On 19 December 2005, the Foundation approved the financing of a research project with the Director of the Centre for Industrial Economics of the Business and Science Foundation of the University of Barcelona, Josep Mª Suris, and the collaboration of Professor Jacint Soler. The aim of the proposed study is to analyse the current debate on China's economic dynamism and its impact on the world economy, trying to identify possible scenarios for future developments. It also aims to apply the conclusions and observations made to the Spanish case.
Over the last two decades, the People's Republic of China has emerged as the world's fourth largest economy and the most dynamic of the emerging countries. Beyond the studies and publications that focus on specific elements of this process - such as the transition from socialism to a market economy or land reform - research sheds light on the various determinants of China's development and, in particular, the most controversial ones.
If there is a general consensus on the contribution that agricultural reform and mass literacy had on China's economic growth, especially in the 1980s and early 1990s, the effect of selective trade opening and the role of the state in this historic process is more controversial. To understand this, the trajectory of the "Asian tigers" is reviewed.
The Chinese case shows certain differences with respect to these models (especially the greater role of foreign capital) but also clear similarities in terms of the government's desire to encourage the country's rapid progression towards higher value-added activities. This has been achieved through a selective trade opening that, even today, six years after joining the WTO, is the subject of harsh criticism from the West. State-owned enterprises, the industrial policy of sectoral restructuring, the regulation of foreign investment and support for R&D have also played a key role.
The study argues that China has, like so many other countries, also been subject to "government failures" to intervene in the economic sphere. However, the authors argue that China has enjoyed better macroeconomic fundamentals (especially in terms of foreign borrowing) and greater trade openness. Moreover, China's SOEs and SOEs have exhibited peculiar management and ownership schemes that have favoured their autonomy, while competition between regions has encouraged greater internal competition and prevented the emergence of inefficient monopolies at the national level.
Finally, China's economic development cannot be understood without taking into account the accelerated process of "offshoring" that has been at work in Japan since the late 1980s. Increasing economic integration in East Asia has greatly benefited mainland China, where a growing number of labour-intensive and, in recent years, increasingly sophisticated activities have been relocated.
The content of this research materialised in the book "The Chinese Economic Miracle: Myth or Reality" published in 2008.
