Ideological Denial of The Basis of China's Economic Success
Wang Feng and his book "China's Age Of Abundance"
Medium: Nikita Coulombe
The book starts with what could pass as an abstract for the book:
Between the 1980s and the present day, China has experienced one of the most consequential economic transformations in history. One-fifth of the Earth’s population has left behind a life of scarcity and subsistence for one of abundance and material comfort, while their nation has emerged as a preeminent economic and political power. In a systematic and sociological analysis of this unique juncture, Wang Feng charts the origins, forces, and consequences of this meteoric rise in living standards. He shifts the focus away from institutions and policies to offer new perspectives based on consumption among poorer rural populations as a driver of global economic change. But is this “Age of Abundance” coming to an end? Anticipating potential headwinds, including an ageing population, increasing inequality, and intensifying political control, Wang explores whether this preeminence could be coming to a close.
There are already some hints at the professor of sociology’s (University of California, Irvine, ex Fellow of the Brookings Institute and on the board of the Columbia University China Centre for Social Policy) ideological leanings and blindsides. Why would he want to shift “the focus away from institutions and policies” when these were so central to China’s growth? Is this linked to his negative view of what he calls “intensifying political control”? Why so negative about the Mao years that even he has to accept built the health, educational, and material foundations of the 1980s economic takeoff? The author himself is a “victim” of the Cultural Revolution, having been “sent down” to a Northern Chinese village from 1975 to 1978. He was then brought back and gained a BA in China (Hubei 1982), but instead of staying in China as Xi Jinping did (who had also been sent down and whose sister had committed suicide due to the families treatment by the Red Guards), he somehow gained a place on an MA at Michigan University - graduating in 1984. Followed by a PhD at the same university in 1987.
The thing that he does get right is that China was uniquely advantaged for such a poor nation with high levels of both health and literacy. But in the next sentence he disparages the Cultural Revolution, and by inference the leadership of Mao during which these incredibly high levels of health and literacy were attained. As Arestis, Karagiannis and Lee (2021) much more accurately note:
From 1949 to 1978, China steadily built its industrial base and transformed itself from an agrarian economy to an industrial one. The country’s political leadership, by utilizing continuous central planning, gave high priority to rapid industrialization and created the industrial foundation for China’s economic success. During this era, under Mao’s dictation, China as a nation started its industrialization, created its university system and constructed hundreds of labs all over the country, and developed its technological foundation in such important sectors as nuclear weapons, satellites, rocket science, and computers. These national development efforts prepared China with numerous talented scientists and engineers, many of whom became technocrats in the government
This was all done within an environment of extensive Western economic, financial and technology sanctions most thoroughly enforced by the United States; and from the early 1960s one without Soviet aid. During this time, Chinese economic growth was still double that of India! The Chinese growth miracle is not one of discontinuity but actually one of significant continuity; without the institutional, infrastructural and industrial work of the Mao era, the miracle era would not have been possible. But of course, the author’s ideological worldview cannot accept this - so instead he falls back on the “people” who had to overcome state resistance!
Three pivotal transformations defined China’s path to material abundance. They were, respectively, private farming, rural industrialization, and rural to urban migration. None of these three movements, as this book will document, was a state-initiative. Instead, they were all born out of the strong desires of the population, who were desperate and determined to improve their lives. Such grassroot initiatives were often resisted by the government at first, before being accepted and embraced by them.
He also states that the citizens “were living under increasing material scarcity thanks to decades of socialism” in the late 1970s. Here his liberal ideology comes to the fore, where the actual significant improvements in the wellbeing, education, and material benefits achieved by the population under decades of socialism are cast aside in a blatant misrepresentation of history. Then the author states another blatant misrepresentation when he states “the shadows of the ten-year Cultural Revolution that devastated economic production and tore the social fabric”. The real social dislocation was limited to the cities, where a small minority of citizens lived (85% of the population was rural), and only lasted at the most 2 years; from 1966 to 1968 when the Red Guards were crushed. In these two years, Chinese GDP fell by 5.8% and 4.1% respectively but in the following two years growth was 17% and 19.3%; with growth averaging 6% per annum in those 4 years, and then 5.9% per annum for the next 8 years. Quite the opposite of a “devastated economic production”.
The period was also one of great gains in literacy and general education for the rural population, greatly helped by the “sending down” of such urbanites as himself, as well as a significant mechanization of agriculture. Quite a propitious base for an economic “takeoff”. The author also regurgitates Cold War propaganda about the Chinese famine of 1959-1961 being “the largest famine in human history” when this is utter unsubstantiated garbage. Even utilizing the official figures, which so obviously understated the prior year death rates (death rates had fallen substantially but the very low numbers reported are not believable), the total number of actual excess deaths in the three years would be around 11.5 million (Patnaik 2011). A more reasonable number is significantly below 10 million, especially given the lack of recollection of foreign diplomats, China watchers and even the local population of what are claimed to be many tens of millions of deaths from famine in a three year period.
In the 1970s China was accepted into the Western economic sphere, with the US providing preferential trade status at the end of the decade; a huge change from the previous extensive sanctions. The author ignores this completely, and then disparages what he calls the “state centred narratives” that:
credit the Chinese government with following a gradualist reform strategy. in contrast to the “shock therapy” used in other former socialist economies … setting up Special Economic Zones, attracting foreign capital investment, promoting an export-oriented growth model, reforming state-owned enterprises while maintaining strong state ownership, control, and regulations, and designing explicit industrial policies.
It’s obvious that he prefers a view that the state constructed “a set of underlying conditions that focused on an adaptive, bottom-up search within the state for localized solutions.” Also, nothing about China’s ability to maintain economic and financial sovereignty which allowed it to forestall becoming a Western cheap labour and resource neo-colony. Also, nothing about the mid 1980s crisis where reforms were halted, and even somewhat rolled back, for a few years to stabilize society and to remove the traitorous destabilizing elements. As the author is a sociologist, not an economist, the ignorance of such things is doubly reprehensible. The body of the book is basically a lengthy version of mistaking the tail (outcomes) for the head (state policies and massive infrastructural investments etc.).
In a later chapter the author treats the fall in share of government revenue as a percentage of GDP from 25% in 1980 to 10% in 1995 as an unalloyed good while the subsequent rise to 22.2% by 2015 (where it has pretty much remained) is typified as the “Empire Strikes Back”. He also misses the critical role of the state owning the commanding heights of the economy in maintaining economic sovereignty and making sure that economic activities remain productive rather than extractive in nature. He quotes Milton Friedman in the classic admonition of “state bad / private ownership bad” neoliberal religious belief. He needs to go read some of Mariana Mazzucato’s work on the “entrepreneurial state”. Then he later quotes two economists (Coase and Wang) as saying:
as remarkable as the Chinese market transformation is, capitalism with Chinese characteristics is impoverished by the lack of a free market of ideas; this deficiency has become the most restrictive bottleneck in China’s economic and social development"
LMFAO! These blind ideologues should read the report Strategic Technology Tracker by the Australian Strategic Policy Institute (ASPI), not exactly a China-loving organization.
China’s lead continues to grow: China has strengthened its global research lead in the past year and is currently leading in 57 of 64 critical technologies. This is an increase from 52 technologies last year, and a leap from the 2003–2007 period, when it was leading in just three technologies. Over the past 21 years, China’s rise from a mid-tier position in global research in the late 2000s to mid-2010s into a research and science powerhouse today has been gradual but consistent. It’s been able to convert its research lead into manufacturing17 in some fields such as electric batteries, 18 though there are other areas in which China has been slower to convert its strong research performance into actual technology capability (see page 16).
• China significantly strengthened its standing in the middle of the last decade: It was ahead of the US in 28 technology fields (out of the 64) in the years from 2013 to 2017. In other areas, it has only recently nudged ahead in the 2020s, including in high-performance computing, adversarial AI, advanced integrated circuit design and fabrication (semiconductor chip making), autonomous systems operation technology and quantum sensors, reflecting Beijing’s push into AI and computing. It has also reached parity in its annual publication rate in natural language processing.
The Chinese state-driven development doesn’t seem to be having any problems with a “restrictive bottleneck”, quite the contrary, it is charging ahead of the West! Instead, the author ridiculously opines
Has China once again returned to its own traditional roots of governance? Examining China’s long history of political governance, sociologist Xeuguang Zhou [at Stanford] considers this a likely scenario …stability has long been the national priority of governance. Between the choice of stability or efficiency, stability always takes preference … Nearly half a century after bidding farewell to the godlike leader Mao, the country seems to be once again willing to put up with another era of charismatic authority.
That such utter tosh can be in an academic book published by a very major academic publisher just goes to show the ridiculously pathetic level of scholarship in the West when it comes to analyzing China. To go back to that ASPI report:
China has built up potential monopoly positions in scientific expertise and top performing institutions: In the fields in which China overtook the US a decade or more ago, it has tended to build steady and unassailable leads. In advanced materials and manufacturing, for instance, China made big gains from the late 2000s to mid-2010s, such that it now poses a monopoly risk with extremely high concentrations of research expertise and top-performing institutions in fields including advanced composite materials, advanced protection, coatings, smart materials, novel metamaterials, and nanoscale materials and manufacturing. In several key communication fields, notably advanced optical and radiofrequency communication, and undersea wireless communication, China took the lead in the mid-2010s and has built up substantial leads with between three and five times the research output of the US in the past five years, again posing monopoly threats. In comparison, China’s gains have been relatively recent in biotechnology, gene technology and vaccines, enabling it to surpass the US in its annual high-impact publication rate in the second half of the 2010s and into the 2020s in five of the seven biotechnologies covered in the Tech Tracker … The biotechnology field in which China poses the most significant monopoly risk is synthetic biology, where it’s publishing nearly five times more high-impact research than the US after taking the lead in 2016. However, the US still leads in nuclear medicine and radiotherapy and maintains a substantial lead in vaccines andmedical countermeasures.
The Chinese state is at the centre of this technology upgrading transformation, through is extensive investments in the educational system and research institutes, and targeted investments, subsidies and incentives. The Chinese state is the greatest entrepreneurial state on the planet. Just as the Japanese state was before the dismantling of its development state, and US economic warfare, in the 1980s and 1990s; followed by an ongoing move to neoliberalism. As the ASPI report notes:
The Chinese Academy of Sciences (CAS) is the global science and research powerhouse: CAS, which is thought to be the world’s largest research institute, is the top-performing institution in the Critical Technology Tracker. With approximately 113 institutes, its sheer size propels it into a dominant position.32 For research conducted in the past five years, CAS leads, against all other institutions, in 31 of 64 technologies—a major increase from 2003–2007, when CASwas leading in only six technologies. CAS currently excels in energy and environment technologies, advanced materials (including critical minerals extraction and processing) and in a range of quantum, defence and AI technologies, including advanced data analytics, machine learning, quantum sensors, advanced robotics and small satellites.
Government agencies and national laboratories feature prominently: A range of government-affiliated research organisations appear throughout the 2019–2023 rankings. In particular, NASA ranks 1st in space launch systems and 3rd in small satellites, and the US’s National Institute of Standards and Technology ranks 2nd in atomic clocks. After CAS (discussed above), the government-affiliated organisation that ranks strongly across the most technologies is the Helmholtz Association of German Research Centres, which ranks 2nd in space launch systems, 3rd in satellite positioning and navigation, 4th in advanced magnets and superconductors and 5th in gravitational sensors …
CAS specialises in commercialising its findings and creating new companies. That approach can be traced back to 1985, when CAS undertook a reform named ‘one academy, two systems’ (一院两制), which encouraged its research institutes with application capabilities to enter the market.
The Chinese Party-state will do what it does best, driving economic upgrading and growth through a combination of state investments and the state direction and guidance of market players within a highly competitive market system. Importantly, the state makes sure that the bourgeoisie will never be able to take control of the state; it is the state class that rules not the bourgeoisie. In this way, market dynamics are utilized for the general and productive good, not for extractive and financialized profiteering. Something of course that a neoliberal sociologist would never understand.
Wang Feng typifies the Western academics and commentators who completely misunderstand the nature of Chinese society and economy, a social market one not a capitalist one, and thus repeatedly make ridiculously negative predictions for the Chinese economy. China’s continued economic upgrading and still fast growth will most probably not penetrate the thick skulls of ideology within such individuals and not their papers and books. To escape these thick skulls, they would have to utterly reject the current structure and organization of their own economies, and quite probably be ejected from their comfortable perches.
They could also read this excellent piece by Godfree Roberts on his Here Comes China blog, entitled “Capitalism With Maoist Characteristics”. More sense in that than in the whole of Mr. Wang’s book.
Unfortunately, as Adam Smith long ago observed, we tend to admire the wealthy (without any reflection on whether the wealth was inherited or ill-gotten). And so many people in the Global South look up to the West.
Perhaps our attitudes will change one day when China’s nominal per capita GDP exceeds the US per capita GDP. But for that to happen, China must let its currency appreciate gradually so that the nominal GDP is more aligned with PPP. This in turn requires China to stop accumulating US dollars in its official foreign reserves and state owned banks.
One day when the US defaults on its public debt, there will be a global shock, and suddenly people will realise the emperor has no clothes!
From a Chinese professor friend: "I can not stand my former classmates who are English professors in Chinese universities. For that matter, most college educated Chinese men are like that as well. They are all admirers of 'western accomplishments'.
I had a female visiting professor who was teaching English in China. She attended the same university I did. While she trashed African Americans, she admired everything white in America. Finally I could not stand it any more, and I had to tell her to stop talking like that, and I consider it an insult to me if I did not shut her up directly. In the end, she left, and went to another college for her study.
After forty years of brainwashing by the current Chinese ideology, China is no longer the country with solidarity to the poor people, colored people and oppressed people in the world. Chinese elite today are like the upstarts everywhere, looking down upon working class, colored people and oppressed people.
China needs another Cultural Revolution to wipe these scum from Chinese society".