-owned enterprises have dominant status  Chinese gov’t has strong influence on society too  Foreign companies play a more important role in China— foreign-invested companies play important role in export/imports  Lower welfare expenditure than in other East Asian countries  Provincial and local governments promote development actively China’s transition from a command economy to a developmental state  2002-2008 Scientific approach to development  2009—present Economic stimulation plan (4 trillion yuan) Recent debate on China Model in China  China model: liberal economy w/ illiberal political system, developmental state industrial policy  Beijing consensus (innovation, equality)—some say the real China does not live up to the Beijing consensus o overconfidence after financial crisis  Political implications of the debate: leftists (criticizing market reform)  Overdependence on investment  Overdependence on foreign market (adjustments)  Income inequality  Urban-rural duality  environmental degradation  Corruption  Tension between local gov’t and the people—land Developmental state after the recent financial crisis  Conflicts between marke3t conforming and industrial upgrading  The gov’t’s ability to target strategic industry—misjudgement o e.g. Suntech—leading solar panel maker Wuxi Suntech declared bankruptcy in 2013 Future of the China  possible convergence point between European, US, East Asian, and China Models (based on gov’t intervention into economy and social welfare provision) Possible future reforms in China  land reform in rural area?  change of population policy?  Democratization of local gov’ts?—elections  Reform of household registration system?  Income inequality o Tackling income inequality through more accountability Socialism—how to define? Basically reduce government’s role and motivate the private sector to invest, increase people’s income as opposed to the gov’t collecting a large share of the GDP  people better at determining which area to invest in The Developmental State Convergence expected and liberalism as only path varieties of capitalism w/o convergence Developmental state echoes the nationalist perspective  Customs union—taking care of German nationals and protecting that economy from England  Friedrich List (German nationalist)—of course the hegemon would want others to continue producing products which they have comparative advantages in. Germany should protect its infant industries (catch up). It was also the political basis for the autocratic Bismarck regime.  Paul Krugman—strategic trade policy – using List’s idea—how countries should behave strategically in the global economy  Suntech failed?—lack of capacity, lack of demand due to Americans passing the protectionist act so American companies could get into the value-added industry too o The developmental state is not only Asian Asian economic miracle  Tiger economies – postcolonial economies that were largely agricultural and very poor—rapid economic growth and industrial growth/ diversification  Developmental theory response to world systems theory— expected to be locked in due to their position in the per
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