Some authoritarian capitalisms have recently lost stability, at least partly, as a consequence of the Great Recession; the Arab Spring is often quoted as an example in this context. There is, however, an important exception to this general rule that calls for closer inspection. This exception is China. China not only weathered the crisis amazingly well, but in one respect appeared to have benefited from it. It seems that the crisis helped this economic giant to initiate the badly needed reorientation of the economy towards the huge do-mestic market so as to reduce tensions produced by an over-heated economy.
China is a world-leading authoritarian capitalist country that lifted hun-dreds of millions of people out of poverty in a relatively short period. The breath-taking speed of development and the country’s relatively solid im-munity to the Great Recession call for reflection. It is not difficult to imagine that, barring a political breakthrough, the coming decade or two may see China catching up with the most advanced world economies while still re-maining an authoritarian state. This assumption is strengthened by the fact that China is already reaching a world-leading position in a number of eco-nomic, technological and military fields.
Should the current rate of the Chinese development be further main-tained, one could expect that China might serve as a trend-setter for both poor authoritarian capitalisms and malfunctioning democratic capitalisms. But for the time being China is a trend-setter without followers. It will be of crucial importance for world order whether China will in the not too distant future enter a transition to democracy and join the democratic family, or continue its
‘authoritarian economic miracle’, prompting others in many different corners of the world to follow suit. Should the latter scenario develop, we may wit-ness another type of global rivalry: not in the military field but rather in eco-nomic and technological areas, and not between communist command econ-omies and capitalist democracies but between democratic and authoritarian capitalisms.
Ursula J. van Beek
Introduction
China is the only ancient empire that survived into the 20th century. For a Westerner to fully appreciate the longevity and richness of Chinese civilisa-tion, it is useful to place it on a comparative timeline. The temporal compari-son shows that during the rule of the Shang Dynasty (1600-1100 BCE), a pe-riod during which Moses led the exodus from Egypt and the Trojan wars were fought, the Chinese were already engraving symbols and pictures onto shells of turtles and bamboo sticks as a means of expression. As these pic-torial characters developed during the Han Dynasty (202 BCE-220 CE) into the unique language system that to this day fosters and preserves the distinc-tive identity of Chinese civilisation, the Romans invaded Britain. During the same period the Confucian philosophical system was adopted in China. All this took place some centuries before the final collapse of Rome in 476 CE.
For much of its recorded history China was a dynastic empire which to-wered over the rest of Asia under rulers whose sovereignty was said to have been bestowed upon them by the Mandate of Heaven and whose autocratic rule over the populace was akin to the paternal function of a strict father in charge of a household. China, or the Middle Kingdom, was thought to have been situated in the centre of the world and possessed of a civilisation supe-rior to that of the entire ‘barbarian’ universe both across the seas and outside its far-flung and ever-changing land boundaries, which were deliberately kept ill-defined. Convinced of its cultural greatness, the imperial Chinese state as-signed itself the mission to ‘civilise’ neighbouring peoples but had little in-terest in the rest of the world, although in the early Ming dynasty (1368-1644) a large navy was built and sailed the China seas and the Indian Ocean, reaching the east coast of Africa. These voyages merely confirmed to the Chinese that they did not have much to learn from the outside world.
From antiquity the Chinese made significant advances in science and inno-vation including, among other things, the first recorded obserinno-vations of comets, solar eclipses and supernovae, the invention of the abacus, the compass, gun-powder, the wheelbarrow, papermaking techniques and printing. Mediaeval Europe borrowed extensively from Chinese science and technology until Eu-rope’s own scientific revolutions in the 16th and 17th centuries propelled it to a
position from which it gradually outstripped Chinese technological advances.
Unconcerned by this shifting balance, up until the early 19th century the Chi-nese emperors treated with disdain the small and squabbling European states, even when the latter were busy building their commercial empires in Asia.
China’s rulers refused to deal with European governments on equal terms and conceded at most limited trading privileges at the coast or at the border through which trade was conducted to meet Europe’s high demand for Chinese tea, porcelain and silk. Repeated British representations made at the turn of the 18th and 19th centuries to improve the severely restricted trading conditions fell on deaf ears as the emperor who saw little point in making concessions to a state he believed had nothing to offer China in return.
This situation changed drastically once foreign traders discovered Chi-na’s virtually limitless demand for opium. By the1830s opium represented nearly half of all British exports to China and, when importation was banned in Canton, smuggling began. To put an end to the opium trade and its disastr-ous health consequences for the Chinese population, the emperor in 1839 or-dered all opium in the possession of British merchants to be seized and de-stroyed. The British response to this action was war. What has since become known as the Opium Wars (1840-1842) ended in the Treaty of Nanking, which included the first of the ‘unequal treaties’ between China and the West. These treaties, which forced the Chinese to grant equal trading rights first to the British and later to the Americans and the French, ended what the West perceived to be a humiliating assumption of Chinese superiority; the Chinese regarded them as an encroachment on their sovereignty.
The Opium Wars marked a crucial turning point in China’s long history.
The conflict, which was less about opium than about grabbing the last prize in the Far East, forcibly prised open the Chinese empire to the world as it ex-posed China’s markets and resources to subsequent colonial exploitation. The wars also helped to eventually oust the weak and unpopular last Chinese dy-nasty (Manchu Qing, 1644-1911) from power. The revolution of 1911, which toppled the imperial regime, opened the door to a failed attempt at republi-canism, instability, corruption, rule by warlords and opportunistic Japanese exploits aimed to establish political and economic domination over China. In 1915, taking advantage of the internal turmoil and the Western powers’ en-gagement in World War I, Japan presented China with the infamous Twenty-One Demands, which would have turned the country into a virtual Japanese protectorate had the surreptitious terms not been made public and had the subsequent pressure of world opinion not forced Japan to modify some of the more extreme demands. But the national sovereignty of China was further compromised and the day of the acceptance of the Japanese demands became known as National Humiliation Day.
It has been said that whereas the word freedom offers the means to un-derstand core American values and the term rule of law is the key to unlock
the spirit of England, the essence of Chinese values can be found in the word history. Both Chinese national identity and the legitimacy of the Chinese Communist Party (CCP) are outgrowths of the past (Callahan, 2004). The Communist Party elite were the product of an extensive but failed search by traditional Chinese elites to save the post-dynastic country from crippling do-mestic chaos and foreign imperialist encroachment. The successful commun-ist revolution of 1949 delivered on both counts. And since then Chinese lead-ers have claimed legitimacy not on the basis of democratic electoral victory, but on the grounds of the historical record of having ended China’s century of national humiliation and of having returned the country to a place of glob-al prominence. Behind modern China's remarkable development is a regime carefully cultivating the inherent patriotism and pride of the Chinese people as a means to bolster its legitimacy, which is further defined by substance, that it to say, by testing good governance in terms of how it delivers. China’s successful weathering of the recent world-wide economic and financial storm could not but highlight this even further, and not only in China itself but well beyond her national boundaries.
The aim of this chapter is to look through the lens of time to try unveil some of the mystery of why China has become so successful economically and to consider the implications of this success for the post-crisis world and for democracy in particular.
Change and tradition
Even prior to the 2008-2009 global financial crisis China had come to be viewed as a major force in the world’s economic and security systems. In the wake of the crisis the country’s stature increased further to a position from which to effectively challenge the dominance of the United States in global af-fairs.
T
he stunning rise of authoritarian China as an economic power and Chi-na’s continued high rate of growth, at a time when the developed world was overtaken by the most severe economic crisis since the Great Depression, con-founds Western economists. The conditions China lacks and that they consider necessary for successful economic development include the limited role of the state; a democratic dispensation as the political mechanism that ensures the balance between state power and decentralised co-operation; and democratical-ly empowered citizens who prevent the state overreaching itself. And so they ask why is it that in the absence of these conditions the Chinese state seems able to arrange productive co-operation on an unprecedented scale without run-ning into the seemingly insurmountable knowledge, incentive and administra-tive problems that economists expect in such circumstances. Part of the answer can be found in the deep history of China and in the way modern China tra-velled from the semi-periphery to the centre of global affairs.The enforced interaction with the outside world, which shattered the tra-ditional Chinese worldview of the centrality of the Middle Kingdom in the world order, brought home two basic truths. The first was that China was but one state among many, and a weak one at that; and the second was that a feeble central power was responsible for the century of humiliation that had transformed the empire into a semi-colony. This in turn led to the conviction that the only way to achieve national survival was to build a powerful mod-ern state with a strong central govmod-ernment. State-building thus became close-ly associated with the concept of national unity and nationalism. Sun-Yat-sen, the founder of the Republic and co-founder of the Chinese Nationalist Party, Kuomintang (KTM), considered nationalism not only the key to sur-vival of the Chinese nation, but also as a fit state doctrine and the means to ensure the equality and freedom of all races in China (Chou Yu-sun, 1996).
Hidden in the shadow of Mao’s revolutionary internationalism, the theme of national unity resurfaced under
D
eng Xiaoping, who took over as China’s de facto paramount leader in the late 1970s, and who replaced Mao’s ideo-logical philosophy of ‘politics in command’ by the philosophy of ‘economics in command’. For Deng the entire project of mapping out a brand new road forward for China’s development rested on the fundamental assumption that national unity was not the source of China’s power, as was believed earlier, but that this power depended on whether or not China could catch up with developed countries (Zheng, 1999). In Deng’s vision economic wealth was to be the foundation of Chinese power and economic development was the way that would lead to China assuming her rightful place in the world of nations.At the same time, national, or even nationalistic, pride and economic success could became mutually reinforcing, thus providing the Communist Party with a form of substitute legitimacy
Given Mao’s near godlike status in China, Deng took a considerable po-litical risk by promoting this momentous change. One of the ideas thought to have inspired him was the Yan Fu argument, a line of reflection pursued at the turn of the 20th century by the famed Chinese scholar and translator, who argued that only by freeing the spirit of initiative in every single Chinese citi-zen could their total energies be amplified to ensure the survival of the state and to maximise the capacity of the nation as a whole (Schram,1984). This spirit of initiative was badly depleted by Mao’s policies of the Great Leap Forward and the Cultural Revolution, which left the people physically de-prived, psychologically scarred and, not unlike the Germans after World War II, totally uninterested in politics. Their overriding concern was how to sur-vive and Deng’s economic reforms offered some hope, thus creating a plat-form on which to build consensus between replat-formist leaders and society. And while the leaders recognised the need to depoliticise peoples’ daily lives, they also identified decentralisation of economic decision-making as a major strategy for reforming the economic system. In this way they created an
insti-tutional setting in China for what came to be known as development-oriented local government (White, 1984).
As the ‘reform and opening’ strategy initiated by Deng in 1978 devalued Mao’s class struggle rhetoric as a device legitimising the party’s continued rule, nationalism was revived. The notion of the century of humiliation came into play once more, as did the party’s historically based credentials. But there are inherent dangers, both internal and external, in using nationalism as a legitimising strategy. By its very nature nationalism is ethnocentric and thus exclusive. In a multi-ethnic country such as China it could – and frequently has – come across more as the nationalism of the Han majority than of the Chinese people as a whole, increasing the threat of ethnic tensions and inter-nal alienation. Exterinter-nally, it conjured unhelpful images of a China that should be feared rather than encouraged to integrate into the world’s structures. Re-cognising this downside, the CCP moved from the theme of injured victim-hood epitomised by the century of humiliation to the safer ground of China’s proud past and the party’s leading role in returning the country to its former global greatness. From the theme of modernisation and rejuvenation of China in the Deng Xiaoping era, the Chinese party chiefs from Jiang Zemin to Hu Jintao started to talk about the Great Renaissance of the Chinese nation, indi-cating a radical turnabout from the earlier disdain for, to the re-embracing of, elements of traditional Chinese culture (Kang, 2006).
The turning point was the 1989 tragedy of Tiananmen Square. Although Chinese intellectuals were unhappy with the vicious way their government had dealt with the protests, they also objected to the harsh criticism of their country by Western governments. A surge of nationalist sentiment followed that, among other things, produced a number of bestselling books calling for resistance to the West’s ‘interference’ in Chinese society and urging the gov-ernment to adopt a strong stance in foreign policy (Trailokya, 2010). While initially pleased with this reaction and encouraging it, the Chinese leadership came to realise the possible adverse effects the anti-foreign nationalist out-burst could have on China’s prospects for further progress and they put an end to it by dusting off the moral teachings of the old sage Confucius. This approach both satisfied the intellectuals who were pleased to see China did not concede to the West, and resonated with the common people for whom traditional values matter.
But opinion is divided among China analysts both inside and outside the country as to how seriously the Communist Party takes Confucianism. Views range from those who claim Confucianism is of marginal and purely utilita-rian interest to the party, to those who forecast the CCP’s imminent transfor-mation from Chinese Communist Party to Chinese Confucian Party (Bell, 2010). On the basis of the historical record of the CCP it seems fairly safe to say that Confucianism is merely another ingredient added to socialism as a device to legitimise the party’s continued rule. The Chinese leaders are above
all pragmatic and adapt well to constantly changing circumstances. This pragmatic mentality can be traced back to Deng Xiaoping, whose most fam-ous political adage held that it was immaterial whether a cat was black or white as long as it caught mice. At the same time Deng Xiaoping also made it clear that while economic construction and development moved to the centre stage, the party would never abandon the Four Cardinal Principles: socialist road, dictatorship of the proletariat, leadership of the Communist Party and Marxist-Leninist-Mao Zedong thought. In all probability the Four Cardinal Principles were less ideological than they were functional. Their aim was to send a message to the Chinese people, and to the intellectual elites in par-ticular, that they were free to improve their material living conditions but should keep out of politics and human rights issues, and that they should for-get Tiananmen. Pragmatism of this kind has made it possible for the Chinese leadership not only to shift to a fundamentally different policy in response to a changing political environment, but also to respond swiftly to single events, especially if these involve populist or nationalist pressures. The sudden shift in labour policy from suppressing wages to actively boosting wages is just one recent example of the pragmatic mentality among Chinese policyma-kers.1
Ideology has been and continues to be used instrumentally. Sometimes it is used as a guide for action, but mostly it is a means to make moral claims associated with leadership and to forestall the possibility of open talk about politics that could lead to chaos, the most nightmarish of prospects for Chi-nese leaders from time immemorial. The seeming absence of any tension be-tween ideology and pragmatism is, according to Lucian Pye (1985), a pecu-liarly Chinese phenomenon and can account for the divergence between doc-trinal theories and practice. Whereas in Western culture correctness about doctrinal questions is a value in itself, the Chinese are much more relaxed about matters of belief; one can sense the great difference between Western
Ideology has been and continues to be used instrumentally. Sometimes it is used as a guide for action, but mostly it is a means to make moral claims associated with leadership and to forestall the possibility of open talk about politics that could lead to chaos, the most nightmarish of prospects for Chi-nese leaders from time immemorial. The seeming absence of any tension be-tween ideology and pragmatism is, according to Lucian Pye (1985), a pecu-liarly Chinese phenomenon and can account for the divergence between doc-trinal theories and practice. Whereas in Western culture correctness about doctrinal questions is a value in itself, the Chinese are much more relaxed about matters of belief; one can sense the great difference between Western