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EL MODO DE DESARROLLO DE CHINA Y SUS CONSECUENCIAS SOBRE LA ECONOMIA MUNDIAL Y AMERICA LATINA Robert Boyer Seminario, Facultad de Ciencias Económicas Universidad Nacional, el 5 de Agosto 2014, Bogota I. CHINA IS EXPLORING AN UNPRECEDENTED FORM OF CAPITALISM 1. A genuine co-evolution of institutions and organizations 2. A definite institutional architecture: a régulationist analysis 3. The macroeconomic regime: trade surplus is compensating structural domestic unbalances 4. China after the subprime crisis: a confirmation of a genuine régulation mode and accumulation regime 5. The uncertain re-composition of the world economy 1. A GENUINE CO-EVOLUTION OF INSTITUTIONS AND ORGANIZATIONS The four stages in the transformation of the Chinese economy The progressive emergence of the present competition-led accumulation regime 1949–1976 Succession of five cycles with major instabilities 1978–1992 First wave of economic reforms Introduction of markets and contracts on top of the existing institutions Competition by entry and no privatization Decentralization of authority and resources Cautious and pragmatic approach Declining government share in GDP Creation of Export-Processing Zones Higher household savings channeled into the banking system Reforms without loser 1993–2001 Reforms with loser 2001–2010 Cautious external liberalization The second wave of economic reforms Strengthening of market economy institutions Market unification Company law and diversification of ownership State-sector downsizing; beginning of privatization Focus on finance and regulation China becomes net importer of oil (1993) Creation of Export-Processing Zones Recentralization of resources, macroeconomic control Surge in FDI Accession to WTO Creation of SASAC: monitoring State Ownership (2003) Large openness to FDI, in order to diffuse frontier technologies and organizations Trading market access for technology A common feature in all periods High saving and investment rates A complex hybrid form: the local State corporatism From a series of local corporatisms to Chinese macro dynamism AUTHORS Jean C. Oi (2002) Krug Barbara & Hendrischke Hans (2008) Marie-Claire Bergère (2007) Jean-Luc Domenach (2008) CONSEQUENCES FOR THE ARGUMENTS Irena Grosfeld (1987) Heng-fu Zou (1991) Tax responsibility for each administrative level allows local government entrepreneurship Rural governments as local corporations Constrained cooperation game between local governments and local businesses Complementarity and alignment of interests at the local level A party/State promotes the transformation of bureaucrats into an emerging capitalist class After 1990, urban entrepreneurs are more dynamic than rural ones Nestedness of public and private sectors Mobility of the elite from political to economic and vice versa A specificity of investment decisions in planned economies When the elite have both political power and economic resources in control, they may maximize investment growth rate SOCIOECONOMIC REGIME An incentive for rural industrialization A possible synergy between polity and economy Business-government and micromacro level networking Institutional competition among local entities Entrepreneurial success is linked to the proximity to public administration Permanent exchange between economic and political spheres A basic compromise: “Promise of better standards of living against political monopoly of the Communist Party” Growth as the core objective A transposition to the local level of a theory of social planning Las vinculaciones entre la política y la economía, el local y el nacional 2. A DEFINITE INSTITUTIONAL ARCHITECTURE: A RÉGULATIONIST ANALYSIS La dominación de la competencia sobre las otras formas institucionales La integración en la economía mundial: la consecuencia del compromiso de base sobre el crecimiento Figura 2: La competencia y la sobreinversión impulsan la apertura internacional de China Amenaza de reacción proteccionista FORMAS DE COMPETENCIA Competencia encarnizada: sobreinversión Superávit comercial permanente RELACIÓN SALARIAL Trabajadores segmentados y serializados Participación salarial a la baja Régimen de acumulación en desequilibrio Inserción asimétrica en la economía internacional Control activo mediante la moneda y los créditos Reconfiguración periódica de las formas institucionales 3. THE MACROECONOMIC REGIME: TRADE SURPLUS IS COMPENSATING STRUCTURAL DOMESTIC UNBALANCES A structurally unbalanced growth pattern A declining output capital ratio and profit share Source: Minqi Li (2007), p. 45. El declino de la participación de les salarios y del consumo La tendencia à la sobre acumulación Source: Minqi Li (2007), p. 44. Source: Minqi Li (2007), p. 43. El desafío del Estado Central: moderar el dinamismo de numerosos comparatismos locales 4. CHINA AFTER THE SUBPRIME CRISIS: A CONFIRMATION OF A GENUINE RÉGULATION MODE AND ACCUMULATION REGIME Beijing’s sustained capacity to monitor the Chinese economy: Acute competition among localities, provinces, firms, individuals… But the Communist Party apparatus is centralizing a vast bulk of information The key role of credit controls The strong anti-cyclical credit policy of China in reaction to the subprime crisis (annual growth rate) House price Credit Source: Artus (2010b), p. 6. Figure 10.8 – Stopping the reevaluation of the yuan in order to promote industrial recovery Spot rate 3 months ahead 6 months ahead 9 months ahead 1 year ahead Source: Artus (2010c), p. 8. A possible exacerbation of the structural domestic imbalances After 2008: still more investment and less consumption shares in GDP Household consumption Export Investment Source: Artus (2010b), p. 5. Overcoming income distribution and productive structure inertia The absence of independent unions representing the interests of the workers The low wage share makes quite unlikely a wageconsumption-led regime Minimum wage policy is implemented at the decentralized level A strategy for implementing a minimalist welfare: more a safety net than an efficient tool for income redistribution A possible opportunity: the emerging scarcity of skilled workers II. THE UNCERTAIN RECOMPOSITION OF THE WORLD ECONOMY China: a key player in the emerging new international regime The United States, China, and the rest of the world United States Consumer of last resort Center of financial intermediation Raw materials Trade surplus Financing of external / public deficit The rest of the World THIRD WORLD: boom of raw materials EMERGING ECONOMIES: de-industrialization DEVELOPED COUNTRIES: financialization and de-industrialization China As the engine of growth in Asia, saver of the world Raw materials Trade, foreign investment, natural resources: the strong imprint of China The complex and contradictory impact of China’s ascent Positive and negative impacts of China upon the world economy + – 1. More export to China 4. Less employment in low skills manufactured sectors 2. More purchasing power via lower consumer prices 5. Progressive acquisition of frontier technologies: possible decline of high skill employment 3. Lower long term interest rates 6. Rapid rise of raw material prices A deepening of national specialization: a possible complementarity between LatinAmerica and China? 30 Dominican Republic 2006 Turkey 2000 25 Dominican Republic 2000 20 Turkey 2006 Uruguay 2000 15 Costa Rica 2006 ACR Services marchands Poland 2000 India 2006 10 Costa Rica 2000 Uruguay 2006 Hong Kong 2006 Hong Kong 2000 5 Czech Republic 2000 Hungary 2000 Poland 2006 Slovak Republic 2000 Slovak Republic 2006 Hungary 2006 Australia 2006 Australia 2000 New Zealand 2006 South Africa 2006 New Zealand 2000 0 Mexico 2006 Chile 2000 -5 Ecuador 2006 AMLAT 2000 Malaysia 2006 Bolivia 2000 Colombia 2006 Chile 2006 Peru 2000 Argentina 2006 Peru 2006 India 2000 Czech Republic 2006 Mexico 2000 South Africa 2000 Taipei 2006 China 2006Korea 2000 China 2000 Taipei 2000 Thailand 2000 Korea 2006 Brazil 2000 Thailand 2006 Malaysia 2000 AMLAT 2006 Colombia 2000 -10 Brazil 2006 Ecuador 2000 Venezuela 2006 Argentina 2000 Bolivia 2006 -15 Ireland 2006 Saudi Arabia 2006 Venezuela 2000 Saudi Arabia 2000 Source : Luis Miotti, Carlos Quenan (2009) Ireland 2000 -20 -60 -50 -40 -30 -20 -10 0 ACR Industrie Manufacturière 10 20 30 40 The future is open: a multiplicity of scenarios Mixing domestic and international evolutions: a multiplicity of futures DOMESTIC A STRUCTURAL CRISIS OF OVER ACCUMULATION A BREAKING DOWN OF REGIONAL / SOCIAL GOVERNABILITY INTERNATIONAL Major conflict with the US and unstable world system A gloomy world scenario with unexpected fallout An asymmetric Asian regional integration A major crisis of Asian integration An inward looking China, as a self contained empire A possible sequence: the crisis triggers an inward looking regime A renewed American hegemony and long downwards swing for China A possible reduction of some barriers to Asian integration but less dynamism Loss of appetite of China for regional integration SMOOTH TRANSITION TOWARD A DOMESTIC LED REGIME A softening of international frictions and unbalances Less regional frictions due to a decline of Chinese structural competitiveness A strong complementarity between domestic / international evolutions CONCLUSION C1 – China is exploring an unprecedented brand of capitalism built upon the dynamic interactions between a myriad of local corporatisms. No equivalent in régulationist taxonomies, nor in varieties of capitalism approaches (Both liberal and coordinated!) C2 – The high Chinese growth is not only an example of fast catching-up but also of an unbalanced competition-led accumulation regime C3 – The accumulation of trade surpluses and reserves are the direct consequences of a declining wage share, and not of a typically mercantilist strategy. Tomorrow, China might be the starting point of a major world crisis Excess of accumulation and permanent recreation of bad performing loans Rising social and regional inequalities Drastic environmental problems Severe international frictions over natural resources appropriation C4 – The new Chinese strategy aiming at a domestic demand-led growth regime is quite clear and able to reduce international frictions but it might be limited by the inertia of a typical profit-led accumulation regime. C5—The last decade has experienced new links between Latin America as provider of natural resources and China industrializing boom. C6– This South /South restructuring of the international relations will drastically depend upon the resilience of the Chinese growth regime. Thanks for your attention and patience Robert BOYER Institute of the Americas e-mail : robert.boyer@ens.fr web sites : http://robertboyer.org http://www.jourdan.ens.fr/~boyer/