The cost of China’s economic achievements

The Communist Party of China (CPC), which observed the centenary of its founding on July 1 with a very assertive speech by Xi Jinping, has much to celebrate and the world, even a divided one, has to acknowledge its accomplishments. A country which suffered oppression by multiple colonial powers and extreme poverty and frequent famines is today a global power with modern industrial strength. It has lifted nearly 800 million out of absolute poverty.

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The victory of the CPC-led revolution in 1949 and founding of the People’s Republic of China (PRC) and the launching of the economic reforms in 1978 are major landmarks in this story. That China has effectively handled the challenge of the pandemic, revived its economy and sent a mission to Mars makes the occasion more joyful for it. Xi announced the achievement of the goal of building a “moderately well-off society in all respects”, set at the 16th Party Congress in 2002, besides underlining, in strong terms, China’s determination to defend its territorial identity.

This is also a time to reflect on the nature of CPC’s century-old mission articulated with a fresh perspective from time to time. What seems to be the running thread, irrespective of leadership changes, is the commitment to building China into a modern industrial nation that competes with the West — a goal set by the late 19th century reformers who wanted a rich country and a strong nation. The CPC, born in the aftermath of the anti-imperialist May Fourth Movement of 1919, has turned out to be the most powerful instrument to accomplish that nationalist goal.

Xi has pursued a determined policy of establishing the party’s direct role in every aspect of decision-making, even encouraging an ideological line in his own name — the Xi Jinping Thought in a New Era. On democracy, he has a different position, defending China’s unique system, and that is bound to invite questions. His foreign and domestic policies — the Belt and Road Initiative and Cooperative, Comprehensive Security, refocusing the economy towards domestic consumption while continuing to produce selective goods for the global market under the Dual Circulation concept, orienting “Make in China” towards innovative fifth and sixth generation technology, and the new urbanisation and zonal development programmes — are all markers of the modernity mission.

At a time when Western industrialisation has come in for critical scrutiny due to the enormous damage it has wrought on the natural environment and generated social inequalities and regional disparities in all countries — fault lines that have become sharper in the wake of Covid-19 — China’s persistence with the Western path may be a disappointment.

For sure, every generation of CPC’s leadership has tried to make China’s path different from that of the West’s. Several analysts regard the Mao period from 1949 to 1976 as attempts to steer China on a different path. They highlight the Great Leap Forward, People’s Communes of 1958-1960 and the Cultural Revolution of 1966-1976 as experiments in radical socialist policies with seriously adverse consequences such as famine deaths, political persecution and killings.

But even during those turbulent years, building industrial and military strength and conducting scientific and technological research in collaboration with friendly foreign countries was an underlying theme in Chinese government policies.

After Deng Xiaoping invited Western financial capital and technological know-how and launched the Reform and Open Door Policy in 1978, this process got into full swing. Deng’s successor Jiang Zemin, who took over as CPC General Secretary in the wake of the suppression of the Tiananmen uprising in 1989, pursued this industrialisation policy with great vigour. The result of this strategy is China’s great economic success. From a per capita national income of about $250 in 1980, China has reached over $10,000 in 2020 even though it still remains a lower middle-income country.

China has emerged as not only the world’s second largest economy but seems poised to overtake the US in 2036 — it has, in fact, surpassed the US in many areas of high-tech. So much so that President Biden has announced a long-term strategy of maintaining US dominance in these concerned fields.

The urge to be different has always prompted CCP leaders to add new dimensions to the modernisation strategy. When Hu Jintao succeeded Jiang in 2002, the problem of rising income inequality and rural-urban gap as well as increasing environmental pollution in China was widely discussed in the country and abroad. China’s carbon emission surpassed that of the US around 2009 and the Gini coefficient has remained between 43 and 49 for the past decade.

The Hu Jintao regime took several initiatives, packaged as building a “Harmonious Society”. It also gave the slogan of turning China into a “Beautiful Country” by taking a large number of anti-pollution, energy-saving measures.

The industrialisation drive has, however, persisted and China remains the world’s top carbon emitter. Rural-urban income gap has increased — the average urban income being nearly five times that of the rural. While better living conditions have greatly benefitted the lives of women at home, the employment pattern and political representation in decision-making shows continuing patriarchal domination. China’s success story has taken it into a “success trap”.

Xi has taken this modernisation mission forward — with its successes, limitations and problems — by focusing on what he calls a “New Era”. Coming to power after the 2008 global economic crisis which brought the weakness of the Western system into sharp relief, he has affirmed that China’s economic success means that it’s a legitimate big player. The CPC’s centenary celebrations — as well as that of the founding of PRC in 2049 — have been imbued with concrete political and economic agenda. Xi’s policies have to be understood in this backdrop.

In the recent weeks, Xi has been emphasising the need for the Party’s 91 million members, especially the youth who constitute some 40 per cent of the membership, to recall the “original aspiration” of the founders. That vision of socialism and communism seems to have become a platform of nationalist mobilisation as China celebrated the gains of a “moderately prosperous society”. The commitment to modern industrialisation, and the larger process of “modernisation”, is even more explicit in the goal set for the second centenary in 2049 — building China into a “great modern strong prosperous socialist country”. Xi affirmed that goal on July 1.