2008 Bangkok Chinas Dev Challenges Jan 22
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2008 Bangkok Chinas Dev Challenges Jan 22

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Chris McNally's China presentation to the EastWest Center's Bangkok Media Conference

Chris McNally's China presentation to the EastWest Center's Bangkok Media Conference

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    2008 Bangkok Chinas Dev Challenges Jan 22 2008 Bangkok Chinas Dev Challenges Jan 22 Presentation Transcript

    • China's Development Challenges Christopher A. McNally Research Program East-West Center January 2008
    • Overview
      • Sino-Capitalism
      • Economics, Geopolitics and Ecology
      • The Quandaries of China’s Rise
    • Sino-Capitalism
      • P olitical economy perspective
      • Sino-capitalism – a global capitalist system that differs from Anglo-American capitalism in important respects
      • Sino-capitalism relies on informal business networks rather than on legal codes and transparent rules
      • Sino-capitalism also assigns the Chinese state a leading role in fostering and guiding capitalist accumulation
    • Sino-Capitalism Incomplete Transition and Imprints of History
      • China’s transition in its internal political economy remains incomplete  the maturing of capitalism
        • China still posses insufficient legal and institutional certainty
        • Dominant state // subservient capital and middle classes  no separate sphere of the “economy”
        • Some historical parallels to China’s imperial political economy during the late Song to Qing dynasties
    • China’s Imperial Political Economy Tributary State Small-scale Merchant Capital $1 25 ¢ $1 50 ¢ $1
    • Sino-Capitalism Networked Character
      • A highly networked system that gives Chinese firms enormous flexibility and global reach
      • Guanxi and common Chinese cultural norms support these networks, though the network character comes in many forms and shapes (e.g., some integration with high-tech networks in US and Taiwan in the Silicon Valley – Hsinchu – Kunshan Triangle)
    • Sino-Capitalism State-dominated Capitalism
      • The capitalist logic of China’s development is being harnessed for the purposes of greater CCP legitimacy (for the time being)
      • PATH-DEPENDENCY: State dominant nature of China’s capitalism will remain for the foreseeable future!
      • In other words, if China’s present political economy is sustained, it implies a state-sponsored form of capitalism.
    • Sino-Capitalism Globalization
      • China is already a large contributor to world GDP growth – A new motor for the world economy!
      • China and the West are truly in the same bed of globalization:
        • West: Low inflation // high corporate profits
        • China: Growing trade, technological sophistication, and rapid capital accumulation (for example, China’s foreign reserves of 1.45 trillion USD in Oct 2007)
    • Sino-Capitalism Size and Speed
      • Never has the world seen such an important political economy rise within such a short time span with such global influence
      • 1.3 billion people  1/5 of humanity
      • China is already a major economic player at an early stage in her capitalist transition
      • China’s global economic influence is substantial and could shake the global economic system
    • Capitalism versus Capitalism
      • This is not “THE CHINA THREAT” but rather frictions generated by Capitalism vs. Capitalism
        • Major conflicts between China and her major trading partners are brewing:
      • Problems in China’s legal system and governance capacity on the local level
      • Different business ethics
      • Role of the state in China’s political economy
      • MOST IMPORTANTLY: International currency policy, especially the value of the RMB/CYN
    • The Geopolitical Equation
      • The geopolitical dimension, in which both systems will vie to govern the global political economy, promises to be contentious as China’s power increases
      • Q: Can East Asia absorb China’s rising power?
      • Q: What is the future role of the United States and Japan in Asia?
      • Q: How will China assure its access to Sea Lanes of Communication (SLOCs)?
    • Ecology
    • Ecology
      • The large and rapid developmental processes unfolding in China raise the specter of accelerating environmental degradation
      • Major ecological dilemmas loom if China continues to develop as she has and follows in the footsteps of other capitalist developers  increasing scarcity of certain global resources and massive impact on global ecology
    • Ecology
      • China’s environmental crisis
      • Water – Pollution and shortage
      • Air – Pollution
      • Land (vegetation and soil) – Degradation and desertification
      • Greenhouse gases (CO 2 , etc.)  reliance on coal!
      • Impacts
      • Immediate human cost (health, economic & livelihood)
      • Long-term ecological damage
      • Global implications, especially re global climate change
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    • Ecology Development Overpowers the Environment
      • Economic growth is “China’s state religion”
      • “ The CCP is addicted to economic growth”
      • “ GDP growth mania”
    • The Quandaries of China’s Rise
      • Domestic challenges produced by China’s capitalist transition:
      • Widening income gaps (and the perception thereof)
      • Environmental degradation
      • Corruption and bad governance
      •  Political will to complete the transition in the political realm (lack of constitutionalism)??
    • The Quandaries of China’s Rise Governance Capacity
      • Bad capacity to govern over a broad range of issues on a day-to-day basis
      • Insufficient feed-back loops and no checks on the CCP’s absolute power!
      • BUT: Enormous capacity to mobilize resources short-term: e.g., SARS campaign; smuggling campaign (in 1997/1998); reforestation campaign
    •  
    • The Quandaries of China’s Rise
      • Three external challenges:
      • The influence of China’s political economy on the rest of the world  international economic management will be more complicated, necessitating a new institutional architecture
      • Rising specter of politico-military conflict between the US and China  possibility of another round of great power struggles, be it a “cold” or “hot” war
      • China’s ecological impact  China becoming the world’s largest greenhouse gas emitter with massive implications for global climate change
    • The China Quandary
      • The fundamental questions:
      • As Sino-capitalism becomes a new force in the global system to be reckoned with, can the world’s established powers adjust and adapt?
      • Can new leadership and management models be developed that can address the globe’s major challenges in the 21st century?
      • Ideally, the US and China should face their differences and work towards a mature partnership of equals that contributes to global management.
    • Thank You! 谢谢