Thursday, December 29, 2011

Rethinking the ‘China model’

The idea that there is a coherent and distinct ‘Chinese model’ of political economy has gained attention in recent years — especially as financial crisis elsewhere has undermined confidence in the (neo)liberal models often associated with Western interests and objectives.

To be sure, there are many in China and elsewhere who argue the crisis has actually highlighted key defects in China’s development model.

The argument that there is an unsustainable reliance on exports — and investment — to generate growth seems widely accepted, even if it is less clear how a ‘rebalancing’ can be achieved. Still, the possibility that an identifiable Chinese model exists is not just the source of considerable interest, but also a degree of national pride.

But rather than highlighting a contradiction in thinking, these apparently divergent responses point to what most observers suggest is a key component of the model; it is flexible, pragmatic and responsive, as it is built around experimentation and doing what works, rather than basing itself on rigid ideological and/or policy prescriptions. This not only means doing different things as conditions change at home and abroad, but also having different models for different parts of the country. While it might not be possible for other developing countries to do what China has done, the essence of this understanding is that they should not search for blueprints, but should instead do whatever works for them.

In this respect, the Chinese model is less important for what it is as what it is not. It is not big-bang reform and shock therapy; it is not a process where economic liberalisation necessarily leads to democratisation; it is not jettisoning state control over key sectors or full (neo)liberalisation (particularly in financial sectors); it is not the Western way of doing things; and it is not following a model or a prescription, or being told what to do by others. And unlike other communist-party states, all this has taken place under regime continuity. While the successes of China’s economic experience are clearly important in promoting this idea, so too are the failings of the neoliberal ‘other’ against which China is being compared.

Within this ‘no-model model’ approach, we have the seeds of other ways of thinking. In defining the model, different people tend to focus on different aspects that reinforce their pre-existing thinking. For example, for those who focus on regime continuity, the model is sometimes reduced to rapid economic growth combined with strong state authoritarian politics. For at least some within China, such understandings focus only on the positives of what has happened, and ignore the myriad social and economic challenges that exist alongside the ‘miracles’.

Similarly, for those who focus on the lack of liberalisation and the state’s dominance, the importance of early stages of marketisation and the relative retreat of the state are often under-emphasised. Many also focus on the managed process of integration with the global economy and globalisation that China is carrying out on its own terms — understandings which do not sit easily with earlier studies of how the process of opening up had much to do with acceding to the interests of global finance and production.

This is partly explained by the dualistic nature of China’s international economic relations. While liberalisation has been promoted to encourage investment to produce exports, key domestic actors and sectors have remained relatively protected and supported by the state. And here there seem to be commonalities between what is happening in China today and what has happened in developmental states previously — not just in terms of trade, but in the state’s organisation of capitalism more generally. Of course there are many country- and context-specific differences, but there are at least some characteristics that link China, not just with the East Asian developmental states of the post-World War II era, but with the renaissance of the post-Meiji Japanese economy and Germany’s Bismarkian development in the 19th century.

In some respects, it does not matter if the Chinese model is indeed a new and discrete entity; if people think there is a China model and act accordingly, the model exists. But debating the genealogy of models is more important than just an exercise in semantics. If the China model is thought of as new and different, this suggests it represents a distinctive deviation from the ‘norm’. But rather than being abnormal, China seems to provide the latest example in a relatively long line of cases of strong state developmentalism that have been ‘successful’ in generating GDP growth (in early stages of industrialisation and national infrastructure construction at least). In this respect, rather than thinking in terms of a China model, it is perhaps more correct to talk of 有中国特色的新李斯特式发展型国家 — a strong state developmentalism developmental state with Chinese characteristics — and to rethink what is normal and what is a deviation.

By Professor Shaun Breslin Director at the Centre for the Study of Globalisation and Regionalisation, Department of Politics and International Studies, University of Warwick, and Associate Fellow at the Chatham House Asia Programme, Royal Institute of International Affairs. East Asia Forum

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