Is Chinese capitalism developmental or neoliberal?: Comparison with the Japanese and American models

This chapter compares the characteristics of Chinese capitalism with the American and Japanese models and examines a case study of China’s vehicle electrification. We argue that the powers of both political (re)centralization and economic decentralization have been at work since 1978, shaping the characteristics of Chinese capitalism, i.e., the co-existence of developmentalism and neoliberalism, and that China’s political power is more concentrated than that of Japan and the United States. This co-existence is nothing new in China, and this resembles the relations between the emperor and scholar-bureaucrats in imperial China. China has been better adapted to neoliberal globalization than Japan since the 1980s due to political power concentration, economic rationalism, and the timing of its integration into the global economy. However, the strength of Chinese capitalism is often exaggerated, and as the automobile electrification case illustrates, excess capacity is a serious side-effect of excessive government intervention. Despite the growing American criticism that Chinese capitalism is irreconcilable with American capitalism, both capitalist models share the combination of developmentalism and neoliberalism (albeit with different mixture proportions) and are not necessarily incompatible. The U.S.–China rivalry stems from the competition over hegemony in East Asia and advanced technology rather than the different economic models.