Which nation is the biggest trading nation and the largest economy (PPP estimates) in the world? Contributes more than a third of global economic growth? Has the the world’s biggest bank by market capitalization? The world’s largest holding of foreign exchange reserves? The largest growing middle-class for consumer products? The greatest potential to challenge the economic, political, and technological dominance of the West? The answer to the above questions is China, China, and China!  If you want to grasp the true magnitude and implications of the shift of economic power that is currently changing the world, it is essential to understand the Chinese economic reform and its political context. This course aims to provide an integral and detailed overview of modern China’s topical issues in both economics and politics as well as their defining impact on the global economic and political order .  It will be co-taught by Professor Kjeld Erik Brødsgaard and Professor Niels Mygind at the Department of International Economics and Management.

In the first part, we focus on Chinese economy with emphasis on the great transformation since 1978, when China first initiated its economic reform after almost thirty years of stagnation and disastrous economic mismanagement. The course is organized around a number of major themes and will include references to the historical and institutional background. These themes include at least the following: 1) What were the major problems and deficiencies of the centralized planned economy before the reform, and why was reform necessary?; 2) What were the main areas of reform, their sequence, and their major impact? And in what respect was China’s economic reform different from the reforms in Eastern European countries and Russia, and why so?; 3) Why has the Chinese economy been able to grow at an average rate of almost  10% in the past 30 years? How could economic theories help explain such a phenomenon?; 4) How capitalistic is China today? And what is the role of the state in Chinese economy?; 5) What are the major problems faced by the Chinese economy?  Of those, we focus on issues such as inequality, urbanization, pollution, financial repression and the changing model of growth – The New Normal; 6) Finally, we discuss China’s role in world economy, its fast productivity growth, rising innovation capacity and the political and economic response of the West.

 
The second part focuses on the political framework and basis for China’s economic development with an emphasis on the post-Mao Zedong era. The objective is to provide a basic understanding of the Chinese governing system and the inter-linkages between structure, power and Party. It will be argued that the Chinese political system is characterized by “fragmented authoritarianism”. The following topics will be covered: 1) The organizational setup of the Chinese political system including central-local government relations, the tiao-kuai matrix and the civil service system; 2) The formation of the Party-state including Party member statistics and profile; Party leading groups and the kou system; 3) Nomenklatura and cadre management including appointment and promotion criteria for leading cadres; ranking systems, executive remuneration and associated benefits; 4) Who is who in China including leadership transition from the current fifth generation to the new sixth generation of Chinese leaders;  5) Party-business-relations with a focus on rotation between business group CEOs, government ministers and provincial governors including examples from the oil sector; 6) Competing scenarios for China’s political system in 2020: fragmentation, strong state, partial democracy or competitive authoritarianism? Global convergence or new divergence?  The impact of the Trump factor on Chinese internal politics.