China in the 20th century - Essay Example

? 20TH CENTURY CHINA Submitted by 2008 25-8636 Introduction 3 A brief history of China in Twentieth Century 3 The al Dynamics of China’s Transformation 5 Economic Institutions and Structures 6 The China Puzzle 6 Political Institutions of China 7 Chinese Reforms 9 Chinese Peasantry 9 The Fengyang Experiment 10 The Privatization of Land 10 The Cost of Reforms 11 The Rural Argument 11 Future Outlook of Chinese Reforms 12 Conclusion 13 Bibliography 14 Introduction Twentieth century has been the period of great massive changes for China. This has been a period of revolution with changes all round including governments, economy, political, social and cultural. Twentieth century China is an epitome of great sociopolitical changes (Schoppa). This changing face of China has its effects on the economic and political future of China. This paper aims at exploring and critically analyzing the three systematic challenges the current leadership is facing namely the challenge of fragile political institutions and structures, growing strength of societal changes and stability and sustainability of economic, social and political progress. This paper will analyze the effectiveness and efficacy of the reform programs initiated by Chinese government. It aims an in-depth study of the hurdles the economic reforms are challenged with and the weaknesses of the political system along with the predictions of the future. A brief history of China in Twentieth Century China was one of the most advanced and politically powerful country of the world, with its long Chinese history and rich Chinese civilization at the beginning of the twentieth century. Even at that time too it was the most populous and politically unified country with very advanced agriculture. However when Europeans landed on this region China was stuck in its old traditions with no industrialization. The Chinese traditional government began to fail in the early years of the twentieth century and Western Nations were fighting over as much control as possible. The resentment of this foreign influence by the Chinese people was revealed in Boxer rebellion. The Chinese people replaced their imperial system with Chinese republic led by Sun Yat-sen in 1911. The battle with imperial forces and republican forces of Sun continued for some time. With the outbreak of First World War china found itself providing laborers for alleged mines and factories. While the internal battle of power in china continued weakening it even further Japan capitalized on the situation. By the end of 1939 Japan’s full blown aggression against China yielded them control over most of the east coast of China. First half of the twentieth century for china mostly meant power struggle, high inflation and economic strife. In 1949 under the leadership of Mao Zedong peoples’ Republic of China was established. The republic of China meant great proletarian cultural reforms. A five year plan which included cultural reform, social reforms, land reforms and economic planning was developed and implemented. China formed a thirty year alliance with Russia against Japan and its allies. It laid the roots of communism in China. Most of the Western world did not establish diplomatic ties with Communist China until 1971. Mao Zedong and Zhou Enlai remained China’s leaders until 1976 who transformed China with many of their reforms. With their death power struggle again continued in China resulting in famous incidents like Tiananmen Square. Deng and Zhao Ziyang brought younger generation into power. They implemented policies for modernization of four major sectors namely agriculture, industry, defense and science and technology. (Phill) Future economy of China is the most talked about topic these days. Is this economic growth sustainable? Different aspects of social, political and economic pressures on China along with its weak political structure are the concern of most of the Western world The Institutional Dynamics of China’s Transformation Institutions provide the basic and fundamental framework which societies choose and under which various social and economic interactions take place. They provide insight into the political, social, economic and legal systems and their interrelationship. These institutions are particularly helpful in understanding the economic system. How the market works? It provides information about allocation of capital and labor, free exchange and control over information by the state. The advancement of China can be termed as the second best option considering the political and social constraints inherent in the institutions of China. To fully understand the great economic transformation of China in the last thirty years one needs to fully understand the complexity of interactions between the institutions. An understanding of the social and political context and the judgment on legitimacy, capacity and effectiveness can determine the direction of institutional change (Huang) Mao Zedong strongly believed in the power of institutional models to change and transform societies. All his reforms were directed to achieve this institutionalization. This target of making and transforming China into a strong, rich and prosperous country has achieved its midterm targets. Economic Institutions and Structures Although China is facing huge obstacles in its growth but still China has become a huge powerful economy and China becoming a global power is no longer disputed. Chinese economy has become the fourth largest economy in the world. The US trade deficit with China is increasing at the rate of 20%. US have lost many jobs to China and they have no answer for the Chinese prices. China is taking over many of the American and European companies including giants like Rover, IBM PC and even some oil producers. European and American markets are flooded with Chinese clothes, appliances and many other things. Chinese products do not hold the tag of poor quality any more as it used to be twenty years ago. The China Puzzle This speedy economic growth of China has become a puzzle for western researchers. China performed so well in the first decade and a half of the reform which is beyond comprehension if compared with the mainstream Western standards of economic policies and institutions. According to them Chinese economic institutions and policies are by and large deficient, weak and inadequate compared to their Western counterparts? It becomes more perplexing if we compare the rise of China with the fall of Russia. The two economies were following the same political and economic ideology for two decades. This fast growth was managed in China with politically authoritative and economically centralized system. Swift economic growth was accompanied by a very slow political reform. It is generally believed that a democratic and strong political system is a prerequisite for a rapid economic growth. In the case of China it happened the other way round. It is believed that the economic growth will bring changes in the political institutions of China (Yang). This trend of decentralization of power to local authorities has already been witnessed with the growing independence of National People’s Congress (NPC). Social pressure is also growing gradually for the decentralization of economy. Political Institutions of China The fast economic growth of China in the past decade has made China the centre of world attraction. Despite this rapid economic growth there still exist some uncertainties about China’s future mainly because of the inconsistencies of its current political situation. China has a long history of political unrest and upheaval which depicts some of the fundamental weaknesses inherent in the political system of China. According to Lieberthal complex governing organizations and political system of China can be traced back to the imperial past, many revolutions of the twentieth century, nationalist, communist and the current regime. According to him the largest and most difficult issues which contemporary China is facing are large bureaucratic structures and the allocation of resources in front and behind the large organizational facades. Lieberthal presents a harsh critique of Mao’s rule and the harmful effects of its legacy. He believes that Mao’s peasant movement which paved the way for military had very long lasting effects on the political system of China. It is responsible for the many characteristics of the political system of china such as military interlocking with the party, intolerance for intellectuals and mass political campaigns. He especially appreciates Deng’s economic and social reforms in late 70’s and 80’s. Lieberthal perceive Deng as an innovative reformer who worked towards reduction of government control in economic and social activities. He also analyzes the current political system of China and highlights the propaganda and still present coercive forces in the Chinese political system. He believes that China is going through a phase of change where social pressure is growing for reduction of government involvement and influence in the social, economic and political issues. China’s new generation is concerned about political succession, managing of economy and limiting environmental damages. According to him despite China’s economic growth it will remain authoritarian in the near foreseeable future. It is a glaring weakness of the political weakness of China and it can even hamper its economic growth as well. (Lieberthal). Consumer revolution in China has created a new middle class and it has also brought the major urban areas into the limelight. There is less emphasis now on the public sector because private sector has generated many jobs in the economy. China is fast becoming the manufacturing ce ntre of the world with all the foreign direct investment pouring in the country. All these opportunities have resulted in large scale migration towards the urban areas. This urbanization trend is so strong that it has become the most massive movement of people in human history. Off course huge population of China has to play a part in setting this record. Such massive movement has its consequences on the environment as well. China has virtually affected all international economies and has integrated with all major multilateral regimes. All this economic advancement has affected the political system as well. Currently there is battle between authoritarian, bureaucratic structures and the popular political movements demanding more liberty and freedom. All this advancement in economic growth and the open economy has highlighted the weaknesses of the political institutions. Chinese Reforms We know that china is a great economic power today. China being a socialist state is undergoing reforms. All these reforms have one target or aim and that is to take a planned economy towards market economy gradually. It involves globalization of china’s commerce, media and culture and opening the economy. China is not a democratic state but still has managed to achieve unprecedented growth in the last two decades. The social pressure of changes in political and economic institutions is mounting and hence resulted in the trend of movement towards market economy. (Cheek) The Chinese economy has blossomed and had shown remarkable growth in the last two decades. China’s gross domestic growth rate (GDP) is more than 10%. But such rapid growth is not without its deficiencies. Financial sector of China is not in good health and hence resulted in distorting domestic demand. Chinese Peasantry The reforms in China had brought wide spread changes. I have selected peasants of Chinese villages to fully gauge and understand the impact of Chinese reforms. Chinese second rural revolution started in 1980’s soon after Mao Zigong’s death. It involved restructuring of the people’s commune system which meant the reversal of the policy of collective labor which was the philosophy of the first rural reform of 1950’s. The Great leap and Cultural Revolution philosophy of the gone era which was supported against free market and sideline production failed to give any monetary benefit or prosperity to the peasants. Peasant’s incentive for economic production declined mainly because of wrong policies and bureaucratic structure which supported grain production instead of sideline rural industry and the emphasis on the doctrine of egalitarian. All this resulted in decrease in production and no improvement in the lives of peasants. Such a situation created unrest and dissatisfaction among peasants and paved the way for revolution. The Fengyang Experiment Zhao Ziang conducted this experiment of rural reforms in two provinces of China without the approval from Beijing but its great success made him popular and his reforms widespread. In this revolution work point system was revolutionized. In the reforms the task difference was based on heavy and light work and that too was self assessed. In this new responsibility system land was passed out to the household depending on the size of the household and the adult power. Readjustment in the title was due in five years depending on the size of the family. In this way economic, administrative and political powers were transferred to the commune system. With these reforms commune system became marketing and Production Company managing various resources. Village teams called Township were responsible for administration but their powers were reduced. The Privatization of Land In the second surge of reforms the commune system was abolished. Attempts were made to make the peasants rich. They were given the ownership of the land and the control of major means of production. It was done to liberate peasants and commercialize agriculture. Rural commercialization and industrialization was considered the only solution of the Chinese population problem. (Elizabeth J Perry) The Cost of Reforms The second revolution transformed China in less than a decade but posed some of its own weaknesses. Grain production fell by 7% in 1985 after a increase of 33% between 1978-1984 due to reforms. It created grain shortage. Grain shortage was considered a social disaster hence controls were imposed on the production of grain. Increased prices of fertilizers and seeds left farmers with little profit even after production increased. With the passage of time reformers realized that problems in rural areas are not simply because of institutional reforms. It was realized that state should also contribute for the welfare of the peasants and agriculture. It was decided that farmers should be ensured (Gittings) High prices to guarantee fair return on work. Spread of technology for high yield of production at low cost Discourage use of agricultural land for non-agricultural purposes Encourage large scale farming through mergers of individual farmers Surplus rural labors should be brought to town. Increase the number of farm technicians. The Rural Argument The benefits and gains of rural reforms of 1980’s could not be continued in the following decade and hence it again resulted in stagnation in agricultural production and wide disparity of rich and poor farmer. Hence liberation has not been cost free. Future Outlook of Chinese Reforms The Chinese economy has blossomed and had shown remarkable growth in the last two decades. China’s gross domestic growth rate (GDP) is more than 10%. But such rapid growth is not without its deficiencies. Financial sector of China is not in good health and hence resulted in distorting domestic demand. Non- performing loans are on the rise. China is also suffering from excess capacity in some sectors. In the medium term China is faced with deflationary risk. While in the short term there is excessive pressure on asset prices. There are some subtle and indirect costs associated with the current growth model. Tight management of exchange rate has put pressures on the financial sector and has reduced investment opportunities. This has led to inefficient intermediation of domestic capital. Long term sustainability of growth is also suspected. (Dali L Yang) Weak financial sector has hampered the ability to sustain any internal or external shock. A well developed and strong financial system along with stable macroeconomic policies is necessary for long run balanced and sustainable growth. Hence the future of China does not seem very promising unless china manages to effectively solve many of the inherent problems in its economic, political and social policies. Conclusion China is one of the leading economies of the world which has shown remarkable growth in the last two decades. It does not follow the strict Western concept of political institutions and democratization but its economic growth is undeniable despite the authoritative form of government. But there is growing pressure in China for reforms in political, social and economic institutions. The country is moving towards market economy but still it’s a long way to go. The growth policy followed by China along with controlled exchange rate policy and other controlled macroeconomic variables has distorted the economy and has put question marks over the sustainability of its growth. These issues need to be settled before any sustained and balanced growth can be ensured for future. Bibliography Cheek, Timothy. Living with Reform: China since 1989. Canada: Fernwood Publishing, 2006. Dali L Yang, Litao Zhao. China's reforms at 30: Challenges and Prospects. Singapore: World Scientific publication, 2009. Elizabeth J Perry, merlie Goldamann. Grassroots political reforms in Contemporary China. USA: Harvard University Press, 2007. Gittings, John. The Changing face of China: From Mao to Market. New York: Oxford university press, 2006. Huang, Xiaoming. The Institutional Dynamics of China's great Transformation. New York: Routledge, 2011. Kenneth Lieberthal, John Gittings. The changing face of China. New York: Oxford University Press, 2005. Lieberthal, Kenneth. Governing China: from revolution through reform. W.W.Norton, 2004. Phill, Abey. China in the Twentieth Century. 20th Februrary 2000. 29th March 2011 . Schoppa, R. Keith. Twentieth Century China: Ahistory in documents. London: Oxford University Press, 2010. Yang, Keming. Entrepreneurship in China. England: Ashgate Publications, 2007. . Read More