Social Sciences in China (Chinese Edition)

No. 12, 2024

The “RealFictitious” Relationship in China’s Economic Development—An Extension of Marx’s Theory on the Reproduction of Aggregate Social Capital

(Abstract)

Li Bangxi, Liu Chong and Chen Liang

Amid the current technological revolution, especially with the rise of digital innovations, the boundaries between the real and fictitious economies have become increasingly blurred. While sector classifications adjust to practical needs, the division into major departments remains relatively stable. It therefore offers a better insight into long-term economic trends. To better understand the dynamics of the fictitious economy relative to the real economy, this study expands Marx’s theory of the reproduction of aggregate social capital. It positions fictitious capital as a third major department alongside the means of production and means of consumption, analyzing stock changes through the flow of capital movement. This approach constructs an analytical framework for the circuit of capital within the “real-fictitious” three-major-department system. Using input-output data, we establish a three-major-department table and develop indicators that reflect both structural and relational dynamics, enabling an empirical analysis of the “real-fictitious” relationship in China’s economy. The findings reveal a deep interconnection between the real and fictitious economies, which together shape China’s economic structure. However, the fictitious economy remains in an “expansive but shallow” stage, with the real economy continuing to underpin development. Notably, the phenomenon of “departing from the real” does not imply a full “shift to fictitious.” While the scale of fictitious capital flowing back into the real economy is relatively adequate, significant structural imbalances and associated risks remain. To promote high-quality economic development, it is crucial to optimize the structural reintegration of fictitious capital into the real economy’s two departments and to implement systematic governance strategies that ensure fictitious capital effectively supports real economic growth.