Liberalism and Chinese Economic Development

Perspectives from Europe and Asia

Gilles Campagnolo

• Publisher: Taylor & Francis
• Year: 2016
• eBook ISBN: 9781317438601
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Liberalism and Chinese Economic Development brings international contributors together in order to consider economic, political, social and legislative aspects of China's modernization. This volume explores how liberalism is received and perceived, and whether it is adapted or adopted upon the basis of centuries of Chinese civilization and decades of capitalism.

China's role in the global economy is an undeniable force. This book examines both historical and contemporary dimensions surrounding the question of Chinese liberalism, exploring China's economic development in a comparative context. In particular, this text explores differences with the Western model, and more specifically, the relationship between Chinese economic thought and European traditions. This text assesses China's economic development at both a macro and a micro level, and also considers its relationship with its neighbours.

Campagnolo answers whether free-trade and capitalistic economic developments are long sustainable without other types of liberal developments? Or is the idea that political liberties and economic freedom are just Western ideologies? This is a uniquely wide ranging book, suitable for scholars of the Chinese economy, the history of economic thought, economic philosophy and international political economy.

1
Introduction

In search of the meaning of liberalism in a China confronting crisis

Gilles Campagnolo

Has the tremendous rise of the Chinese economy already met (some) limits? In other words, has mainland China encountered forces that may hinder its apparently inevitable development into the first world power? And what forces may decelerate China’s growth, a phenomenon already visible? Conversely, what forces may help China overcome obstacles on the path explicitly taken by Chinese leaders towards realizing the “Chinese dream”? This is the main topic of this volume.¹

These questions accompany a scholarly puzzle: whether some of the forces at play are internal, whether they stem from the very sources of the Chinese development path and are furthermore embedded in its culture and civilization, much rather, for instance, than from resistance on the part of East Asian neighbors, which share with China the rich heritage of many common values.

This reflection agrees with the facts too: as of 2015, China has in fact met some difficulties, more than the usual worries already raised by specialists, in its most extraordinary experience, the most baffling success story of modernization in the contemporary era. Both at first sight and in retrospect, the present times are the period of China’s economic development since 1978, together with the 1992 turn, two major steps which have been much discussed. In 1978 Deng Xiaoping oriented the country anew towards prospects of wealth and more economic freedom. In 1992 the CCP Plenary Session marked a second turn towards some full-fledged economic capitalist economy including “liberal”/pro-free trade measures. Deng made his famous “Southern tour” to illustrate swiftly this shift in the discourse. Now, would the year 2015 stand at the other end of the trajectory, with the result of unprecedented growth and accumulation of wealth (in absolute terms) being halted, or at least slowing down? No one slammed on the brakes, that is certain. On the contrary, the authorities are sustaining economic activity more than ever when a multifaceted crisis threatens. What about China?

China has arguably experienced, in proportion to its size and with respect to its demography, the most important change for its effective and, even more, potential impact on the history of mankind since Great Britain first trod the path of the industrial revolution. It took China roughly one third of a century to develop economically so as to stand at the forefront of international economic powerhouses. In the first decade and a half of the twenty-first century, China got from that event more respect, even fear (for instance, regarding the threat to levels of employment in the West), and attention concerning its economic situation than for centuries before. After Japan already at the end of the nineteenth century and Taiwan and (South) Korea after World War II, China has been diagnosed as the single player that is insuring that the center of gravity of the world economy shifts to the Asia–Pacific region. Let us not forget that both the United States and Russia have a Pacific coastline.²

For all other major powers, China now offers both immensely new opportunities and worries. China itself, put in this new “global” role, has opportunities and duties on the scene of world economics like never before – with the tasks and perils that go with it. In particular, each and every power-player in the world, to begin with its neighbors, has had not only to take into account this power–state–party entity, but also to contend (and perhaps to contain) this new high-stake international player that, once “awakened” (according to the famous saying attributed to Napoleon), is now acting at global scale not only strategically, but also, and most importantly because this is the new aspect, in terms of the economy.

This being said, China’s role was given a further push since the other powers suffered greatly from the global major crisis that originated in 2008 in the United States with the so-called subprime and Lehmann Brothers default crisis. Sequels followed that shook the West arguably much more than China or other regions of the world. Sovereign-debt crisis in Western European countries displayed the relative weakness of the West – even in front of Russia, that had recovered since the collapse of the Soviet model, a trauma that China spared itself, for better or worse with respect to consequences in socio-economic or political terms. From 2008 on, the crisis reached such dimensions that it was named a Great Recession, like that of the 1890s, and recalling the Great Depression of the 1930s. In a so-called “globalized” world with most Western nation-states proving relatively penniless and weak, and to some extent leaderless (as on the issues of global climate-change, the United States’ reluctance made it a laggard on the issue while, for once, French diplomacy met a much-needed success in ending the December 2015 world-meeting COP21 with the unanimous signature of the binding so-called “Paris Protocol” to succeed the “Kyoto-Protocol”), then may it be the case that China could ever be a leader for the twenty-first century? Or are there some obstacles in the nature of its development and/or its civilizational traits that would hinder that geopolitical role?

This book aims to point out some internal socio-cultural and even philosophical traits that impact the economy, at the micro scale of the agents’ behavior. Methodologically, the assumption is that these are causally related to macro-economic effects which are generally widely felt and registered in various types of national and international statistics, that strangely enough do not always coincide. Talks about the “Beijing consensus” (opposed, or at least independent from so-called “Washington consensus”) may lead to think China may be contemplating such a role of leader. The question is not whether this is possible, but which inner forces contribute or hinder such a “central” role in the minds. As China is traditionally the “Middle Kingdom” (or rather Central Kingdom, 中国 Zhongguo, since 1949 under the guidance of a Central Standing Committee of the Chinese Communist Party – CCP henceforth), this means that all others countries are but peripheral. Now, on the regional and global scale, is this sustainable?

If power depends on economic development and the latter in turn on free/liberal economic practises, then are both sustainable in the long run without the other traits that liberalism is/was said to bring to the fore in the West (especially democratic politics in the sense understood, notably in the West, as multiparty elections, among other features)? Or is liberalism but one Western ideology? Would China reject parts of it while digesting others, as the CCP did for Marxism, in a sense, leading to an interpretation by the CCP that differs quite a lot from the Western views on Marxist ideology (needless to say itself originally a Western product)?

Add, however that China gives evidence that the role of major player is set as a goal: in 2014 and 2015, China managed to set up a major tool (the Asian Infrastructure Investment Bank, known as AIIB), to orientate financial investments in countries that are close to the new center of gravity of the world economy. Notice though, that rulings and procedures for the AIIB are clearly not the same as those of the World Bank with its headquarters in Washington, or as those practised by the International Monetary Fund and commonly recognized in the West. Governance and the understanding of finance may differ from the Western liberal stands – and yet, the UK, Germany, France and Italy take part in the scheme, while Japan and the US do not. Besides geo-strategy (the subject of a different book from this one), a kind of world-view underlying economic and socio-political development is at stake. The AIIB is just a (major-scale) example. The meaning of liberalism per se is at stake: what has become of early British political thought of the seventeenth century (John Locke to name only one thinker) and French philosophy of the eighteenth century Enlightenment? The very notions of universality vs. plurality, what “individual” means are at play since, in any given society, such traits display the original models of life, mindsets and frameworks that run the whole system of behaviors, and the cogs and wheels of the economic machine in the end.

Such notions provide the frame for economic exchange and any socio-economic order, while, as a matter of fact, they are diverse, even if they have been partly imported and adapted/adopted. The nature of these notions in China is of utmost significance if, or rather since, the whole world has entered a mutation where China plays a, if not the, major role. Does it mean, since the whole world has entered a crisis, that the change is such that these notions will be decisive? One should recall this warning by a French sinologist: “Conceptions that we have about the state, about what is ‘political’, how ‘public service’ contrasts with ‘private activities’, etc. either have no existence in China, or do have a totally different meaning” (Billeter 2000: 107).

Facts about China in 2015 put in global perspective and the “Chinese dream”

Understanding fundamental notions in the background will provide keys to grasp how a country that is already a geographic and demographic giant, already known for social and environmental evils, namely mainland China, is now facing both success and the elements of crisis that go with it, while the political turmoil that lasted for most of the twentieth century is over since the end of the Cultural Revolution. Facts and some historical perspective are needed here to form the background upon which the contributions in this volume will make most sense for the reader.

Economic facts, then: China is still in 2015 (yet may well not be, according to demographic forecasts, by 2030) the most populated country in the world. China comes globally second in terms of GDP (second to the USA since China overcame Japan on that criterion around 2010). China is also newly a large foreign direct investor in many countries around the world, both developed (first owner of US Bonds and present in all sectors in the European Union, buyer of all kinds of minerals from Australia) and under-developed (Africa and Asia). China’s ever larger growing investing power gets no better illustration than the AIIB: through investing heavily in the development of many other economies, China (with allied partners) will rival the International Monetary Fund and already compelled the World Bank to insert the renminbi into the basket of five most-in-use currencies.

In historical perspective, China displays traits more significant than just now being wealthy. The issue is whether it is an over-powerful nation – and how it may confront crisis. It has become more powerful than neighboring Japan in the 2010s for the first time in the Modern era. In undertaking to reshape the Asian–Pacific region around its mainland territory, China has begun an expansionary policy with neighboring areas, especially those among still sparsely populated regions (like Siberian Russia) and is facing opposition in the so-called “pearl necklace” of the South China Sea. But the issue is whether the economy can sustain China in regaining its ancestral central role. And this is where the history of imported liberalism matters. Is China dependent on Western notions or can China bring forth a model (and which one?) without reaching the peak of a trajectory that has effectively left unprecedented traces in the historical records of national accounting since these have been in existence and – given that these are both recent in history and contemporary with industrialization where growth is highest – thus probably in the whole history of mankind?

Once again, some impressive figures: in 2015, China has overcome the United States in terms of exports of merchandize for two decades or so. And the pace of growth during the past three decades, with two-digit figures, has had the consequence of tremendously reducing the level of poverty, pushing the front line of developed China from the sea coastal regions always further inland and well into traditionally poorer inner countryside of its Western provinces. Pockets of poverty, and even misery, do however remain sometimes in areas that would be large enough to include whole countries in other regions of the world. But this is in a country where, at a moment when China is quitting the one-child policy (officially cancelled from October 2015), the mere margin of error relative to the exact figure of the population is higher than the whole count of the population of countries like France, Germany, or Japan.

Now, the point is that the Chinese government in this situation regards it to be the duty of CCP governance, by either Communist or newly popular again (neo-)Confucian standards, to serve well a population busy getting rich. It is true that in remote provinces, this still means providing enough help for development so that all have enough to eat. In Shanghai and along the coastal areas, it means, though, a lifestyle on a par with that of the large metropolitan cities of the world. Not every Chinese lives in the main “global cities” of Beijing, Shanghai or Tianjin, but for those who do, they live “almost like” the people in any other “global city” of the world – and with time many more cities of that kind will arise in China. Obviously, there are also social evils that come with such wealth.³

Actually and quite naturally, much remains implicit and adding the qualification “almost like” implies both a divergence, for instance in political activities, and similarities. So, despite the fact that post-modern life has standardized some attitudes which give the appearance of commonalities to all, the need exists for the study of civilizational features and traits of socio-economic “embeddedness” within a cultural analysis that shall help to explain social and economic behaviors.⁴

In this regard, one of the most paradoxical aspects is probably the following: on the one hand, China is still suffering from diseases typical of a “young” capitalist country in an environment that has grown at a fast-pace. The experience of catastrophic events shows that point well: the mega-explosion which destroyed part of the city of Tianjin in the summer of 2015 illustrates what happens in the complex situations of mega-cities that have grown out of multi-industry and potentially defective (and destructive) development.⁵ There are numerous examples of such major accidents, due to mis-construction on sites as significant as industrial complexes, chemical plants, railways; many are also due to cases of corruption. They cast a spell on countries and cities that usually carry or have just left, thanks to fast-paced development, the status of being labeled as “Third-World”. Difficulties of this kind are still felt in China – like pants leaving bare skin where teenagers grew too quickly to adjust the hems.

On the other hand, evoking the image of “youth” about a country that rightfully boasts one of the longest (if not the longest) tradition of civilization in human history sounds strange. China is both a post-modern capitalist society and the most traditional culture, at the forefront of modernity and still with traits pertaining to the most traditional. Such is the case of many so-called “Third World countries”, some of which are also now on the rise, like also Brazil, Russia, India, South Africa (under the new denomination of “BRICs”). If Brazil is something of a newcomer in world history, India may boast a history as old at least as China’s. But in China the paradox reaches its peak. When was the time that just sneezing in the US could give a cold to the rest of the world? The position newly taken by China at the international level implies a continuous assessment of this country’s demeanor as well henceforth.

China now boasts world-level scientific achievements, with its first Nobel Prize in science (medical sciences, in 2015), and manufactures the computers of tomorrow (harvesting “game-playing farms” for instance) while using characters/ideograms dating back to the first traces that human hands left on pebbles or turtle-shells. Chinese dynamism makes it all the more striking that China’s growth will continue to rise along a model of modern capitalism that, after all, dates back only to the Western industrial revolution. By bridging the times before and after modernity in the contemporary world, and doing so in not much more than a third of a century, China mixes syndromes of societies with long development and new abundance. Has therefore China reached the peak of such a development path, and does China have the means to put together pieces of a new economic and socio-intellectual model?

Now, for all the excitement that such a perspective may bring, and which motivated this volume, let it be known that the Party has an answer: the apogee will come when the country feels self-assured, dominant (and possibly less sympathetically, arrogant), stable and prosperous. Goals are set under the guidance of the CCP for a zenith already planned and scheduled: it has got a name, given by the Standing Committee and conveyed in Party literature. It is called the “Chinese Dream”. And it is set to be realized in 2049 – for the centenary of the People’s Republic of China.

Notice, then, that whether this “dream” becomes a reality or not, it will still be three-quarters of a century, less than one hundred years, since China took the first steps into modern capitalism, since the moment when the CCP, under the leadership of Deng Xiaoping, decidedly turned away from the remnants of Mao Zedong’s teachings and prioritized the accumulation of capital rather than socialist distribution. That policy of the initial stage of reforms applied in th...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures
• List of tables
• Notes on contributors
• List of acronyms
• 1 Introduction: in search of the meaning of liberalism in a China confronting crisis
• PART I History of thought: contributions to the reception and adoption/adaption of Western thought
• PART II Liberalization and individualization
• PART III Liberalism, universalism and pluralism
• Index