The Three Waves of the Fordist Model of Growth and the Case of China

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The main thesis of the paper is that, while the US economy has widely adopted a fordist model of growth since 1908, and this has largely contributed to the building and consolidation of its economic pre-eminence, Japan and most Western European countries have adopted it mainly in the 1950-1973 period, the golden age of European and Japanese growth, and China has adopted important aspects of fordist and post-fordist models in the 1980-2008 period.. The Chinese case shows that the crucial elements of the fordist model of growth - the economies of scale or of network, the rise of productivity, the increase in wages and in total wage bill, the increase in consumption, in total profits, in investment and in GDP - can give a great boost to industrial and economic growth and then to exports in certain phases of the economic history of a country, although contributing to determine also some socially undesirable consequences, such as rapidly growing economic and social imbalances and income inequalities.

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... The objective of this paper is to evaluate and compare some aspects of the different growth patterns of the two economies analyzing in particular the relations between structural change and economic development. In doing so, we will utilise three concepts: Gerschenkron's " relative economic backwardness " (Gerschenkron, 1962; Fuà, 1980), " the fordist model of growth " (Valli, 2002Valli, , 2005Valli, , 2009) and Syrquin's distinction between the productivity effect and reallocation effect (Syrquin, 1986). The first concept is well known and stresses the fact that an emerging backward economy may benefit from some advantages, such as the adoption of modern technologies coming from more advanced countries and the possibility of transferring large masses of the labour force from low productivity sectors (agriculture and traditional tertiary activities) to sectors with higher productivity (industry and modern services). ...
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The comparison of the periods of rapid economic growth in China since 1978 and India since 1992 markedly show different patterns of development and structural change. However, both countries experienced some advantages of "relative economic backwardness" and some aspects of the "fordist model of growth". China had an anticipated and deeper structural change, spurred mainly by economic reforms and the growth of the internal market in the 1980s, and, since the mid-1990s, by a very rapid penetration of its industrial products in the world market. However, a substantial part of China's exports in medium and high tech sectors are due to joint-ventures with foreign multinationals. India had a more balanced structural change and a slower insertion in the world market, although some sectors, such as software, steel, automotive and pharmaceuticals are recently increasing their share in the world markets. Owing to the huge number of micro-enterprises and the great size of the informal sector, India benefited much less than China from the economies of scale and from the third wave of the "fordist model of growth". Both countries, but in particular China, experienced negative externalities of this recent phase of rapid growth, such as higher inequalities, pollution and urban congestion.
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Together with the economic transition, in China the return to education and the skill premium increased; this phenomenon was deeply demonstrated by a large number of studies identifying it with one of the main cause of the increasing inequalities at national, regional and sector level. For this reason, these studies underlined the relevant role of education in influencing the future evolution of the income distribution. Our study aims to analyze the evolution of educational inequality and educational poverty over the period 1975-2004 by using traditional inequality indicators, but adapting them to some features of education distribution. In particular, we exploit the Theil index decomposition properties to distinguish between distributive improvements due to changes in basic education diffusion and improvements related to all the educational levels. The analysis is carried out by using the China Health and Nutrition Survey provided by the Carolina Population Center for the period 1989-2004. In spite of its incomplete geographical coverage (only 7 Chinese provinces were considered), this survey allows us to follow the evolution of educational inequality and poverty over 15 years. Moreover, we also use other data sources representative at national level: the Barro-Lee dataset, providing observations from 1975, and the data published in the China Statistical Yearbooks. The results show that educational inequality indicators constantly decreased not only at national level but also within each province and area. However, the Theil index decomposition shows that the decrease of educational poverty and the reduction of its depth played a relevant role in improving the whole education distribution. On the contrary, with regard to people accessing to education, educational inequality indicators show a modest tendency to increase over the considered period; this reveals that the strongest changes and distributional progress concerned the lowest part of the education distribution, while inequalities among educated people didn't improve.
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This paper investigates the position of China in the international fragmentation of production in the ICT industry, the most dynamic and globally dispersed sector in the world economy. The evidence shows that during the 1990s China dramatically increased its market shares in ICT products and now ranks among the top three world exporters. Moreover, China has upgraded from mere assembly of imported inputs to the manufacturing of high-tech intermediate goods. As a result, import dependence has declined and the domestic value added of exports has increased. This supports the hypothesis that industrial upgrading occurred in some tradable sectors through technological learning associated with processing trade. Therefore, a pattern of specialization initially dominated by processing trade could be favourable to a country's long-term development, to the extent that entering at the lower end of high-tech sectors is promotive of catching up in more sophisticated technology-intensive production
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This paper examines the changes in regional and sectoral inequality that accompanied economic transformation in Russia and China throughout the 1990s. The experiences of the two countries are widely viewed as having been polar opposites. While the Soviet collapse had adverse consequences for many parts of the post-Soviet population, the Chinese experience produced a continuing rise of average living standards. Nevertheless, both countries experienced a drastic increase in economic inequality. In both cases, regional inequalities rose more sharply than inequalities across sectors but within regions. In particular, major urban centers gained dramatically relative to the hinterlands. Also, in Russia as in China, those sectors exercising the largest degrees of monopoly power gained the most (or lost the least) in relative terms. In both countries, the respective position of finance improved greatly, while that of agriculture declined. The decline of agriculture in China, however, was not as precipitous as in Russia, and certain sectors, such as education and science, maintained their position in China in a way that was not possible for them in Russia.
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This paper uses the detailed information in the 1995 Census of Industrial Production as a benchmark for analysing the coverage, concepts and consistency of published statistical series. On the basis of the analysis, the paper proposes a series of adjustments which result in more consistent long-run series of labour productivity for 21 manufacturing sectors from 1980-2002. For purposes of international comparisons with the USA, the paper subsequently presents industry of origin unit value ratios for the benchmark year 1995. These are used to convert Chinese value added into US dollars. In 2002, value added for the statistically well-covered sectors of Chinese manufacturing was 43 per cent of US value added, against 12 per cent in 1980. The comparative analysis of labour productivity points to a long period of Chinese growth without catch up from 1980-1992. After 1992, there was a rapid and accelerating process of catch up. In comparative terms labour productivity increased from 5.3 per cent of the US level in 1995 to 13.7 per cent in 2002.
A study of the economic development of Western Europe from the early 1950s to the late 1970s. The analysis centres on two major questions: what forces propelled Europe to unprecedented growth rates in the 1950s and 1960s, and what were the main reasons for the deterioration in the 1970s.
Many are interested in China's energy situation, however, numerous energy related issues in China still remain unanswered. For example, what are the potential forces driving energy demand and supply? Previous reviews focused only on fossil fuel based energy and ignored other important elements including renewable and "clean" energy sources. The work presented here is intended to fill this gap by bringing the research on fossil-based and renewable energy economic studies together and identifying the potential drivers behind both energy demand and supply to provide a complete picture of China’s energy situation in the new millennium. This will be of interest to anyone concerned with the development of China’s economy in general, and in particular with its energy economy.
This book first took shape in my mind as little more than a study of occupational shifts in the United States. I was interested in the structure of the working class, and the manner in which it had changed. That portion of the population employed in manufacturing and associated industries—the so-called industrial working class—had apparently been shrinking for some time, if not in absolute numbers at any rate in relative terms. Since the details of this process, especially its historical turning points and the shape of the new employment that was taking the place of the old, were not clear to me, I undertook to find out more about them. And since, as I soon discovered, these things had not yet been clarified in any comprehensive fashion, I decided that there was a need for a more substantial historical description and analysis of the process of occupational change than had yet been presented in print. This article can also be found at the Monthly Review website, where most recent articles are published in full. Click here to purchase a PDF version of this article at the Monthly Review website.
Incl. bibliographical notes and references, name index, subject index, coda
In this paper we set out to show that China has certain significant specificities in terms of the gradual (i.e. “step by step”) approach it has followed in implementing reforms affecting its financial system. This is in contrast with the traditional shock or “big bang” therapy adopted by other emerging or transition countries, on the basis of what is known as the Washington Consensus, which notoriously prescribes the immediate, wholesale introduction of market-oriented systems through large-scale liberalisations and privatizations. Nevertheless, as we will endeavour to demonstrate the process of reform of China’s financial system has not prevented problems of financial fragility from arising in the banking sector, and of corporate governance for firms, such as to threaten the very sustainability of growth in the future.
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