The political economy explanation of the logic of China’s “two miracles”

Purpose - During the Communist Party of China's endeavors over the past century, China has created “two miracles,” namely, large-scale and rapid economic development and long-term social stability. Design/methodology/approach - The causes for China's achieving the “two miracles” lie in the adherence to the Party's leadership as the political guarantee, the scientific theoretical guidance as the ideological guarantee, the socialist system as well as the national governance system as the institutional guarantee and giving full play of people's creativity under the Party's leadership as the driving force guarantee. Findings - From a political economy point of view, the theoretical logic behind the creation of the “two miracles” is that the combination of the state capacity and the scaling up of markets under the Party's leadership contributes to the rapid economic development and further the long-term social stability based on the financial foundation laid by rapid economic development. The historical experience of the “Two Miracles” can be summed up as the cultivation of state capacity under the leadership of the Party, the synergy and complementarity between the central government and local governments, the combination of development planning and market mechanisms, and the coordination of selective, functional and inclusive industrial policies. Originality/value - It is necessary to judge future development trends from a medium and long-term development perspective, further promote the co-evolution of the state and the market, reshape the growth regime for high-quality development, fully tap the potential of domestic demand and create a “people-centered” economic development model so as to continue the “two miracles” and achieve a miracle of high-quality development in the second century.