Saturday, May 09, 2009

Is there a China model?

Speaking of interesting conferences, check out this one hour documentary on a recent meeting between Chinese and Western intellectuals. I found this while searching for an interview with Azar Gat, whose book War in Human Civilization I am now reading.

The two most outspoken Chinese professors, Cui (Tsinghua) and Wang (CUHK), are fairly aggressive in stating their view that the Chinese government is pragmatic and highly competent. However, they didn't fully address the issue of legitimacy in the absence of elections. Reliance on polls and performance indicators presupposes that they are instituted in an honest and effective way.

It's odd that all the Chinese academics seem to agree on the main points -- I am sure it would not have been difficult for the organizers to find some dissident perspectives, highlighting problems like corruption, misallocation or resources, social unrest, etc. Still, the overall impression is that few China experts doubt the stability of the current system.

At one point Cui notes that (extrapolating current trends) by 2020 the per capita GDP of 300 million urbanites on the eastern seaboard may equal that of Portugal, accounting for a total GDP roughly that of the EU. His numbers seem a bit aggressive, but not totally crazy; see here and here.

Is there a China model? -- a video documentation of a China-West Intellectual Summit.

...Can we now speak of a Chinese model, an authoritarian capitalism, which perhaps can even inspire others, in particular now when the crisis that has emanated from the USA drives many people to a critical view of the West?

Glasshouse Forum assembled prominent academics from China and the West at Maison Louis CarrĂ© outside Paris on 23-24 February 2009 to an intellectual summit on the theme “Is there a China model?” In the video documentation which Glasshouse Forum has produced in cooperation with the production company Edinim, we can follow the occasionally tense debate, moderated by Gideon Rachman of the Financial Times, on the issue of whether there is such a model and whether the rest of the world, including the West, might have something to learn from it.

It is significant that no one at the meeting subscribed to Fukuyama’s theory on the end of history. No one saw any signs of China adopting liberal democracy. It was also evident that the Chinese participants considered China to have good prospects to overcome the global economic crisis.

This documentation gives fascinating and thought-provoking insights into what may become the political landscape of the future.

The participants in the film are: Gideon Rachman, moderator of the summit and Chief foreign affairs columnist for the Financial Times, Timothy Garton Ash, Oxford University, Daniel A. Bell and Zhiyuan Cui of the Tsinghua University in Beijing, Azar Gat, Tel Aviv University, Simon Long, Asia editor for The Economist, Vivienne Shue, Oxford University, Shaoguang Wang, Chinese University of Hong Kong, Feng Zhang, The Foreign Policy Centre in London, Wei-Wei Zhang, Centre for Asian Studies in Geneva and Fudan University in Shanghai, and Yongnian Zheng, National University of Singapore.

Gideon Rachman described the meeting as follows (comments are also good):

Chinese views of the crisis

February 25, 2009 11:11am

I have just spent a fascinating couple of days, closeted with some Chinese academics in a house outside Paris, at a seminar organised by Sweden’s “Glasshouse Forum“.

Several of the assembled profs were members of China’s “new left” - people like Zhiyuan Cui, an economist from Tsinghua University and Shaoguang Wang of Hong Kong university. I was surprised by how confident they seemed. The consensus seemed to be that China would weather the global economic crisis better than most - and that the Chinese political system is sufficiently robust to withstand higher unemployment and slower growth. One of the participants pointed out that in the late 1990s, 60m Chinese people had been thrown out of work in the aftermath of the Asian economic crisis and the restructuring of China’s state-owned enterprises. But the country’s long-term trajectory remained ever upwards.

Another participant joked that China had discovered that whatever country it models itself on is doomed. In the 1950s China had modelled itself on the Soviet Union; in the 1980s there was a fashion for imitiating Japan; and more recently, there has been a fascination with American capitalism.

It was a nice joke that I think contained a broader insight. Western analysts tend to measure China’s economic and political progress by asking - are they becoming more or less like us? More democratic, more free-market; or more authoritarian and state-directed?

The Chinese participants seemed to be arguing that their country was finding its own unique way to modernity. Zhiyuan Cui was keen on the idea of a “socialist market economy”, which allowed space for both private enterprise and for a large and profitable state sector. The new left generally believe that socialism remains a genuine ideal in China - and not just a rhetorical hangover from a bygone age. Others, in particular, Daniel Bell - a Canadian who teaches philosophy at Tsinghua - reckoned that the Confucian tradition was increasingly important in modern China.

And Zhang Wei-Wei, who used to be Deng Xiaoping’s translator and is now a professor at Fudan University, argued that the idea that legitmacy is conferred on a government by elections is a western-obsession. The Chinese believe in “performance legitimacy”. If the government governs well, it is percieved as legitimate.

I am sufficiently western to find this not entirely convincing. And I am not sure what kind of results the Chinese government will be able to produce, in the face of a world-wide slump.

See also this related LSE discussion (podcast), particularly Chen Jian's comments in the last 20 minutes or so:

Rising Asia in the World Crisis

Asia’s rise has brought about profound changes to the international system and the current world crisis presents the continent with both opportunities and challenges. The initiatives and responses by Asian countries, China and India in particular, have the potential to define the world’s path of development now and in the future.

Chen Jian holds the Philippe Roman Chair in History and International Affairs at LSE IDEAS for 2008-09 and is the Michael J Zak Chair of the History of US China Relations at Cornell University. Danny Quah is head of department and professor of economics at LSE. Athar Hussain is director of the Asia Research Centre, LSE.


Seth said...

Thanks for the link. I worry that the China model is more Lee Kuan Yew than Uncle Sam. Friedmanite Economic Determinism -- the idea that economic freedom creates political freedom -- isn't much better than Marxist Economic Determinism. The main difference is believing that economic forces will drive all societies to the Liberal Democratic Ideal (a la Fukuyama) rather than to the Communist Ideal.

I see no reason to have such confidence that the dynamics of human society has such a simple (and singular) attractive basin. Power is sought, power will maintain itself at great cost, and only a strong cultural expectation of its voluntary surrender (eg after an election) can consistently prevent it from maintaining itself to the point of civil war. (Occasional imperial retirements, like Gorbachev or Charles V, are interesting cases to consider, but they are rare and hardly disprove the general point.)

I don't trust the China model of 'benevolent' corporate authoritarianism precisely because it amounts to the same thing as letting your life be run by the management of GM (or pick your company). Once upon a time, GM was a leading company which attracted lots of talented young people and did reasonably creative things. Those days are looong gone. So maybe China is currently more like Microsoft, or even (to be generous) Google. But those companies, too, are totally unequal to the task of managing anything beyond their own industrial niches. And they lose their touch pretty quickly.

There has to be a model of succession that allows for disruptive change to be championed from outside the established channels. That means pluralism of *some* kind. Elections are perhaps the most radical form: any idiot could be elected (whom could I possibly have in mind?), but at least he has to step down on a set timetable. At least we don't have to endure a mediocre king's pathetically incompetent offspring on the throne for a whole lifetime. (Kim Jong-il?)

Seth said...

There is an interesting parallel between my view of the China model and a comment you made in the Econophysics meeting at Perimeter.

Your observation was that maybe an unregulated financial regime is justified as a "high variance, high return" strategy. Yes there are crashes, maybe you address them with social insurance, but the consistently higher return is worth the higher volatility. I'm not sure I'm persuaded that this is true, but it's a fair argument which deserves examination.

One can think of Chinese political attitudes as broadly similar to those on the pro-regulatory side of the financial debate. China seems to view elections as dangerous because of the 'social pathologies' of American or European culture. We're too willing to run crazy risks just for the sake of getting to elect people who turn out to be really stupid and incompetent. It looks like a really lousy bargain.

And for a country with huge growth and apparent political stability, they probably feel pretty confident about this approach. High returns, low variability. But just as this is the "Ponzi signature" in a time-series of investment returns, I strongly suspect that such political 'returns' conceal a great deal.

But if you take politically respectable Chinese intellectuals to a house in the polite suburbs of Paris, you'll find they're all "investing with Bernie". Quelle surprise! I'm a bit disappointed that the "Westerners" weren't a bit more willing to challenge their complacency. They were all a bit too humbled by events for that, I suspect. Not the best time to seem to be lecturing our Chinese guests about governance ;)

Steve Hsu said...


Thanks for your thoughtful comments.

I think the tradeoffs of an authoritarian governance model can be similar to the laissez faire (high avg. return + occasional crisis) economic strategy: superior efficiency at first, but problems with succession and the possibility of a bad apple taking power.

BTW, my comment at the end of Doyne's talk wasn't meant to endorse a laissez faire system, but simply to point out we can't be 100% certain that it doesn't provide a better bargain in the long run, even given the current crisis. I tend to agree with Doyne's conclusion, but just want to ascribe a lower certainty to it.

Unknown said...

Has there ever been a "libertarian" political tradition in China? What do they think of hard-core Ayn Rand ideas, "taxation is theft", seasteading, etc?

Ian Smith said...

"legitimacy in the absence of elections"

well I do know that elections do not give legitamcy.

"freedom and democracy" is ideology. that's all it is. that's all it has ever been.

the chinese have never had a bourgeoisie!

zzzhou said...

The PRC is not really a nation state; it holds on to substantial inherited imperial possessions. About 40% of its area is outside of traditional China proper. What's a good example of a long term stable, liberal democratic, multi-national state?

The American model is a great, self-stabilizing system, but the Civil War did take place. It shows that there are limits to the level of division/polarization that regular elections and such can reconcile.

For things to work, one key requirement is a strong common identity. We've seen cases where open elections help forge such an identity, and cases where they threaten to tear countries apart. As a nation-building exercise, it's a crapshoot.

What really build a common identity are shared, positive, formative experiences. A successful general election, in which everyone is happy with the outcome, is certainly a good example. International sporting events, a Chinese obsession, can help too. China's economic rise might be another one of such experiences for its populace.

Dog of Justice said...

About 40% of its area is outside of traditional China proper.Yes, but that area is very sparsely populated and is less technologically developed than the heartland. The analogy to the US would be territory formerly possessed by the American Indians, not the Confederacy.

(That said, I am in favor of China leaving Tibet alone; Han Chinese simply aren't biologically adapted to living at such altitudes. I remember reading that the miscarriage rate of Han Chinese women in Tibet was very, very high. The only rational reasons I see for China staying in there are (i) natural resource rights and (ii) national pride. (i) should be negotiable, and I have little sympathy for (ii) when it's the Communist party's own fault for indoctrinating its people in such a way that they won't even accept "concessions" that are basically Pareto improvements.

I do support Han colonization of Xinjiang. That is one of the better ways to weaken Islam and/or force it to modernize.)

Also, outstanding comments STS.

Dog of Justice said...

well I do know that elections do not give legitimacy."freedom and democracy" is ideology. that's all it is. that's all it has ever been.No. Democracy may be commonly misunderstood, but it's not just ideology. It's like an agreement to count everyone's troops before a war and declare the largest army the winner. The most powerful military force, knowing in advance that that's how victory will be determined, will more likely than not be able to gather the numerically largest army... or if it can't this time around, it might be able to do so by the next election.

So you're likely to get the same outcome as actually fighting a civil war... except you don't destroy half your capital stock. This is a really big deal.

Democracy is a fairly bad method for setting public policy. But that's not really its job. The US was founded as a democratic republic, not a pure democracy, because the Founders understood this.

George Shen said...

Interesting forum indeed. Good discussion but I am very surprised that nobody talked about the HongKong model before the China model.

HongKong was not a democracy under the British but prospered nonetheless. It is the favorable economic and tax policies that mattered more than political policies. The Chinese study the HK model more than people from West realized. The Cantonese learned a lot from HK model and Deng appraised its economic policies and gave thumbs up during his famous visit to the region in 1980s. Then Shanghainese learned from Cantonese model, the rest of them are all copy cats. I believe HK model triggered a paradigm shift in the economic policy making in China. Very surprised that these so call experts never discussed this at all.

Mr Zhang's view on China may be overly optimistic from the West point of view. And I agree. But I am also sufficiently eastern (or precisely Chinese) to find the prevalent view in West that democracy has to be the prerequisite to economic prosperity not entirely convincing. My own view that is China will once again change fundamentally in next 10 to 20 years. I would not be surprised if there is more political transparency and accountability.

One thing I totally agree with Mr. Zhang is that new invisible walls have been built after the fall of Berlin Wall. The whole West need to be less ideological and more pragmatic when they approach China.

Seth said...


Good point about Hong Kong as the source of the model. The fact that Britain had a hand in the development of that hybrid model is quite a salient point. It's a subject which deserves close attention. Some enterprising economist/journalist should write a book about that. I'd pre-order it on Amazon ;)

"the prevalent view in West that democracy has to be the prerequisite to economic prosperity not entirely convincing."

The view that is common in the West is what I termed "Friedmanite Economic Determinism" (after Milton and Rose Friedman, whose "Free to Choose" popularized the idea). It is not quite the same as your statement: political freedom is a prerequisite for economic freedom. This places political freedom as something that has to happen before economic freedom. That is clearly false, which might explain why you disagree with it ;)

Rather, Friedman's view is that economic freedom causes political freedom. And the usual conclusion drawn from this assumption is that we needn't bother pressuring authoritarian governments to liberalize. That will just happen automatically if we make nice and trade with them. Let's just say Friedmanite Economic Determinists don't get nervous when they hear about the sarcastic remark attributed to Lenin that "the capitalists will sell us the rope we'll use to hang them."

"My own view that is China will once again change fundamentally in next 10 to 20 years. I would not be surprised if there is more political transparency and accountability."

This sounds like you find Friedman's view intuitively plausible. But I wonder how you expect this to come about? Is it because the new middle class will demand political power (ie. the Marxian view of bourgeois revolution overthrowing aristocracy)? Or something else?

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