Development and Finance from issue 2009/3

András Inotai

China and the Global Economic Crisis

- Abstract -

JEL F-59, O-53

China considers the 21st century to be its ‘Quattrocento’, making reference to developments in some Italian city-states seven centuries ago. This century is expected to bear Chinese characteristics that include three decisive factors. One is the new quality of economic catch-up that represents not only high GDP growth and exports but also more cohesion in cross-regional development, the upgrading of technology in production and exports, higher value added, more balanced development between the (so far) export-oriented pattern of growth and increasing domestic market-orientation. Another feature is the socio-political transformation which, on the one hand, has to follow both positive and negative consequences of economic modernisation (and catching-up), but at the same time should keep conflicts and tensions that necessarily accompany this process under control. Thirdly, and most interestingly, the intellectual reinterpretation of Chinese traditions has to be stressed. In the jungle of different interpretations about China’s future role which includes an exaggerated but probably unjustified fear in some parts of the world, the correct position is a balanced approach. It has to be emphasised that ‘the greatest danger is not from a successful China but from a China that is held in check’.

András Inotai, DSc, general director (Institute for World Economics, Hungarian Academy of Sciences)

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