Can the China model guide other countries’ development?

October 30, 2017 13:39
In the new era under President Xi Jinping, China seems happy to talk about its achievements since it moved from extreme poverty 40 years ago to the second largest economy today. Photo: CNSA

China is basking in the interest that the whole world is taking in the 19th congress of its Communist Party and pondering the weighty speech delivered by General Secretary Xi Jinping, who was given the signal honor of having his name incorporated in the party constitution.

A party conclave, generally speaking, focuses on domestic affairs, but this one was different. For the first time, China presented itself as a model for other developing countries. In the past, China invariably adopted a low profile.

But that era is over and, in the new era of party leader Xi Jinping, who also serves as president, China seems happy to talk about its achievements, which are certainly impressive, since it moved from extreme poverty 40 years ago to the second largest economy today.

In the past, while others talked about a Chinese model of development -- sometimes called the Beijing Consensus -- China kept quiet. Now, Beijing is openly saying that others can learn from its experience.

During the past five years, said party leader Xi, “we have seen a further rise in China’s international influence, ability to inspire, and power to shape, and China has made great new contributions to global peace and development”.

He added: “The Chinese nation, which since modern times began had endured so much for so long, has achieved a tremendous transformation… It means that the path, the theory, the system, and the culture of socialism with Chinese characteristics have kept developing, blazing a new trail for other developing countries to achieve modernization.”

A little over a week after these words were uttered, Global Times, which is affiliated with the official People’s Daily, denied that China was promoting its political model to other countries. It said that unlike the West, which had been “enthusiastically promoting its so-called democratic system,” China was merely “offering a choice to nations that seek to develop rapidly” by “providing the China wisdom and model to resolving problems facing humanity.”

The Chinese leader did not describe the Chinese model of economic growth, which has been described as high-speed growth accompanied by political repression.

Actually, when China started the reform and opening up policy 40 years ago, it did not have a blueprint. It was simply pragmatic
and willing to experiment, a process it described as “crossing the river by feeling the stones.”

It began trade, too, through experimentation, gradually overcoming ideological obstacles. Foreign investment during Maoist times was forbidden since, it was thought, it meant that foreigners would own part of China. Gradually, China loosened the ideological chains that it had wrapped around itself during its long period of self-isolation.

China offered foreign businesses low-cost land and labor, and other countries today can certainly do the same. In fact, as Chinese wages have risen, some manufacturing has moved to countries that now offer better deals to investors.

But few other countries can match two of China’s assets: its highly literate population and vast market.

China’s decision not to develop western-style democracy may be attractive to some countries. But that in itself doesn’t guarantee economic growth.

The West had attempted to hold up economic policy prescriptions to be followed, known as the Washington Consensus. This included opening up with respect to trade and investment as well as the use of market forces within the country. But during the 2008 crisis, western governments rescued endangered banks rather than let the market decide their fate.

The market is not regarded by China as an exclusively capitalistic device. Deng Xiaoping used to say that the market is a tool and it can be used by both capitalistic and socialistic countries.

In China, however, there is a controlled market, with state-owned enterprises that are favored by state banks, so there is not a level playing field where private business is concerned.

But even this may be changing. In his speech, the Chinese leader said that in future the market would be allowed to play a decisive role in the allocation of resources. He also spoke of the need to encourage and guide the development of the private sector. So, the vision for development continues to evolve.

It may be useful for those looking to China to provide a guide to development to realize that they are now in a position to learn from China’s mistakes. For example, Xi said the country is seeking to control air pollution “to make our skies blue again.” The same goes for water and soil pollution.

So, just as China learned from America and its mistakes in earlier years, others today can now learn from China as well as its mistakes.

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Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.