The Chinese Economy

When asking a Chinese citizen about a particularly puzzling aspect of China’s economy, the response will sometimes be “ 这是中国特色的“ or this is the Chinese way of doing things. In this course, we will think deeply about what exactly that means in terms of how China’s macro-economy and financial system operates and what are the policy implications for those differences. This course has three distinguishing characteristics: i. It uses modern tools from macroeconomics and finance to analyze the Chinese economy; ii. It compares and contrasts the Chinese economy with the United States as a way of highlighting what makes the Chinese economy (and incidentally the US economy) special; and iii. It treats a country like a company using methods from finance, accounting and management to shed new light on macroeconomic questions. While the focus of the course is, of course China, what students will also learn is how to think more broadly about all emerging economies. Many scholars have written about the significant steps in China’s development process since 1978. Wu Jinglian (2005) or Barry Naughton (2007 – see below), for example, provides excellent step-by-step descriptions of China’s remarkable path of economic progress from both before and after that critical year. This course takes a different approach from that very worthwhile historical/institutional approach in that it asks which tools from the modern economics and finance toolbox can and cannot be used to understand the Chinese economy and financial system. There will be both quantitative and qualitative aspects involved in our pursuit of that understanding. Every lecture will have a theory component, policy discussion component and data analytic component. By the completion of this course, students will know how to work with data related to the Chinese economy and how to go about thinking analytically about China’s economy and financial system. This will allow the student to intelligently answer challenging questions related to China’s current and future economic/financial circumstance.