ABSTRACT
Introduction: China Inc.? China’s rise as an economic and trading power has been impressive on many levels, and the development of the Chinese economy and its remarkable transformation from its minimal effect on the global economy to actively shaping it will be examined in this chapter. There is currently much debate over the development of what has habitually been referred to as “China Inc.”,1 including how Chinese economic growth has affected its foreign policy development. Following the initial economic reforms of the late 1970s and especially after joining the World Trade Organization (WTO) at the turn of this century, China’s effect on the global economy has been staggering, and both scholars and economists have noted the growing percentage of global trade coming from the country, its increasing stockpiles of foreign exchange and the gradual development of Chinese brands for sale internationally. In 2011, China officially overtook Japan as the second-largest economy in the world after the United States, and there has been much speculation as to when, not if, the Chinese economy will become the largest, with some estimates suggesting as soon as 2016. As well, in a controversial book, Eclipse: Living in the Shadow of China’s Economic Dominance, published in 2011, economist Arvand Subramanian argued that in many ways Chinese economic power had already superseded that of the United States. This chapter will discuss how and why the country has made the transition from a closed command economy which was directly controlled and often restrained by the state to a more modern, but still reforming, economic and trading system.
