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The Challenges of Governance Structure, Trade Disputes and Natural Environment to China's Growth

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  • Wing Thye Woo

    ([1] John L. Thornton China Center, Brookings Institution, Washington DC, USA [2] University of California, Davis, CA, USA [3] School of Finance, Central University of Finance and Economics, Beijing, China.)

Abstract

Viewing the Chinese economy as a speeding car, there are three types of development that could crash the car: (1) a hardware failure, which is the breakdown of an economic mechanism (analogous to the collapse of the chassis of the car), for example, a banking crisis; (2) a software failure, which is a flaw in governance that creates social disorders (analogous to a fight among the people inside the car), for example, the state not being able to meet the rising social expectations about its performance because many of the key regulatory institutions are absent or ineffective; and (3) a power supply failure, which is the loss of economic viability (analogous to the car running out of gas or having its ignition key pulled out), for example, an environmental collapse or an export collapse. The fact that China has recently declared that its most important task is to build a Harmonious Society (described as a democratic society under the rule of law and living in harmony with nature) suggests that improvements in governance and protection of the environment are among the most serious challenges to achieving sustainable development. The greatest inadequacy of the Harmonious Society vision is the absence of an objective to build a harmonious world because a harmonious society cannot endure in China unless there is also a harmonious world, and vice versa. The large amount of structural adjustments in the developed countries generated by rapid globalisation and technological innovations has made the international atmosphere ripe for trade protectionism; and environmental degradation has made conflict over the global environmental commons more likely. China's quest for a harmonious society requires it to help provide global public goods, particularly the strengthening of the multilateral free-trade system, and the protection of the global environmental commons. Specifically, China should work actively for the success of the Doha Round and for an international research consortium to develop clean coal technology. Comparative Economic Studies (2007) 49, 572–602. doi:10.1057/palgrave.ces.8100231

Suggested Citation

  • Wing Thye Woo, 2007. "The Challenges of Governance Structure, Trade Disputes and Natural Environment to China's Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(4), pages 572-602, December.
    • Handle: RePEc:pal:compes:v:49:y:2007:i:4:p:572-602
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    References listed on IDEAS

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    1. Woo, Wing Thye, 2001. "Recent claims of China's economic exceptionalism: Reflections inspired by WTO accession," China Economic Review, Elsevier, vol. 12(2-3), pages 107-136.
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    4. Wing Thye Woo, 2001. "Recent Claims of China's Economic Exceptionalism: Reflections Inspired by WTO Accession," CID Working Papers 70A, Center for International Development at Harvard University.
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    7. Wing Thye Woo, 2003. "Recent Claims of China's Economic Exceptionalism: Reflections Inspired by WTO Accession," Working Papers 13, University of California, Davis, Department of Economics.
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    Cited by:

    1. Iikka Korhonen, 2019. "Forty Years of Chinese Reforms: An Overview," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(3), pages 349-358, September.
    2. Amesheva Inna, 2017. "Environmental Degradation and Economic Development in China: An Interrelated Governance Challenge," The Law and Development Review, De Gruyter, vol. 10(2), pages 425-450, October.
    3. Zhu, Qinghua & Cordeiro, James & Sarkis, Joseph, 2012. "International and domestic pressures and responses of Chinese firms to greening," Ecological Economics, Elsevier, vol. 83(C), pages 144-153.
    4. Thais Nunez-Rocha & Camelia Turcu, 2019. "Trade in Fuels and Environmental Regulation: A Two-Sided Story," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(2), pages 302-343, June.

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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