The China Boom: Why China Will Not Rule the World, by Ho-fung Hung. New York: Columbia University Press, 2015. xxiv+232 pp. US$35.00 (cloth), US$34.99 (eBook). (2016)

Previous articleNext article FreeReviewsThe China Boom: Why China Will Not Rule the World, by Ho-fung Hung. New York: Columbia University Press, 2015. xxiv+232 pp. US$35.00 (cloth), US$34.99 (eBook).Edward S. SteinfeldEdward S. SteinfeldBrown University Search for more articles by this author PDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreHo-fung Hung’s The China Boom: Why China Will Not Rule the World is really two short books in one. The first situates China’s recent economic emergence within the grand sweep of modern Chinese history and the equally grand sweep of comparative East Asian development. Hung’s point is that what we see in China today represents not an iconoclastic, punctuated departure from the past, but rather a natural, Gerschenkronian pattern of late capitalist development, one that flows seamlessly from the last 150 years of Chinese history, and one reflected just as clearly in the modern developmental trajectories of Japan, South Korea, and Taiwan. China, in this sense, is simply reenacting time-tested patterns of capitalist development.Book 2, however, pivots to a different argument. Focusing on the last 15 years of Chinese growth, it emphasizes the sui generis quality of the most recent stage of China’s development. For Hung, what is distinctive about China today is not the country’s purported rejection of the rules and norms of global capitalism, but exactly the opposite—China’s purposive embrace of a global neoliberal order of American design. In Hung’s telling, China and the United States are locked in an embrace of codependency, with China “addicted” (in Hung’s terminology) to gearing itself economically toward America’s public debt, overconsumption, and underinvestment; and the United States, conversely, addicted to Chinese lending, underconsumption, and overinvestment. From this perspective, we are witnessing an economically unsustainable pas de deux by the two main geopolitical pillars of contemporary global capitalism.Hung presents a provocative argument, based more on a synthesis of already published secondary sources than on original empirical research. It is this synthesis that lends The China Boom both its greatest strengths and its most serious weaknesses.On the positive front, Hung does readers a great service by reminding them that the characteristics of China’s twenty-first-century rise that ostensibly alarms global audiences—the extensive government involvement in capital mobilization, the ambiguous intermingling of the state and an emergent entrepreneurial class, the deep antirural biases in Chinese public policy, and China’s aggressive forays into global export markets—are part and parcel not just of the longue durée of Chinese economic history, but also that of virtually every other successful East Asian nation. A robust government industrial policy, elbows-out exporting, and extensive financial intervention, rather than signifying the antithesis of market capitalism, are, in fact, market capitalism. That is as true for contemporary China as it was in earlier decades for Taiwan, South Korea, Japan, or even—turning the clock back slightly further—the United States and Germany.On the less positive front, Hung’s synthesis, particularly in the second part of the book, draws heavily on a select few authors: Yasheng Huang, Carl Walter and Fraser Howie, and Michael Pettis, all of whose works are summarized extensively across multiple pages. That these are all exceptional scholars is beyond dispute. The problem is that each in his own way depicts China’s current developmental model as fundamentally flawed and unsustainable, a view that, not coincidentally, coincides with Hung’s. An ideal synthesis would put these works in direct discourse with alternative scholarly views, which, in fact, abound in the literature, albeit not so much in Hung’s bibliography. Such a discourse between competing scholarly perspectives could potentially generate new and original conclusions, or even wholly new framings of the issues involved. However, by failing to tackle the debates in the literature, particularly those surrounding the sustainability of China’s growth model, The China Boom falls short and also risks being derivative rather than truly original.This is a shame, since a number of issues that Ho-fung Hung raises really are worth debating—and for the sake of understanding not just China but global capitalism as a whole. For example, Hung repeatedly describes China’s infrastructure investments—including high-speed rail, housing, and industrial upgrading—as wasteful, unnecessary, and reflective of politically distorted incentives to overinvest. That may be true. But then again, why would we not associate these with comparable projects—the Transcontinental Railroad, the Tennessee Valley Authority, the Interstate Highway System—that played key roles in launching the United States into a modern economy? How are we to distinguish analytically between value-creating and value-destroying public infrastructure investment? How can we do that for China today, and how can we situate that judgment across the history of Germany, the United States, Japan, or any other major modern economy?On a related note, Hung makes virtually no mention of urbanization. In China today, roughly 44 percent of the population still lives in rural areas, a level comparable to America’s situation in 1930. Why would we not expect ongoing urbanization to underpin continued expansion of household consumption and, by extension, the next phase of Chinese growth? What is the analytical basis for asserting, as Hung does, that investments in urban infrastructure and housing are impediments—rather than complements—to consumption growth, whether in China or anywhere else?And, what about the role of technological change, which also goes essentially unmentioned in The China Boom? Substantial investment has been made in China in recent years in technological upgrading, including in the much maligned state industrial sector. Anecdotally, of course, we can point to instances of poor investment choices on this front. But, so too can we point to the many instances—whether in power generation, urban mass transport, telecommunications, information technology infrastructure, and so forth—of China deploying globally cutting-edge technology at a nationwide scale. If the Solow growth model is correct, such technological investments lead to growth-enhancing productivity increases. Hung may be right in derisively characterizing China’s contemporary growth model as an “addiction” to overinvestment. But, what exactly is his analytical basis for doing so? Put differently, how does Hung propose that we go about distinguishing, whether in China or anywhere else, between addiction to overinvestment and appropriate public investments?Interestingly, variants of this last question are being asked today across much of the advanced industrial world, and often by constituencies that have grown increasingly disillusioned by contemporary market economics. Hung is undoubtedly correct in asserting that China today represents the least of the major threats to global capitalism. Whether represented by the “Brexit” vote in the United Kingdom, the Trump and Sanders political campaigns in the United States, or growing anti-immigrant and antiglobalization sentiment across continental Europe, the real threats to the traditional liberal order seem to be coming from within the advanced industrial economies. But, contrary to Hung’s assertions about the centrality of the United States–China relationship to global capitalism, the trends apparently driving those anti-neoliberal sentiments—negligible wage growth and declining living standards for middle-class populations, growing within-country disparities in wealth and income, expanding corporate profits, and skill-biased technological change—predate China’s most recent stage of economic development and China’s concomitant economic relationship with the United States. Previous articleNext article DetailsFiguresReferencesCited by The China Journal Volume 77January 2017 Published on behalf of the Australian Centre on China in the World at the Australian National University Article DOIhttps://doi.org/10.1086/689219 For permission to reuse, please contact [email protected]PDF download Crossref reports no articles citing this article.