Neoliberalism in China - Essay Example

Neoliberalism in China: The Two-Faced Economy Neoliberal ideology brought significant changes to world’s strongest nations. China, which has the world’s most numbers of people, became one of the nations that eventually embraced the neoliberal rule. It was during the time reform was sought to bring about change in China after the worldwide economic crises the World War has caused. Did neoliberalism paved way for developing a new and better China? This study will tackle on the impacts brought about by neoliberalism in China and the contemplation of the effects of such change in the Chinese political system. This will include the distance of how far neoliberalism made China travel the great wall of economic stability and how the society benefited. In addition, the impacts of neoliberalism in different aspects of the living in terms of trade, education, health and labor are also included. Neoliberalism has awakened dragon China. It is a nation that can be considered as a powerful dragon that has might for stability but with fierce claws for suppression. To better understand the context of neoliberalism, it is important to go under the varying definitions neoliberalism from different writings and publications. Harvey in the first part of the book ‘A brief history of neoliberalism,’ defined the concept as a theory of political economic practice that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. Deregulation, privatization and withdrawal of the state from many areas of social provision can be the words to best describe neoliberalism in this sense (Harvey 2). To Cros (As cited by Thorsen and Lei 9), neoliberalism is the political ideology which resulted from a few efforts at reinvigorating classical liberalism in the period immediately before and during World War II. Contemporary definition of neoliberalism says Neoliberalism is a loosely demarcated set of political beliefs which most prominently and prototypically include the conviction that the only legitimate purpose of the state is to safeguard individual, especially commercial, liberty, as well as strong private property rights (Thorsen and Lei 14). These varying definitions impose power and stability intended for the common good of man through financial freedom for the stability of the nation. During the earlier part of the book Harvey vaguely discussed some of the points of having neoliberalism type of government. One of the key points is the government’s role to create and preserve an institutional framework needed for the practice of such type of government. Another point is to secure private property rights and to guarantee the proper functioning of markets the state must set up military, defense, police, and legal structures and functions. Also, if in case markets do not exist then, they must be created by action of the state. In order to facilitate order within the realms of neoliberalism, state interventions in markets must be kept to a bare minimum because according to theory the state cannot possibly possess enough information to second-guess market signals and because powerful interest groups will inevitably distort and bias state interventions for their own benefit (Harvey 2). This point of the systems seems to be its own anti-graft and corruption watch by putting the cycle of trade out of the hands of the public servant—an intention that seems to be far different from what was expected. According to theory, the neoliberal state should favor strong individual private property rights, the rule of law, and the institutions of freely functioning markets and free trade. These institutional arrangements are considered essential to guarantee individual freedoms. Under the neoliberal rule the sanctity of contracts and the individual right to freedom of action, expression, and choice must be protected. The state must therefore use its monopoly to preserve these freedoms at all costs. By extension, the freedom of businesses and corporations to operate within this institutional framework of free markets and free trade is regarded as a fundamental good. Private enterprise and entrepreneurial initiative are seen as the keys to innovation and wealth creation. Intellectual property rights are protected so as to encourage technological changes. Continuous increases in productivity should then deliver higher living standards to everyone (Harvey 2). These are the aims of the neoliberal government to its people though execution of power will significantly affect or alter the neoliberal goals. The best regard for the commitment of monetary stability is the greater the focus of the state and it has to be achieved even to the point of execution of public power. The Chinese Neoliberal State Deng Xiaoping took the first historical steps towards the liberalization of the communist-ruled China that accounted for a fifth of the world’s population. Deng took the courage to transform China away from being a closed nation by opening opportunities to the world outside its own that marked sustainable changes in country’s history. The changes that Deng painstakingly took along with the people of China, despite being flooded with different opinions, were pursued and achieved with firm political hands, all for the sake of liberating the people from national economic decline. It was not China alone but alongside leaders globally, economic revolution spread to remake the post-war world in a totally different image (Harvey 1). This shift changed the image of the Chinese rule—an image that revealed by the two opposing group of the blessed and the oppressed of the hopeful government. In Dung's China the image of an ideal economy is viewed to be based on wage labor; that China would be integrated into the world capitalist economy and will rise as one leading nation; profit making would be the main goal of economic life; and labor would be fully modified (Girdner 128). Neoliberalism projected the Chinese economy surging upward from the down trend economic growth. Transformation and heavy reforms and changes have to be made before the phenomenal sustained growth rate that became highest in the world by the year1992 (Girdner 122). Deng emphasized the emergence of capitalist accumulation in the hands of private people to help build and support the economy in its entry into the world capitalist market (p.123). Neoliberal capitalism attracted capital and built large state-guaranteed firms to capture large shares of the global market in areas such as electronics and communications (p.124). Thus, the eventual change in the face of the Chinese economy was made under the rule of the neoliberal reform—economic stability was an eventual consistent trend since then. China became an emerging market since then and is on the way to becoming a modern country and significant player in the global economy. China now is the second largest industrial producer in the world and third largest in GDP in purchasing power parity, after the US and Japan and predicted that may become the world's largest economy by the year 2015 (Girdner 126). Amidst the economic success achieved by China why was it never free of criticisms by people under its assumed successful strategic regime? During the early years of neoliberalism in China, the state manipulated the economy that delivered spectacular economic growth that increased the standards of living for a significant proportion of the population. There are two faces shown here of neoliberalism—that of the benefited significant portion and that of the not benefited portion. How come that of the said surging economy brought by capitalism to China not all was benefited? The reason for such incongruence will be further answered. By the eventual rise of the Chinese economy, state owned enterprises and capitalist dominated the market. Propagation of more businesses would mean more income generation for the state and more employment and employment benefits increasing the livelihood for the people (Harvey 125) making the trade and economic market boom with the sprout of private capitalist all over china. Furthermore, the spurts of state owned banks provided investments outside of state budget for capitalist that paved way for the creation of more businesses in the coming years (Harvey 125). Urban locations were soon filled with businesses and eventually creation of township and village entrepreneurs (TVE) opened for centers of entrepreneurialism, flexible labor and market competition that even expanded the economic market by small-scale production of the private sector in towns and villages of the rural sites (Harvey 126). Of course the ever growing economy means new innovations, infrastructures and technologies such as the construction of the new subway systems, an international high way system, coastal zones, railroads, international airports in major cities and even the recent construction of the largest shopping mall in the world (Harvey 131-133). This marked the fast and over growing economy of China. Better transportation system would produce better trade due to better accessibility of the Chinese market within its walls and for outside traders. The rapid urbanization of China created more cities and developed inter-state competitions to surpass the economic status one city has achieved. Alongside all the achievements, the modernization of education and science and research propagated for the pursuit of finding better innovations (Harvey 134) and technology to better provide better skilled workforce. Cheap but highly skilled laborers attracted foreign investors to incur China’s services in comparably lower costs than that of other countries like Mexico. Hence, there was the spread of skilled workers that opened the doors for manufacturing technological devices. The opening of China to foreign trade caused its massive growth in trade and capital inflows that it became the most dynamic and successful economy during that time. Up to date, China can be considered as a major supplier of common goods for other countries like the United States (Harvey 138). On the other hand, while privatization and capitalism is polishing an image of a perfect economically stable and globally competitive nation unfortunately there is a counterpart of a distorted image of injustices far different from the goals set by the neoliberal ideals. Capitalism under Deng has led to greater authoritarianism, political repression, labor exploitation under transnational capital, repatriation of profits abroad, a resurgence of feudalistic practices in the countryside, a lack of emphasis on education (Girdner 129). Despite the surge in economic reputation these injustices seemed to be eating the other side of the Chinese economy. Social inequality is one of the things from the other side of the stable economy; with the advent of economic blast the urban and rural communities were separated by means of residency permit system to prevent massive migration to urban places. The rural dwellers were least privileged in favor of the urban dwellers (Harvey 125). One of the proofs of biases the government has over its sovereignty was the creation of the real estate law that conferred real-estate ownership rights on urban residents (Harvey 127). Due to this lack of regard for rural dwellers, a significant increase in the number of rural migrants happened which was the highest in the world resulted in exploitation of labor—vulnerability of these oppressed workers resulted in getting jobs that has low wages, low benefits and no legal protection (Harvey 129). The labor markets were then plagued with unjust rule, by virtue of free trade managers are given significant part of the shares that are hundred times more that of the average worker (Harvey 144) and can even retain a portion of the workers profits and can sell any surplus produced at free market price. This kind of capitalist mismanagement often results in closure of numbers of enterprises that can lead to massive and vast number of unemployment (Harvey 130) and can increase the numbers of non-profiting loan due to bankruptcy. Jiamasu is a clear example of severe unemployment of eighty percent of its total population after a textile factory closed (Harvey 149). Workers then lack medical insurance and compensations that later lead to demonstrations for reform (Harvey 149). Another issue of social injustice in the neoliberal China is corruption. Benefits of the government were bestowed mainly on urban residents and government and party officials (Harvey 144). Corrupt officials began using their networks and connections in enjoying a lavish life style and importing expensive cars enriching themselves. Officials, including Deng Xiaoping, set their children and relatives up to control lucrative sectors of the economy bringing crony capitalism under the guise of socialism. Demonstrators for change demanded that officials and their children make their assets and bank accounts public and known to reveal corruption. The worst is that local government officials transfer shares of enterprise on a personal account stealing from the hard worked labor of the working state (Girdner 131). To get rich is glorious--these mantras apply essentially to capitalist accumulation. However the great acceleration of capitalist accumulation created a great deal more of inequality. Greater social turmoil and tensions have emerged (Girdner 124). In agriculture, 70 million farmers lost their lands to illegal claims of people in position. A significant amount of national property “legally” and illegally was transferred to the personal economic advantage of a small minority—mainly the capitalist, the government and party officials (Harvey 146). Compensations and benefits if not small are sometimes not given at all. In addition, there was an increase in unpaid labor rate that encouraged violent protests among different groups that oppose the unjust working conditions. Monetary interest has been the prime medium of living during that time where the rich get richer while poverty intensifies among the ones who are left behind—making the poor poorer through injustices and oppressions that the state was supposed to protect its people from. Other aspects of change include crisis in education. Due to privatization lack of proper funding of educational institutions resulted to low quality education and closing of some schools to turn them into factory. Low pay for teachers has led to instructors and professors being forced to use their time looking for part time jobs to have additional income to make ends meet. Low quality graduates from universities are produced due to letting siblings of rich people attend school even without passing the exam as replacement of a bigger tuition fee (Girdner 135). Health care is being privatized as well leading to decrease of normal services and standards due to limited and thrifty funding by the private owners leading to poor health quality that can lead to increase in the rate of morbidity and mortality in disease. Housing is increasingly being privatized favoring the urban dwellers over the rural residents. Of all the injustices especially against the members of the increasing numbers of the average class social strata such as the common workers and rural dwellers, the increasing desire for reform of the government which was thought to bring reform for everyone brought about multiple demonstrations to call the attention of the power directed abusive government. Did neoliberalism paved the way for developing a new and better China? The neoliberal capitalist during its early years was opted to lift the economic restrain that was then imposed on many economies worldwide due to the outbreak of World War. Neoliberalism was used then as a means to end the economic draught to bring reform to the state struggling out of the gasping economic status. On the aspects of liberating economic reform, neoliberalism did bring changes to Chinese society that paved way for the development of stable and globally competitive China today. Other aspects of the economy such as social parity need alleviation and justice. The government during the early years of neoliberalism was merely focused on the monetary aspect of the economy and has forgotten to balance it with other aspects that were disregarded and not given attention as long as the state is gaining profitable status out of its current generation. All the good and bad obstacles during China’s travel through history are part and parcel of the transformation needed for the alleviation of the Chinese people from economic gloom. Neoliberal ideology has all the good intentions of bringing forth economic freedom to all its constituents but the pitfalls are with the Chinese neoliberal runners and to the means used by the implementing body of the state in promulgating the neoliberal ideology. The Deng government lost control in the process of liberation and let the power, materialism, and monetary value take control and define the concept of neoliberal rule. There was a failure in the part of the government to go by the true essence of neoliberal government and failure to watch over the tendency to lurk officials into power and abuse. Today China has achieved a lot in terms of economic stability but with all the sacrifices it has made within its internal reformation. It has created a two-faced facade of the Chinese government. One face is of the sturdy economic giant that has established stability in the global economy and one face of the fierce firm government willing to take the risk to attain strength and stability in a world of economic rivalry. Contemporary ideals no longer permit this kind of social injustices and every nation seemed to evolve from the past government’s mistakes that lead into an adaptive kind of government customized according to their own benefits. One cannot truly say that only neoliberalism in itself took China by storm, neoliberalism was supposed to be an ideology but Deng customized its implementation to impose changes in China the way it is personally seen in a way deemed necessary for its commitment. Works cited Girdner E. China as a Capitalist State: from primitive socialist accumulation to neoliberal capitalism. [n.p.] 2004. Print. Harvey D. A brief history of neoliberalism. Oxford University Press, New York. 2005. Print Thorsen D. & Lie A. What is Neoliberalism? Department of Political Science University of Oslo. n.d. Print. Read More