PERI researcher Isabella Weber argues that state capitalism is experiencing a revival as a term to capture the current capitalist constellations, increasingly replacing neoliberalism. Unlike neoliberalism, the term state capitalism has a long history reaching back to the age of imperialism in the late 19th century, being used to describe developmentalist and neo-mercantilist projects in reaction to imperialism in the periphery. What is new is that, starting with China, deploying state capitalism as a means for catching up with the West is bearing fruit in ways that could undermine the predominance of Western economies.

Although contemporary China has developed a distinct economic system, the analytic foundations underpinning China’s state–market relations remain unclear.  PERI researcher Isabella Weber and Hao Qi develop in this paper a conceptual framework of what they term China’s state-constituted market economy. They argue that the Chinese state ‘constitutes’ the market economy by creating, participating, and steering markets for essentials in order to stabilize and guide the economy as a whole. Then then draw on China’s statecraft tradition as well as on proposals for financial policy reform in the U.S. to conceptualize the state-market constitution in China.