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Thursday, May 29, 2008

China's growth pains

International Socialism Journal Issue: 118
Charlie Hore

This year will see the thirtieth anniversary of Deng Xiaoping’s announcement of China’s “Four Modernisations”, the economic reform programme that laid the basis for China’s economic boom. This summer’s Olympic Games, planned to be among the most spectacular ever, will underline the extent to which China has become a major economic and political power. But 2008 may also be the year when the long-predicted recession finally hits world capitalism—and that would have a profound effect on the Chinese economy. One way and another China will be much in the news this year.

One constant theme in that news coverage is the “threat” of China overtaking the US to become the world’s dominant economic power. The most obvious aspect of China’s recent economic growth has been its sheer speed, and it is this that largely fuels the idea of the “threat” (with a barely hidden undercurrent of “yellow peril” racism). However, what has less often been recognised is the unpredictability of China’s economic development. Time and again the direction and pace of China’s economic growth have taken Western capitalists and academics, as well as China’s rulers, by surprise. As the introduction to one academic survey ruefully noted:

Where in 1989 the consensus appeared to urge a policy of rapid privatisation, trade and foreign exchange liberalisation, and rapid stabilisation through drastic cuts in subsidies and the money supply, China’s economic dynamism appeared to result from strategy that ignored such advice.1

In this compendium review of a number of new and recent books on China I aim to do three things: to give an overview of China’s current position in the world economy and how it got there; to look at the limitations and constraints on China’s future growth; and to give a sense of what the past 15 years of breakneck growth have actually meant for peasants and workers in China. Readers should be aware that this is a very small selection of what has been published on contemporary China in the past couple of years. I have chosen these books because I think they are both interesting and accessible accounts of particular aspects of China, and all are worth reading for getting a greater sense of the scale, effects and limitations of China’s growth.

Continued HERE

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