Would it be invitation to oversimplification if I asked if people on this list who hold a particular assessment or opinion of China, to put theirs forth in brief if possible?
..................
To a significant extent, my ideas about Chinese economic development have been shaped by David Harvey's analysis in "A Brief History of Neoliberalism" which I enthusiastically recommend.
Available via the Oxford Univ. Press:
Original URL -
Tiny URL -
...........
Here's a relevant excerpt from a quite good review of the book:
<snip>
The thing we are asked to conceive, therefore, is the way that uneven geographic development knits itself together into the dynamics of far-reaching crisis. The geopolitical Gordian knot that appears so clearly at the end of the book (particularly if you have also read The New Imperialism) is the one that intertwines the ever-expanding debt of the United States, the industrial boom of China and the coveted oil reserves of the Middle East. It would be interesting to hear an informed opinion on the chapter dealing with China's economic and social history, since 1978 when Deng Xiaoping began the privatization of state enterprises and agricultural collectives, and the opening of coastal cities to foreign capital. What's compelling for the ordinary reader is the way Harvey recounts a series of isolated experiments that gradually fit together into a coherent pattern of practice (indeed, all his historical accounts adopt this empirical approach). The Communist Party is credited with managing "to onstruct a form of state-manipulated market economy that delivered spectacular economic growth (averaging close to 10 percent a year) and rising standards of living for a significant portion of the population for more than twenty years." At the same time, the Party is hardly spared critique: "It almost certainly embraced economic reforms in order to amass wealth and upgrade its technological capacities so as to be better able to manage internal dissent, to better defend itself against external aggression, and to project its power outwards onto its immediate geopolitical sphere of interest" (p. 112).
The authoritarianism of Deng and the successive leadership is repeatedly stressed. But it is China's overwhelming growth that takes your breath away: 114 million migrant workers who have left the countryside for the city; a rate of urbanization of around 15% a year; foreign direct investment at 40% of GDP in 2002; automobile production of 250,000 a month in 2004 (mostly for internal consumption, and with ecological consequences one would rather not imagine...). A phrase from a New York Times report sums it up: "In 2003 China took '30 per cent of the world's coal production, 36 per cent of the world's steel and 55 per cent of the world's cement" (p. 139). One imagines endless highways, skyscrapers, shopping malls, airports. China is now the world's second largest oil importer after the US, with its hungry eye on all the world's reserves. This phenomenal growth stems from a pattern of strategically privatizing, profit-driven management, which broadly corresponds to that of the neoliberal state. "But in one respect the Chinese Depart glaringly from the neoliberal template," Harvey writes. And he continues:
"China has massive labor surpluses, and if it is to achieve social and political stability it must either absorb or violently repress that surplus. It can do the former only by debt-financing infrastructural and fixed-capital formation projects on a massive scale (fixed-capital investment increased by 25 per cent in 2003)...But all of this requires that the Chinese state depart from neoliberal orthodoxy and act like a Keynesian state. This requires that it maintain capital and exchange rate controls. These are inconsistent with the global rules of the IMF, the WTO, and the US Treasury.... The enforcement of capital flow controls is becoming increasingly difficult as Chinese yuan seep across a highly porous border via Hong Kong and Taiwan into the global economy. It is worthwhile recalling that one of the conditions that broke up the whole Keynesian post-war Bretton Woods system as the formation of a eurodollar market as US dollars escaped the discipline of its own monetary authorities. The Chinese are already well on their way to replicating that problem, and their Keynesianism is correspondingly threatened" (p. 141).
What plainly worries Harvey are the possibly violent consequences of a crisis affecting the US-China relation. For the two continent-sized countries are now the double engine of world productivity: as the one constantly struggles to consume what the other struggles to produce, domestic peace in both comes to depend on the continuity of what looks like a mad race to nowhere. Harvey, like Giovanni Arrighi and his collaborators, thinks that a major hegemonic shake-up--i.e. the displacement of the US from its now-fragile position as linchpin of the world economy--may well be in the offing. But he does not see any way this could occur peacefully:
"A peculiar symbiosis emerges, in which China, along with Japan, Taiwan, and other Asian central banks, fund the US debt so that the US can conveniently consume their surplus output. But this renders the US vulnerable to the whims of Asian central bankers. Conversely, Chinese economic dynamism is held hostage to US fiscal and monetary policy. The US is also currently behaving in a Keynesian fashion ? running up enormous federal deficits and consumer debt while insisting that everyone else must obey neoliberal rules. This is not a sustainable position, and there are now many influential voices in the US suggesting that it is steering right into the hurricane of a major financial crisis. For China, this would entail switching from a politics of labour absorption to a politics of overt repression. Whether or not such a tactic can succeed, as it did in Tiananmen Square in 1989, will depend crucially upon the balance of class forces and how the Communist Party positions itself in relation to those forces" (p. 142).
[...]
<http://www.turbulence.org/blog/archives/001529.html>
.d.