The Twilight of “Chimerica”? China and the collapse of the American model
Abstract“Chimerica” illustrates the interactions between a Chinese model of high savings, overinvestment and export-led growth and the American model of leverage investment, credit consumption and finance-led growth. The collapse of the U.S model, linked with the unregulated derivatives market, drives China to redirect its growth toward domestic consumption, despite the strengthening of regionalisation in East Asia. The new stimulus plan, based on investment, is limited by both income disparities and the under-development of social protection. Land reform, or the collective redistribution of the remaining state assets, could stimulate domestic consumption. But the first solution deprives the local state of financial resources, and the second solution collides with the interests of the state-party system. However, stronger social movements could lead to a better income distribution. Like two faces of the same coin, credit consumption or high savings rate reflect the crisis of a global accumulation regime, tailored for a financial oligarchy in the U.S, or for a party-state oligarchy in China.
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Bibliographic InfoPaper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2009_06.
Date of creation: 2009
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World Financial crisis; World Economic crisis; China; Usa;
Find related papers by JEL classification:
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- F59 - International Economics - - International Relations and International Political Economy - - - Other
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
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- Nicholas R. Lardy, 2008. "Financial Repression in China," Policy Briefs PB08-8, Peterson Institute for International Economics.
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