- 1.China’s New Science & Technology Strategy: Implications for Foreign Firms
- 2.Can Development Dissolve Spears and Shields? Hu’s ‘Harmonious Socialist Society’ betwixt Mao Thought and Deng Theory
- 3.Teaching Innovation: Implications for India, China and America
- 4.China’s Equity Markets: Recent Reforms Encourage Domestic Investors
- 5.The Geopolitics of Kung Fu Film
- 6.The New Politics of Equity
- 7.Taiwan: A Key to China’s Rise and Transformation
- 8.U.S.-Taiwan-European Conference “Taiwan’s Democracy and Future: Economic and Political Challenges”
China’s political development is undergoing an important transformation. Beijing’s latest emphasis on the need to address social and economic concerns of the average person has led to a series of new policy initiatives. These initiatives are designed to more fairly distribute wealth and promote the quality of human development. The politics of equity-maximization have returned to the center stage of politics, though not in its radical form.
Economists such as Arthur M. Okun have observed the phenomenon of the efficiency-equity tradeoff.1 According to this hypothesis, efforts to improve efficiency can degrade equity, and excessive welfare distribution will lower growth rates and reduce economic efficiency. On the one hand, extreme egalitarianism leads to incentive traps, free-riding, high operating costs, and corruption, and on the other, extreme inequality leads to social unrest, erosion of social cohesion, and instability2
China’s success with reform has greatly improved China’s economic performance since 1979. However, the widening income gap between rural and urban populations, the emergence of the new urban poor, the worsening regional disparity between the more developed coastal regions and the western part of China, and the widespread public criticisms of market-oriented reforms in health and education in recent years have put the reformers on the defensive. The mounting pressure for social justice has resulted in escalating numbers of disputes, complaints, and protests. Can technocratic managers survive the onslaught of the moralists who demand that the government provide fair and equitable distribution of wealth?
Many problems facing China today, such as inequality, immorality, insecurity, alienation, rootlessness, and ruthlessness can be linked to the relentless pursuit of efficiency and the neglect of human problems by leaders whose training is limited to science and engineering. Although technocracy, which has taken root in China’s economic and political system since the 1980s, is an important step toward acquiring what Max Weber has termed a rational-legal basis of political legitimacy, the lack of popular sovereignty and the innate tendency toward oligarchic rule will eventually weaken the legitimacy of bureaucratic technocracy. Can China move beyond technocracy? Will China improve political and social equity without sacrificing economic efficiency? Can an optimal balance between efficiency and equity be achieved through proper implementation of an equity-maximizing policy?
The sixteenth CCP Party Congress, held in November 2002, and the tenth National People’s Congress, held in March 2003, completed the power transfer from the so-called third generation to the fourth. This group of new leaders seems to have reached a consensus that reform has reached a critical point at which some policy adjustments must be made. They have proposed a new development model that may produce “a harmonious society” internally and “a harmonious world” internationally. They believe that this new model should be based not only on continued economic growth but also on fair distribution of the growth, unlike the unrestrained and unbalanced growth of the Deng-Jiang era. The upcoming Seventeenth Party Congress to be held fall 2007 will certainly codify this new developmental strategy and consolidate the policy changes initiated in the last few years.
Consider rural development. The government has taken steps to alleviate income disparity between rural and urban residents. The agriculture tax was abolished last year; a new rural health care insurance system has been expanded rapidly with heavy government subsidies; tuition and fees for all children attending rural schools have been waived; and a rural welfare program will be put in place to help peasants who live in poverty. All of these popular moves have large appeal to the rural population, and have enhanced the utilitarian dimension of the political legitimacy of the state.
Equity maximization has returned. Nevertheless, the new leaders neither intend to return to radical redistributive schemes nor to a bottom-up style of populism. Many Western observers have noticed the latest wave of new policy initiatives, and they consider it to be a Chinese version of the “New Deal.” Notably, Hu Jintao, the General Secretary of the Chinese Communist Party, has returned to ancient Chinese top-down populism. He has used the words “min ben” or “putting the people first,” repeatedly in his speeches, and has proposed his “three peoples” principles. Premier Wen Jiabao shares similar views. According to him, from “Confucius to Dr. Sun Yat-sen, the traditional Chinese culture presents many precious ideas and qualities, which are essentially populist and democratic.”3Both Hu and Wen want the government to respond to average people by addressing their social and economic concerns.
Is this an end to pragmatist ideology? Has China entered an era of enlightened elitist rule? Or is this just a new ideology designed to paper over problems and allow a continued emphasis on the Deng-Jiang policies of rapid growth? Is a new breakthrough in the making? It is apparent that the top-down style of populism is proactive and led by an existing elite group within the establishment. It differs from the bottom-up populism advocated by revolutionary modernizers because it does not appeal to the people directly, and it certainly has no intention of mobilizing the public to stand up against the establishment; instead, it calls for changes within the system. Its rise, therefore, should be interpreted as the government’s preemptive response to an emerging governing crisis. The question is whether the people who run China mean it.
- Arthur M. Okun, Equity and Efficiency: the Big Tradeoff (Washington D.C.: The Brookings Institution, 1975). ↩
- Giovanni Andrea Cornia and Julius Court, Inequality, Growth and Poverty in the Era of Liberalization and Globalization, policy brief no. 4., World Institute for Development Economic Institute, the United Nations University. ↩
- Wen Jiabao, “Turning Yours Eyes to China,” remarks made at Harvard University, December 10, 2003, transcripts from Harvard Gazette, December 11, 2003. ↩