Lovely presents on state’s role in China’s economy

International trade expert spoke at Western Michigan University about China’s strong-state model of economic development.

After China’s recent stock market instability, academic interest in explaining its underlying economic issues has grown. On February 24, Professor Mary E. Lovely presented at Western Michigan University on the challenges of China’s efforts to move its economy from investment-led growth; her talk, part of the Werner Sichel Lecture series, was titled “The ‘Hybrid Economy’ and China’s Transition.” Lovely discussed how failure to transition away from heavy governmental involvement in industrial and service sectors poses serious barriers to China’s attempts to create a modern economy.

Discussing difficulties in moving away from investment and exports as key growth drivers, Lovely noted that restricted competition, an embedded elite class, and low productivity have inhibited the development of its service sector. The Chinese economy has relied on easy credit to stimulate growth, but Lovely indicated that cracks have started to form in this policy. In the presentation, she connected rising state enterprise and local government indebtedness to China's current stock market turmoil and rapid capital outflow.

Lovely is a professor of economics and the chair of the International Relations program at the Maxwell School. Her recent research has focused on Chinese industrial restructuring and environmental policy across Chinese provinces and their impact on labor. Lovely received her PhD in cconomics from the University of Michigan, Ann Arbor, and has taught at Syracuse University since 1988. 03/11/16