IDEAS home Printed from
   My bibliography  Save this paper

The Challenges of Governance Structure, Trade Disputes and Natural Environment to China's Growth


  • Wing Thye Woo


Viewing the Chinese economy as a speeding car, there are three types of development that could crash the car: (1) a hardware failure, which is the breakdown of an economic mechanism (analogous to the collapse of the chassis of the car), e.g. a banking crisis; (2) a software failure, which is a flaw in governance that creates social disorders (analogous to a fight among the people inside the car), e.g. the state not being able to meet the rising social expectations about its performance because many of the key regulatory institutions are absent or ineffective; and (3) a power supply failure, which is the loss of economic viability (analogous to the car running out of gas or having its ignition key pulled out) e.g. an environmental collapse or an export collapse. The fact that China has recently declared that its most important task is to build a Harmonious Society (described as a democratic society under the rule of law and living in harmony with nature) suggests that improvements in governance and protection of the environment are among the most serious challenges to achieving sustainable development. The greatest inadequacy of the Harmonious Society vision is the absence of an objective to build a harmonious world because a harmonious society cannot endure in China unless there is also a harmonious world, and vice-versa. The large amount of structural adjustments in the developed countries generated by rapid globalization and technological innovations has made the international atmosphere ripe for trade protectionism; and environmental degradation has made conflict over the global environmental commons more likely. China's quest for a harmonious society requires it to help provide global public goods, particularly the strengthening of the multilateral free trade system, and the protection of the global environmental commons. Specifically, China should work actively for the success of the Doha Round and for an international research consortium to develop clean coal technology.

Suggested Citation

  • Wing Thye Woo, 2007. "The Challenges of Governance Structure, Trade Disputes and Natural Environment to China's Growth," CASE Network Studies and Analyses 0349, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnstan:0349

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
    2. Woo, Wing Thye, 2001. "Recent claims of China's economic exceptionalism: Reflections inspired by WTO accession," China Economic Review, Elsevier, vol. 12(2-3), pages 107-136.
    3. Dwayne Benjamin & Loren Brandt & John Giles & Sangui Wang, 2005. "Income Inequality During China's Economic Transition," Working Papers tecipa-238, University of Toronto, Department of Economics.
    4. David G. Streets, 2005. "Black Smoke in China and Its Climate Effects," Asian Economic Papers, MIT Press, vol. 4(2), pages 1-23, Spring/Su.
    5. Liu, Liang-Yn & Woo, Wing Thye, 1994. "Saving Behaviour under Imperfect Financial Markets and the Current Account Consequences," Economic Journal, Royal Economic Society, vol. 104(424), pages 512-527, May.
    6. Wing Thye Woo, 2003. "Recent Claims of China's Economic Exceptionalism: Reflections Inspired by WTO Accession," Working Papers 13, University of California, Davis, Department of Economics.
    7. World Bank, 2001. "China : Overcoming Rural Poverty," World Bank Publications, The World Bank, number 13902, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Zhu, Qinghua & Cordeiro, James & Sarkis, Joseph, 2012. "International and domestic pressures and responses of Chinese firms to greening," Ecological Economics, Elsevier, vol. 83(C), pages 144-153.

    More about this item


    China; harmonious society; governance issues; mass incidents; environmental protection; water crisis; trade imbalances; protectionism;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sec:cnstan:0349. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aleksandra Polak) The email address of this maintainer does not seem to be valid anymore. Please ask Aleksandra Polak to update the entry or send us the correct email address. General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.