Re: China

[Martin Hart-Landsberg <marty@xxxxxxxxxx>]

I wanted to change the subject/thread from markets to China.  As far as 
I can tell China is increasingly gaining attention as the one major 
economic development success story, and from the right and from the 
left.  And I wanted to get Pen thoughts about how best to understand 
what is happening there and how we should respond.

First to provide some setting from my own perspective:

In the early 1990s, largely because of the collapse of the Soviet Union 
and the shift of Russia and other Eastern/Central European countries to 
capitalism, China became the country that many looked towards to uphold 
the banner of socialist economic possibilities.  At the time, it was 
moving towards some proclaimed form of market socialism, having taken a 
position that the state sector would remain strong but that growth 
would be encouraged through non-state enterprises.  A leading growth 
sector was township and village enterprises, that were considered 
collective enterprises, and which were based on the dissolved 
communes.  And according to state objectives more and more of the 
direction of economic activity was being handled by market forces and 
encouraged by the profit motive.

Many on the left at the time hoped that China had pioneered some new 
path towards a more democratic, decentralized, and efficient form of 
non-capitalist production.  Even Cuba began to look closely at the 
Chinese experience.  In fact, I was at a conference in May in Havana 
where it was clear that a number of Cuban economists still look towards 
China as a model, now because of its ability to export increasing 
advanced manufactures.

After the east asian crisis of 1997-98, a whole new group of 
progressives began to embrace China.  This was because many 
progressives had previously endorsed the East Asian state capitalist 
model as an alternative to neoliberalism and were devastated by the 
crisis and the movement of many of the crisis impacted countries, such 
as South Korea, to adopt neoliberalism.  China became the hero in that 
it had not liberalized as much as the other east asian countries and 
had survived the crisis and then accelerated its growth.  So, the 
progressive competitiveness crowd began shifting its attention to China.

Significantly, China has moved increasingly to a capitalist based 
economy that is more and more dominated by foreign directed production 
for export.  The government no longer even speaks of promoting a market 
socialist system but now a market system.  And it increasingly is 
celebrated for its ability to attract foreign investment and export.  
This is why the right has also come to celebrate China.

So, some questions: in what sense does the post-1978 Chinese move from 
planning to market, from state to private, from domestic enterprise to 
foreign, and from domestic production to export, represent a failure 
for market socialism as a theory and alternative from of social 
organization.  In other words does the Chinese experience prove that it 
is an unstable set of relations?

And what does it mean that those on the left who celebrate China are 
celebrating an export led growth model.  I would think that an export-
led growth model, as opposed to exporting, would be the last framework 
that progressives would want to encourage.  

It seems to me that when progressives celebrate China?s recent growth 
it blinds them, among other things, to the notion of combined and 
uneven development, which more concretely means that that its success 
cannot be understood separately from the growing tensions and 
deindustrialization in Mexico and in East Asia in countries like South 
Korea and Malaysia and Singapore.  Does this political blindness 
highlight the decline in our theoretical understandings of capitalism 
as a system? 

Then of course there is the growing tendency for the governments and 
workers in the U.S. and Japan to argue that it is China that is 
undermining their respective economies when it is largely transnational 
corporations from their countries that are organizing the export 
production from China.  Are these governments just playing a game to 
divide workers or is more at work?

Any thoughts on these or related questions would be greatly appreciated.

Marty Hart-Landsberg