Why is China Booming? [Archives:2008/1133/Business & Economy]
By: John Delury
Providence, R.I. – China is now celebrating the 30th anniversary of the period officially known as “reform and opening.” Labeling time in this way echoes China's imperial history. During moments of political transition – a military victory, for example – the emperor might designate a special “era name” to help celebrate the good news. Or the court might test out a new era name after a political debacle, in an effort to wipe the slate clean. The last emperor of the Tang Dynasty proclaimed seven era names in fourteen years, as he sought in vain to “re-brand” his reign and avoid his regime's demise.
Deng Xiaoping began to champion “reform and opening” in 1978. “Reform” suggested a loosening of central controls on economic life, undertaken in a spirit of pragmatism and gradualism, as an antidote to Mao Zedong's ideology of “revolution.” Similarly, “opening” heralded the PRC's integration into the world community – especially the capitalist West. Deng's principles still guide policy today.
One must go back to the Qing Dynasty (1644-1912) and its 60-year era of “heavenly flourishing” ( Qianlong ) in the eighteenth century to find a comparable period of coherent political and economic policy. The era of “reform and opening” has outlived its “emperor” by more than a decade, and has been the common thread running through transfers of political authority from Deng to Jiang Zemin and Hu Jintao. Even the largest popular challenge the Chinese Communist Party ever faced, the demonstrations of 1989, now looks like a blip that helped Deng consolidate support for his model of development.
If one factor undergirds China's commitment to “reform and opening,” it is the extraordinary macroeconomic changes of the past 30 years. In China, people call it fazhan , or “development,” but in much of rest of the world, it is more commonly described simply as the “China Boom,” or the “China Miracle.”
The boom began in the countryside in the late 1970's and 1980's, and was followed by today's urban, industrial-led growth. Indeed, there have been many smaller “booms” – in consumption, foreign direct investment, domestic stock markets, trade, travel, overseas study, military modernization, and international diplomacy. There is also a boom in pollution and toxic waste, and booming interest in religion – from Buddhism to Pentecostal Christianity – and in Confucian philosophy. Little in China today speaks of moderation.
A leading fashion industry executive argues that a key engine driving the economic boom has been the influx of women into the workforce, particularly in the manufacturing zones of the south. Another compelling explanation comes from a venture capitalist who credits Chinese society with copious reserves of entrepreneurial energy that derives, he believes, from the fact that Chinese culture attaches very little shame to failing in a business enterprise. High tolerance for failure keeps everybody striving to succeed.
Whatever the cause, the boom seems an unlikely capstone to a century of war, ferment, and revolution, and only adds to the sense of discontinuity that characterizes modern China. Certainly, few observers looking in 1978 at the smoldering embers of the Cultural Revolution, or at the seeming ruination of the post-1989 years, thought China would emerge as the lightning rod of the world's developmental hopes.
Paradoxically, the apparently discontinuous and contradictory nature of the “era of reform and opening” may actually help explain how China's boom came about. The tumult of the Maoist period instilled in a broad cross-section of people a profound appreciation for stability, and a yearning to be left alone. Deng capitalized on this revolution-weariness by diminishing the role of politics and the state in people's private lives and freeing them to release their pent-up energy to pursue their own goals.
Revolutionary communism may well have cleared the path for the boom in other ways as well, suggesting that the shift from socialist utopianism to capitalist pragmatism was less a U-turn than a sequential process of “creative destruction.” After all, Mao's Cultural Revolution against “feudal society” did raze much of the cultural landscape, denuding it not only of traditional values and institutions, but also of failed socialist efforts, leaving China ready for the seeds of capitalist development.
Mao's revolution fueled countless rectification movements and campaigns that inverted the once-inviolate primacy of ruler over ruled, scholar over worker, husband over wife, father over son, and family over individual. By the time of the reforms of the 1980's and 1990's, bonds tying individuals to culture, the state, the work unit, and household-registration systems, for example, had largely unraveled. The path had been cleared for a vast new population of atomized entrepreneurs and laborers, freed from fealty to family and Party, to storm the marketplace with newly liberated individual energy.
Of course, the boom's costs should not be discounted. Environmental damage has been staggering, the gap between rich and poor has been growing, and urbanization – with all its attendant problems – has surged. And, at least so far, the boom has not induced the systemic political changes for which many hoped.
But still, a key question remains unanswered: why did China's boom happen? This is one of the great questions of our time, relevant not only to China's future, but to scores of other developing countries enthralled by China's extraordinary, but still largely unexplained, success.
John Delury teaches Chinese history at Brown University and is the Director of the China Boom Project at the Asia Society. Copyright: Project Syndicate, 2008.
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