The Political Economy of the Chinese Business Cycle: The Dangers Ahead

Abstract

China has grown by leaps and bounds since the inception of the reform programme in the late 1970s. However, progress during this period has been uneven, with the country moving abruptly from a state of "boom" to one of "burst" and vice versa. At present, evidence is beginning to emerge that the economic engine has yet again gone into overdrive and that countercyclical measures may have to be introduced in order to cool it down. The purpose of this article is to establish whether the economy is indeed about to spin out of control, and explore the implications of such a development for both the mainland and Hong Kong.