Uneven Economic Overheating in a Transforming Party-State During the Global Crisis: The Case of China

Maria Csanádi () and Ferenc Gyuris ()
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Maria Csanádi: Institute of Economics, Centre for Economic and Regional Studies, 1097 Budapest, Tóth Kálmán u. 4, Hungary
Ferenc Gyuris: Department of Regional Science, Eötvös Loránd University , 1117 Budapest, Hungary, Pázmány Péter stny. 1/C.,

No 2036, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: We scrutinize the systemic consequences of state intervention triggered by external shocks in the transforming Chinese economy before and after the global crisis. We interpret investment dynamics using a comparative party-state model concept framework. We identify the overinvestment as an outcome of the dynamics of party-state power formed by relations of dependence and interest promotion between party, state and economic decision-makers and of emerging structural motivations inside of this network. Due to the structural and operational characteristics of the party-state network, which are self-similar in time, space and at various aggregation levels, overinvestment and economic overheating can also be detected on the provincial level. This local phenomena is intensified by the specific decentralized pattern of power distribution of the Chinese party-state system. Thus, local intensity of overheating is further increased by major state interventions reacting to external shocks. Overheating is further amplified during economic transformation by market actors adapting to network priorities. Investment swings in both heating and cooling periods hide different forms of behavior in enterprises with different ownership types.

Keywords: China; crisis; overheating; overinvestment; party-state; system transformation; enterprise behaviour (search for similar items in EconPapers)
JEL-codes: P12 P16 P2 P26 P31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2020-09
New Economics Papers: this item is included in nep-cna and nep-tra
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