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Making sense of China's Economic Slowdown

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  • Suzuki, Yasushi

Abstract

This paper aims to review the factors inducing China's successful economic transformation, so as to find the causes of the subsequent economic slowdown, from the New Institutional Economics (NIE) viewpoint and the Marxian viewpoint, respectively. The former school is primarily concerned about the "supply-side" driver (changing rules of game for producers) of increasing economic output and efficiency, while the latter is basically sharing with the Marxian concern of the "demand-side" driver (an egalitarian pattern of income distribution which underpins mass-consumption) of increasing economic output and sustainability. NIE emphasize that unless a free and open market for ideas is created, China cannot sustain its economic growth or advance itself into a global centre of technological innovation or scientific discovery. However, this paper points out that the creation of an active market for ideas would not always guarantee the sustainability of economic growth, drawing the lessons from Japan's experiences. This paper suggests that it takes more or less several years to create an active market for ideas to transform to a new phase of post-industrialization. In addition, in the phase of post-industrialization, rapid product obsolescence is brought by severe competition in which rival firms are accelerating the introduction of competitive products to the market, which may expose innovative firms to fundamental uncertainty.

Suggested Citation

  • Suzuki, Yasushi, 2014. "Making sense of China's Economic Slowdown," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(2), pages 195-201.
    • Handle: RePEc:zbw:espost:105849
    DOI: 10.1453/jepe.v1i2.64
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    References listed on IDEAS

    as
    1. Dic Lo, 2012. "Alternatives to Neoliberal Globalization," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-36116-4, October.
    2. Hsing, You-tien, 2010. "The Great Urban Transformation: Politics of Land and Property in China," OUP Catalogue, Oxford University Press, number 9780199568048.
    3. Ronald Coase & Ning Wang, 2012. "How China Became Capitalist," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-01937-0, October.
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    More about this item

    Keywords

    Economic transformation; Market socialism; Post-industrialization; China;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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