A tale of two recoveries: uncovering the imbalance between state-driven production and private consumption in post-pandemic Wuhan, China

Evaluation of local leaders in China

Ziming Li, Xiangming Chen and Lei Wang

Cambridge Journal of Regions, Economy and Society, 2022, vol. 15, issue 3, 725-746

Abstract: The world’s first epicentre of Covid-19 that contained the virus early and recovered quickly, Wuhan, the capital city of China’s Hubei province, offers a rare case for examining the effective but unbalanced role of the Chinese state in recovering a post-Covid city against a continued zero-Covid policy. Due to institutional inertia in policy-making, Wuhan has experienced a two-track recovery of (i) rapid GDP growth from infrastructure investment fuelled by government stimuli and large state-owned enterprises, and (ii) a weak recovery for small private businesses and grassroots consumption. Combining analyses of city-level data and survey/interview information, this paper examines the unbalanced role of the Chinese state in producing Wuhan’s uneven two-track economic recovery and its implications for recalibrating the roles of the central versus local governments and empowering the latter to rebalance from production to consumption and to improve livelihood.

Keywords: two-track recovery; strong state; institutional inertia; investment bias; production; small business; private consumption; Wuhan; China (search for similar items in EconPapers)
Date: 2022
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