“Western capitalism needs an enemy other than itself. China, the convenient 'Other', offers the best target 🎯”
tandfonline.com
tandfonline.com
“The material rewards of globalization expanded the Chinese middle
class. But not so in the West where speculative financialization appealed
only to a small section of the middle class.”
class. But not so in the West where speculative financialization appealed
only to a small section of the middle class.”
After the 2008 economic crisis, globalization rapidly lost legitimacy in the West, leaving China as its main defender.
Meanwhile its Western business partners struggle with an array of social and political contradictions that have upset cross-border economic relationships.
Meanwhile its Western business partners struggle with an array of social and political contradictions that have upset cross-border economic relationships.
“Now clearly allied with neo-fascists, Trump’s Republican Party has disregarded democratic norms, while appealing to white Christian nationalism as the surest way to control working-class anger.”
China nearly followed the advice of the shock therapists, once in 1986 and again in 1988. Both times, leaders were poised to liberalize prices and quickly push China’s state-controlled economy into a market economy.
bostonreview.net
bostonreview.net
Both times, however, they pulled back at the last moment and instead trod a path of gradual reforms that eased the Chinese economy into the market through a slower process of price reform, privatization, and market openings that were guided by experimentation.
Neoclassical followers found much to fault in dual-track pricing. Not only did they decry it for delaying the goal of freeing prices and fully opening markets, but they also claimed that it created imbalances and friction in the economy.
Most immediately, a two-tier price system enabled illicit dealings, where entrepreneurial individuals could buy cheap and sell dear.
China’s transition from plan to market aligns with the onset of neoliberalism the world over, articulated most forcefully in the political projects of Margaret Thatcher and Ronald Reagan.
The structure of power begins with the Communist Party itself. Organized like a pyramid, the party concentrates power and responsibility toward the top among fewer and fewer people.
Appointments are made through a top-down, Soviet-style nomenklatura system, where each level selects members for the level just underneath it: central leaders appoint provincial leaders, who in turn appoint municipal leaders, who appoint village leaders.
This design gives each level a degree of autonomy in making selections but it also holds them accountable for underlings’ performance and locks each level into pre-specified political priorities.
Selection and performance criteria are telling in this regard. Each office is assessed every five years, within which time appointees are required to meet certain performance expectations and targets.
Political entrepreneurship is necessary only to the extent of devising means to translate party directives and policies sent down from the central or provincial levels; it is not employed in the development of an independent vision.
China has no lack of entrepreneurs or market demand. And given the enormous wealth and political will, China has the potential to set the kind of economic policies and build the kind of education and research institutions that propelled the U.S. to technological dominance.
In the 1980s and 1990s, China created the National Natural Science Foundation and the State Key Laboratory program, and revamped its Soviet-style Chinese Academy of Sciences to fund pre-commercial university research on a peer-reviewed (rather than a political) basis.
Since 1985, when the first high-tech zone was developed, in Shenzhen, they have proliferated to the point where they are a common stop on official tours of any major Chinese city.
30 years of poverty and suffering under Mao proved that the combination of top-down planning, state ownership, and political repression was a recipe for failure.
That is why Deng quietly introduced a hybrid system: “directed improvisation.”
project-syndicate.org
That is why Deng quietly introduced a hybrid system: “directed improvisation.”
project-syndicate.org
Playing the part of a director rather than a dictator, the government in Beijing defined national goals and established appropriate incentives and rules, while lower-level authorities and private-sector players improvised local solutions to local problems.
Deng’s hybrid system – top-down direction combined with bottom-up autonomy – has been overlooked both by Western China hawks and by Xi’s own leadership.
China accumulated ample experience in adaptive governance between the late 1970s and the early 2010s. But by the time Xi came to power in 2012, Deng’s economic model had reached its limits.
Over the past few decades, China’s economy has soared alongside a particular type of venality: elite exchanges of power and wealth.
The incidence of embezzlement and petty extortion fell as the government built up its monitoring capacity and enthusiastically welcomed investors.
The incidence of embezzlement and petty extortion fell as the government built up its monitoring capacity and enthusiastically welcomed investors.
Along with cronyism came rising inequality. Since the 1980s, income inequality has risen faster in China than in the US. China’s Gini coefficient (a standard measure of income inequality) exceeded America’s in 2012.
Corruption spurred officials to promote construction and investment aggressively, regardless of whether it was sustainable. Luxury properties that enriched colluding state and business elites have mushroomed across the country, while affordable housing remains in short supply.
Corruption, inequality, and financial meltdowns can trigger social unrest and erode the legitimacy of the Communist Party of China, given its promise of equality and justice.
Xi’s socialist mission actually began in 2012, when he vowed to eliminate rural poverty and simultaneously launched the largest anti-corruption drive in the CPC’s history.
All crony-capitalist economies, no matter how fast-growing, eventually run into limits. If American history is any guide, the problems facing China today do not necessarily spell doom.
But whereas the American Progressive Era relied on democratic measures to fight crony capitalism – for example, through political activism and a “muckraking” free press that – Xi is attempting to summon China’s own Progressive Era through command and control.
The lesson from America’s upheavals today is that even a mature democracy must be constantly maintained in order to function; there is no “end of history.” As for China, we learn that liberalizing tendencies can be reversed when power changes hands.
The supposed institutional advantages of China’s top-down rule are both a strength and a weakness.
In the drive to eliminate poverty for example, Chinese authorities are abruptly relocating millions of people from remote areas to towns, regardless of whether they want to move or are able to find sustainable livelihoods.
The idea that we can choose only between freedom in an American-style democracy and order in a Chinese-style autocracy is false.
Yuen Yuen Ang (洪源远) is the Alfred Chandler Chair of Political Economy at Johns Hopkins University.
project-syndicate.org
project-syndicate.org
“Many Chinese believe that the country’s recent economic achievements — large-scale poverty reduction, huge infrastructure investment, and development as a world-class tech innovator — have come about because of, not despite, China’s authoritarian form of government.”
“Most ordinary people we meet don’t feel that the authoritarian state is solely oppressive, although it can be that; for them it also provides opportunity.”
In much Western analysis the verb most commonly attached to China’s reforms is ‘stalled.’ The truth is that political reform in China hasn’t stalled. It continues apace. It’s just not liberal reform.
Empowered by Xi to deal with the corruption that had become so prevalent, the CCDI can arrest and hold suspects for several months; its decisions cannot be overturned by any other entity in China, not even the supreme court.
China has often had to fight off invaders and, as is rarely acknowledged in the West, fought essentially alone against Japan from 1937 until 1941, when the U.S. entered World War II.
Many Chinese believe that their political system is now actually more legitimate and effective than the West’s. This is a belief alien to many Western business executives, especially if they’ve had experience with other authoritarian regimes.
A Marxist system is concerned primarily with economic outcomes. That has political implications, of course, but the economic outcomes are the focus. Leninism, however, is essentially a political doctrine; its primary aim is control.
If China were concerned only with economic outcomes, it would welcome foreign businesses and investors and, provided they helped deliver economic growth, would treat them as equal partners, agnostic as to who owned the IP or the majority stake in a joint venture.
Some have expressed optimism that China’s need for control will lessen after they’ve proved their worth as partners.
That’s not likely, precisely because in China’s particular brand of authoritarianism, control is key.
That’s not likely, precisely because in China’s particular brand of authoritarianism, control is key.
China’s leaders argue that its essentially Leninist rule book makes Chinese politics far less arbitrary or nepotistic than those of many other, notably Western, countries (even though the system has its share of back-scratching and opaque decision-making).
The Chinese word for the resolution of a conflict (解决) can imply a result in which one side overcomes the other, rather than one in which both sides are content. Hence the old joke that China’s definition of a win-win scenario is one in which China wins twice.
China uses its particular authoritarian model — and its presumed legitimacy — to build trust with its population in ways that would be considered highly intrusive in a liberal democracy.
While hierarchy and equality may appear to the post-Enlightenment West to be antithetical concepts, in China they remain inherently complementary.
At every point since 1949 the Communist Party has been central to the institutions, society, and daily experiences that shape the Chinese people.
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