2017 Syllabus

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China’s Modern Economy
Winter 2017 MWF 2:30-3:25 pm CGL 104

In 1980 China was a overwhelming agrarian and poor country, insignificant in global trade. Then from the mid-1980 the economy began expanding, at 10% pa for the next 30 years. That wrought a social transformation unprecedented in human history. Today China is an urbanized service economy with a middle class larger than that of the US. Its PPP GDP is comparable to that of NAFTA and the EU, though with a population of 1.3 billion (3x that of the EU or NAFTA), average incomes remain 20% below the level of Mexico and a quarter that of the US.

Poverty remains an issue, and an unbridled focus on increasing GDP has resulted in environmental degradation, unequal access to education and healthcare, a financial system saddled with debt and a fiscal system that provides an inadequate revenue stream for local and regional governments. The population is aging, and the working age population is declining in absolute numbers. Meanwhile, a range of industries have caught up to the global technology frontier; productivity growth has slowed. Put the two together and they imply that the boom is over. The political system will have to address these problems without the cushion provided by hand-over-fist growth.

This term we analyze the growth process, and the impact on the population, from the development of private agriculture and industry – China is no longer “socialist” – to migration and urbanization to changes in income and health. Several political economy themes stand out. One is that China is quite decentralized; it is a multiethnic empire in the process of becoming a nation-state with a unified economy. Another is that the fiscal system at the local and regional level is not structured to allow governments to meet local needs. A third is the process of catching up to the productive capabilities – management, capital equipment, labor skills – of the rich countries of Europe, Northeast Asia and North America.

Economics divides itself by topics and not geography. Because of that, this is the only course in the economics curriculum that focuses on a single contemporary country.. (Economic history courses often, but not always, have a single country as their focus.) Likewise it means that there is no textbook on the Chinese economy (though given the prominence of China, there are several long-outdated surveys). We thus must draw upon a range of sources, with readings by journalists, political scientists and, yes, economists; visiting speakers; and even documentaries. We will develop an array of formal models, most based in development economics, but the focus of the course is on understanding China and more broadly the developing world. Rather than problem sets, you will be writing memos and papers. The pure theory portion will be chalk-and-talk, but most classes will be oriented to discussing readings and “thinking on our feet” about empirical issues.

We have 4 outside speakers scheduled this term. When possible, I will arrange meals with visitors, including at least one trip to Canton in Buena Vista, the best restaurant (or at least the best Chinese restaurant) in a 60 mile radius. I will also prepare tea in class at least once a week. Informality facilitates discussion.


  • understand foreign exchange rates and China’s presence in the global economy
  • understand the basic growth model and its extension, the two-sector Lewis “dualism” model
  • understand issues underlying migration, including the role of the agricultural sector
  • understand the role of technology/productivity in growth, and examples from several Chinese industries
  • understand the process and magnitude of urbanization
  • understand how urbanization interacts with public finance

Class Requirements: Papers and Blogging Paper guidelines are on the course web site. Adhere to them! Above all, I require clean, succinct writing. You should all avail yourselves of the CommCenter. I require that you hand in hard copies, but you should always maintain an electronic copy. Of course due dates and topics will be on the web site as well.

You will also be asked to blog. Feel free to post on topics that interest you. Since in past practice few of you did that on a regular basis on your own initiative, I will assign dates and topics on a rotating basis. However, you are all expected to regularly read and comment on the posts of your classmates (and those your professor) on a regular basis. I will periodically assess that, and assign grades on comments and on the quality of your posts. Again, see the web site for guidelines on blogging.

Web Site Most of you have already joined the WordPress course site at https://econ274.academic.wlu.edu. I will provide an introduction to the mechanics of blogging, and there are also how-to pages on the web site. The syllabus, schedule, paper assignments, handouts and so on for the term will be on (this!) course web site: https://econ274.academic.wlu.edu

Participation You can’t participate if you don’t do readings in advance of class. Because of the focus on discussion, attendance is mandatory. Cell phones and computers should be put away except we are actively using online resources.

Grading Papers will be given letter grades, and weighted by whether they are memos, short papers or long papers. Tentatively there will be 1-2 short papers, 2 longer papers, and blogging.

Exams I reserve the right to impose a midterm and/or final exam if you collectively are not diligent. I may have 1-2 short quizzes to provide an incentive for you to learn geography and jargon.


I ask all of you to blog this term. Please let me know if you have not yet signed up on the web site. I will do an initial post by Wednesday. Your first assignment will be to comment on that post.


  1. Hessler, Peter (2010). Country Driving. NY: HarperCollins. ISBN 978-0-06-180409-0 but also in eBook format.
  2. Shepard, Wade (2015). Ghost Cities of China. London: Zed Books. ISBN 978-1-78360-218-6.

Office Hours / Contacts My office is Huntley 125B, next to the handicap ramp at the front of the building. However, I often prefer to meet with students at Lexington Coffee on Washington Street. On such days coffee is on me; I run a tab, let them know when you order. My cell is 540-460-6288 but please use sparingly, e.g., to let me know that I’m running late for an appointment.

I can be available M-F up to 11 am (on MWF I can run later than that). I will also often be available Mondays 5:15-7:00 pm, but typically at the Palms or Brewridge. Sometimes I will also be in town in the same time slot on other Thursdays.

AccommodationsPlease let me know privately if you have been approved for special accommodations.

version January 25, 2017