29 December 2019

Wither China?

China presents serious paradoxes for conventional wisdom in both political theory and economic development. Here are some scattershot reflections on it.

On one hand, China has experienced immense rates of economic growth, year after year, without, so far, a really serious recession, and with huge infrastructure investments. It has built thousands of miles of high speed rail lines, major hydropower installations, and thrown up many cities as big or bigger than Denver in a blink of an eye.

Many countries have experienced the "demographic transition" associated with a shift from having a "Third World" economy to a developing one, with far fewer children per woman per lifetime. But, no other country has done so in such a forced, rapid and pervasive manner. Many countries have seen mass migrations from rural areas to urban ones to support economic development, but few have done so in such an intentional manner.

China's military has grown immense in scale and technology, almost despite itself. Unlike countries like Israel or North Korea, China's mobilization of active duty and reserve military personnel is not particularly intense relative to its population, nor are its defense expenditures relative to China's GDP. But, when you have roughly four times the population of the United States and an economy that is growing by leaps and bounds lifting more people out of poverty in the last generation or so than the rest of the world combined, that still adds up to lots of sailors and soldiers, and lots of advanced military equipment. It isn't that China has been particularly ambitious in its military build up either. Until the last decade or so, China's military technology, while sufficient to make it a "near peer" of the United States, has lagged behind the cutting edge of the United States, Japan, Western Europe and Russia. China doesn't really have a "blue sea navy" and is trying merely to be regional power militarily, not a global policeman that isn't designed to fight medium sized wars many thousands of miles from home for prolonged periods like the U.S, Russian, British and French militaries.

Chinese Communism diverged early on from the style of communism found in the Soviet Union and Eastern Europe. In some ways, it was even more pervasive and disruptive of prior institutions than Soviet style communism. But, it was also more conscious of public opinion, less bureaucratic and established a loose approximation of Western style market based capitalism in its economy much sooner than the Soviet Union and Eastern Europe did.

Soviet style communism collapsed dramatically in the matter of a few years, and also immediately converted from a system of state managed enterprises to the kind of oligarchic, ill regulated developing economy that i more characteristic of Latin America or South Asia. Organized crime surged at that same time, built on the records of decades of unavoidable corruption to circumvent state institution mismanagement of the economy in the Soviet era. And, the long term effect have been a devastating and prolonged recession so bad that deaths of despair, especially among men, have surged so much that life expectancies have plummeted.

In contrast, China's economy has been transforming gradually since the end of the Cultural Revolution (basically since about 1980). It now has property rights, but they are weaker and less absolute than elsewhere in the world, for example, with very weak protections from exercises of eminent domain. Corruption is pervasive, but, to a great extent this corruption is firmly entrenched in the very fabric of mid-level to senior level executives in business and government alike. Break neck economic growth, with an emphasis on construction, manufacturing and mining in ways that have leapfrogged intermediate stages of technological innovation by copying progress previously made by others, has allowed poor decisions in the financial sector and in business management to go unpunished as a rising tide lifts all boats.

But, unlike elsewhere, where economic growth has led to more transparency and firmer rule of law, and to greater freedom of expression and political rights, in China, the pervasiveness of heavy handed government control of the media and private political, academic, social and religious expression would put the world of 1984 to shame. China has somehow managed to do that without squelching economic growth, despite the fact that unlikely most totalitarian regimes, China's economy is not predominantly based upon the exploitation of natural resources and instead requires broad based enthusiastic and relatively decentralized efforts for a large, skilled and semi-skilled domestic urban labor force.

China has also taken rather draconian steps to reduce ethnic diversity among its ethnic minorities who are small percentage-wise but large in absolute number and approach genocidal levels.

Meta Footnote: This is the 9,750th combined post at this blog and its sister blog, Dispatches From Turtle Island.


neo said...

since you're a liberal, who supports socialism of bernie sanders

what do you think of communism, which comes after socialism.

andrew said...

Complicated question.

First of all communism does not come after socialism. Can't think of a single example of that ever happening. Communism is much more likely to follow monarchy, military dictatorship, or a newly adopted Western style democracy.

Second, Democratic socialism of the type espoused by Bernie Sanders is hardly that radical and not a bad thing. Most of nicest places to live in the world have significant Democratic Socialism.

Third, Soviet style Communism and Maoist Communism such as that found in China, diverged greatly at the outset and further diverged over time. Modern Chinese Communism is a kludge of traditional Confucianism, klepto-capitalism and a local conception of Communism that have been less communism and more market based over time.

Chinese style communism today is very economically successful which has produce lots of positive outcomes, but a lot of that is due to the ability to leapfrog development by copying other nations that are more economically developed, rather than by trying to economically develop at the margins with entirely new innovation.

The totalitarian aspects of Chinese Communism are still pretty horrible and China is exhibit number one in the case that human rights and rule of law and democracy are not necessary in a modern, non-natural resource based economy, that many political economists had previously assumed was an iron law.