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A time of test for the China model of economic growth

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A woman rides a tricycle past a giant poster of late Chinese leader Deng Xiaoping in Beijing. The poster reads, ‘Development is the absolute principle’. China has come a long way since Deng initiated economic reforms in 1978, but much remains to be done to create a more sustainable China model. (Photo: Reuters/Reinhard Krause).

In Brief

The ‘China model’ of economic growth has been essentially a story of a hyper-charged economy led by an authoritarian state. But now the model has become unsustainable, with China experiencing economic slowdown as well as rampant corruption, growing inequality and environmental destruction.


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This is an ideal time for Chinese leaders to move the country’s growth model focus from exports and investment to qualitative internal development. It is also the time for the Chinese government to build institutional checks on state authority and boost accountability.

If China can complete this transition on both fronts, the China model will stand. But a sustained economic downturn or a lost decade or two could mark the end of the China model.

The notion of a China model first emerged in Joshua Cooper Ramo’s 2004 article ‘The Beijing Consensus’, which asserted that China had found a unique path to modernisation through a willingness to innovate, taking account of quality of life and providing enough equality to avoid unrest while refusing to let other Western powers impose their will.

The China model notion re-emerged after the successful 2008 Beijing Olympics and the global financial crisis, which China weathered better than many Western countries. The China model became a popular term in the so-called ‘discourse of greatness’, which included terms like ‘the China miracle’ and ‘the rise of China’. But the Hu Jintao–Wen Jiabao administration avoided endorsing the China model, reflecting a hesitancy to engage in ideological debate and a concern over the emerging perception of the ‘China threat’.

The China model has also been a central interest since President Xi Jinping came to office in 2012 and called for a ‘China dream’ of national rejuvenation. Xi’s China model promotes Chinese exceptionalism. According to Xi, because of China’s unique characteristics, only a quintessentially Chinese model can accommodate China’s national circumstances.

The key issue in the China model debate is the role of the state, reflecting the long struggle of Chinese elites to build and maintain a powerful state.

Since founding the People’s Republic of China, the Chinese Communist Party (CCP) has claimed the public mandate by building a centralised state to maintain order. But Deng Xiaoping’s economic reforms in 1979 decentralised many economic decision-making authorities. These reforms helped China’s economic take-off by creating market based resource reallocation efficiencies.

More recently, a neo-authoritarian sentiment has emerged in China criticising the decentralisation of the state authority for weakening central planning bureaucracies and creating opportunities for some intellectuals to advocate liberal ideas from the West.

President Xi has echoed this sentiment by significantly strengthening state capacity through concentration of personal power, anti-corruption campaigns, empowering state-owned enterprises and launching the largest ideological campaign against ‘Westernisation’ in post-Mao China. Xi has centralised policymaking at the highest levels of the party by moving a large proportion of decision making into small leadership groups. Underlying these moves is a recentralisation of power from Beijing and the CCP to Xi Jinping.

Centralisation under Xi has allowed the Chinese state to utilise a much larger economic toolkit than its Western counterparts. China marshalled extraordinary resources into infrastructure, housing and transportation. The Chinese government was also much more effective in deploying enormous state capacity to ward off the global recession than its Western counterparts during the global financial crisis.

But this economic growth has come with significant costs, including excessive human casualties, environment pollution and overcapacity as well as income disparity and moral disintegration.

These costs have seen China enter a period of deepening social tension, marked by unrest and protests. With China’s economic growth now decelerating, Chinese leaders are increasingly fearful of China descending into chaos. Strikes and labour protests have already increased as bloated private and state-run enterprises lay off millions of workers.

The Chinese government has deployed more coercive measures to maintain social stability. China’s spending on domestic security outstripped the defence budget for the first time in 2009 and has continued to hit new heights since then, showing the rising costs of maintaining stability. Xi has clamped down on social media, shutting accounts of labour activists, deleting news reports and monitoring chat forums. The state has also prohibited workers from establishing independent labour unions, severely persecuted activists and detained human rights lawyers.

As China’s economy slows the costs of the China model of rapid economic growth are becoming less and less bearable, even to those who have benefited from its fruits. The existing model does not fit China anymore. This is evidenced by the growing numbers of China’s new rich who are choosing to emigrate abroad and take their money with them. Students are flocking to the West for a liberal college education.

The real test for the China model is whether Chinese leaders are able to achieve transformation on both the economic and political fronts. China has come a long way since Deng Xiaoping initiated economic reforms in 1978, but now much needs to be done to create a more sustainable China model.

Suisheng Zhao is Professor and Director of the Center for China–US Cooperation at the Josef Korbel School of International Studies, University of Denver and Editor of the Journal of Contemporary China.

5 responses to “A time of test for the China model of economic growth”

  1. Thanks for an insightful, albeit sobering, analysis. Suggesting that Xi needs to institute greater ‘checks on institutional authority and boost accountability’ strike me as inherently contradictory in the context of his efforts to increasingly centralize his authority and to push China’s influence, if not power, out into Asia and the world. How can he accomplish these latter goals if he reduces his authority and holds himself more accountable to the people? Aren’t they already showing their dissatisfaction with the status quo with their desire to take money out of the country, to educate more of their youth in other countries, and to travel outside of China? Is he not caught in a catch 22?

  2. Every society is governed by its historical and sociological factors. Every society is limited by them in governing itself. I do not like the way the CCP rules the Chinese people, but it is the only way that the Chinese people know how to rule themselves or how to be ruled by those above them. It is the only way that the Chinese society “knows” how to rule itself.

    In liberalism, economics is treated as if it had an independent existence separate from politics but it does not have such independence in China and elsewhere. This inseparability is clearly visible in China but it is so anywhere else in the world. Economics or economy cannot be seperated from politics, except when economy is theoretically treated for analysis.

    I do not like the way the CCP’s despotism rules Chinese society and the people but it cannot be helped.
    What I want to say is that liberal economic policy changes as suggested by Prof. Zhao and many other economists would be possible only at the risk of inviting the recurring theme in Chinese history of social anarchy. The Chinese leaders seem to know it very well.
    The CCP might muddle through within the limits of not falling into that danger.

  3. An article full of old western cliches. It is 2017 now, how about writing something from this century.

    The Chinese economy is unsustainable has been tossed about for 20 years now but it continues to grow at rates 5-6 times those of the West.
    China is slowing with rampant corruption ……. obviously the author has little knowledge of what actually has happened in China regards corruption over the last few decades.

    Roughly 500,000 Chinese student attend western universities each year and the vast majority home afterwards after having lived in the west. Out of China tourism has now reached 120 million trips per year. China is not closed, it’s people can and do travel.

    People have seen what has happened with all the failed democracies created since 1950 and no one wants that.

    Yes yes yes China is evolving slowly but in it’s own way, with a stable society that has a positive outlook. That the West could say the same, it would be a welcome change.

  4. Seems like a well trodden path whenever anyone writes on China. Unstainable, corruption, emigration. If you look at most of South East Asia, its the same thing. Everyone migrates when they can afford a lifestyle they can’t get locally whether its education, space, clean air, freedom or access to higher income and quality of life. Even with Singapore’s successful economy, you will find many Sporean migrants in Australia and NZ. What is not said are the ones who can afford it but stay behind or those who return. Why is it a bad thing if the Communist party wants to stay in power and provides an improving life to the citizens as a trade off? Consider the alternative.

  5. Very timely article. I completely agree with Zhao’s proposition that China needs to create a more sustainable model of development.

    Let me add a correction: The concept of Beijing Consensus was first described by Kavaljit Singh, an Indian economist, in his two articles published in Asia-Pacific Journal published in 2002, much before Joshua Ramo and others popularized it later on. Not many scholars have acknowledged this fact.

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