The western world has been forced to pause when confronted with the enigma that is China’s political economy. The labyrinth of the northern orient creates at best confusion, at worst a dilemma when one attempts to describe and understand the truth behind the “bamboo curtain.” If the waters were not murky enough, the Communist Party of China released a communique, outlining its bold aims for reform.
A general theme can be gleaned. The bulk and by far the most important reforms are aimed toward the cornerstones of capitalism, private ownership and labor liberation. So the debate becomes what exactly China’s political economy is, especially in light of such capitalistic reforms. I would argue that the definition and eventual economic results of the system China will have in place could be one of the most important questions of this young century.
The reforms include the relaxation of the one-child policy. China harbors an ever-aging population and one of the worst gender gaps in the world. By 2020 it is estimated that 35 million young Chinese males will be entirely without the prospect of a female mate.
They will reform the welfare system. The original law was put in place to stave urban overcrowding and the drain on valuable city resources. Now, though, citizens that migrate from the rural to urban communities must forfeit all rights to public services.
Furthermore, considerable strides are being made in agriculture. Under the current body of law, all land is federal. Farmers are thus seen as tenants, and, as a consequence, they have not had the luxury of using their land as collateral. This will now change. Though the national government will ultimately retain ownership, it will empower tenants to receive the benefits as if they actually owned the land.
You see, the western mind believes that “the end of history” has already passed. Let me explain. If we interpret history as a chronology of events building toward the final outcome of the best political, social, environmental, moral and economic system, then, arguably, the edifice has been reached in liberal democracy anchored in laissez faire.
Yet, now China approaches with the ability to break the entire paradigm. For China cannot be classified as strictly a completely control-oriented economy, yet neither can it be classified as an open economy.
And if it remains someplace in the middle (capitalism with so called Asian values) we must conclude, through the traditional lens, that China will continue to reform until it reaches a fully distilled embodiment of free enterprise and liberal democracy. Because the distilled is more powerful than its alternate, case in point the Albanian drinking tradition, and so it must always win out if economic progress is the goal.
However, perhaps the unbelievable growth we have witnessed in China has strictly occurred because it does operate somewhere in the middle in a kind of awkward marriage of collectivism and capitalism. If such were to be the case, the western world would have to rethink the fundamental beliefs that stand guard over our precious liberal democracy. Perhaps history need begin again.
cgerst@indiana.edu
