SOAS Research Online

Abstract

Chinese economic growth in the transition era between the deaths of Mao Zedong in 1976 and Deng Xiaoping in 1997 has been exceptionally rapid by historical and international standards. However, and contrary to the conventional wisdom espoused by the Washington consensus, it is shown here that only a small part of Chinese growth can be explained by trade, foreign direct investment, and the mobilization of surplus labour. Instead, growth has been driven by China's state‐led industrial policy, and facilitated by the many favourable industrial and infrastructural legacies of the Maoist era. But the Chinese developmental state did not emerge from a vacuum. Rather, its existence and effectiveness depended upon the limited degree of inequality of income and wealth in China at the end of the 1970s. As inequality has increased over the course of the 1980s and 1990s, so the ability of the Chinese state to promote growth has diminished.