n African Journal of Science, Technology, Innovation and Development - Global recession and the national system of innovation in China : 'a blessing in disguise'? : research note / commentary

Volume 3, Issue 4
  • ISSN : 2042-1338
  • E-ISSN: 2042-1346
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Since the early 1990s China's economy has emerged one of the leading economies in the world using judicial mix of policies of economic liberalisation and protection. China's national system of innovation (NSI) has been evolving and has been adapting to the challenges posed the globalisation. China has benefitted significantly from the global economic boom driven by the globalisation and its economy has registered consistently GDP growth of over 10% for over 15 years before the onset of global recession in 2008. The recession has slowed down the economy in every country in the world including China, which was triggered by the global credit crunch and slow down of trade. Major economies across the world have introduced a series of measures in response to recession and to stem the tide of its negative impacts. These measures included: bank bailouts, rescue packages, fiscal stimuli, and, most crucially, monetary easing. Even with all these measures, we would argue that, some countries are likely to be affected more severely than others due to the differences in individual characteristics of their NSIs. That is, the recession is likely to have varying impacts in varying degrees on different economies in the world due to the differences among their NSIs.

In the case of China, to reduce the negative impacts of the global recession, it announced a fiscal stimulus package of $586b (14% of GDP) in November 2008 aimed to stimulate the domestic demand and also to boost the income of the poor. In this context, we wish to investigate the following research question: 1. How did the strengths and weakness of NSI help or hinder in coping with the adverse effects of the recession in China?
It appears that China is the least affected emerging market by the global recession mainly due to the inherent strength of its NSI. Also, it appears that China has decided to use the global recession as an opportunity rather than an obstacle and as 'blessing in disguise' to introduce changes and reengineer its economy and NSI.

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