Working Paper

The Making of an Economic Superpower―Unlocking China’s Secret of Rapid Industrialization

Abstract: The rise of China is no doubt the most important event in world economic history since the Industrial Revolution. The institutional theory of development based on a dichotomy of extractive vs. inclusive political institutions cannot explain China?s rise. This article argues that only a radical reinterpretation of the history of the Industrial Revolution and the rise of the West (as incorrectly portrayed by the institutional theory) can fully explain China?s growth miracle and why the determined rise of China is unstoppable. Conversely, China?s spectacular and rapid transformation from an impoverished agrarian society to a formidable industrial superpower sheds considerable light on the fundamental flaws of neoliberalism and the Washington Consensus and provides more-accurate reevaluations of historical episodes such as Latin America?s lost decade and plagued debt crisis, 19th century Europe?s great escape from the Malthusian trap, and the Industrial Revolution itself.

Keywords: Industrial Revolution; rise of China; Great Divergence; Market Fundamentalism; Neoliberalism; Big Push; Import Substitution Industrialization; Shock Therapy; Washington Consensus; New Structuralism; New Stage Theory;

JEL Classification: B00; N00; O1; O2; O3; O4; O5;

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2015-03-01

Number: 2015-6

Pages: 156 pages