Project Details
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Challenges for the Stability of the Chinese Economic Model

Subject Area Political Science
Sociological Theory
Term from 2018 to 2022
Project identifier Deutsche Forschungsgemeinschaft (DFG) - Project number 396568804
 
Final Report Year 2023

Final Report Abstract

The main objective of the research project was to investigate the medium-term stability of statepermeated capitalism (SME) in the People's Republic of China in its transition from the "workbench of the world" to a technologically modernized economy. To this end, we first conducted comparative analyses with other major emerging economies (Brazil, India) and, incorporating the institutionalist SME model as well as the more demand-focused growth models perspective, were able to explain the different stability of growth since the 2010s in China and India on the one hand and Brazil on the other. Second, by verifying a reorientation of close cooperation between the party-state bureaucracy, enterprises, and the science sector toward technological modernization, we provide evidence of the model-immanent adjustment of Chinese capitalism, which nonetheless includes regional variance and vulnerabilities. As a result, China has risen to become by far the most innovative middle-income country in the early 2020s, leaving the other major emerging economies behind. We analyze this using, among other things, reforms to the state bureaucracy and case studies in two cutting-edge technology sectors, semiconductors and electric vehicles. Third, we have conducted studies on the consequences of the internationalization of the SME model. Our analysis of the externalization of China's state-centered model of standard setting in leadingedge technologies has plausibilized the benefits of a "second image" approach. At the same time, we were able to draw conclusions about the external motivations for technological upgrading. A more hostile international environment increased pressure within China to form "upgrading" coalitions. Our research contributes to the international debate on state capitalism and the differential economic development of large emerging economies. In addition, our findings on the role of the Chinese state bureaucracy, on novel functional networks between the state, firms, and academia, and on two key industrial sectors provide important impetus to the debate on the determinants of industrial and innovation policy effectiveness.

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