EVENTS

Abstract

China’s “second transition”, which follows the first (from state-controlled to market-led economy) after 35 years, is surrounded with ambiguity. While some see it as merely one more leap towards becoming a globally integrated market economy with an internationalized renminbi, others see it as an effort at turning inwards to ensure multiple forms of ‘re’balancing: lower growth; more consumption and less investment; greater dependence on the home market and less on export; and less rural-urban and vertical inequality. Central to achieving this is a reduction in China’s startlingly high and close-to-50 per cent average investment ratio. Reducing that ratio and opting for slower growth without triggering a slump would be easy if the state directly or indirectly controlled investment and if the consequences of the reduction would not be destabilizing. But has liberalization, especially financial liberalization, taken control over the financing of investment out of the hands of the state? Whose money is it anyway? And how does that matter?

About the Speaker

C. P. Chandrasekhar is Professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University. His areas of interest include the role of finance and industry in development and the experience with fiscal, financial and industrial policy reform in developing countries. Besides publishing extensively in journals and edited volumes, he has co-authored Crisis as Conquest: Learning from East Asia (Orient Longman), The Market that Failed: Neo-Liberal Economic Reforms in India (Leftword Books) and Promoting ICT for Human Development: India (Elsevier). He is a regular columnist for Frontline (titled Economic Perspectives),Business Line (titled Macroscan), and The Hindu web edition (titled Economy Watch).