Abstract
This book is based on a study of ‘the momentous transformation that has taken place in China, especially in rural China’, since the launch of reforms by Deng Xiaoping in 1978. Interestingly, the very disclaimer of the author that this not a work of an economist ‘but by a student of politics interested in development studies and social systems’, assures a comprehensive framework. In an attempt to restore some balance in development discourse, the author does a kind of ‘walking on two legs’, one that treads along the issues of justice, equity, participation and sustainability in building a better society, and the other along the nature and magnitude of economic growth that can foster them. This is sought to be done in three ways, first, by recognising the many achievements of China in the course of reforms; second, by acknowledging serious problems that people and the regime confront; and third, more importantly, by pointing out reasons as to why efforts to tackle problems along the reform path continued to face hurdles. The study systematically unfolds that the structural logic of the chosen development path has been too powerful to allow policy initiatives to successfully address problems such as inequality and unsustainability.
The study has an ambitious objective of not only an assessment of the Chinese development path but also presents a critical perspective on global development history since the European Industrial Revolution by keeping in mind questions relating to new challenges and civilisational issues raised about contemporary development theory: the questions raised in political science on freedom, equality and justice, and the questions in contemporary Marxism on socialism in eliminating class and caste and establishing new relations of harmony between humans and nature and practicing democracy at all levels.
Methodologically, the book has certain distinct features. The author is conversant with both Mandarin and English, and thus has accessed extensive sources that include official reports, documents and other studies. The other dimension is that besides an extensive analysis of macro-level policies and processes, there is a detailed micro-level view of the development process based on fieldwork in Wuxi, where the author made nine visits over a period of thirty five years between 1979 and 2016. The study thus has been a labour of love.
Besides the introduction, the book is divided into three parts. The first sets out China’s reforms, with one chapter providing an overview of reform strategy since 1978 and the other focussed on the grassroots level in rural Hela in Wuxi district of Jiangsu province. The second part looks at the agencies of reform, namely the state and the party which formulate and implement reform policies. The third part is on the performance and impact of these policies on people in certain specific spheres. While the first two parts decode ideological and political formulations like ‘socialism with Chinese characteristics’—a state-guided market economy with its many unique features—the last part concentrates on the policy effects on peasants, workers and women as well as on people’s health and education.
The ‘reforms and open door’ policy unveiled by Deng Xiaoping in 1978 was guided by two principles’ and the author characterises one as negative and the other positive. The negative dimension refers to the rejection of the Mao’s era ‘great leap forward’ based on ‘people’s communes’, and the ‘Cultural Revolution’, that denounced the market. The positive aspect includes economic reconstruction with high levels of growth by mobilising all resources at home and abroad, and doubling of per capita income every ten years from 1980 onwards. The strategy was spelt out in the now famous Deng’s pronouncement of implementation through ‘wading through the river by feeling for the stones’. And of course several more slogans like ‘emancipating the mind’ and ‘seeking truth from facts’.
The unfolding of reform policies and processes are broadly divided into four periods, each of it also marked by shifts in leadership and an emphasis on strategies, but without any fundamental deviation from reform principles. The first period (1978–1992), broadly under the spell of Deng’s leadership begins with a focus on ‘four modernisations’ enveloping agriculture, industry, science and technology, and national defence. By the mid-1980s, the ‘household responsibility system’ (HRS) through dismantling communes in agriculture, and the town and village enterprises (TVEs) in the rural non-farm sector became a mechanism of not only a link between farm and non-farm activities but also as institutions to ensure a rural–urban balance in development in which lay the foundations for improved productivity and faster growth. The second phase of reforms (1992–2002) under the leadership of Jiang Zemin prioritised faster industrial growth through a shift to private, including foreign, capital, export promotion and urbanisation. This was the period during which the Communist Party of China (CPC) adopted in 1997 Deng’s ‘Theory of building socialism with Chinese characteristics’ as the guiding doctrine of reforms. By the end of the period, several imbalances like urban–rural and other disparities surface. In the next phase (2002–2012), Hu Jintao reorients the strategy with an emphasis on balanced development with a focus on social justice and sustainability. In the fourth phase (2012–2017), Xi Jinping takes the balanced approach further under what is referred to as the ‘new development philosophy’ that emphasises ‘four comprehensives’—balanced, open, green and shared development.
The state and the party are agencies for the implementation of reforms. While the agency of the state is to provide efficiency, the party is the source of legitimacy rooted in history. Though the basic characteristic of the Chinese state is unitary in nature with centralised power, ‘it is at the village level where the State and society merge and crucial political formation in the power structure takes shape. Cadres acquire experience, first at this level before they move on to higher organs’ (p. 134). There are hardly any detailed studies on the governance process at the local level. This study fills that gap taking advantage of a grassroots field study extending over thirty years. By focussing on the local political process, it serves as a useful window and guide to understand the macro-political process as well. Besides three chapters which are entirely devoted to grassroots reforms and the local state, ‘the success story’ and the ‘success trap’ as they are reflected in the village/township level are also captured in the narratives of other chapters.
In a sense, the success story of China has become a legend of recent times. Here is a brief account of the macro and micro dimensions of success as it unfolds in this study. Surpassing all expectations, China achieved an average annual growth rate of 9 per cent for twenty years between 1995 and 2015, an achievement unprecedented in global development history. The level of per capita income went beyond the target visualised by Deng and more than doubled every ten years since 1980. Not only did it emerge as the second largest economy of the world by 2010, but also became the world’s number one producer of steel, coal, electricity, cement, chemical fibres, woven cotton fabrics, TVs. Its progress in the Human Development Index (HDI) has been equally remarkable. The book goes on to show in detail changes visible in the countryside. Rural per capita income increased almost twenty times, wage share increased substantially and rural poverty declined to less than 6 per cent. While these facts are also corroborated by several other studies, the book makes a significant contribution by way of recording the nature of transformation at the grassroots level based on the data accumulated through repeated field visits to Wuxi. Wuxi, located in the country’s eastern belt, its transformation was much more spectacular. Between 1981 and 2010, Wuxi experienced an average annual rate of growth of 16 per cent. Its workforce structure changed drastically with the share of agriculture declining to just one-tenth from more than 50 per cent to a little over 5 per cent, industry became principal source of employment with a share of 56 per cent, followed by services with 39 per cent. Wages which were stagnant during 1952–1977 increased by forty times by 2001.
The very success based on the strategy of ‘reform and open door’ that led to the entry of private capital driven by the expansion of market forces brought challenging problems that threatened the very socialist characteristics. By 2012, the CPC had to openly pronounce that unbalanced, uncoordinated and unsustainable development was a big problem. Inequalities of income increased, and the Gini ratio increased from 0.30 in 1982 to 0.49 by 2008. Regional inequalities increased. The HDI of coastal areas was five times more than Western provinces. There were serious environmental pollution problems with the country becoming the world’s number one emitter of CO2. Urban–rural income disparities soared to a ratio of 6:1. By 2003, ‘three rural problems’—low productivity due to a rapid depletion of natural resources and degradation of soil due to chemical fertilisers resulting in the low income of peasants and massive migration; diversion of agricultural land for commercial purposes; and poor rural infrastructure—showed the neglect of rural areas. There were about 300 million rural migrant workers in cities without any enrolment for housing, health and children’s education facilities. The trends towards the privatisation of health and education facilities aggravated rich–poor differentiation. Of the several contradictions that emerged during the ‘reform’ period, which the author characterises as the ‘success trap’, it is ‘women who hold up half the sky’ who receive special attention (a full chapter) in the book. Based on the Wuxi field study, the author observes that by 2010, ‘China’s success trap in respect of women’s development had become even more conspicuous’ (p. 293). Though women were part of the increased prosperity that this high growth brought about, in all the high rises, from apartments to income, were signs of an adverse sex ratio, wage disparity, inadequate political representation—indicators of an iniquitous gender situation or as the writer says, ‘clouds in half the sky’.
While the success story, and to an extent the contradictions the success has thrown up, have been the theme of much literature on Chinese development, the thrust of this book is to unravel the morphology of the reform process which changed the character of ‘market socialism with Chinese characteristics’, which resulted in what the author calls ‘the success trap’. As pointed out earlier, the emphasis in the first phase of reforms (1978–1992) was on modernisation and creating institutions to build agriculture–industry linkages at the grassroots level and ensure a balance between rural–urban regions. But by the end of this phase, the growth obsession shifted its emphasis towards industry and urbanisation which produced a capitalist class consisting of a spectrum of managers, professionals, shareholders and business people. The turning point comes in 1992, when Deng, in his now famous ‘Southern speech’, exhorted that there was no need to fear capitalism in China, and that it will be guided by the CPC. Going further, Jiang Zemin opened party membership to the capitalist class in recognition of their contribution to the Chinese economic rise. This class was closely integrated with the Western economic processes and part of the global capitalist system. These interest groups thus get intertwined with the party and the state system. This entrenched structural character that evolved along the reform path has resulted in an imbalance where forces of market economy tended to trump the elements of socialism, and pushed the country towards high growth, increasing inequality, corruption and alienation and environmental degradation. It is this situation, the author characterises as the ‘success trap’ from which, the he feels, it is very difficult to come out.
As one reads through the text, the strength of these conclusions arises not only on the basis of analysis of the structural alignments of market, state and party at the macro-level but also from the detailed systematic field level observation of the institutional processes at the grassroots. Here, particular mention could be made of two institutional shifts, one from the ‘people’s commune’ to HRS, and the other relating to the rise and full of TVEs. And the detailed analysis of these two aspects account for almost one-fifth of the text. There is a graphic description of the shift in the countryside from the commune to the HRS and the restructuring of production relations. HRS did incentivise agricultural production, improve productivity, stimulate rural industrialisation and brought about a substantial increase in rural incomes, but it also brought privatisation, inequalities, new social differentiation and general neglect of collective welfare. ‘It had produced a new class of rich farmers and entrepreneurs who now operated in agriculture, industry and commerce, rural and urban economy and the production, as well as the administration processes’ (p. 55).
The TVEs had their origin as rural industries in the communes but on a very limited scale. With the shift to HRS and better procurement prices, peasant incomes increased and their collectives at the township and village level were encouraged to set up industrial enterprises. In 1984, these collective enterprises were designated as TVEs which acted as catalysts in China’s success story in the countryside by utilising the savings of peasant collectives, absorbing surplus labour by generating employment, by bringing about an integration of agriculture with industry and rural with the urban. TVEs supported public education and health and facilitated a degree of political participation. At an overall, TVEs ‘contributed enormously to the growth of peasant prosperity and development of rural economy’ (p. 203). But by the late 1990s, the collective nature of TVEs vanished and got transformed into small–medium enterprises as avenues for private investment and sources of profit. The abandoning of TVEs resulted in widening rural–urban inequalities, declining rural unemployment in the countryside, increasing rural unemployment and distress migration. The author feels that TVEs held a great potential to avoid the ‘success trap’ and indeed these could offer a lesson or two for countries like India to keep out of the ‘success trap’, and move towards ‘village and the city serving each other’ (p. 242).
One of the remarkable aspects that emerges out of the Chinese experience is that unlike elsewhere, there was a willingness shown by the Chinese leadership to accept mistakes, openly debate them at the highest level and come up with strategies to deal with these traps. For instance, the CPC General Secretary, Hu Jintao openly admitted in 2012 that an ‘unbalanced, uncoordinated and unsustainable development’ remained a big problem, and suggested correctives though a ‘scientific development outlook’. And the present leadership of Xi Jinping initiated a ‘New Development Philosophy’ that eschews the high growth obsession and accepts moderate growth as the ‘new normal’. He proposed ‘four comprehensives’ that emphasised a ‘balanced, open, green and shared development’.
The past experience of the growth path and the present pronouncements and commitments of leadership generate at once a kind of dilemma of scepticism and also hope. The scepticism runs like this: ‘The reform path of China is so grounded in the premises of the European Industrial Revolution, and it has generated so strong socio-political forces at home that a major change in the development path is unlikely’. But in the same breath, as it is pointed out, all indications show that China is emerging as a strong prosperous power with a capacity for grappling problems as they emerge. The book offers several lessons for a development strategy, but one major lesson for development theory that comes out is not only a rethinking on growth as development but also new thinking of development as a civilisational shift towards an equitable and sustainable world.