Political Economy Perspectives on the Chinese Economy
Paper Session
Monday, Jan. 5, 2026 8:00 AM - 10:00 AM (EST)
- Chair: Ningzhi He, University of Massachusetts-Amherst
Gradualism and Structural Adjustment in the Chinese Political Economy
Abstract
Scholars have long contrasted the gradualist trajectory of China’s economic reforms with the shock therapy implemented in the former USSR. Our research, however, reveals a more nuanced story: China’s path combined pervasive gradualism with targeted, bold structural adjustments. We present three key findings. First, gradualism overwhelmingly characterized the reform process. Even at the height of market reforms, the most severe structural adjustments were short-lived, affecting a moderate share of the national economy and population. Second, the specific mix of gradualism and shock therapy was shaped by the pre-reform political economy, particularly developmental legacies and class relations. For example, provinces that were more industrialized under the planned economy often experienced more radical adjustments. Finally, our analysis indicates that regions subjected to more intensive reforms subsequently tended to exhibit slower growth in the following decades.Marxian Crisis Theory and the Method of Real Abstraction: Dialectics Among Rising Organic Composition of Capital, Profit Squeeze, and Technological Evolution Since the 19th Century and Evidence from China (1992-2018)
Abstract
In the 1970s “rising organic composition (OCC) vs. profit squeeze” debate on Marx’scrisis theory, scholars often cited Marx arbitrarily, lacking rigorous methodological
identification and engagement with his method of real abstraction, i.e. applying the
unity of logic and history to the study of economic phenomena in capitalism. This
methodological incoherence, compounded by Marx’s incomplete crisis theory
manuscripts, left the debate trapped in false dichotomies.
This paper reconstructs the debate through the lens of Marx’s real abstraction.
Critiquing prior debates for methodological inconsistencies, I first outline basic
characteristics of Marx’s real abstraction method and reexamine how Marx developed
the two crisis tendencies in Capital by this method. Then I apply Marx’s ‘real
abstraction’ to demonstrate how these tendencies interact dialectically across different
capitalist stages, especially in the historical context of J.D. Bernal’s analysis of the
evolution of science and technology under capitalism from Marx’s time until the
contemporary era. I present how this evolution, dependent on both its internal logic
and the capitalistic profit motive, shaped the particular features of productive
technologies. This in turn generates the dialectical interplay between rising OCC and
profit squeeze as “concrete universals” as the reflection of relations of production and
accumulation paths in different stages of capitalism as a world-historical
phenomenon. An empirical analysis of China’s productive sector (1992-2018) further
validates this dialectical relationship between these crisis tendencies. In sum, both the
theoretical implications of the two crisis tendencies as Marxian categories plus their
practical relevance for contemporary capitalism will be more comprehensively
grasped.
The Hidden Role of Multinational Corporations in the U.S.-China Trade Conflict: A Financialisation–Offshoring Nexus Perspective
Abstract
Since 2018, the U.S.-China trade conflict has generated significant uncertainty in the global economy. While most analyses focus on state actors and the bilateral trade imbalance—particularly its implications for reshoring U.S. manufacturing—this perspective neglects the corporate structures underlying global trade. In particular, the role of multinational corporations (MNCs) remains underexplored.This study reframes the trade conflict through the lens of the financialisation–offshoring nexus (Milberg, 2008; Milberg & Winkler, 2009, 2013). Drawing on financial data from leading MNCs, we analyze how profits are created and allocated within global production networks.
We identify four key mechanisms. First, MNCs offshore production to China and extract a substantial share of value added, leveraging superior bargaining power over suppliers. Second, the export of outsourced goods generates service trade revenues through intra-firm payments for intellectual property rights. Third, to minimize tax liabilities, MNCs retain most offshore earnings abroad and invest in short-term financial assets rather than repatriating capital. Fourth, profits from final sales in the U.S. market are primarily used for shareholder payouts—such as dividends, stock buybacks, and acquisitions—rather than reinvestment in domestic production.
Our findings reveal a tightly coupled relationship between financialisation and offshoring: the former depends on liquidity enabled by the latter, while shareholder value imperatives reinforce the drive to offshore. This nexus plays a central role in shaping the U.S.-China trade imbalance and constitutes a structural barrier to the reshoring of American manufacturing. Beyond geopolitics, the conflict reflects deep-seated transformations in corporate accumulation strategies.
JEL Classifications
- B5 - Current Heterodox Approaches
- N1 - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations