Zhiyuan Cui is Professor of Political Science at the School of Public Policy and Management at Tsinghua University, Beijing. He has taught at MIT for nearly a decade, and was a Distinguished Visiting Professor at Cornell University Law School. His current research focuses on China and the global political economy in the aftermath of the 2008 financial crisis. He co-authored the first public report of the New Development Bank: The Role of BRICS in the World Economy and International Development (2017). His publications include The Dilemma of Invisible Hand Paradigm (1999), Whither China (2003), China and Globalization: Washington Consensus, Beijing Consensus or what? (2005). His recent essays have been translated into Korean under the title Manifesto for Petty-Bourgeois Socialism (2014). Since 2018, he has been a member of the academic committee of the Holberg Prize.
I plan to write a book m.s. about the “political economy of China: 2008-2020” during my stay at the EURICS. I have already been collecting data and have written several Chinese articles about this topic and have a contract for publication with Palgrave Macmillan. Very tentatively, here is the outline of the chapters.
Introduction: “Performance Legitimacy” is not Sufficient
The introduction chapter will engage with the debates within and outside China about the CCP regime’s “performance legitimacy”. I argue that “performance legitimacy” in terms of economic achievement will not be sufficient for the justification of the regime’s legitimacy. However, the economic performance does need to be taken seriously. Therefore, the study of economic mechanisms of the successes and failures of China’s post-2008 performance becomes necessary for our understanding of today’s China and its possible evolution in the near future.
Chapter 1 : The 2008 Fiscal Stimulus Program: Success and Failure
This chapter will provide a detail picture of the Chinese 2008 fiscal stimulus program. According to Adam Tooze of Columbia University, “it was the first large-scale fiscal response to the crisis worldwide”. The reason for this Chinese lead in the fiscal stimulus globally was that fiscal policy in most Western countries has been crippled by “balanced budget rule” (as the case of US) or “3% rule” ( as the case of EU), therefore, monetary policy has become the “only game in town”. There were two big successes of the Chinese 2008 fiscal stimulus program. The first big success was the construction of high-speed railway network between 2008 and 2014. The journey from Beijing to Shanghai was cut to 4.5 hours. Arguably, after borrowing the most advanced technologies from Germany and Japan and combined them with the indigenous innovations, Chinese high-speed railway network become the envy of the world. The second big success was the huge public health investment. Two thousand county hospitals and five thousand township clinic centers were built with the fiscal stimulus money, and health insurance coverage were extended from 30 percent to 90 percent of the Chinese population. It meant a huge progress in covering rural people. One big mistake, though, was that in a rush to match the central government’s fiscal stimulus program, many banks and local governments imprudently invested in too many bad projects, and as a result, the Chinese economy has built up enormously domestic debts (company debts and local government debts, rather than the central government debts) and excessive productive capacities.
Chapter 2: The Supply-Side Structural Reform Starting from 2015
The adverse consequence of the 2008 stimulus program (bad company debt problem and excessive capacity problem) led to the Chinese government adopting the so-called Supply-Side Structural Reform in November 2015. The very word “supply-side” has not been much used before in China, I guess its use in the official policy document has something to do with the G20 summit in Australia in 2014 which proposed the agenda of supply-side reform for G20 countries from 2014 to 2018. Though the word of “supply-side reform” is borrowed from the West, it fits well the need of Chinese policy makers facing the bad company debt problem and excessive capacity problem. It is the guiding idea of the Chinese economic policy until today.
Chapter 3: Global Supply Chain and the Chinese Domestic Institutions
This chapter will explore some features of Chinese domestic institutions (such as land ownership and local government’s economic coordination) which facilitate global supply chain locating in China.
Chapter 4: WTO and the Chinese Domestic Institutions
This chapter will explore some features of Chinese domestic institutions which cause the conflict (intentionally and unintentionally) with the rule of WTO.
Chapter 5: Search for a unified theoretical perspective
This chapter will try to put the Chinese policy measures in a unified theoretical perspective. This perspective is very much inspired by James Meade’s (1977 winner of Nobel Prize in economics) theory of “liberal socialism”. I first explored this perspective in the Chinese reform context in a lecture given at Oxford University in 2014 ( http://podcasts.ox.ac.uk/chinese-reform-light-james-meades-liberal-socialism
Conclusion: After the Pandemic