In today’s world, anyone serious about anti-imperialism, global development, and monetary sovereignty needs to break through the well-funded US propaganda machine and develop a fact-based, nuanced understanding of China. 

To this end, Steve asked Yan Liang to come back to the podcast to look at China through the MMT lens, analyzing its economic management, global role, and response to Western villainization. They discuss China’s development ethos and describe China as a state that actively uses its monetary and fiscal sovereignty to guide development towards internal goals (poverty alleviation, technological self-reliance, common prosperity) and external partnership (Win-win cooperation, Belt and Road Initiative).  

Illustrating the difference between state steering and the so-called “free market,” the conversation goes into China’s mobilization of real resources through strategic state guidance, like Five-Year Plans and state-owned enterprises in key sectors.  

Yan talks about the use of capital controls and a managed exchange rate. She details lessons from 2015 and the application of MMT principles to insulate domestic policy from volatile external forces. 

Without romanticizing China, Yan also walks through its real challenges. But from an MMT-aware lens, these are seen as problems of policy design and resource use (issues a sovereign, planning-oriented state can address!) rather than proof of an impending collapse. 

Yan Liang is Peter C and Bonnie S Kremer Chair Professor of Economics at Willamette University. She is also a Research Associate at the Levy Economics Institute, a Non-Resident Senior Fellow at the Global Development Policy Center (Boston University), and a Research Scholar of the Global Institute for Sustainable Prosperity. 

Yan specializes in the Modern Monetary Theory (MMT), the Political Economy of China, Economic Development, and International Economics. Yan’s current research focuses on China’s development finance and industrial transformation, and China’s role in the global financial architecture. 

https://www.linkedin.com/in/yan-liang-1355b91a2/ 

@YanLian31677392 on X