CHINA’S RESPONSE TO THE GLOBAL FINANCIAL CRISIS: EXAMINING THE INCENTIVES BEHIND CHINA'S STIMULUS PACKAGE
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Authors
Herron, Clement W.
Subjects
China
global financial crisis
political economy
economic stimulus
scientific development concept
global financial crisis
political economy
economic stimulus
scientific development concept
Advisors
Glosny, Michael A.
Date of Issue
2018-06
Date
Publisher
Monterey, CA; Naval Postgraduate School
Language
Abstract
This thesis examines the incentives behind China’s decision to implement its aggressive $585 billion economic stimulus package in response to the global financial crisis, or GFC. The thesis assesses the explanatory power of economic, social, and political causal factors to explain China’s decision. The main finding of this thesis combines all three factors to demonstrate that China’s stimulus package was most likely implemented because the Chinese Communist Party (CCP) perceived that it was necessary to protect its regime. The economic argument demonstrates how China’s government had to resort to an investment-led stimulus plan to generate economic growth through domestic demand after the GFC severely damaged China’s export sector. The social argument establishes how tens of millions of people left unemployed by the GFC felt marginalized by the government due to the country’s inequitable economic growth, which was perceived to have primarily benefitted the regime. This increased the potential for social instability, which would have been directed at the CCP. Lastly, the political argument determines how the regime was under significant political pressure to meet domestic and international expectations to sustain economic growth throughout the GFC. These findings underscore how the CCP prioritizes regime survival over long-term economic development.
Type
Thesis
Description
Series/Report No
Department
National Security Affairs (NSA)
Organization
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NPS Report Number
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Citation
Distribution Statement
Approved for public release; distribution is unlimited.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.