Is China turning Latin?: China’s balancing act between power and dependence on the wave of global imbalances

textabstractThis paper investigates whether China has escaped the vulnerabilities of peripheral and dependent late industrialisation in the build up to the current global economic crisis, with reference to structuralist critiques of Latin American industrialisation in the 1960s and examined through China’s balance of payments data. While it would seem that China’s huge surpluses amid sustained growth eliminate any comparative relevance to Latin America, the paper argues that analogous vulnerabilities exist. These were more evident before China’s spectacular surplus surge in the 2000s, although even in the midst of the surge, volatility on the capital account and in the errors of omissions was ominous. Changes on the trade account also reflect China’s relatively subordinate position within the massive rerouting of international production networks via China that followed the East Asian crisis, for the most part led by Northern transnational corporations. In sum, overly optimistic appraisals of China’s strength underestimate many of its persisting structural vulnerabilities as a contemporary developing country and distract attention away from important lessons for other developing countries