The Great Transformation: the Double Movement in China

What constitutes China's model of transition? According to the conventional wisdom, it has two key components. On the one hand, its development-oriented state has been unwaveringly following market-conforming policies. On the other, the ruling communist party has been indomitably resisting political pluralism.

The two lectures contend that neither of the two attributes can explain the China model. The first lecture shows that China has since 1978 undergone a great transformation consisting of a double movement rather than a single movement towards a self-regulating market system. The politically induced expansion of market forces in the early years of reform has recently been met by a countermovement aiming at protecting man and nature against the perils inherent in a self-regulating market system. In other words, "market reform" is not an accurate characterization of China's development trajectory. In the meantime, China's political system has become increasingly transparent and participatory, which enhances policy makers' responsiveness to newly emerging problems, imbalances, and difficulties. This explains why one survey after another have shown that trust in party/state institutions is fairly high in China compared to many, if not most, so-called "electoral democracies." The political responsiveness is an important factor that has contributed to the rise of the countermovement.

If "authoritarian capitalism" misrepresents the China Model, what the model really is? The second lecture argues that if there is a China model at all, it is a model of never strict adherence to any ideologically circumscribed "model".

As a large country in rapid transition, the problems facing China are unique and extremely complex and there is no model for China to emulate. Thus, as pointed out by the architect of China's reform, Deng Xiaoping, at the outset of the reform, China could only "seek truth from facts," not from dogmas.

Such open-minded pragmatism nurtures strong willingness on the part of Chinese policy makers to learn from all sources, in particular from local initiatives and from both centralized and decentralized experimentations. In retrospect, almost all major policy changes in China have gone through a process of trial and error on a limited scale first. Only when they deliver tangible benefits, are they scaled up, rolled out across the country, and improved along the way. China has also learned from international sources, including so-called "Washington consensus". Rather than blindly following any orthodox prescriptions, however, China practices "selective borrowing," retaining its own policy space as to when, where, and how to adopt foreign ideas.

To react to unintended outcomes, unforeseen events, newly emerging problems, imbalances, and difficulties, Chinese policy makers have tried to fine-tune policy instruments or even change policy goals according to lessons learned from earlier periods. They never make a distinction between so-called "market-conforming" and "market-supplanting" policies in a dogmatic way. To meet the most pressing needs of the people, they have adopted different mixes of two kinds of policies in different periods of transition in line with Deng's encomium to "cross the river by feeling for stones".

Precisely because China never believes in "one-size-fits-all", the country has been able to create, however imperfect, a viable alternative path to modernity, vastly different to that followed by the West.