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By Zhao Changwen & Zhu Hongming, DRC

2016-12-01

This book has nine chapters, dealing with the strategic issues of China's economic growth in the next five to ten years. The theme of this book is “on protracted war", and it explains why we need to insist on the long-term battle strategically in order to adapt to the “new normal” of economic development and how to persist in it strategically.

First, on the cognitive level, the protracted war concept stands against the economic collapse and reversal theory. We constructed an analytical framework that includes the core concepts such as late-developing advantages, institutional transformative feasibility and political-economic ecology, and found that China's economy will not collapse, or fall into the L-shaped growth mode of Japan or long-term stagnation, or into the middle income trap like Latin America; nor will China's economy be reversed in the short term.

Second, on the practical level, the protracted war doesn’t mean to wait for the economy to pick up automatically; rather, it contains a set of strategic and tactical arrangements to overcome the current difficulties and to strive for the long-term sound economic growth. The arrangements include the following measures: we need to follow the periodic growth theory, with short-term tactics to promote the realization of strategic goals; we need to fight an annihilation war and exert a thorough control over economic pollution; we need to maintain an institutional transformative feasibility for the release of the late-developing advantages; we need to rely on capable cadres to build an effective government; and we need to carry on a protracted war based on a global landscape.

Third, we would like to give some further explanations to the following issues. 1. This book is not using military theory to guide economic policy, but borrows the conceptual framework adopted by Comrade Mao Zedong in his article On Protracted War. In light of the commonalities and differences between military and economy in terms of the philosophy and working methods, we use the term the annihilation war to illustrate that we need to concentrate our efforts on addressing the existing serious problems in the economic field. 2. The understanding of time span is prone to be one-sided. The concept of fighting a protracted war is different from the long-term stagnation theory, but a strategy based on the thinking of many a little making a mickle for the purpose of solving the current outstanding conflicts and problems. 3. It must be pointed out that this book in no way likens reform to a protracted war, and in addition, the institutional transformative feasibility is more important than the reform itself, because it is the comprehensive result of two combined forces including the institutional innovation led by politicians and the binding forces of the interest groups and the ideology.