The Economic Ascent of China and the Potential for Restructuring the Capitalist World-Economy

Abstract

The economic ascent of China in the past two decades is the most dramatic change in the capitalist world-economy of this period. Analyses focus on changes in government control of the economy, the availability of low cost workers for export production, the historical characteristics of Chinese economy and society, and the role of the Chinese government as a developmental state. All highlight key parts of China’s economic ascent, but none addresses what we argue will be the critical component of future sustained economic ascent, if it is to take place in China: the role of raw materials and transport industries as generative sectors. These generative sectors in the most successful historical cases articulate domestic economic development with the creation ofnew systems of international economic and political relations, ultimately restructuring the capitalist world-economy in support of a nation’s ascent to core status and its ability to challenge the existing hegemon and other ascendant economies for hegemony. China is following the Japanese model of coastal greenfield heavy industrialization as state policies focus on deepening industrialization in steel, shipbuilding, and other heavy industries. However, following the models of earlier ascendant economies does not guarantee success. In this paper, we analyze the efforts underway in China to use steel, coal and other linked industries as driving forces for sustained economic ascent, and the potential consequences of these efforts for China and for the world economy.