China's Integration with the World: Development as a Process of Learning and Industrial Upgrading
43 Pages Posted: 20 Apr 2016
Date Written: December 1, 2008
Abstract
The process of development is full of uncertainties, especially if it is a process of transition from a planned economy to a market oriented one. Because of uncertainties and country specificity, development must be a process of learning, selective adaptation, and industrial upgrading. This paper attempts to distill lessons from China's reform and opening up process, and investigate the underlying reasons behind China's success in trade expansion and economic growth. From its beginnings with home-grown and second-best institutions, China has embarked on a long journey of reform, experimentation, and learning by doing. It is moving from a comparative advantage-defying strategy to a comparative advantage-following strategy. The country is catching up quickly through augmenting its factor endowments and upgrading industries; but this has been only partially successful. Although China is facing several difficult challenges - including rising inequality, an industrial structure that is overly capital and energy intensive, and related environmental degradation - it is better positioned to tackle them now than it was 30 years ago. This paper reviews the drivers behind China's learning and trade integration and provides both positive and negative lessons for developing countries with diverse natural endowments, especially those in Sub-Saharan Africa.
Keywords: Economic Theory & Research, Emerging Markets, Political Economy, Debt Markets, Access to Finance
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Robert Koopman, Zhi Wang, ...
-
China's Embrace of Globalization
By Lee Branstetter and Nicholas Lardy
-
What Accounts for the Rising Sophistication of China's Exports?
By Zhi Wang and Shang-jin Wei
-
Specialisation Across Varieties Within Products and North-South Competition
By Lionel Gérard Fontagné, Guillaume Gaulier, ...
-
Specialization Across Varieties and North-South Competition
By Lionel Gérard Fontagné, Guillaume Gaulier, ...
-
Quality Competition Versus Price Competition Goods: An Empirical Classification
By Richard Baldwin and Tadashi Ito
-
Quality Competition Versus Price Competition Goods: An Empirical Classification
By Richard Baldwin and Tadashi Ito
-
Give Credit Where Credit is Due: Tracing Value Added in Global Production Chains