Search Results

As some scholars have indicated, development is the keystone of China's future, and the main threat to national security is not foreign invasion but whether China can support a stable, orderly, and healthy society. Other scholars warn against focusing on military force at the expense of diplomacy. If China becomes a more democratic country, it too will play an increasingly constructive role in the world system. Democratization is essential to China's emergence as a global power. The major challenge for China will be to deal correctly with the United States, the leader of the present global world order. By following a strategy of putting integration first while also seeking some amendment and alteration, China and the United States can use cooperation as a basis for managing challenges. Accordingly, if the Chinese government can innovate, overcome corruption, and distribute the fruits of economic growth more rationally, it can avoid crisis.

Since 2009–2010, China has developed a distinctive set of international economic policies that were by no means inevitable. These policies grew out of the unusual economic events that marked the first part of the twenty-first century—including the Global Financial Crisis (GFC)—and from the determination the Chinese leaders displayed thereafter to exert worldwide global economic influence. The broad policy orientation that grew from these forces can be best considered by examining two complex policy initiatives: renminbi internationalization and the Belt and Road Initiative. Each can be seen as a response to the surplus of domestic saving that emerged in the wake of sustained rapid economic growth, and they are to a certain extent competing strategies. The chapter also assesses China’s overall international economic position as of 2018. It concludes with some prognostications about the future of China’s position in the global economy.

The paper endorses the thesis that current macro imbalances are partly due to an excess of household savings in China, whose origin is to be found among other things in household uncertainty about the provision of public services like health care, pensions and education. Focusing on health services, because of their priority in the concerns of the Chinese people, we describe the recent trends in the provision of health care. We then argue that social spending by the government may have important intergenerational content, in that it allows higher private spending, lower inequality, higher levels of human capital and the like. All these factors are related to the potential growth rate of the economy. We conclude that a more important role of the government in the sector of public services, and in particular of health care, may help reduce the possibility of future bottlenecks, and hence help keeping the Chinese economy on a sustainable growth path. We conclude the paper by an assessment of the current debate on how to reform the system, and we advocate universal publicly funded basic health coverage.

The next few years will test the resilience of the posttransformation Chinese banking system. Banks must cope with the transition to the “New Normal” and decelerating growth as the economy moves to a more balanced and sustainable model. This will cause a rise in NPLs, but as long as government policy eases the economy into a “soft landing,” NPLs will not rise to crisis levels. The transformation has succeeded in producing a banking system that is stable, that is reasonably efficient, and that provides broad financial access. The challenge for the West will be to understand China’s banking system on its own terms, not through a “Western lens.” The banking system is a microcosm of China’s political economy as a whole, so understanding of how it works will assist in understanding how China’s economic and political systems work successfully. Understanding requires dropping a doctrinaire Western analytical framework.

The book closes by critically conceptualizing the Chinese state as a “developmental” state in the global system of digital capitalism. The conclusion also summarizes the centrality of communications in China’s opening-up and in its market reforms, explains the limited effect of China further embracing communications in correcting unbalanced economic dynamics, and assesses what may be learned from China’s successes and mistakes.