International Political Economy Series Series Editor: Timothy M. Shaw, Visiting Professor, University of Massachusetts Boston, USA and Emeritus Professor, University of London, UK The global political economy is in flux as a series of cumulative crises impacts its organization and governance. The IPE series has tracked its development in both analysis and structure over the last three decades. It has always had a concentra- tion on the global South. Now the South increasingly challenges the North as the centre of development, also reflected in a growing number of submissions and publications on indebted Eurozone economies in Southern Europe. An indispensable resource for scholars and researchers, the series examines a variety of capitalisms and connections by focusing on emerging economies, companies and sectors, debates and policies. It informs diverse policy communi- ties as the established trans-Atlantic North declines and ‘the rest’, especially the BRICS, rise. Bringing together some of the very best titles in the International Political Economy series’ history, the IPE Classics showcase these titles and their continued relevance, all now available in paperback, updated with new material by the authors and a foreword by series editor Timothy M. Shaw. Titles include: Shaun Breslin CHINA AND THE GLOBAL POLITICAL ECONOMY Kevin C. Dunn and Timothy M. Shaw AFRICA’S CHALLENGE TO INTERNATIONAL RELATIONS THEORY Randall Germain GLOBALIZATION AND ITS CRITICS Perspectives from Political Economy Stephen Gill GLOBALIZATION, DEMOCRATIZATION AND MULTILATERALISM John Harriss, Kristian Stokke and Olle Törnquist POLITICISING DEMOCRACY The New Local Politics of Democratisation David Hulme and Michael Edwards NGOs, STATES AND DONORS Too Close for Comfort? Sharon Stichter and Jane L. Parpart WOMEN, EMPLOYMENT AND THE FAMILY IN THE INTERNATIONAL DIVISION OF LABOUR Peter Utting and José Carlos Marques CORPORATE SOCIAL RESPONSIBILITY AND REGULATORY GOVERNANCE Towards Inclusive Development? International Political Economy Series Series Standing Order ISBN 978–0–333–71708–0 hardcover Series Standing Order ISBN 978–0–333–71110–1 paperback You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBNs quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England China and the Global Political Economy Shaun Breslin Professor, Department of Politics and International Studies, University of Warwick, UK © Shaun Breslin 2007, 2013 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2007 This edition published in paperback 2013 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN 978-1-137-35520-1 ISBN 978-1-349-67537-1 (eBook) DOI 10.1007/978-1-349-67537-1 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. Contents Series Editor’s Foreword by Timothy M. Shaw vi Acknowledgements xx List of Abbreviations xxi Note on the Transliteration of Chinese Names xxiii Introduction: China – Yes, But ... 1 1 Studying China in an Era of Globalisation 14 2 T he Transition from Socialism: An Embedded Socialist Compromise? 40 3 R e-engagement with the Global Economy 82 4 B eyond Bilateralism: What the Statistics Don’t Tell Us 106 5 I nterpreting Chinese ‘Power’ in the Global Political Economy 131 6 T he Domestic Context: Stretching the Social Fabric? 157 Conclusions 190 Afterword 202 Notes 211 Bibliography 220 Index 249 v Foreword: Learning from the IPE Series Classics Over Three Decades Timothy M. Shaw UNDP 2013 Human Development Report – ‘The Rise of the South: Human Progress in a Diverse World’ – ... will examine the profound shift in global dynamics that is being driven by the fast-rising powers in the developing world – and the implications of this phenomenon for human development ... Looking ahead at the critical long-term challenges facing the international com- munity, from inequality to sustainability to global governance ... (www.hdr.org/en/mediacentre/ humandevelopmentreportpresskits/ 2013report/) I am delighted, honoured and humbled to craft this Foreword for the initial set of Classics to be reissued in paperback from the IPE Series, accompanied by new Prefaces. Both I and my students/colleagues/net- works have been greatly informed over a trio of decades as both analytic and existential ‘worlds’ have changed in myriad ways as indicated in the opening citation from the 2013 UNDP HDR on the rise of the South. Symbolic of this exponential transformation is this very Series, which has always concentrated on the ‘global South’. Thirty years ago, col- leagues and editors alike were quite sceptical about the viability of such a limited focus; and indeed initially we only managed to publish a half- dozen titles per annum. By contrast, since the start of the second decade of the 21st century, the IPE Series has been proud to produce over 20 titles a year. As Jan Nederveen Pieterse (2011: 22) has asserted, the estab- lished N–S axis is indeed being superseded by an E–S one: ... the rise of emerging societies is a major turn in globaliza- tion ... North-South relations have been dominant for 200 years and now an East-South turn is taking shape. The 2008 economic crisis is part of a global rebalancing process. This overview juxtaposes a set of parallel/overlapping perspectives to consider whether the several ‘worlds’ – from North Atlantic/Pacific and vi Foreword vii onto Eurozone PIIGS versus ‘second world’ (Khanna 2009) of Brazil, Russia, India, China, South Africa (BRICS) / Columbia, Indonesia, Vietnam, Egypt, Turkey, South Africa (CIVETS) / Mexico, Indonesia, South Korea, Turkey (MIST) / Vietnam, Indonesia, South Africa, Turkey, Argentina (VISTA) – have grown together or apart as global crises and reordering have proceeded (see myriad heterogeneous analyses such as Cooper and Antkiewicz 2008, Cooper and Flemes 2013, Cooper and Subacchi 2010, Economist 2012, Gray and Murphy 2013, Lee et al. 2012, Pieterse 2011, USNIC 2012, WEF 2012 and World Bank 2012 as well as O’Neill 2011). In turn, ‘contemporary’ ‘global’ issues – wide varieties of ecology, gender, governance, health, norms, technology etc (see part (v) below) – have confronted established analytic assumptions/traditions and actors/policies leading to myriad ‘transnational’ coalitions and het- erogeneous initiatives/processes/regulation schemes as overviewed in Bernstein and Cashore (2008), Dingwerth (2008), Hale and Held (2011) et al. (see part (vii) below). Such extra or semi-state hybrid governance increasingly challenges and supersedes exclusively interstate interna- tional organization/law. Clark and Hoque (2012) have assembled a stel- lar, heterogeneous team to consider any such ‘post-American world’ (Zakaria 2011): what salient, sustainable features of ‘the rest’ (Shaw 2012b)? My overall impression or assumption is that IPE with such a focus on the global South increasingly overshadows – trumps?! – IDS, IR (but cf Bremmer 2012 and Bremmer and Rediker 2012 on resilience/revival of Political Science (PS) as analysis of Emerging Markets (EMs) (www.eura- siagroup.net)), area/business/gender/security studies, and established orthodox social science ‘disciplines’ such as economics, political sci- ence, sociology etc. In turn, IPE may yet increasingly face challenges from analysis broadly construed as ‘global studies’, especially in the US whose universities never really did ‘development’. So I seek to identify areas where such a version of IPE generates similarities to or differences from such approaches, along with ‘silences’ in each plus divergent rank- ing of factors among them. Every title in this set of Classic editions includes a contemporary update on both existential and theoretical developments: from ‘Asian’ to ‘global’ crises, from newly industrializing countries (NICs) to BRICs and onto PIIGS and BRICS/CIVETS/MIST/VISTA, Price Waterhouse Cooper’s (PWC) E7 (PWC 2013). These sets of Emerging Markets embody slightly different sets of assumptions/directions/implications; PWC expanded the ‘Next-11’ of Goldman Sachs (i.e. 15 without RSA) to 17 significant EMs by 2050 (Hawksworth and Cookson 2008). Symptomatically, the viii Foreword initial iconic acronym was proposed at the start of the new century by a leading economist working for a global financial corporation – Jim O’Neill (2011) of Goldman Sachs (www2.goldmansachs.com) – who marked and reinforced his initial coup with celebration of its first decade. As he notes, global restructuring has been accelerated by the simultaneous decline not only of the US and UK but also the south- ern members of the eurozone. Many now predict China to become the largest economy by 2025 and India to catch-up with the US by 2050 (Hawksworth and Cookson 2008: 3). PWC (2013: 6 and 8) suggests that: The E7 countries could overtake the G7 as early as 2017 in PPP terms ... the E7 countries could potentially be around 75% larger than the G7 countries by the end of 2050 in PPP terms ... By 2050, China, the US and India are likely to be the three largest economies in the world ... But Stuart Brown (2013: 168–170) notes that there are competing proph- ecies about the cross-over date when China trumps the US, starting with the International Monetary Fund (IMF) advancing it to 2016. Meanwhile, global architecture is very fluid: the inter-governmental Financial Stability Board (www.financialstabilityboard.org) is matched by think tank networks like the World Economic Forum’s (WEF) Risk Response Network (RRN) (www.weforum.org/global-risks-2012) and the Global Risk Institute (www.globalriskinstitute.com); all creations in response to the global crisis towards the end of the first decade. As the G8 morphed into G20 (Cooper and Antkiwicz 2008, Cooper and Subbachi 2010) a variety of analysts attempted to map the emerg- ing world, including Parag Khanna’s (2009) second world and Fareed Zakaria’s rest: for example: the WEF’s Global Redesign Initiative (GRI), which included a small state caucus centred on Qatar, Singapore and Switzerland (Cooper and Momani 2011) (for a readers’ guide to GRI see www.umb.edu/cgs/research/global_redesign_initiative), to the Constructive Powers Initiative advanced by Mexico (www.conse- jomexicano.org/en/constructive-powers), which brought older and newer middle powers together (Jordaan 2003) such as the old Anglo Commonwealth with inter alia Indonesia, Japan and South Korea. And at the end of 2012, from both sides of the pond, the US National Intelligence Council produced ‘Global Trends 2030: Alternative Worlds’ (GT 2030) (www.gt2030.com), which identified four ‘megatrends’ like ‘diffusion of power’ and ‘food, water, energy nexus’; a half-dozen Foreword ix ‘game-changers’; and four ‘potential worlds’ from more to less conflict/ inequality, including the possibilities of either China-US collabora- tion or of a ‘nonstate world’. And Chatham House in London reported on ‘Resources Futures’ (Lee et al. 2012: 2) with a focus on ‘the new political economy of resources’ and the possibility of natural resource (NR) governance by ‘Resource 30’ (R30) of major producers/consum- ers, importers/exporters (www.chathamhouse.org/resourcesfutures): G20 including the BRICs, but not BRICS (i.e. no RSA), plus Chile, Iran, Malaysia, Netherlands, Nigeria, Norway, Singapore, Switzerland, Thailand, UAE and Venezuela. And in the case of the most marginal continent, Africa, its possi- ble renaissance was anticipated at the turn of the decade by Boston Consulting Group (BCG), Centre for Global Development (CGD), McKinsey et al. (Shaw 2012a), with the Economist admitting in January 2011 that it might have to treat Africa as the ‘hopeful’ rather than ‘hope- less’ continent. In December 2012, James Francis in the African MSN Report cited Africa’s 15 biggest companies: from Sonatrach (Algeria) and Sonangol (Angola) and Sasol (RSA) through MTN, Shoprite, Vodacom and Massmart/Walmart to SAPPI (www.african.howzit.msn.com/ africa’s-15-biggest-companies/). The demand or need for ‘development’ is shifting away from the poorest countries, including ‘fragile states’ (Brock et al. 2012, www.for- eignpolicy.com/failedstates), to poor communities in the second (and first?!) worlds: the other side of the rise of the middle classes in the global South (Sumner and Mallett 2012). Moreover, the supply of devel- opment resources is also moving away from the old North towards the BRICS (Chin and Quadir 2012) and other new official donors like South Korea and Turkey plus private foundations like Gates, faith-based organ- isations (FBOs), remittances from diasporas, Sovereign Wealth Funds (SWFs) and novel sources of finance such as taxes on carbon, climate change, emissions, financial transactions etc (Besada and Kindornay 2013). (i) Varieties of development ‘Development’ was a notion related to post-war decolonisation and bipolarity. It was popularised in the ‘Third World’ in the 1960s, often in relation to ‘state socialism’, one-party even one-man rule, but superseded by neo-liberalism and the Washington Consensus. Yet the NICs then BRICs pointed to another way by contrast to those in decline like fragile states (Brock et al. 2012); such ‘developmental- ism’ (Kyung-Sup et al. 2012) has now even reached Africa (UNECA