Written by Kean Fan Lim.
Along with China’s expanding economic influence are growing debates on the nature and feasibility of the ‘China model’ (中國模式). Similar to debates accompanying the ascendency of the Japanese economy in the 1980s, the contemporary focus on the ‘China model’ presupposes the existence of a different – and seemingly static – regime of socioeconomic development that is discretely different from the more ‘liberal’ and ‘democratic’ approaches in advanced liberal economies. It must be noted that the term ‘China model’ and its corollary, the ‘Beijing Consensus’, is viewed as a foreign construct by the Chinese government and has never been portrayed as a path demarcated for the rest of the world to follow. It is arguably for this reason that prominent development analyst Arif Dirlik terms the Beijing Consensus “a notion, rather than a concept or an idea, because it does not have any of the coherence that we associate with either of those terms”. How fruitful, then, would it be to construe the Chinese developmental trajectory as emblematic of one ‘model’ when it is evolving dynamically with the global economy?
A more grounded approach to determining the ‘China model’ of development – if it is possible to term it as such – might be helpful. Specifically, I believe discussions on the ‘China model’ should not be framed in terms of simple binaries like ‘authoritarianism vs. liberal democracy’ or ‘state capitalism vs. the free market’. Authoritarianism comes in different guises (e.g. the US’s disregard for UN rules when it invaded Iraq), and all states intervene in markets. Rather than construe each country’s developmental experience as reflective of a static institutional ensemble that can be easily duplicated and transferred to other political economies, it might be more fruitful to begin with a process-oriented approach that takes into account the geographically-variegated ways in which the Chinese political economy interacts with the global economy. In other words, rather than focus on defining what is, the emphasis shifts to what the Chinese government is doing in different locations.
It would be useful to illustrate my perspective against the backdrop of China’s 12th Five-Year Plan (2011-2015). During the buildup to this plan, the Chinese central government issued an unprecedented acknowledgement that its developmental approach is undergirded by numerous structural constraints. While these challenges were described as outcomes of the post-Mao growth ‘model’, they arguably also enabled this model. The constraints on resource environments, for instance, may be a negative outcome, but it was through the extensive extraction of natural resources and low-cost dumping of waste into the biosphere that generated GDP growth. Similarly, the growth in social contradictions is facilitated by the rollback in rural welfare provision and municipal governments’ corresponding denial of (already minimal) social benefits to rural residents who migrate into and support urban economies. This rollback-cum-denial saved the state and rural collectives massive financial resources, which were then ploughed into capital-friendly supply-side measures like tax breaks and construction of industrial parks. The costs of this rollback were borne by rural households and by the ‘floating population’ of migrant workers, albeit in the context of rising incomes. For this reason, ten socioeconomic challenges in the 12th 5-Year Plan proposal embody the fact that the Chinese ‘miracle growth’ of the past three decades was premised on a fragile, growth-based social contract. The challenges included increasing constraints on resources, unbalanced investment and consumption, widening income distribution, weak scientific and technical innovation capacity, increasing “social contradictions” etc.
Just as these challenges were acknowledged officially, it became apparent that the new round of experimental reforms were beginning to take distinct geographical forms. Specifically, the central government began to designate targeted zones within selected cities as “nationally strategic new areas” (國家戰略新區). New regulatory authorities in these zones were then delegated the power to ‘move first, experiment first’ – known officially as xianxing xianshi quan (先行先試權) – with exploratory reforms deemed to be of national significance. In itself, the demarcation of urban frontiers of reform is not a novel process; the key observable difference is the considerable expansion of its scale and scope of implementation since 2006 Following the economic success of the first four Special Economic Zones (SEZs) in the provinces of Guangdong and Fujian, the world-renowned Pudong New Area in Shanghai was approved for development in 1990, and has since been transformed into a city regional ‘motor’ of China’s economic growth. What is interesting is this strategy to launch “nationally strategic” institutional reforms was not extended elsewhere in China for 14 years until the Binhai industrial region adjacent to the northeastern city of Tianjin was designated China’s second ‘nationally strategic new area’ in 2006.
The central question this developmental phenomenon poses for popular understanding of the ‘China model’ is its impact on national socioeconomic stability. Through the designation of the ‘nationally strategic new areas’, it is clear the Chinese central government is readopting a flexible strategy – last launched in the early 1980s by Deng Xiaoping when he designated the first ‘Special Economic Zones’ in southeastern China – that makes the most of one location to actualize what it defines as the ‘national interest’. This ‘national interest’ is in itself multi-dimensional. The experiments in Zhoushan, for instance, are to explore the formation of a ‘marine economy’ (i.e. a strong environmental focus), while those in Chongqing addresses issues relating to the urban-rural ‘dual structure’. Is it possible, then, for experimental reforms in selected locations, each with its own developmental history and each sure to generate a distinct developmental pathway, to be expanded nationwide? The tentative answer appears to be no.
Seemingly designed to fit the preexisting socioeconomic conditions of the selected locations (each location has its own developmental history), the experimental reforms appear to be inherently contradictory at the national level. For example, the Chongqing reforms to provide social benefits to incoming rural migrants in the urban zones are difficult to replicate in other areas. This especially applies to major city-regions in the coastal areas (e.g. Shenzhen, Guangzhou, Shanghai) that are heavily dependent on migrant workers and are yet unwilling to provide social benefits for these workers. Similarly, it is hard to see how environmentally-friendly policies in Zhoushan New Area could be implemented in areas that rely significantly on low-cost natural resource extraction (e.g. in Gansu and Inner Mongolia). It thus appears unfeasible to have these experiments extended ‘as is’ to other locations with different socioeconomic developmental pathways.How, therefore, could geographically-selective experiments constitute a nationally coherent ‘China model’? Or, perhaps counter-intuitively, has geographical differences in reforms become the distinctive feature of the ‘China model’?
Fundamental to an enhanced understanding of the ‘China model’, in my view, begins with the premise that the Chinese political economy comprises institutionally-distinct experimental regions. These regions have evolved in their own (divergent?) ways following the first wave post-Mao reforms in the 1980s, and the Chinese central government is recently reacting dynamically to this variegation by launching experimental reforms in the “nationally strategic new areas”. Specifically, it aims to solve the ten major challenges during the 12th Five Year Plan, and yet it seems to realize it cannot solve them at the national scale. For this reason, challenges deemed to be of national significance would – or, to be precise, have to – be addressed locally, with no guarantee that changes would then be applied nationally. The crucial point to note is the different experimental reforms are to run simultaneously in the designated “nationally strategic new areas”. This makes it almost inevitable that contradictions will emerge. How the Chinese central government handles these contradictions would thus be the defining characteristic of the ‘China model’. It will determine whether the ruling Communist Party of China could deepen economic integration with the global system of capitalism without exacerbating the aforementioned structural challenges that underpinned the ‘growth miracle’.
Kean Fan Lim is Assistant Professor in Economic Geography at the School of Geography, University of Nottingham.