Animal Spirits With Chinese Characteristics

Animal Spirits with Chinese Characteristics is the first detailed account of the investment booms and busts that drive China's business cycles. This exciting new volume looks first at the causes of these fluctuations, then examines the central government's countercyclical policy responses. DeWeaver shows that the volatility of Chinese investment is primarily the result of perverse incentives inherited from the command-economy era.

Beijing's most effective countercyclical policies therefore still take the form of ad hoc administrative interventions. Contrary to popular belief, Beijing cannot 'fine tune' the economy. It also stands little chance of transitioning to a less volatile 'mode of growth.' Review: If you want to understand China's economy, or the political system that's attached to it, you should read this book.

DeWeaver's account of the business cycle as it operates in that country's system of state capitalism will be extremely useful to academic economists, policymakers, investors, and anyone else who wants to understand how the world's second-largest economy really works in detail. The book's focus on inefficiencies, and on the political aspects of the process that produces policy, make it invaluable both as a guide to the country's present economic system, and a warning about its future.

The author's scholarship is profound - the book draws extensively on information unavailable in English - but his practical experience in the Chinese business world gives the discussion a realism and depth that are very unusual in Western accounts of modern China, and his dry wit makes reading it a pleasure. - Daniel Cloud, author of The Lily: Evolution, Play, and the Power of a Free Society