Pragmatic Statism: Marketization, Vulnerability, and China’s Economic Statism since the Early 2000s

Mingtang Liu, Johns Hopkins University

Disputing the new wisdom that Xi’s rise to power marked the ‘stall’ of China’s market reform, this paper contends that China’s growing state activism in managing the economy has more structural roots and was originated in the early 2000s. Three theses are advanced. First, China’s growing economic statism was derived from a profound sense of vulnerability perceived and mobilized by the party leaders to mitigate the ‘triple crises’ of the declining state sector, economic dependency, and widespread social conflicts under China’s newly founded market economy. Second, the growing statist orientation of economic policies was more of a pragmatic than ideological response to mitigate perceived political risks under new circumstances. Third, this ‘pragmatic statism’ has translated into broad, albeit limited, changes in the distribution of resources via financial and fiscal channels, leading to a revived sector sector, growing industrial protectionism, and economic redistribution, and paving way for Xi’s reinforcement of China’s statist development course in the 2010s. Globally, China’s shift to growing economic statism was one among many developing countries that drifted away from economic liberalism at the turn of the new century; it foreshadowed similar turns in the Global North amidst the retreat of the neoliberal world order.

No extended abstract or paper available

 Presented in Session 115. Socialism, Capitalism, and the State