Turning pressure into opportunity: CAI and the future of China’s structural reform

Many pundits and media believe that China under Mr. Xi Jinping is politically and economically illiberal with concentration of political power to Xi himself and the expansion of state capitalism. This article believes that China is still in transition and the Daobi (倒逼) mechanism, namely, a planned...

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Bibliographic Details
Published in:Asia Europe journal 2022-03, Vol.20 (1), p.15-20
Main Authors: Duan, Xiaolin, Song, Xinning
Format: Article
Language:English
Subjects:
International Economics
Policy Paper
Social Sciences
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Summary:Many pundits and media believe that China under Mr. Xi Jinping is politically and economically illiberal with concentration of political power to Xi himself and the expansion of state capitalism. This article believes that China is still in transition and the Daobi (倒逼) mechanism, namely, a planned strategy of introducing foreign competition and international rules to advance domestic reform, takes effect. The EU-China Comprehensive Agreement on Investment (CAI) is a milestone that could possibly contribute to structural economic and even political changes in China. This article centres on the Daobi mechanism and explains how the synergies among CAI, domestic socioeconomic changes and Chinese leaders’ self-consciousness may set the agenda of China’s domestic reform.
ISSN:1610-2932
1612-1031
DOI:10.1007/s10308-021-00628-0