Abstract

Ever since the onset of the latest global financial crisis in 2008, China’s continuous rapid growth has led many to see the Chinese model as a viable alternative to neoliberal development. Some even see Chinese capitalism as the last hope for the rejuvenation of global capitalism. This paper argues that rather than constituting a progressive alternative to neo­liberalism, China’s stellar export-led economic growth is in fact a core part of the global neoliberal order. The exceptional competitiveness of China’s export sector originates in an urban-bias policy that is detrimental to rural-agricultural development, creating a large rural surplus labor, perpetuating the low manufacturing wage among rural migrant workers, and restraining domestic consumption. The falling consumption share of the economy led China to depend on western markets, the US in particular, for its exports. The global financial crisis ended the consumption spree in the US and elsewhere in the global North, precipitating a crisis of China’s export-led growth. China’s apparent success in weathering the global economic crisis so far is grounded on a stimulus program that escalated debt-financed fixed asset investment, which is unsustainable, though the beginning of the end of the urban bias is also evident over the last few years. The continuous rise of China as the new center of global capitalism in the long run, therefore, hinges not on the perpetuation of China’s current model of development, but on whether China could shift to a new model of development based on urban-rural balanced growth and larger household consumption share of the economy.