40 years of Chinese growth. And now?

Following 40 years of reforms in the Chinese economy, eight universities and business schools from China, Australia, Japan, Vietnam and Belgium organised an international conference in Ningbo, China1 in December 2018. What path has China taken and which challenges lie ahead? Professor Filip Abraham and his former PhD student, Professor Zhaoyong Zhang, have brought together a selection of the papers presented at this conference in the book China's Rise and Internationalization – Regional and Global Challenges and Impacts. It is highly recommended for people who wish to look beyond the mainstream.

Three themes

The book consists of three sections, each dealing with a particular theme. The first concerns everything related to China’s internationalisation, such as its trade relations with the EU and its neighbours and the role of foreign investments including those in the context of the Belt and Road initiative. For this section, together with PhD student Yannick Bormans and Jan Van Hove, Chief Economist at KBC Group and part-time Lecturer in International Economics at KU Leuven, Filip wrote a highly accessible article that immediately provides a good overview of the challenges facing trade relations between China and the EU.

“Although China has similarities with Europe,” says Filip, “there are also major differences. In particular, the financial sector is organised in a completely different way over there.” This is exactly what the second part of the book is about: the financial aspects of Chinese growth and development. “China does not have a liberalised financial market, banks are usually (partly) owned by the government,” he continues. “Perhaps one of the most striking differences is the fascination with the stock market, also among ordinary people. When they hear that I’m a professor of economics, they always ask me what I think about the evolution of the Chinese stock market, but that isn’t exactly my area of expertise,” he smiles.

The last section deals with the themes of innovation and sustainable growth. It might be surprising to learn that the points of discussion in China are not so different from those in the EU: who should take the lead when it comes to innovation, the government or companies? How do you determine an effective environmental policy? And as far as fiscal expenditure is concerned, what is the role of the central government and what can be left to local authorities such as the federal states in the EU or the provinces in China?

Different perspectives

The speakers at the conference are also the authors of the papers that were brought together in the book. How were they selected?

“From the submissions for the open call, we chose the speakers based on their academic qualities,” says Filip. “Because make no mistake, 40 years from now, China and the rest of Asia will also have closed the academic gap. For the book, we therefore selected papers that tied in with one of the three themes we wanted to explore in greater depth. We also made a conscious choice to not just choose renowned academics. We also felt it was important to give researchers from smaller universities a chance, as they have a harder time finding a platform for their work. Readers will become acquainted with various different perspectives as a result: not just those from China and Europe but also from the countries surrounding China, such as Vietnam.”

For beginners and the more advanced

It is only logical that the book takes an academic approach and assumes a certain amount of prior economic knowledge, but don't let that put you off. Low-threshold articles are alternated with more technical ones. Readers are given answers to concrete questions: what is the impact of China's growth on the surrounding countries, and what do they think of this? To what extent does competition exist in the financial sector? How does China deal with environmental issues? The list goes on.

“Even if you restrict yourself to the easy-to-read chapters and the conclusions of the advanced papers, you will still gain an insight that goes much deeper than what the media or the numerous management books about China can offer,” stresses Filip. “For academics, the book is a collection of capita selecta – an overview of the state of affairs and a source of inspiration for further research.”

“If I may make a philosophical observation, separate from the book: Asia is not a monolithic bloc. And I have the impression that if you understand the differences in Europe, you will also have a better understanding of those in Asia and vice versa. Some issues in Asia are similar to ours. Both in Asia and in Europe, there are some large countries with smaller ones next to them, each with their own interests yet dependent on one of the larger ones, thus creating blocks. I have learned that in this respect, the Asian economic system more closely resembles that of the EU than the US.”

Yin and yang

Summarising a book like this in a few key messages is impossible, but Filip is keen to highlight two.

“China is a world power, on its way to becoming the largest. We have to deal with this as constructively as possible in the EU. In a climate of increasing protectionism, tensions are mounting worldwide. The arrest of Huawei's chief financial officer in Canada on the very first day of our conference, at the request of the US, was significant. It is important to build trust, pursue harmonious relationships and create as many win-win opportunities as possible. The best way to do this is to reach clear agreements.”

“China does think and act differently from the EU, for example, but there are also similarities such as the ageing population, environmental pollution and the impact of climate change, which are high on the agenda in both China and the EU. This is precisely where you will find opportunities for the EU and China to complement each other, allowing both parties to benefit from cooperation.”

“Admittedly, the differences are what they are and our interests are not always the same. It's a matter of achieving a good balance, of yin and yang,” he concludes.

About the editors

Filip Abraham is a full professor of International Economics at KU Leuven and a professor and partner at Vlerick Business School. Zhaoyong Zhang is a professor of Finance & Economics and head of the Asian and International Markets research group of the Markets and Services Research Centre at Edith Cowan University in Australia.

Interested in reading more?
China’s Rise and Internationalization – Regional and Global Challenges and Impacts (editors: Filip Abraham and Zhaoyong Zhang) is published by World Scientific Publishing. You can also order the book from Amazon and Kobo.

1 Edith Cowan University (Australia), KU Leuven (Belgium), Ningbo University (China) and Yokohama National University (Japan), in collaboration with Dongbei University and Xi’an Jiaotong University (China), Vlerick Business School (Belgium) and Ho Chi Minh Open University (Vietnam).

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