China's Exchange Rate Controversy: A Balanced Analysis

A noted American authority on China's economy and monetary policy presents a statistical as well as theoretical analysis of a variety of perspectives on the controversy surrounding China's currency, basing his paper on both. The author provides the historical background and comprehensive summaries, focusing on different viewpoints about whether China's currency is undervalued, and thus may contribute to global imbalances. In the paper, he divides observers involved in the controversy into two main camps, namely the ones who find China's trade balances to be sensitive to price effects through exchange rate adjustments and those who emphasize other factors as bearing the responsibility for China's large surpluses, including the U.S. credit bubble emerging before the global financial crisis, as well as a version of Dutch disease.     

Xi'an as an Inner China Development Model

An American geographer examines the recent economic resurgence of a historically significant city in China's interior as a result of a policy utilizing science and technology research institutions and the local labor force to "jump-start" technology-intensive growth. The study, based on a series of interviews and data gathered during field research in 2000 and 2002, reveals synergies among the city's pre-existing defense-related activities (electronics and aviation), its favorable financial and transport infrastructure, and the concentration of several large, prestigious technical universities, which have been utilized in the transformation of the city economy toward high-technology production for China's domestic market. Journal of Economic Literature, Classification Numbers: F23, H50, O18. 7 figures, 2 tables, 36 references.     

A China Paradox: Migrant Labor Shortage amidst Rural Labor Supply Abundance

A U.S. geographer and noted authority on China's urbanization seeks to explain the apparent paradox between reported recent shortages of migrant labor in cities in eastern China's export-oriented manufacturing belt and the abundant supply of labor in China's rural areas. He examines important socioeconomic contexts often overlooked in the debate over whether China has reached the Lewis turning point (when dual rural-urban labor markets begin to merge and a labor surplus economy is transformed into a full-employment economy), which make possible the existence of such shortages over the short term and in local areas. These include the special characteristics of China's export industrialization (e.g., preference for workers in the age category 16-30); its immense migrant labor force, constrained under the hukou system; the short-term impacts of China's economic stimulus program launched in early 2009 in the wake of the global economic crisis; and cycles in the global economy that support or impede export production.     

The (Ineffective) Financial Statecraft of China's Bilateral Swap Agreements

Since 2008, the People's Bank of China has signed bilateral swap agreements (BSAs) with 35 foreign central banks. Collectively, these deals amount to nearly US$ 500 billion in Chinese renminbi (RMB) available to Beijing's foreign partners. What has led China to be so aggressive in its efforts to sign so many swap agreements? What are the political economic implications of the swap programme for the US‐centric global economic order? China's BSAs can be understood as a form of financial statecraft: the use of national financial and monetary capabilities to achieve foreign policy ends. China has deployed BSAs for both defensive and offensive reasons. Defensively, Beijing has sought to use BSAs to promote trade settlement in RMB thereby reducing China's vulnerability to the dollar's structural dominance in trade. Yet, as explained in this article, they have been ineffective in this regard. Offensively, Beijing has used BSAs as a short‐term liquidity backstop outside of the Bretton Woods institutions for partner countries in need. Here, there is greater potential for BSAs to impact the status quo economic order by enhancing Chinese economic influence. However, their potential is dependent on Beijing's willingness to act as a unilateral crisis lender and its ability to further internationalize the RMB.     

Not-so-new silk roads: Japan's foreign policies on Asian connectivity infrastructure under the radar

Scholarly narratives concerning China's Belt and Road Initiative (BRI) tend to contextualise this project within China's rivalry with the United States and Japan. Such interpretations often reduce and misconstrue Japan's initiatives in Asian infrastructure finance as mere reactivity to China's advances. This paper will showcase Japan's own foreign and financial policies regarding infrastructure in Asia and the New Silk Road regions since the end of the Cold War. I argue that Japan's presence in that field is underappreciated and under-researched, as Japan's infrastructural footprint in the New Silk Road significantly pre-dates the BRI. Furthermore, I stress the fact that Japan's foreign policy in Asian infrastructure finance featured important cooperative postures toward China, especially within multilateral development banks. The paper makes a contribution to emerging scholarship on the BRI—often reliant on strategic communications and projections—by highlighting Japan's role in regional infrastructure to show how our understanding of international relations and international political economy in Asia can be better informed by economic history and area studies.     

The limits to China's non-interference foreign policy: pro-state interventionism and the rescaling of economic governance

China's foreign policy has been long committed to a principle of non-interference in the internal affairs of sovereign countries. While one could easily point out past and present-day inconsistencies in its implementation, this article argues that defenders and critics of the principle both rely on a limited interpretation of ‘interference’ or ‘intervention’ based on an ideology of Westphalian sovereignty. Particularly problematic is the conceptual distinction between the ‘political’ or ‘diplomatic’, on the one hand, and the ‘economic’, on the other. As Polanyi's concept of embeddedness reminds us, markets, society and politics occur simultaneously, and can only act as discrete realms in epistemological abstractions. It is thus argued that non-interference is a semi-formal institution that governs China's diplomatic engagements and affects its economic activities. While the totality of China's interactions with the world has diverse and sometimes contradictory impacts on global governance, non-interference itself has apparent consequences for the rescaling of regional economic governance. Specifically, this article contends that Chinese non-interference results in the empowerment of political elites at national levels, and thus in the (re-)emergence of the nation state as a gatekeeper and facilitator of the advancement of capitalist enterprises. As a result, through non-intervention, China's foreign policy undermines supranational regulatory approaches and fosters state-based regional architectures.     

20世纪90年代以来的中国宏观经济政策调整

20世纪90年代以来,中国政府的宏观经济政策经历了三次较大的调整。即:1993-1996年政府实行了适度从紧的财政、货币政策,降低高通胀率,使国民经济顺利实现第一次“软着陆”;1998-2002年财政货币政策由适度从紧转向积极有限度扩张,扩大内需,降低高失业率,使国民经济顺利实现第二次“软着陆”;2003年下半年至今政府采取稳健的财政货币政策,加强宏观调控,抑制部分行业投资增长过快,减缓物价上涨压力,对保持经济平稳较快发展而避免大起大落起到了显著的作用。     

The International Monetary Fund and its New Economics

This article focuses on a key element of the IMF's agenda for change: the repackaging of its economics of crisis around inflation targeting. It examines how this new policy regime redefines the political economy of the IMF's policy advice, and contextualizes it by focusing on Eastern Europe, the region worst affected by the global financial crisis which began in 2007. The article compares the conditionalities designed under the new and old policy regimes and argues that the mainstreaming of inflation targeting reproduces the IMF's function within a neoliberal political economy. It shows how, depending on the role of the IMF in the policy process, the models that inform policy are employed differently. During ‘normal’ times, models engender a contractionary bias that favours speculative capital. When acting as ‘lender of last resort’, the IMF retains the traditional emphasis on fiscal contractions, paying only lip service to its new economics of crisis while further ignoring crucial questions of macroeconomic policy coordination or the destabilizing potential of short‐term capital inflows.     

Beyond win–win: rethinking China's international relationships in an era of economic uncertainty

China is the least disadvantaged major economy in the current era of global economic uncertainty. Thus it is becoming the focus of attention of its neighbours and is achieving a prominence in the world political economy unparalleled in its modern history. To a great extent, China's success is the result of ‘good neighbour diplomacy’ such as ‘win–win’ and the policies of reform and openness of the past thirty years. However, despite continuity in policy, China's ‘peaceful leap forward’ since 2008 has changed the context of its external relationships. The increasing asymmetries between China and its neighbours, as well as decreasing asymmetry with the United States, require an adjustment of win–win values beyond mutual benefit to credible reassurance. As China's neighbours become more dependent, they also become more anxious concerning their interests. Meanwhile, China's relative gain on the US requires a different kind of confidence‐building diplomacy.     

The Global Economic Crisis and China's Foreign Trade

Two noted academic specialists on China's economic geography are joined by a research assistant to examine the impact of the current global economic crisis and recession on China's trade with the rest of the world. Relying on statistics collected by the country's customs administration through the first half of 2009, the authors identify and analyze trends in China's imports and exports (detailing countries of origin and destination) as well as balance of trade. They also develop and present an input-output model in order to gain a more precise understanding of the country's trade dependence (both before and during the crisis) than afforded by analyses based on conventional statistics, and explore some of the implications of the decline in trade on levels of domestic unemployment.     

Ukraine's Financial Crisis, 2009

A prominent specialist in the economic affairs of the former Soviet Union relates and analyzes the state of Ukraine's economy in light of a series of discussions and interviews with the country's Prime Minister and leading economic officials in Kyiv in 2008 and April 2009. The author, a former economic advisor to the country's government and co-chair of the UN's Blue Ribbon Commission for Ukraine, devotes this paper to a penetrating analysis of the impact of the global financial crisis of 2008-2009 on Ukraine's budget, banks, exchange rates, money supply, industrial sectors (particularly energy and steel), GDP, and inflationary pressures. Due attention is given to economic relations with the EU and Russia as well as to financial assistance from the IMF.Journal of Economic Literature, Classification Numbers: E500, E600, O520, P200. 1 table, 4 figures, 38 references.     

China's Nuclear Energy in Light of the Disaster in Japan

An American specialist on Russian agriculture examines that country's agrarian policy, as well as the agricultural sector more generally, one year into the presidency of Dmitriy Medvedev. Focusing on the three key policy issues—state financial support, state intervention in the grain market, and international food trade policy—he assesses the extent to which current policy represents a continuation of that prevailing during the presidency of Vladimir Putin. The author discusses the appointment of a new Agriculture Minister in 2009, which may signal a different approach to the management of the sector, and concludes with an assessment of the impact of the global financial crisis. Journal of Economic Literature, Classification Numbers: F130, Q100, Q170, Q180. 2 tables, 63 references.     

From Idealism to Pragmatism: An Analysis of China's Policies toward the Middle East

After World War II, the Middle East stage attracted Beijing's attention. While Israel and China proved at that time to be too diverse, through the 1950s China made inroads with Arab countries. Egypt became the first to recognize the P.R.C., which, however, suffered rebuffs as anti-Communist forces generally prevailed in the Middle East. Beijing supported the people of Palestine. After the Soviet Union had become China's enemy, China tried to unite the Third World against the two superpowers. With Deng in 1978, China's Middle Eastern policy became more pragmatic, tilting toward the developed countries and economic cooperation rather than ideology (e.g., with Yemen). China enhanced relations with Gulf states; cooperated with the United States in supporting the Afghan mujahedin; and declared neutrality in the Iran-Iraq War, although economic alliance with Iran grew. The Gulf War affected Beijing's attitudes toward weapons technology and toward the United Nations and China's role in it. Israel is currently viewed as a channel for possible influence with the West. Overall, China's basic policy now is to watch and wait.     

Learning by Debating

This essay traces the main lines of debate among economists during the course of China's reform. It first reviews how the market has become legitimated in the country. Then it examines three schools of thought that have emerged from an ongoing debate over the economic role of the state in China's “socialist market economy.” Debates have transformed radically the conceptual frameworks of economists, as well as policymakers, and thereby have exerted enormous influence on the policy process.     

Financial Globalization,Local Debt Markets and New State Financial Activism in Middle-income Countries

Since the global financial crisis of 2008–09, there has been a renewed interest in the role of the state in processes of financial development and globalization. This article explores new forms of state economic activity via the development of debt capital markets in Southeast Asia, specifically Indonesia and Malaysia. It suggests that the expanding profile of various state-controlled entities in local capital markets constitutes a new form of state financial activism responsive to (upper) middle-class consumption preferences such as modern infrastructure, urban housing and low-risk investments. This activism highlights state agency and complicates the propositions of the emergent literature on state capitalism and financial de-risking that focuses on increasingly close alignment of the interests of states and international portfolio investors. Accordingly, the authors caution against unilinear conceptions of the state in which activism is primarily geared towards accommodating the preferences of international investors. The article posits that states are actively trying to establish new market logics for the benefit of their domestic middle classes via the development of domestic capital markets, and that the emergent role of middle-income country (upper) middle classes as financial consumers reconfigures processes of state-managed financialization.     

From Urban Social Space to Social and Environmental Justice: Observations on Laurence Ma's Essay

A senior American specialist on China and noted geographer evaluates the merits of an essay by an equally prominent specialist who advocates reflexive activism as a method designed to generate more relevant studies of the country. The author of the evaluation stresses the value of empirically based work, noting a number of contributions by geographers to the study of China's transition from doctrinaire communism to "socialism with Chinese characteristics." While not denying the need for geographical research focused on deficiencies in social and environmental justice, he is not in favor of excessive activism that may overlook advances in economic development and related accomplishments of China's governing regime. Journal of Economic Literature, Classification Numbers: P30. 24 references.     

The politics of education for globalisation: managed activism in a time of crisis

Since the 1990s, governments of the Organisation for Economic Co-operation and Development (OECD) have begun to promote their foreign aid politics domestically via global education. This policy remit has its origins in civil society and has been combined with a stated aim on the part of governments to prepare populations for globalisation, but also to convince populations of the need for increased aid spending in the context of various challenges, including calls for aid effectiveness, large-scale protest by the metropolitan left and rising parochialisms that diminish cosmopolitan world views. In the context of the apparent spontaneity of political mobilisation globally, this article seeks to qualify the optimism of the political sociology and social movements literature on the network society by comparing two OECD government remits for global/development education in the UK and Australia, which are attempts to manage or socially engineer civic activism and engagement. The problem which this article addresses is that, on the face of it, state funding of ‘global education’ appears to be a success of the activism of educators combined with the networked advocacy efforts of development non-governmental organisations, except that it has occurred in tension with international drivers to use education to further global economic competitiveness and governments' desire to promote their own foreign aid spending in a climate of falling legitimacy. This phenomenon of state funding for global education might be considered an elaboration of network politics, but this article argues that it must equally be read, via Gramsci, as a hegemonic contest in the struggle for subject production appropriate to the global knowledge economy.     

Economic crisis in Korea and the degraded developmental state

This article analyses the Korean developmental state since the late 1990s, and argues that the state has continued to play a weighty role in the economy. The state guided industrial and financial restructuring after the Asian economic crisis, and intervened to stimulate the economy during the 2008 global financial crisis. In doing so, state elites have displayed a distinctive form of economic leadership that is largely consistent with the developmental state. Rather than focusing predominantly on performance-related indicators of state strength such as growth rates, this article analyses the deeper aspects of the developmental state, specifically its internal functions and its collaboration with business. The article brings politics back into analysis of the developmental state by questioning the assumption that strong economic performance is necessary for the maintenance of close ties between the state and chaebol. Instead, economic performance is better understood as a predictor of patterns of conflict and cooperation. Long-standing ties between the state and big business have endured two significant economic crises, even if the performance of the developmental state has been degraded compared to earlier decades.     

Feminist Mobilization,Claims Making and Policy Change: An Introduction

More than two decades after the Fourth World Conference on Women was held in Beijing, gender equality policies have not delivered in the ways envisaged. This special cluster of articles seeks to understand why. Women's mobilization and feminist activism was central to the Beijing process and the advocacy that followed, yet their influence on policy processes seems constrained in the current context of global political and economic changes. The articles in this cluster explore the negotiations between different actors, institutions and discourses — and the tensions and contradictions therein — as explanations for why certain domains of women's rights remain at the margins of political agendas and others receive more attention. Specifically, why have women's labour rights and the demands of the unpaid care economy failed to gain policy traction? The articles point to the importance of political practice, which includes the ‘framing’ of policy demands as compelling narratives, engagement with state entities and the forming and managing of alliances. There are trade‐offs inherent in each of these elements, for example, between transformative gender equality objectives and the pragmatic impulse to frame claims in less politically and socially threatening ways. Further, in a context of increasing globalization, mobilization is required at multiple levels — from the local to the transnational. The articles thus seek to deepen our understanding of how policy change for women's rights occurs.