Sun, Aug 07, 2011 - Page 8 News List

The reality behind China’s growth

By Sushil Seth

Without discounting China’s impressive economic growth, starting with the opening of its economy in the 1980s, it has also done a good job of projecting itself as an alternative model to the faltering Western world with its economic malaise. However, China’s alternative model is not what it is made out to be. To understand this, one needs to go back to the 1980s, when it all began under former Chinese leader Deng Xiaoping (鄧小平).

Soon after Deng initiated economic liberalization, he had to contend with ideological opposition from the Chinese Communist Party’s (CCP) left wing, which was worried about “spiritual pollution” from the “tainted” Western model of economic growth. While Deng did prevail, he wasn’t all that prepared for an incipient democracy movement that made the death of Hu Yaobang (胡耀邦), who was earlier forced to resign as party general secretary, a rallying point. This student-led movement, inspired in part by Soviet leader Mikhail Gorbachev’s perestroika, emerged to challenge the system as well as the practice of communism in China. We all know what happened to this democratic movement, with its brutal suppression by the Chinese army in June 1989.

One main lesson communist China’s leadership learned from the collapse of the Soviet Union was not to go for the Gorbachev-style perestroika, as this would be the end of the CCP’s monopoly on power.

When the Soviet leader visited China in 1989 in the midst of the student movement for democratic reforms, Deng had apparently already made up his mind to crush the movement as it was expanding its constituency to include other segments of society as well as beyond the capital, Beijing. After the brutal crackdown in Tiananmen Square, China faced strong international condemnation and sanctions from a number of countries.

Deng was not deterred and, after a brief hiatus, he sought to rally the party around his policy of economic growth and China’s modernization. He was successful in this. However, at the political level, he was determined to uphold the Leninist political system where the party wields all the power. He believed that as long as China was in growth mode, with industrialization creating opportunities for employment, the regime would be able to sustain its momentum and maintain a measure of legitimacy. Moreover, as economic growth picked up, it created an aspirational middle class with a stake in the system.

After Deng died, his successors have broadly followed the same guiding philosophy of stepping up economic growth, with the party controlling political power.

However, the country’s political and social situation is getting more complex; sectoral economic and social imbalances have created serious distortions. The disproportionate emphasis on an industrial economy has hit the agricultural sector, resulting in millions of rural workers migrating to cities in search of jobs. As a result, the rural sector has lost many of its young and able-bodied people to the cities, thus hurting its economy as well as its social landscape.

In the cities, these new workers either have very little or no access to facilities because of strict residency requirements. Their wages are low (though this is gradually changing because of increased demands from workers) and there have been reports of employers withholding wages or, at times, not paying at all. Since the employers are politically well connected, the workers don’t have access to legal processes.

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