This article endeavors to explore the fundamental tenets of the unique ‘China Model’ of development over the past 30 years. More specifically, this article will argue that, although there is a clear distinction in political ideology and a different approach to the way in which it regulates the market economy compared to the West, the ‘China Model’ have created a market society which echoes the inherent inequality, cultural alienation, social dislocation evident within the majority of Western market civilizations.
Before we begin, it is essential to distinguish the key features of the ‘China Model’, this is a list produced by academic and former Chinese official Zhang Weiwei (2006):
• Down to earth pragmatic concern with serving the people
• Constant trial and error experimentation
• Gradual reform rather than Neo-liberal shock therapy
• Strong and pro-development state
• ‘Selective cultural borrowing’ of foreign ideas
• A pattern of implementing easy reforms first, difficult ones later
The first feature characterized by Weiwei is arguably contestable considering the historical development of China’s market economy introduced by Deng Xiaoping in the 1970s, where the overriding priority of the political elite became distinctly economic, reflected in Deng’s rhetoric at the time:
“China is poor. Poverty cannot demonstrate the superiority of socialism. Our general aim is for everyone in society to become rich and prosperous… Our overall method is to encourage the advanced to take the lead in becoming rich, so that others can follow.”
(Deng 1978 cited in Nolan, 2004)
The first wave of reforms in rural areas between 1978 and 1984 did revitalize the rural areas and freed the peasants and farmers from the oppressive communes during the Maoist period, and markets were introduced to lift incentive and consequently, the income gap between rural and urban areas declined. However, after 1984, the focus became pre-dominantly in urban areas, where market principles of ‘efficiency’ and competition immediately caused excessive inequality among residence. Soon the growing discontent in cities led to the tragic Tienanmen Square protests which ended in the violent suppression of society. Far from serving its people, the CCP (Chinese Communist Party) silenced those who tried to voice their concerns over the implementation of market principles and the resulting social polarization and inequality that has not been resolved since.
In 1993, Vice Premier Zhu Rongji and newly elected President Jiang Zemin, both hardline reformers, looked to continue Deng’s legacy, ushering a second period of economic reforms. The focus was on the public sector, abolishing the dual-track system, establishing new regulatory and restructuring in the banking, tax and corporate governance system (Naughton, 104) and strengthening its managerial and fiscal ability (So in Chu,2010: 57). This was ‘the China Model’ in full fruition: retaining and improving the ‘iron hand’ over its expanding economy, the Communist party-state simultaneously introduced further reforms towards a functioning market economy, a stark contrast to the weakened state envisaged and encouraged in neoliberal literature. As growth rates forged ahead many economists predicted bright prospects for China’s future. However, this period also saw a rapid acceleration of the ‘gradual’ approach listed in Weiwei’s characterization, which continued to exacerbate the social problems caused by further market expansion.
Even more worrying was the stagnant rural reforms which resulted in mass migration in the 1990s, where the superior lifestyle enjoyed in cities and the poor and primitive conditions in rural areas further widened the disparities between the divide of urban/rural areas. The ‘pro-development’state, in this context, was only relevant to the urban section of China’s society. As a result, China’s unequal society showed no signs of stopping, and while “migrants may earn more than those who remain in the countryside; their economic and social status is still markedly lower than that of registered urban residents” (Lin, 2012:7). This is a sign of the cultural alienation brought by the market economy where traditional communities are destroyed and considered inferior to the lavish lifestyle that, in reality, only a select few people enjoyed. Many fieldworks conducted in China reflect this trend of behaviour:
“Lui Fanmei is no stranger to public humiliation and discrimination due to her outsider origins. Once while she was browsing in a bookstore, a clerk cornered her and demanded proof of identification, as if implying that a migrant worker would not be buying books, only stealing them.”
(Gaetano 2004: 69)
Statistically, inequality in China became endemic: the Gini Coefficient stood at 0.32 in 1980 had risen to 0.45 by 2001 (Wang, 2008), a report by Lu (2002) showed that even in rapidly developed cities with an enormous middle class, 60-70% of people earn below the average household income. This is the true product of ‘China Model’, although millions have been lifted out of relative poverty by economic growth, the majority continues to struggle with everyday life, reminiscent of the egalitarian foundations which China was founded that has all but vanished along with the shattering of the iron rice bowl replaced by the individualistic and normative material uncertainty of a market society.
The global financial crisis of 2008 brought to forth the severe structure deficiencies laced within China’s market society that will have profound implications for the future, the CCP have realized the urgent need to address the excessive inequality and dependency on exports and investment for growth that is not sustainable nor fair on the majority of citizens who are struggling to survive while the rich simply gets richer. This is reflected in Hu Jintao’s rhetoric of the ‘harmonious society’ in 2004, but words have been stronger than actions in China’s case as the fundamental issues discussed above have yet to see a comprehensive response from the government.
To conclude, although China continues to adhere to the superiority of socialism, its policies and development over the last 30 years have been vaguely in line with its socialist ideals. Ultimately the tenets of the ‘China Model’ has been solely responsible for a thriving economy, but it has also created a society riddled with inequality, social dislocation, cultural alienation and a threat to the environment. All these issues associated with the emergence of the market society will soon have a detrimental effect on the overall stability of China’s economy, society and consequently on the global economy and the rest of the world.
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