organizationIntroduction
Economic growth in China since the end of the 1970s has now outperformed every other long economic upswing in modern history. While the largest member countries of the Organisation for Economic Co-operation and Development (OECD) continue to struggle with the effects of the deepest recession since World War II, the People’s Republic of China (PRC) is still enjoying growth rates that are massive by comparison. With these trends, China is leaving behind its role as “workshop of the world” and preparing to become a global engine for innovation.
Of course, beyond these developments is a different China, one still battling with social problems similar to those faced by other developing or large emerging countries. Nevertheless, according to criteria for measuring growth in economic efficiency, China is still the most successful and dramatic case of catch-up development in the world. Even experienced researchers in economics or industrial sociology are surprised by the scale of industrial expansion in some areas of the country. This particularly applies to the Pearl River and Yangtze River deltas, which over the past thirty years have seen the construction of the largest industrial zones in global history. Often the most astonishing fact for Western observers is that the second largest economy in the world has emerged in a country dominated by an authoritarian party-state where the unrestricted rule of the Chinese Communist Party (CCP) prevails to this day.
The renaissance of the Middle Kingdom triggered strong interest in China and raised a number of questions: What social structure has developed during the course of China’s reform process, the length of which has now exceeded that of the Mao era (1949–78)? What have been the driving forces behind the country’s development? What paradoxical consequences have been brought about by this “economic miracle”? The new China debate is characterized by a broad spectrum of different positions ranging from suspicion of an emerging China to “Sinomania” (Anderson 2010a). Today’s enthusiasm about China’s dynamic economic growth, although intermittently qualified by reports on political repression in the PRC, is reminiscent of the writings of seventeenth- and eighteenth-century thinkers such as Leibniz, Voltaire, and Quesnay. These philosophers were exceedingly impressed by the prosperity of imperial China, attributing to it a more advanced level of civilization than Europe. Even their slightly more skeptical contemporaries (Montesquieu and Adam Smith, for instance) admired the country’s political regime and its wealth. However, in the nineteenth century, after parts of the country were colonized, there were dramatic shifts in attitude toward China, with the military, economic, and social backwardness of the crumbling empire coming to the fore. In the twentieth century, these antipathies escalated, culminating with the Maoist seizure of power. Today, though, admiration permeated by apprehension appears to be gaining the upper hand.
Research Interests
The progress of present-day China is, in many respects, reminiscent of other capitalist processes of catch-up development. In the country’s smog-choked cities, against a backdrop of rapidly growing “collections of commodities” (Marx 1986, 49), a chaotic climate of buying and selling prevails. Tireless expansionism and inventiveness joins forces with an attitude of national euphoria where anything seems possible. The establishment of new business ethics transformed the “acquisition principle” (Sombart 1921, 320) and competition into quasi unquestioned and irreversible economic guiding principles.
In actual fact, however, China’s unparalleled economic growth ought to silence every advocate of the free market. The Chinese economy is characterized by significant government intervention. In contrast to the transition countries of the former Eastern Bloc, in the PRC it was possible to avoid radical “big bang” liberalization, and, for a long time, there were no clearly defined private ownership rights. The sustained legacy of a bureaucratic command economy and the ruling party doubtless also require explanation.
A rich but controversial body of literature examining China’s process of transformation has emerged. We can, however, identify a series of key issues that have not yet been adequately analyzed or that remain contentious:
• first, there is no plausible answer to the question regarding the main features of the socioeconomic system of the People’s Republic;
• second, the question as to the key driving forces and dynamics of the country’s rapid development remains controversial;
• third, more recent responses to the question about the paradoxes that are inherent in the growth process are also inconsistent.
There is an array of sophisticated insights and concepts to help us address these issues. As discuss below, I will link these concepts to a research framework, which in contrast to market- and/or business-centric approaches might be described as an extended analysis of capitalism. The aim of this framework is to contribute to a more in-depth understanding of the key features and growth dynamics of China’s political economy, the different courses it has taken, and its paradoxical lines of development.
In my approach, I distance myself from the following arguments, which I have presented in an exaggerated ideal typical way here. In a number of journalistic but also scientific articles, market-economy aspects of the Chinese economy are contrasted with its “communist” politics. On the one hand, a combination of new entrepreneurial spirit and economic development are shaping social change. On the other hand, the party-state—which, contrary to the findings of China research, is frequently treated as a monolithic unitary state where all threads converge in the Central Committee of the CCP—continues to exert influence on this process of change. According to this line of argument, China’s political system is seen as incompatible with the real demands of a market system. How can this perplexing juxtaposition be understood from a theoretical point of view? Is China’s process of modernization in any way even comparable to the Western paths of modernization?
Another line of argument refers back to China’s diverse civilizational roots, which, in the eyes of Western observers, enabled the country to relatively effectively combine market and party-state in a unique pairing. Critical China researchers have established that this culture-centric “China is China” perspective, which is reduced to Chinese traditions, is strictly speaking incompatible with a comparative social science angle (Kennedy 2011a). Even a postmodern perspective advanced in the media discourse really prevents any attempt to draw historical comparisons or make theoretical generalizations. This approach retells Chinese contemporary history as a chaotic, contingent process and disputes any kind of historical regularity. Consequently, wanting to make coherent statements about an incoherent reality where the fundamental constant is change seems like intellectual insanity.
And yet in China research and the areas of the economic and social sciences with a focus on China, a wide range of innovative perspectives have emerged. These have resulted in a much more convincing analysis of the processes of transformation based on far more than simply anecdotal evidence. There will be frequent reference to these approaches throughout the present work.
Undeniably, opinions on the current social structure in the PRC differ, in the advanced economic and social sciences as well as in the traditional field of China research. One of today’s most renowned economists, Douglass C. North, even argues: “Yet none of the standard models of economic
