The State Resurgent

Abstract

This chapter outlines the contours of this emergent state capitalist SOA and probes its growth dynamics and crisis-tendencies. I begin by examining in more detail the kinds of state-led investment and the evolution of China’s combined development in an era of the resurgence of the Keynesian-Fordist state sector. I examine the recent history of the corporate sector to demonstrate how the state has encroached upon the private economy for both political and economic reasons. This encroachment, I argue, both represents China’s first serious attempt at infant industry-style industrial policy along the lines of prior East Asian developers, and simultaneously a risky Keynesian-Fordist attempt at ramping up investment, independent of demand, to stimulate growth and productivity. I then go on to explain why so much of the bout of state-financed stimulus in infrastructure after 2008 found its way, alongside the overproduction of heavy goods, into real estate investment. This risks what Harvey (2016) refers to as a ‘switching crisis’: whereby investments flow from the productive manufacturing sector into unproductive speculation on the built environment, deferring—but ultimately heightening—the crisis which has built up in the real economy over preceding years.