The decades that transformed China (The story of China and its struggles ahead)

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The decades that transformed China (The story of China and its struggles ahead)

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• December 1978 plenum: Deng Xiaoping proposed his economic reforms first during the Third Plenary Session of the XI Central Committee of CPC. He propsoed "reform and opening up" (gaige and kaifang). That was to change the world for ever, in the coming decades.
• From Agri to Manufacturing: China herself changed, from a poor agricultural state, to a manufacturing powerhouse, by blending authoritarianism with liberalisation. Today, 40 years later, numbers are impressive -

1. China holds world's largest forex reserves ($3.05 trillion),
2. It has the second largest GDP ($12.2 trillion),
3. Share of world economy stands at 18.2%.

• Lots of contradictions: The ruling party promotes a communist, egalitarian ideology and the actual society is hugely unequal and capitalism-driven. The middle-class interests are different from the rural interests.
• Censored yet prolific: The communists censor almost everything online, yet China has 77 crore online users and 40% global e-commerce transactions.
• Not collapsing anytime soon: Experts repeatedly speak of CPC's collapse, and it just goes on an on! A pilot project as per Deng's maxim "crossing the river by feeling the stones" has helped. So policy is made as per what works best. Then national adoption is done.
• SEZs on coasts: First local experiments proved they can work, then they were launched in a big way. They attracted huge FDI, and made fishing villages like Shenzhen global mfg. hubs.
• Same trick, repeated: New policies were tried repeatedly - from cooperative medical care schemes to removing controls on workers coming from rural to urban areas. So Mao era's violent abruptness gave way to Deng's pragmatism.
• How to define what worked? It was driven by maintaining CPC's power. Censorship and purges were used, and middle-classes were co-opted. Once they became prosperous, the CPC's most dangerous potential enemy was neutralised!
• From economic prosperity to quality of life: Middle classes started asking for it, and CPC went in for strong pollution control measures. Beijing transformed.
• A new face: The world may not see it, but an autocratic China has leaders who respond quickly to socio-economic challenges. Officials mandatorily retire, and have term limits, and face internal report cards!
• Emphasis on outcome not ideology: So performance is important, not just process. India lags behind China on most developmental parameters due to this difference. Since we are democratic, so governments never face the heat of performance (as legitimacy is inbuilt - elections).
• China versus India: So an elected government in India can afford not to perform, but an unelected govt. in China remains sensitive and performs!  (basic public goods - roads, drains, schools)
• What ahead? China reached so far by "reform and opening up". But Xi Jinping era is taking a different turn, most visibly with the huge trade war with US. And the contradiction between Party control over economy, and a market economy, is unresolved. So, "socialism with Chinese characteristics" continues.
• More differences: Xi's term limits are all removed, and he is not open to hiring foreign experts. Nationalism is rife. The experimental style too is slowing down (500 projects in 2010, and only 70 by 2016).
• A tough project: For Xi Jinping, managing a changed US position, while balancing the multiple tightropes domestically, is not going to be easy.
• Summary : The miraculous story of China's rise was a story of Deng Xiaoping's pragmatic experimentation in governance and economy, and it is now being replaced by a less open style of Xi Jinping with unknown consequences.

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