On The Chinese Socialist Market Economy And The “New Projectment Economy”

• DOI: https://doi.org/10.13169/worlrevipoliecon.13.4.0502
• Pages: 502-530
• Published date: 20 October 2022
• Date: 20 October 2022
• Author: Elias Jabbour,Alexis Dantas,Carlos José Espíndola
• Subject Matter: China,new projectment economy,socialist market economy,socioeconomic formation

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ON THE CHINESE SOCIALIST

MARKET ECONOMY AND THE

“NEW PROJECTMENT ECONOMY”

Elias Jabbour, Alexis Dantas and Carlos José Espíndola

Elias Jabbour (left) is an Associate Professor of the Theory and Policies

of Economic Planning at the State University of Rio de Janeiro. Email:

eliasjabbour@terra.com.br

Alexis Dantas (right) is a Full Professor of Economics at the School

of Economics at the State University of Rio de Janeiro. Email: alexis.

dantas@gmail.com

Carlos José Espíndola is a Full Professor of Geography in the Department

of Geosciences at the Federal University of Santa Catarina. Email: carlos.

espindola@ufsc.br

Abstract: This article aims to show that the Chinese development process over the past four

decades is not a self-explanatory fact. It is a process that may have revealed the ultimate

limitation of the current capacities for interpretation represented by both orthodox and

heterodox approaches. This limitation is due to two objective facts: 1) the transformation

of the “socialist market economy” into a new socioeconomic formation (NSEF), a process

that has accelerated since the financial crisis of 2008—the emergence of this NSEF results

from a series of institutional innovations designed to accommodate a myriad of modes

of production, all of them under the leadership of the public (socialist) sector; and 2) the

continuous technical progress achieved by the state-owned enterprises (SOEs). Following

the successful implementation of proactive industrial policies, the above-mentioned

developments led to the appearance in China of new and superior forms of economic

planning. This process can be understood as the re-emergence of Ignacio Rangel’s “project

economy,” now under the title of the “new projectment economy.” In our view, perceiving

and understanding this change in the mode of production in China, and the theoretical

resources involved in it, represents the greatest challenge before today’s social science.

Key words: China; new projectment economy; socialist market economy; socioeconomic

formation

Introduction

Over the past four decades, the world has undeniably experienced deep transfor-

mations. Financial deregulation, globalization and the emergence of a newly

DOI:10.13169/worlrevipoliecon.13.4.0502

ON THE CHINESE SOCIALIST MARKET ECONOMY 503

World revieW of Political economy vol. 13 no. 4 Winter 2022

dominant financialized pattern of accumulation have drawn the world into a spiral

of instability with unpredictable outcomes. These changes are presenting constant

challenges to international economic governance, and are also raising questions

concerning the very ability of liberal democracies to remain viable almost 30 years

after the fall of the Soviet Union and the old socialist system of alliances. Some

economists acknowledge the possibility that the capitalist system will experience

what Alvin Hansen in the late 1930s called secular stagnation.1

A side effect of so-called globalization is a phenomenon that challenges analysts

from all schools of thought: the Chinese economic rise can be deemed the most

impressive phenomenon of recent times. It is already the longest development and

growth process in history, having overtaken the “miracles” that occurred in South

Korea, Japan, Brazil and the Soviet Union in different periods. China’s economic

growth between 1980 and 2018 was outstanding: the real GDP annual growth aver-

age in this period was 9.2%. For more than four decades, almost without interrup-

tion, the country’s economy grew at rates well above the international average.

Over more than 35 years, the annual growth rate of GDP per capita in China aver-

aged 9.0%, and income per capita (at purchasing power parity) has grown by 36

times, leaping from just USD 250 in 1980 to USD 8,827 in 2018. This process has

been accompanied by high rates of investment, which averaged 36.9% of GDP in

the period 1982–2011, and above 40% from 2004 to the present.2

Since 2013 China has had the largest share of foreign trade of any country, a

performance that has had flow-on effects for practically all other economies.

China has also become a significant capital exporter; its contribution to global

foreign direct investment (FDI) rose from USD 0.8 billion in 1990 to USD 101.9

billion in 2017. The inward flow of FDI to China meanwhile increased from USD

1.4 billion in 1984 to USD 168.2 billion in 2017.3 While until 1991 foreign invest-

ment in China was directed almost exclusively toward export sectors, a high pro-

portion of which were located in Guangdong, from that year on a significantly

higher share of FDI took the form of joint ventures aimed at constructing and

enhancing domestic productive capacity to serve the internal market.

The structural change in China’s economy is reflected in the urbanization pro-

cess that gained speed from 1980, when only 19.3% of the population lived in

cities. By 2018 the urban population had reached 59.1%.4 Although this propor-

tion is well below the average level for developed capitalist countries, the pace of

urbanization suggests the specific challenges of planning and managing the intrin-

sic contradictions of a country where there is a strong cyclical trend toward a crisis

of agrarian overpopulation.

A relevant fact that did not pass unnoticed in the latest Forbes magazine list of

the world’s 500 largest companies, and which indicates a steady if still slow transi-

tion of systemic power, is that for the first time since the list began to be published