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About this book

This book mobilises the theory of uneven and combined development to uncover the geopolitical economic drivers of China’s rise. The purpose is to explain the formation and trajectory of its economic ‘accumulation system’ — which remains a confounding hybrid of statist and neoliberal forms of capitalism — as the outcome of China’s geopolitical engagement of the USA during the late stages of the Cold War, and its participation in manufacturing global production networks (GPNs). Fear of geopolitical catastrophe drove China to open its economy, while GPNs enabled China to generate substantial export surpluses which could be recycled through state-owned banks as cheap credit and subsidies to large, vertically integrated and politically-controlled state-owned enterprises. In this way, a synergy emerged between the ‘neoliberal’ and ‘Keynesian-Fordist’ sectors of the economy, while the national-territorial state retained its form and expanded its functions. The book chronicles how this reliance on export surpluses, however, rendered China extremely vulnerable to external shocks — prompting a dramatic monetary and fiscal stimulus response to the crisis of 2008, even while sustaining the illusion of economic ‘decoupling’ from the global economy. Finally, it examines the growing role of the state in the current crisis-ridden economic model, as well as China’s current geoeconomic and geopolitical expansionism in areas such as the Belt and Road Initiative and the militarisation of the East and South China Seas.

Table of Contents

Frontmatter

Chapter 1. Introduction: China Shakes the World System

Abstract
This chapter presents a short overview of the manuscript. It introduces some existing literature on uneven and combined development, the role of the state under globalised capitalism, and the major debates surrounding the role of states vs markets in the ‘rise of China’.
Steven Rolf

Chapter 2. Uneven and Combined Development and the Capitalist States System

Abstract
This chapter establishes the theoretical framework of the book. I explain how Leon Trotsky’s theory of uneven and combined development (UCD) can be mobilised in order to transcend the limitations of both globalising and methodologically nationalist theories of the global political economy. First, I demonstrate that while theorists of uneven development have demonstrated how the development of a global capitalist economy tends to reproduce (rather than undermine) geographic unevenness, they have failed to specify or problematise the role of states in this process. Consequently, uneven development fails to explain either why, or with what sociological effects, the states system persists under conditions of deep economic integration. State theorists, meanwhile, have point to the continuing role of states and politics in political economy while tending to exclude the world economy and the states system as conditioning factors in state (trans)formation. For this reason, much state theory focuses overwhelmingly on the ‘internal’ politics of particular states. I close the chapter by explaining how UCD can provides a nonreductionist means of integrating global processes of capital accumulation with their distinctive and peculiar national mediations, and suggest how the insights of UCD can be mobilised to conduct social research.
Steven Rolf

Chapter 3. From Varieties of Capitalism to Uneven and Combined Development: A New Perspective

Abstract
This chapter considers how orthodox and heterodox comparative capitalisms research has approached the ‘China question’. It outlines how latent conceptual limitations have often fed into impoverished empirical research strategies, before suggesting why UCD (outlined at a high level of abstraction in the last chapter) may fare better as a means of both conceptualising contemporary Chinese capitalism in comparative fashion. The chapter first spells out a critique of Varieties of Capitalism theory, highlighting three distinct characteristics of China’s growth which pose major problems for VoC theory: ‘bad’ institutions, the significance of global production networks (GPNs), and profoundly uneven internal geographical development. Next, I consider heterodox ‘comparative capitalisms’ approaches (represented here by the most influential and theoretically coherent of these, ‘Variegated Capitalism’). While this work addresses most of the shortcomings of VoC theory, it also suffers from its own self-imposed ontological restrictions—most significantly, a simultaneous supranational and subnational bias, which successfully analyses local differences. Finally, I outline why I consider UCD an improvement on the other theories discussed at this lower level of concrete institutional political economy analysis, insofar as its careful deployment permits the study of subnational variegation without abandoning the analytical core of a historical materialist research programme.
Steven Rolf

Chapter 4. China’s Boom (I): The Geopolitical Economy of Reform and Opening, 1978–2000

Abstract
This chapter examines the substantive outcomes of China’s distinct modality of integration into the world economy. These were (1) to unleash the dynamics of catch-up development while forestalling the formation of a politically independent domestic capitalist class; and (2) to insulate the central state against the ‘internationalisation’ of its institutions. In China, political responsibility for GPN-led accumulation was devolved to local party cadres. This engendered the emergence of a multilevel governance structure, under which local government actors came to form a ‘bureaucratic capitalist’ class in pursuing strategic coupling with GPNs. Localised bureaucratic capitalism (in its many regional variants) did become a defining structural feature of China’s contemporary political economy (Au 2012), but this class fraction never became fully dominant at the national level, where a nationally oriented elite maintained political control and patronage relations with large state-owned enterprises—and arrangement which persists to date. In sum, China has experienced an internationalisation of capital without the internationalisation of the state. The absence of an independent capitalist class requires greater attention to internal divisions of the state, both geographical and institutional: since it is through these administrative divisions that fractions of Chinese capital are organised.
Steven Rolf

Chapter 5. China’s Boom (II): Making the ‘Leap’, 2001–2008

Abstract
The export-led boom of the 2000s sufficiently entrenched a set of political economic dynamics in China to allow for a cross-sectional analysis of the economy to illuminate some major structural features of China’s form of capitalism. I develop such an analysis in three stages: first, by briefly introducing the concept of a system of accumulation (SOA) and how a semi-static political economic configuration emerges from the dynamic process of UCD. Second, by providing a broad overview of China’s ‘exportist’ SOA as it appeared in 2008—by looking inside the export sector, China’s major surplus generator, at the industrial dynamics of the clothing, electronics and machinery industries. Next, I examine the persistence and continuing significance of the state sector. Finally, I suggest means by which these two disparate economic spheres were combined by national state institutions into an ‘exportist’ SOA. This enabled China’s remarkable reconstitution as a bastion of ‘state capitalism’, albeit one inseparable from the success of the private export-manufacturing sector.
Steven Rolf

Chapter 6. The ‘Rebalancing’ Fallacy: 2008 and Its Aftermath

Abstract
This chapter interrogates the views of those optimists who expect China to ‘rebalance’ away from dependence on the export sector and towards serving increasingly wealthy domestic markets. Such rebalancing is unlikely, I argue, because such accounts mistake long-run trends in the data which demonstrate, on the contrary, that China’s economy remains profoundly imbricated with the global economy. Surpluses accumulated through export-led growth and captured by the state, alongside its distinctive form of control over the financial sector, have together allowed the Chinese government to insulate itself from global headwinds for a long period. As these surpluses have dwindled, state managers have turned to fictitious capital—debt—creation as a means of sustaining growth and social stability. As such, the exportist SOA outlined in the previous chapter underwent a critical transformation after 2008. But it is only through a return to the profitability of investments across its core export sectors can China hope to sustain its dynamic growth rates into the future. These ‘core sectors’—which generate the large surpluses upon which China relies to sustain its sky-high investment rate—as yet remain deeply embedded in global production networks in which Chinese firms remain by and large weak.
Steven Rolf

Chapter 7. The State Resurgent

Abstract
This chapter outlines the contours of this emergent state capitalist SOA and probes its growth dynamics and crisis-tendencies. I begin by examining in more detail the kinds of state-led investment and the evolution of China’s combined development in an era of the resurgence of the Keynesian-Fordist state sector. I examine the recent history of the corporate sector to demonstrate how the state has encroached upon the private economy for both political and economic reasons. This encroachment, I argue, both represents China’s first serious attempt at infant industry-style industrial policy along the lines of prior East Asian developers, and simultaneously a risky Keynesian-Fordist attempt at ramping up investment, independent of demand, to stimulate growth and productivity. I then go on to explain why so much of the bout of state-financed stimulus in infrastructure after 2008 found its way, alongside the overproduction of heavy goods, into real estate investment. This risks what Harvey (2016) refers to as a ‘switching crisis’: whereby investments flow from the productive manufacturing sector into unproductive speculation on the built environment, deferring—but ultimately heightening—the crisis which has built up in the real economy over preceding years.
Steven Rolf

Chapter 8. Conclusion: China Cracks the Whip: The Geopolitical Economy of Chinese Externalisation

Abstract
This chapter explicates how the structural dynamics of the state capitalist system of accumulation are shaping choices being made by China’s leaders across foreign, trade, and industrial policy spheres, while also considering how the dynamics of the international system are reciprocally restructuring China’s growth model. First, I examine two dangerous flash points for China’s newly assertive foreign policy: the South and East China Seas, where China is contending with the U.S. to assert regional security dominance. Next, I explore the intensifying geoeconomic antagonism between China and the U.S. Third, I turn to the most dramatic example of China’s externalisation dynamics: the Belt and Road Initiative, a major attempt to lay the basis for China’s regional hegemony through a sweeping round of infrastructural investments. Finally, I consider whether the accumulating economic problems in China might be evaded through the growth of the most dynamic sector of its economy today: the digital economy. I conclude with a summary of the core contributions of this book, and suggest that the emergent social, political and economic crises to which the Covid-19 pandemic has given rise are likely to deepen the trends towards autocentrism, the national territorialisation of economic growth, and inter-imperialist rivalry described here.
Steven Rolf

Backmatter

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