A “China Model” for the rest to follow?

9 May

In much of the scholarly literature, the so called “China Model” is presented as gravitating on the combination of centralised authoritarian politics and liberal free market economics. This does not, however, covey the complete nature of China’s economic stance; China’s banks are state affiliated, and among the 42 largest and most powerful Chinese companies, only 3 are privately owned. Nevertheless, in recent years, the suggestion that a country’s strong economic performance can be facilitated without a co-ordinated move to democracy, as put forward in the “China model”, has gained increasing acceptance through much of the developing world and Asia. This is due to China’s remarkable economic success. Thus, China’s alternative path is increasingly calling in to question the “Washington Consensus;” which advocates democracy and economic development as being an inseparable pairing.

Since Deng Xiaoping’s economic reforms of the late 1970s, China has effectively managed to undertake a complete transformation of their economic outlook, whilst maintaining the same strong authoritarian grip on the country’s political sphere as they have had since the establishment of the People’s Republic in 1949. Evidently the “China Model” has continued to display two components. The economic component has been to internationalize successful elements of liberal economic policy through opening up the country to foreign direct investment, keeping taxes low and regulation minimal, and developing a quality domestic infrastructure through both public and private sector spending. The political component of the “China model” permits the ruling Chinese Communist Party to maintain a firm grip of the army, military, government, legal system, and the flow of information. Strong and centralised governing is therefore uncompromised. Thus although economic liberalisation essentially reinforces “Western” capitalist thought, which marks a significant departure from China’s socialist ideology; the Chinese government appears to have circumvented this problem by describing their ideology as “Socialism with Chinese Characteristics.” The Chinese characteristics, explains the un-typically socialist move towards quasi-free market economics, whilst maintaining the government’s strong and centralised control of the people.

Over the same period of the development and emergence of the “China Model,” Western actors began “helping” developing countries in Africa and Latin America to develop economically. Using the World Bank and the IMF as a tool of their unofficial disposal, the United Kingdom, and, most notably the United States began piloting poverty reduction and development projects. However, much to the displeasure of China, who has continually upheld a commitment to non-intervention and self-determination, in the cases of the most financially troubled economies, the United States would condition economic assistance with political democratic reform. The applicability of democracy and “Westernisation” to the recipient countries in question, however, was seldom questioned. In response, China forcefully asserted that Western actors were effectively imposing their individual values on other countries, and trying to bring “change” without ascertaining the benefits of doing so. In some respects, China was right: in the latter part of the 1990s, the economic advantages of the United States’ interventions and democracy drives were waning, and the “Washington Consensus” began to be questioned. Nevertheless, democracy has continued to be promoted by the United States as the only path for successful economic development.

However, in recent years China’s stubborn rejection of the “Washington Consensus,” and its remarkable economic performance alike, has provided a “new way” for many Western-cautious developing countries. China has not only argued that it does not need to follow the path advocated by the West; it has actively proved it. In 30 years China has transformed itself from being a poor, and internationally insignificant country, to the second largest economy in the world; with absolutely no intention of conducting a major political reform in the process. The United States may be economically superior to the People’s Republic of China, but their colossal national debt considerably mars their performance. In contrast, during the global economic crisis of 2008-2009, China increased their purchase of international bonds, creating a situation whereby the U.S has become indebted to China.

As such, the credibility of the “China Model” is gaining increasing numbers of follows; not least by China’s own doing. In a study of the values of Asian countries conducted by Wibowo, it was found that nearly all of the countries asked were willing to abandon their democratic values if it facilitated higher economic growth. Moreover, when examined politically, many of these countries had followed China’s example and moved away from democracy and towards illiberal democracy in recent years. These nations had studied China’s success, in contrast to the catastrophic recent failures of the West.

As the economic stability of Western countries has continued to waiver, the United States will face increasing difficulties in convincing developing countries to ideologically and politically converge towards Western standards, to “improve” the recipient’s domestic prospects. Moreover, as the Bank of China is five times larger than the World Bank; when developing countries are faced with the politically conditioned financing of World Bank and IMF international loans, they simply turn to China. “Good governance” according to Western values, is thus no longer a necessary condition for the grounds of economic development.

However, although the “China Model” is clearly gaining international credibility, China’s development continues to be marred with problems. Domestic inequality has drastically risen, the country’s demographic structure is shifting and beginning to threaten China’s economic prospects, China’s government is riled with internal corruption, and its leaders still face domestic protests on a daily basis. And these are just a small subsection of China’s domestic problems. Clearly, the “China Model” is not without flaws.

Nevertheless, what “China Model” has undeniably proved, is that, in contrast to what has continually be advocated by the U.S., democratic economic development is not the only path to success. Perhaps, China’s biggest accomplishment so far is being able to say, with increasing international support, that “America does not always know best.”

Sources:

Breslin, S. (2011). The ‘China model’and the global crisis: from Friedrich List to a Chinese mode of governance?. International Affairs87(6), 1323-1343.

Chan, L. H., Lee, P. K., & Chan, G. (2008). Rethinking global governance: a China model in the making?. Contemporary Politics14(1), 3-19.

Halper, S. (2010). The Beijing consensus: how China’s authoritarian model will dominate the twenty-first century. New York: Basic Books.(especially chapter 2 – The Rise and Fall of the Washington Consensus, and chapter 4 – The Competitive Edge: State-Directed Capitalism)

Li, X. (2007). Paradigm Shift: From ‘Washington Consensus’ to ‘Beijing Consensus’. Afro-Chinese Relations, Past, Present and Future, Cape Town: The Centre for Advanced Studies of African Society (CASAS).

McKinnon, R. I. (2010). China in Africa: the Washington consensus versus the Beijing consensus. International Finance13(3), 495-506.

Zhao, S. (2010). The China Model: can it replace the Western model of modernizati/on?. Journal of contemporary China19(65), 419-436.

http://www.theatlantic.com/china/archive/2013/03/why-the-china-model-isnt-going-away/274237

http://www.economist.com/debate/overview/179

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