Capitalism, Crises, and Constraints in China, 1990s–2000s

Abstract

How do states navigate economic crises? How do crises affect state capitalist systems? This article explores how the government of the People’s Republic of China (PRC) understood and responded to the 1997 Asian Financial Crisis and the 2007–2008 Global Financial Crisis. It argues that Chinese policymakers and economic decision makers were often constrained by global political factors and structures, for example, concerns over government legitimacy and domestic political support, World Trade Organization (WTO) membership, and global demand for Chinese exports. We show that the PRC had to adjust its economic policies and, consequently, its state capitalist model in response to these crises to secure its political and economic interests. This research traces the agency behind the rise of the Chinese economy and its intersection with crises, state capitalism, and global economic structural forces.