The State

Studies of the latecomers to industrialization, especially the Asian NIEs, have emphasized the crucial role of a strong interventionist state (cf. Amsden, 1989; Wade, 1990). Examining the historical decline of China from one of the most advanced countries to one of the poorest countries, Perkins (1997, p. 29) concludes that ‘the core problem for China’s development was the issue of governance’. If its lack of industrialization, more than anything else, was China’s weakness relative to the capitalist West, then the lack of a strong state was the primary reason for China’s inability to industrialize. This situation changed drastically following the rise to power of the Communists in 1949. As if to prove the point, the state immediately undertook full-fledged industrialization and made tremendous progress within a relatively short time.