Teaching Comparative Government and Politics

Wednesday, October 03, 2012

The politics of economics and the economics of politics

Making sense out of the Chinese example or similar case studies from Mexico or the UK require that your students have some basic understanding of macroeconomics. You might have to give them an assessment to find out what you need to teach.

China Politics Stall Overhaul for Economy

When it comes to confronting economic slowdowns, the Chinese government has not been shy about making bold moves. Faced with the contagion of global recession four years ago, policy makers created a $585 billion stimulus package that helped inoculate the nation against the economic malaise still sapping the United States and Europe.

But today, even as China’s vaunted export manufacturing juggernaut loses force… the Communist Party appears so distracted by its politically tangled once-a-decade leadership transition that it is unwilling or unable to pursue the more ambitious agenda that many economists say is necessary to head off a far more serious crisis in the future…

[M]any analysts question whether the incoming leadership has the political will to overcome the resistance of the so-called princelings and other well-connected families that have prospered under the current system.

Deng

Since the death of Deng Xiaoping, the wily leader who steamrollered his conservative opponents to introduce market reforms in the 1980s and ’90s, China’s political system has increasingly operated through consensus. The horse-trading, involving a dozen or so men who negotiate in secrecy, has dimmed the prospect of significant political or economic change…

Prime Minister Wen Jiabao is a vocal advocate of what many experts see as the kind of change China needs: breaking up state-owned monopolies, encouraging more consumer spending and reducing reliance on investment in real estate and heavy industry. But he has already been rendered something of a lame duck because of his planned retirement in March…

“The system is so opaque and the new guys are such unknown entities that no one really knows what to expect,” said Alistair Thornton, senior China economist at IHS Global Insight.

Xi

Supporters of Xi Jinping, the man expected to be China’s next president, and Li Keqiang, who is all but certain to replace Mr. Wen as prime minister, have been quietly putting out the word that the new team plans to introduce a more far-reaching agenda once the incoming leaders are secure in their new posts…

But so far, Mr. Xi has offered almost no clues as to where he stands on overhauling the economy, while Mr. Li’s track record during his time as a provincial governor and party secretary suggests he is more of a risk-averse technocrat than a reformer…