China Special Issue A Introduction: Economic Growth, Social Policy, and Technological Development

Abstract

China’s rapid economic development has attracted the interest of many scholars following its emergence as the world’s second largest economy and stimulated research into the underlying factors that may have made this development difficult to overlook. In advancing research, papers included in Issue A help with refining our understanding of the forces that have been driving China’s social-economic, political, and technological developments, addressing the related issues, thus, advancing the social economic literature in its influence in the world, specifically, within the China context.

Keywords:

• Economic growth
• social policy
• technological development

Introduction

Buckley et al. (2007) and more recently, Luo and Bu (2018) have identified that the central role played by State-Owned Enterprises (SOEs) has been pivotal, enabling China to invest in risky host country assets on a large scale. Ravi Ramamurti (2012), Ping Deng (2009) and Mike Peng (2012) have recognized that China has entered culturally distant countries more quickly and on a greater scale than what would have been predicted by the standard entry model, and make a greater overseas commitment in the form of mergers and acquisitions as opposed to alliances. According to Ramamurti and Hillemann, (2018), these factors together with China’s political ‘heft’ and a range of policy levers seems to have been crucial in providing Chinese enterprises with a series of ‘state created advantages’ unavailable to leading competitors from other countries. In advancing research on China, the papers included in Issue A help with refining our understanding of the forces that have been driving China’s social-economic, political, and technological developments, addressing the related issues, thus, advancing the social economic literature within the China context.

The opening essay by Nikolaos Karagiannis, Moula Cherikh, and Wolfram Elsner examines how China’s economic model differs to that of other emerging economies by utilizing ‘a developmental state perspective with Chinese characteristics’. The study has captured three specific features of the China model that is distinguished from other East Asia models, which in several ways contributes to our understanding of China’s distinctive economic models. The paper reviews the salient features of China’s development since the Communist Party came to power in 1949 with the long-term goal to transform China into one of the world’s leading nations, and the significance of central government policy over the period 1953 to 2020. The complex set of interdependent activities may also suggest China’s development of a model based on cooperation between the SOE, private-sector businesses, and an international network of inter-governmental agencies. Through the documentation of China’s economic plans, the study reveals the strategic and entrepreneurial dimensions of its development efforts compared with other East Asia countries. Given China’s ‘historical legacy’ and its pursuit of a different development path, crucially, the world’s second largest economy (in GDP dollar terms) coupled with a highly interdependent system—largely a consequence of China’s economic development strategy—created what the authors claim is a tension between different policy initiatives, leading to unbalanced development, notably export-led growth on the one hand and growth constrained internal linkages on the other.

The question concerning China’s emphasis on export-led growth and unbalanced development leads to the second paper authored by Franklin Obeng-Odoom. The research identifies the limitations of the standard model as well as offering a critique of China’s large-scale migration flows. While labour migration continues to attract considerable interest among economists, reliance on the ‘standard (neoclassical) model’ and Western settings has meant that important migration issues associated with other socioeconomic contexts have been neglected. The study, therefore, sets the focus on large-scale Afro-Chinese migration, identifies several concerns from an institutional political-economic perspective and raises questions concerning China’s investments in Africa and the social costs of Afro-China migration that have arisen. Using the ‘circular, combined and cumulative causation’ model and longitudinal observations, the study brings up the framework of ‘institutional economics’ rather than the ‘rational choice model’. Thus, the study draws out a robust alternative that advances our understanding of the complexities in social interactions associated with Chinese labour migration to Africa and vice versa.

The third article by Shuanping Dai and Wolfram Elsner focuses on within country migration following China’s rapid industrialization. Fast economic growth coupled with substantial regional disparities and shrinking trust were exacerbated by policies of city governments who often discriminated against migrant families. The study, therefore, examines how changes in industry structures lead to changes in social relationships, consequently, how internal mass migration impacts individual wellbeing as families abandon their rural kinship communities and relocate in larger and more autonomous host city regions. More crucially, the paper considers how such development has affected the levels of trust and reshaped ‘small-world’ networks. Using three agent types and two stylized network structures, the study examines the relationship between the declining trust across Chinese societies and its disruption of social networks. Mathematical modelling within a game theoretic framework and empirical observations enable the study to show how internal migration from rural neighbourhoods to host-city regions changed the nature of social interactions that resulted in greater economic and social distance. The displacement of labour together with increasing social distance compromised integration in host city regions, leading to an overall decline in trust and cooperation within Chinese societies. These crucial attributes allow the study to draw out several important implications for future research on social policy.

The fourth article, by Elias Jabbour and Luiz Fernando de Paula, turns to the impact that the changing role of the State and of institutions has determined on the socialisation of investment. The authors examine how the State’s changing role has affected China’s growth dynamics by drawing insights from the symbiotic relationship between government and markets during long periods of rapid economic growth. The study builds on Keynes’ ‘socialisation of investment’—the idea that the State creates space for capital investment (as opposed to consumption investment)—and Gerschenkron’s notion of the State as an investor and financer, Rangel’s cycles of institutional innovations between the State and private initiatives and Hirschman’s uneven growth hypothesis. The study shows a step advance in the idea that institutions change within economic cycles, leading to changes in the relationship between central government and other government agencies, including state-owned enterprises. The dialectic between the Chinese State and its changing relationships with other agencies, explains institutional innovation cycles in a modern monetary economy, where the development of the financial system and the role of State financial capital is conducive to the socialisation of investment.

The fifth article by Lorenzo Compagnucci, Dominique Lepore, and Francesca Spigarelli examines China’s technological development, specifically the role played by science parks in China’s ambition to reduce its reliance on imported technology through developing domestically derived innovation. Science parks in the context of China’s ‘Go Global’ policy, initiated by central government in the early 2000s, was an attempt to shift China from an export-driven manufacturing economy to one that is driven by high-value added innovation and creativity. The paper shows China’s upgrade capabilities and innovation on a scale that would enable China to become effective in competing with technological leaders across global markets. The authors use the Triple Helix Model as an integrated approach to technological innovation involving universities (and other research institutions), enterprises, and government. The examination deploys different research applications, drawing on data from 14 Chinese science parks according to size, diversity, technological focus, degree of specialization, international linkages, and the degree of international exposure. The findings also reveal that, despite the Go Global initiative, international exposure is patchy, and most parks seem to have either underdeveloped links to international research institutions or weak relationships with international firms in the advanced technology sectors. However, leveraging knowledge from ‘on-park’ universities and co-located international enterprises for utilisation across China has had some success. Given the findings are mixed, the study raises the question: Can science parks improve China’s international exposure to advanced technology?

The Special Issue has sought to reinvigorate debates on the growing forces influencing China’s social economic evolutionary states. Working on different aspects, each paper in Issue A has contributed to the debate on what is distinctive about China’s rapid economic development and is a testament to the strength of this vibrant area of research. Besides documenting China’s development, collectively the papers draw attention to several neglected areas in the discussion of China’s rapid economic expansion, such as unbalanced growth, mass internal migration, international labour flows, disparities in access to education, public health, and housing. Besides institutional policy, research in this issue has drawn attention to the social costs of globalization and the implications of fast economic development for people and communities.

The issue serves the interests of scholars who seek to understand more fully the development of China as well as of other emerging economies. The challenges identified in this issue could be expanded to include employment, personal and group identities, working conditions and wages, social categories such as gendered spaces, age cohorts, and social class distinctions. More importantly, institutional policies concerning business sustainability and increasing globalization pose further challenges for migration across the geopolitical landscape, economic growth, and employment. These areas have growing demand for future research.

Zhi Wang and Lefteris Giovanis

Special Issue Editors