International Political Economy Notes - China Case Study

Introduction to International Political Economy

• Instructor: Mike Crawley
• Course based on "Introduction to International Political Economy" by David Belong and Bradford Dhillman.
• Focus on chapter six, which discusses global production structure with case study centered on China.

China as a Case Study

• Analyzed in the context of the global production structure.
• Significant elements include China's Belt and Road Initiative (BRI) and its implications on global supply chains.
• Understanding China's transition from a developing country to a major economic power over the past four decades.

China's Economic Growth

• Economic reforms began in 1979; average GDP growth of nearly 10% per year until 2017.
• World Bank reports China has lifted over 800 million people out of poverty.
• Bilateral trade with the US surged from $5 billion in 1980 to $660 billion in 2018.
• China: largest partner for US merchandise trade, 3rd largest export market, and top source of imports.
• Prominent US companies use offshore operations in China to remain competitive and offer low-cost goods.
• China holds significant quantities of US Treasury securities, aiding the funding of US budget deficits and keeping interest rates low.

US-China Economic Relations

• Concerns in the US regarding China’s unfair trade practices (e.g., undervalued currency, subsidies).
• Debate over China’s industrial policies and intellectual property rights violations impacting US competitiveness.
• Trade and investment barriers in China pose challenges for US companies.

The Belt and Road Initiative (BRI)

• China's grand strategy aimed at financing infrastructure across Asia, Europe, and Africa.
• Potential expansion of China's export markets and enhancement of global soft power.

Influences on China’s Political Development

Geographical Influences

• China has the largest global population and the third largest land area.
• Historical term "Zonggao" meaning Middle Kingdom reflects cultural perspective.
• Important geographical elements include ice-free ports, navigable rivers, and geographic isolation in the west, which shape political development.

Historical Influences

1. Dynastic Rule: Confucian values emphasizing order, harmony, hierarchy, and scholarship.
   • Mandate of Heaven justifying emperors’ rule; merit-based bureaucracy.
2. Imperial Control: Spheres of influence by foreign powers (Britain, France, Germany, Japan).
3. Revolutionary Upheavals: Major revolutions (1911, 1949) emphasizing nationalism and socio-economic development.
   • Long March: pivotal event enhancing Mao Zedong’s popularity and leading to the establishment of the People's Republic of China in 1949.

Political Structure of the People's Republic of China (PRC)

• Established after the civil war between nationalists (Chiang Kai-shek) and communists (Mao Zedong).
• Mao’s ideology influenced by Marx and Lenin; key values included collectivism, struggle, and self-reliance.
• Shift from Maoism to Deng Xiaoping’s reforms in 1978, leading to economic modernization via free-market principles, opening trade, and investment.
• Key reform policies: rural, industrial, and financial reforms emphasizing performance and accountability.

Government Institutions

• Three parallel institutions: Communist Party of China (CPC), government, and the People’s Liberation Army (PLA).
• NPC holds ultimate power; the president, along with the NPCSC, acts as the head of state.

Challenges and Transitions

• China undergoing three primary transitions:
  1. From planned to market economy.
  2. From rural to urban society.
  3. Integration with the World Trade Organization (WTO).
• Issues of inequality and environmental pressures persist alongside economic growth.

Global Economic Role

• China's population and land mass contribute to its potential economic power.
• Strategic advantage in late development due to prior technological advancements in other regions.
• Strong Confucian values supporting a stable and productive society; education and gradual reforms shaped success.

Africa and Chinese Investment

• Belt and Road Initiative aims at developing African infrastructure, leading to deepened economic ties and potential neocolonialism.
• China dominates FDI in Africa, focusing on mining and infrastructure, creating dependency.
• Contrast between Chinese and Western investment models, with China's approach offering less conditional aid.

Summary of Key Terms and Concepts

• Key terms covered include:
  • Transnational corporations (TNCs),
  • Foreign Direct Investment (FDI),
  • Outsourcing,
  • Offshoring,
  • Corporate social responsibility,
  • Tax havens,
  • Transfer pricing.
• Suggested readings underline critical analysis for examination topics.