China's Contingencies and Globalization

Changgang Guo, Liu Debin, Jan Nederveen Pieterse

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351867412
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

How have Chinese views on globalization developed over time? How is China managing the new normal of slower growth? Is China creating an alternative modernity? Is China a status quo power or a reform power? Can China manage its growing international role in international institutions and in the New Development Bank, the Asian Infrastructure Investment Bank, along with infrastructure projects in the region such as One Belt One Road and the Maritime Silk Road? Can China achieve balanced interactions with ASEAN and with developing countries in the region and worldwide? How is governance in China evolving in relation to social movements, protests, labour struggles and migrant workers? Do Chinese policies in relation to religious diversity contribute to social harmony or to friction? This timely volume by Chinese and international scholars offers diverse perspectives on these questions. This book was originally published as a special issue of Third World Quarterly.

China’s contingencies and globalisation

Jan Nederveen Pieterse

Global Studies, University of California, Santa Barbara, USA

Will China be able to rebalance its economy, heavily tilted towards investment? Will it be able to increase the share of household consumption in GDP? Will it turn steeply growing social inequality around? Will urbanisation contribute to China’s rebalancing or will it add to the imbalances? Will China manage to bring pollution under control? Such variables will determine whether China can move beyond the middle-income trap and also affect its external relations. In addition, China’s rebalancing is a variable in global rebalancing. This article provides an introduction to the special issue.

There is no significant account of China that doesn’t feature major contingencies. China’s development has been momentous, yet its further course hinges on challenges across many terrains. Since this concerns the world’s largest economy and a fifth of humanity, the stakes are large and China’s contingencies take on a dramatic character. The contingencies have been shaped by globalisation (such as foreign direct investment, the role of Chinese diasporas, export markets, the intertwining of economies and global value networks, World Trade Organization (WTO) membership, international institutions, regional and wider geopolitics); how China meets these challenges shapes globalisation in turn (as in China as importer, Silk Road economic projects, the role of the renminbi (RMB), the G20, the BRICS, and Asian and South–South cooperation).

The theme is familiar enough. Hardly a week goes by without another exposé of a China bubble about to burst or disaster pending. Pollution, over-investment, overheating real estate, bad debts, shadow banking, labour conditions, social protests, poor product quality, water scarcity and legal uncertainties are among the themes that come up in the media and reports.

For a long time China bulls were ahead of China bears, as in books such as When China Rules the World.¹ Recently a Chinese economist argued that China could easily continue to grow by 8% a year for another 20 years.² But such voices have become relatively scarce. During recent years the constraints that China faces have become more visible and more salient in media and research, also in China. The balance has gradually shifted, particularly since the crisis of 2008.

There are ample warning signs. China’s rich are leaving – because of pollution, their children’s education and uncertainty about the country’s future. When they can afford it they leave for Australia, Canada or the USA.³ A society that cannot keep its elite at home is not in good shape. The worker suicides and strikes at the Foxconn and Honda factories in 2010 and 2011 signalled that labour conditions in China’s factories are not sustainable. The protest over land appropriations in Wukan flagged local government corruption. Air pollution in Beijing and other cities is well above hazard levels. To be a China bull now requires taking a prep course in warding off criticisms.

This introduction reviews the major constraints and transformations that China faces, primarily on the basis of policy discussions in China. I then turn to how these constraints and China’s rebalancing policies relate to globalisation dynamics. The closing section is an overview of the papers in this special issue.

Before stepping into specifics, a preliminary question is how, in what terms and from what perspectives should we view China’s dilemmas? Several perspectives take Western (read: American) institutions and capitalism as a yardstick and assume, implicitly or explicitly, that China should become ‘more western’.⁴ Discussions of democracy and human rights are part of this and experienced an upswing in the wake of the Tiananmen uprising. The hazards of state capitalism, in contrast to market capitalism, are another familiar trope.⁵ Other discussions compare China to Japan, South Korea and Taiwan. Michael Pettis views China as ‘mostly a souped-up version of the Asian development model, probably first articulated by Japan in the 1960s’.⁶ This isn’t as bad as it sounds, because this happens to be the sole model that enabled poor countries to become rich in the 20th century.⁷ Nonetheless, differences among Asian countries are significant and whether an ‘Asian model’ exists is in question.⁸ Other accounts view China’s problems as problems of neoliberal capitalism or of capitalism generally (also known as ‘global capitalism’).⁹

To sidestep some of these problems it is best to focus on discussions in China. In the 1990s the Jiang Zemin government followed the ‘Singapore model’ of fast-lane growth led by foreign direct investment (during a brief period as an actual model; generally as an analogue). Multinational corporations and ethnic Chinese tycoons from Southeast Asia investing in Special Economic Zones in southern China played a major role at this stage. This growth model produced sharp imbalances between coastal and inland development and between economic growth and development. China’s New Left highlighted the imbalances in China’s growth model and criticised growing materialism along with ‘market romanticism’ and ‘the fetishism of American culture and its liberal market idea’.¹⁰ Some of these concerns were taken up by the Hu Jintao and Wen Jiabao government, which in 2003 initiated ‘harmonious society’ and the ‘scientific outlook on development’ as policy frameworks.

In 2007 premier Wen Jiabao warned that, while the Chinese economy looked strong on the surface, in terms of GDP and employment growth it was increasingly ‘unbalanced, unstable, uncoordinated, and unsustainable’, an assessment that became known as the ‘four uns’. Unbalanced – in terms of urban–rural and east–west disparities; unstable – with overheated investment, excess liquidity and a large current account surplus; uncoordinated – with regional fragmentation, excess manufacturing and an undeveloped services sector, excess investment and lagging consumption; and unsustainable – in view of environmental degradation, excess resource use and persistent tensions in income distribution.¹¹ These considerations set the stage for the 12th five-year plan (2011–15), which aimed to build broad social safety, reducing the need for household savings, and urbanisation to bridge urban–rural income gaps, something that would serve to boost domestic consumption and reorient the economy away from dependence on exports.

Thus China will no longer be an economy driven by manufacturing exports but will be a major importer of consumer goods – this mantra has been repeated for years, but when and how is this to take place? China must reign in over-investment and boost domestic consumption; however, since this objective was announced in 2005, household consumption has gone down, not up. Household consumption stood at 46% in 2000 and had shrunk to a meagre 34% in 2010 (while the global average is 65%).¹² China must counter rising inequality – but China’s Gini index has been rising, not declining, to 0.47 in 2010, which is well above the government-established threshold of when inequality would generate social instability (set at 0.40). After Hong Kong’s China’s Gini index is now the highest in Asia. China must in particular counter inequality in rural–urban incomes and a major way of doing so is through urbanisation (and ‘townisation’). However, this also feeds over-investment in infrastructure, local government land appropriation and corruption, and seems to be a blunt and easily misdirected instrument. Evidence includes newly built ghost cities, giant empty malls and the investment gigantism of the ‘Chongqing model’.¹³ Rural development, as advocated by Wen Tiejun and others, and rapid dismantling of the hukou urban household registration system would have a greater impact on reducing inequality than urbanisation.

Nevertheless, some transitions are being achieved. The shift from price competition to quality competition in manufacturing has been in motion for some time, alongside a strong emphasis on science and technology and vast investments in tertiary education and science and industrial parks. Following worker protests, a looming scarcity of labour and the adoption of the Labour Law in 2007, higher wages and better labour conditions are gradually being achieved. The relocation of some industries to poorer inland areas is also in motion.

Some transformations have been set in motion but are yet to deliver definite outcomes. Pollution has been declared a top government priority. The number of environmental NGOs in China is now over 8000. While China leads in investment in renewable energy and has become a world leader in solar panels and wind turbines, polluting industries and reliance on coal need to be reined in. Aging has been signalled as a concern and the one-child policy is being loosened, but this is at an early stage. The hukou system remains in place even though it is a major variable in rural–urban inequality. Gender inequality ...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• Citation Information
• Notes on Contributors
• 1. Introduction: China’s contingencies and globalisation
• 2. Engaging with globalisation: Chinese perspectives
• 3. A reform-minded status quo power? China, the G20, and reform of the international financial system
• 4. China’s national defence in global security discourse: a cultural–rhetorical approach to military scholarship
• 5. Globalisation as glocalisation in China: a new perspective
• 6. China’s industrial transformation and the ‘new normal’
• 7. From export platform to market provider: China’s perspectives on its past and future role in a globalised Asian economy
• 8. Unequal partnerships and open doors: probing China’s economic ambitions in Asia
• 9. Illiberal China and global convergence: thinking through Wukan and Hong Kong
• 10. The new contentious sequence since Tiananmen
• 11. Voicing the self: discursive representations of Chinese old-generation migrant workers
• 12. Religion and social stability: China’s religious policies in the Age of Reform
• Index