How did China come up with its Own Model of Development, and why is it Successful?

How did China come up with its Own Model of Development, and why is it Successful?

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How did China come up with its own model of development, and why is it successful?

The Chinese development model that pursues economic rather than political liberalization has been developed over time through the pragmatic customization of western capitalist development approach to suit the Chinese circumstances and its success is pegged on its delivery of continuous social development. Notably, China has enjoyed rapid economic growth and development in the last four decades despite having an authoritarian system of government is renowned for delivering poor developmental results in other developing countries. The impressive 9.5 % annual economic development growth rate in China became conspicuous during the financial crisis of 2008. The Chinese economy remained unscathed by the crisis and kept growing while the large western economies experienced massive contractions (Kurlantzick 2013). The Chinese model, also called the Beijing Consensus to differentiate it from the Washington consensus, was inaugurated by Deng Xiaopin to remedy the failures of the previous model advanced by Mao Zedong (Kurlantzick 2013). China had experienced dismal economic performance during the Great Leap forward and the Cultural Revolution initiatives.

The Chinese development model is famed for delivering about 680 million Chinese out of poverty between 1981 and 2012 and has contributed to making China the second-largest economy in the world after the United States (Esmail and Shili 2018). The assertiveness of China increased as it attempts to popularize its development model through The Belt and Road Initiative (BRI) has inspired the consideration of the Chinese model as alternative developmental model to the longstanding neoliberal capitalistic model (Morrison 2014). The western development model has been traditionally prescribed to developing countries but instead delivered suboptimal developmental outcomes (Morrison 2014). The ensuing discussion seeks to explain how china developed this model of development and reasons behind its success.      

The Chinese development model

The Chinese government, specifically the Chinese Communist Party (CCP), developed the Chinese model of development to accelerate and maintain social economy growth of the country and its citizenry. The motivation of the development of this model was the need to integrate the Chinese economy to the global economy after a long period of pursuing self-sustenance policies and the failure of the Soviet-led socialist policies. The Chinese model differs from the capitalistic model pursued by the west and traditional socialism that was pursued by the soviets. The Chinese model differs from the western model that is characterized by liberal democracy by customizing democracy to the Chinese circumstances, thus providing it with unique Chinese characteristics (Li 2015). It also differs from the traditional soviet-let socialist model because it injects market elements into the socialist economy, which enables many Chinese to enjoy modern socioeconomic development.

The Chinese model of development is characterised by the prioritization of development that is led by the state and focuses on good governance and reform that is realistic and continuous. Notably, development is prioritized at the expense of political campaigns. The Chinese lose interest in political campaigns when their government is dedicated to uplifting the standards of living of all the Chinese. Therefore, the Chinese accept their government and its developmental policies, which fostering political stability and buy-in. In addition, development in China is championed by the government and therefore benefits from the central planning and resource allocation from it. The state-owned economy, also denoted as state capitalism, has the government formulating and implementing policies targeting various sectors of the economy simultaneously. The government also removes the barriers imposed by the market and injects massive resources to well-performing state-owned enterprises (Li 2015). As such, although the sectors of the Chinese economy have been marketized and integrated with the global economy, the state controls firmly large, successful and strategic state-owned corporations. Therefore, the government spearheads and accelerates development through state-owned corporations. Further, the model focuses on good governance as being pertinent in delivering social and economic development because it addresses the economic and social issues through the delivery of excellent services and robust policing. According to the Chinese government, good governance overweighs electoral democracy because it effectively tackles economic, social, and environmental problems. Hence, the need for liberal democracy dissipates and a conducing environment for development is created. Moreover, the model advocates the implementation of pragmatic reforms gradually to deliver incremental changes in development. As such, the government improves the development initiatives from the lessons learnt continuously, ideas gathered and changes in circumstances. This guarantees that the development policies will remain relevant to the circumstances and needs of the Chinese, thus making the development meaningful and sustainable.      

How the model was developed

The Chinese development model was developed during the post-Mao Zedong Era under the auspices of his successor Deng Xiaoping. Xiaoping used the failures of the previous reform initiatives and the successes of the soviet and western models to come up with a model that was uniquely Chinese (Kurlantzick 2013). 

During the Mao Zedong era, China was experiencing poor economic development characterized by low productivity under the centrally planned economic development model (Morrison 2014). The Great Leap Forward policies of the 50’s and 60’s had caused the Great Chinese Famine in which millions of Chinese died after the attempt to transform the country from an agrarian economy to a socialist society through swift collectivization and industrialization resulted in an economic and social disaster. In the 60’s and 70’s, the Cultural Revolution launched by Mao Zedong to preserve communism failed by causing massive political unrests and deaths as the government sought to rid the society of Chinese traditions and capitalism (Hirst 2015). Both events caused the regression of the economic development of the country and impoverished many Chinese (Morrison 2014). To remedy these failures and return back to economic development, Xiaoping, led the Chinese Communist Party to formulate economic and social reforms that would undo the past failures and spur the accelerated development of the country. These reforms also aimed at bringing the Chinese development to par with that of the United States and the United Kingdom within 15 years. The model that emerged from a series of meetings at the Central Committee and National Congress borrowed from both capitalist and socialist principles was a development model with a Chinese character (Hirst 2015). These meetings considered the problems and aspirations of the people, and the decisions made were arrived at democratically. Xiaoping presented his model as a paradigm shift from traditional capitalism and socialism, which after the consensus of the CCP, was adopted as the official model.

Several specific considerations informed the Chinese development model. Firstly, capitalism and liberal democracy were unable to foster political stability and rapid development because considered too many diverse interests. These systems tend to favor the powerful and elite few at the expense of the poor majority and slow the decision-making process, in turn slowing down the implementation of unified development policies. Secondly, planning, which was the hallmark of socialism, was crucial in taming the market forces without compromising competitiveness, which was pertinent for economic growth. Therefore, the Chinese government decided that capitalism and socialism could coexist in a framework known as the socialist market economy (Esmail and Shili 2018). As such, the government could leverage its immense resources, collectivist culture and Confucianism values to formulate that development model that can give the country a competitive and comparative advantage over the neoliberal capitalistic model employed by western countries or the authoritarian capitalistic system used by the countries such as Singapore, Hong Kong, Taiwan, and South Korea also known as the Asian tigers (Poon 2014).

Reasons for the successes of the Chinese development model

The success of the Chinese model is pegged on its pragmatic approach, experimentation, and gradual but incremental improvement and implementation. Specifically, the Chinese government has realized that being flexible and adaptable effective in delivering development. Besides, learning from past challenges and failures allows for the development and implementation of more realistic reforms. This is premised on the realization that development is an incremental journey rather than a destination or a fixed state. For instance, China began its developmental journey by intensifying industrialization through the use of its resources and savings. However, to keep pace with technological advancements that were increasingly influencing industrial processes, China sought to attract foreign direct investments (FDI). Foreign investors were allowed to entered into joint ventures with state-owned corporations in strategic sectors such as the telecommunications and manufacturing industries (Morrison 2014). Similarly, the government has invested heavily in education, particularly in the field of science and technology, leveraged the savings in the country to fund capital-intensive projects and entrenched a diligent work ethic. These are characteristic of the Chinese culture that is based on Confucianism (Zhao 2014). This allowed the Chinese government to develop the internal human and technical capacity of the country to venture into fields that are relevant to the modern economy. Also, the diligence of the Chinese was directed towards economic and social progress. Consequently, the Chinese economy can compete favorably in the technology and manufacturing sectors in the global arena alongside other highly developed economies.    

Besides, the Chinese development model has no reference template or precursor model. Therefore continuous experimentation of innovative approaches helps identify the policies that work best for the Chinese situation and environment. For instance, China experimented with the authoritarian control of the market, including the fixing of prices as prescribed in the soviet-based socialism. However, after realizing that this approach stifled competition and stunted productivity and development, the government relinquished some of its state control to the market forces while retaining the most successful enterprises as state corporations. This saw the government set up special economic zones in which productivity could be enhanced, and local industries could grow (Zhao 2014). In addition, the country redefined development differently from the traditional approaches and keeps redefining development concepts in cognition of changing approaches, with innovation, coordination and sharing being emphasized (Kuhn 2016). This demonstrates that experimentation with different levels of state control can reveal which level delivers the speediest economic development under the prevailing conditions. In this case, the state control of large and successful corporations is strategic sectors of the economy can guarantee a focused state-driven development agenda (Kurlantzick 2013).        

Moreover, since the development model is still work in progress, the Chinese government has learnt to implement pieces of policy that they are most familiar with and are simple. In turn, it gains experience to implement the more complex ones as time progresses. For instance, the CCP started introducing a new type of its own form of democracy by having an elaborate selection process for identifying highly talented individuals from all over the country, a social consultation process that was intensive and extensive, and a democratic supervisions mechanism (Li 2015). However, with time, the existing system revealed structural defects that lacked checks and balances and in which the roles of the market and the state were enmeshed. From these lessons and feedback, CCP is able to formulate more comprehensive reforms to address these deficiencies, thus advancing the democratic structure of the country. This is an example of how the Chinese development model has managed to infuse western governance ideologies and managerial systems into the development policies that started from selection processes to institutional reforms to support the customized democratic processes (Esmail and Shili 2018). Selection is a typical socialist approach that the Chinese government was already familiar with and therefore, easy to implement. However, institutional reforms that have modern governance structures are more complex reforms that required a positive experience with the selection process alongside the unearthing of more complex issues more complex solutions.   

Conclusion

The Chinese development model has unique Chinese characteristics that reflect a hybrid of western capitalism and Soviet socialism. The China Communist Party and the leadership of Deng Xiaoping set off on a journey of reforms to correct the mistakes and failures of the centrally planned economic development model that was in effect during the Mao era by coming up with the socialist market economic model otherwise known as the Beijing consensus. This model was formulated and adopted after the presentation of development ideologies by Xiaoping, a lengthy deliberation at the different levels of the Chinese political structure and its unanimous acceptance by the China Communist Party.

The Chinese development model pursues economic liberalization instead of political freedom because the more pragmatic social development is valued above capitalistic development in the Chinese society. This discussion has dwelt in explaining the development of the model and the reasons behind its successes. Notably, the rationale behind China developing its development model was that capitalism and socialism could coexist and deliver economic and social development in China. Specifically, the democratic processes, managerial systems, and governance and institutional structures that are characteristic of the western neoliberal capitalistic development model were fused with the Confucianism values of human excellence and aspirations associated with socialism to deliver a development model that provided China with the comparative and competitive advantage it needed to operate on the global stage. The successes of this model originate from its responsiveness to the prevailing circumstances in Chinese and global environments due to its flexibility and adaptability. The model incorporates innovative approaches that are tested in the country and gradually scaled up if they are successful. As such, the model undergoes continuous and incremental improvement through a learning mechanism that enables it to deliver economic development continuously and sustainably. Moreover, the model is centered on pragmatism that allows it to deliver development realistically.           

Bibliography

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Hirst, Tomas 2015. “A brief history of China’s economic growth.” World Economic Forum. https://www.weforum.org/agenda/2015/07/brief-history-of-china-economic-growth/.

Kuhn, Robert Lawrence 2016. “China’s five major development concepts.” The Telegraph. https://www.telegraph.co.uk/china-watch/society/chinas-five-major-economy-development-concepts/.

Kurlantzick, Joshua 2013. “China’s model of development and the ‘Beijing Consensus’.” China US Focus. https://www.chinausfocus.com/finance-economy/chinas-model-of-development-and-the-beijing-consensus.

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Morrison, Wayne M. 2014. China’s economic rise: history, trends, challenges and implications for the United States. Congressional Research Service https://www.digitalcommons.ilr.cornell.edu.

Poon, Daniel. 2008. China’s development trajectory: A strategic opening for industrial policy in the South. No. 218. United Nations Conference on Trade and Development.

Zhao, YuKong 2014. “What drives China’s success?” Forbes. https://www.forbes.com/sites/realspin/2014/10/02/what-drives-chinas-success/#7b033bd65852.