Dr. Richard Westra historically contextualises China’s 21st century meteoric growth in terms of its post World War II socialist development and the particular modalities of the post 1978 market reform process. It is argued that no state can free itself from generalised patterns of global accumulation as these have shaped the world economy from the 1980s into the present. Thus, despite decades of high growth, China will never become an advanced economy as did South Korea. Rather, China’s development path as the consumer goods assembly hub of the world has saddled it with mounting travails that portend the breakdown of its current order. How, then, will China egress from its economic girdles?
In all recorded world history, per capita GDP growth over 6 percent for an extended period has occurred only three times with each episode taking place in post World War II (WWII) East Asia. Japan’s spurt, averaging over 8 percent annually from 1955 to 1973, is the first. South Korea and Taiwan’s growth in GDP per capita in the period 1982-1996, averaging 7.4 percent and 7.1 percent respectively, is the second. Third, there is China’s post 1978 trajectory averaging around 7 percent GDP growth per capita to 2005 and beyond which is the longest in human history.1
Though Japan’s industrialisation commenced in the late 19th century, what catapulted it into the premier league of global competitiveness following WWII was the spectre of Mao Zedong’s peasant army marching triumphantly into Beijing. Besides thousands of technology patents lavished gratis upon Japan, United States (US) taxpayer booty flooding in for Japan’s support of the Korean and Vietnam War efforts spurred the near quadrupling of its industrial output. South Korea, finding itself on a Cold War fault line, was the recipient of US taxpayer dole for both civilian and military use from 1945 to 1976 amounting half of that received by all Latin America in that period.2 This enabled South Korea to solve the development “catch-22 of having to export in order to pay for imports but being unable to produce for export without first importing materials and machinery”.3
About the Author
Richard Westra is Designated Professor in the Graduate School of Law, Nagoya University, Japan. His most recent books are Unleashing Usury: How Finance Opened the Door to Capitalism Then Swallowed It Whole (Clarity Press, 2016) and Exit from Globalization (Routledge, 2015).
1. Naughton, B., 2007, The Chinese Economy: Transitions and Growth, MIT Press, pp. 142-3.
2. Westra, R., 2012, The Evil Axis of Finance, Clarity Press, pp. 52-60.
3. Eichengreen, B., 2007, The European Economy since 1945, Princeton University Press, p. 65.
4. Hung, H., 2016, The China Boom, Columbia University Press, pp. 43-50.
5. Westra, R., 2016, “China in the crash lane”, in Yokokawa, N. et al. (eds.) The Rejuvenation of Political Economy, Routledge, pp. 303-6.
6. Hung, The China Boom, pp. 69-73.
7. Westra, Evil Axis of Finance, p. 154.
8. Brown, K., 2014, The New Emperors: Power and the Princelings in China, I. B. Tauris.
9. Webber, M. and Rigby, D., 2001, “Growth and Change in the World Economy Since 1950”, in Albritton, R. et al. (eds.) Phases of Capitalist Development: Booms, Crises and Globalization, Palgrave.
10. Hart-Landsberg, M. 2013, Capitalist Globalization, Monthly Review Press, pp. 31ff.
11. Westra, Evil Axis of Finance, pp. 154-6.
12. Aglietta, M. and Bai, G., 2013, China’s Development, Routledge, pp. 137-8.
13. Westra, Evil Axis of Finance, pp. 165-6.
16. Aglietta and Bai, China’s Development, pp. 142, 213-18.
17. Hung, The China Boom, pp. 148ff. on this and below.
18. Murphy, M. and Yuan, W. J., 2009, “Is China Ready to Challenge the Dollar?” https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/091007_Murphy_IsChinaReady_Web.pdf
19. Vague, R., 2015, “The Coming China Crisis”, Democracy, 36, http://democracyjournal.org/magazine/36/the-coming-china-crisis/
22. Vague, “The Coming China Crisis”.
23. McKinsey Global Institute, China’s Choice, June 2016, http://www.mckinsey.com/global-themes/employment-and-growth/capturing-chinas-5-trillion-productivity-opportunity.
24. Murphy and Yuan, “Is China Ready to Challenge the Dollar?”