Saturday, September 15, 2007
Perhaps the most striking aspect of this scholarly article is the assertion that China's capitalist transformation is being primarily generated by domestic factors instead of foreign direct investment:
Modern China is undergoing a relentless process of transformation, from the forests of construction cranes in its coastal cities to the gargantuan infrastructure projects in its interior. Its economic trajectory has been equally dramatic: China is now ranked 4th in the world by GDP, rising from 11th in 1990. A range of developments testify to its rapid progress along the path to a capitalist economy: the commodification of land and labour, emergence of private firms, formation of finance capital, among many others. Yet China scholars have been curiously reluctant to apply the classic Marxist idea of a transition to capitalism—and its corollary, primitive accumulation—to the Chinese case. Instead, they quite loosely use terms such as globalization, marketization, post-socialism, reform era and market socialism, seemingly unaware of how closely the transformations under way in China compare with the development of capitalism in Europe and North America—not to mention many other ‘late developers’ in Asia and Latin America.
Comparison with historical experience of the rise of capitalism in the West can act as a useful counterbalance to three shortcomings of contemporary China studies. The first common error is to exaggerate China’s uniqueness vis-à-vis the general process of capitalist transition. This does not mean adopting the flat-earth neoliberalism of Thomas Friedman or a unilinear Marxism in which the rest of the world must recapitulate the economic history of Britain or the United States. While capitalism has universal elements, the road to capitalism follows many routes, depending on history, geographic circumstance and politics. Like a virus, capitalism cannot survive without living hosts, whose dna it alters in order to reproduce. Therefore, one can certainly refer to ‘capitalism with Chinese characteristics’.
A second pitfall for China watchers is an obsession with the socialist past. Certainly, the Maoist era shaped the country’s present course to an important degree, and China shares characteristics with other ex-socialist countries. But it differs profoundly from most post-Soviet and East European countries in that it did not undergo a sudden implosion of state, party and economy. Instead, an autocratic state has maintained a close hold on economic policy and the Communist Party continues to monopolize political life. Nonetheless, China in the twenty-first century can no longer sensibly be called ‘late’ or ‘market’ socialist.
A better comparison, in our view, is with the experience of capitalism in the West. But here lies a third danger, of drawing parallels only with contemporary developments around the world, from Internet search engines to mega-malls. Less well understood are the striking parallels with the past in Europe and North America, such as mass rural-to-urban migration and the gradual creation of a banking system. Such processes unfold over decades, and much of China is still pre-capitalist by any measure. Nevertheless, a generation after the prc was set on the road to capitalism by Deng Xiaoping’s market reforms in 1978, the Communist leadership can no longer return the genie to its bottle. ‘Market imperatives quickly proved uncontrollable’, as Martin Hart-Landsberg and Paul Burkett have put it; the ‘Chinese economy now operates largely according to capitalist logic.’ Or, as Robert Weil wryly notes, instead of the reformers ‘using capitalism to build socialism’, they ‘used socialism to build capitalism’.
Central to Marx’s presentation of primitive accumulation are the expropriation of the producers to create a working class, the emergence of a capitalist class with a stock of original capital, and the development of the home market. To these must be added the commodification of land, the rise of cities and extension of the spatial division of labour, and the transformation to a modern bourgeois state. We shall consider each of these in turn.
The discussion here focuses on cities, where the transition to capitalism is especially intense, but this is not to say that agrarian transformation has not been essential to the whole process. Indeed, the era of ‘reform’ was launched in the countryside with the break-up of the communes and introduction of the household responsibility system after 1978, followed by the explosion of town and village enterprises (TVES). Over the last twenty years, however, industrialization, proletarianization, accumulation, property development and consumerism have accelerated in the cities—though these are still deeply linked with the commodification of land, labour and consumption in rural areas and the extraction of surplus from the peasantry and rural industry.
The authors also possess a nuanced perspective about recently publicized efforts to alleviate poverty, mentioned here last year (click on the China label below):
Chinese firms depend most on the domestic market, where household consumption constitutes over 50 per cent of GDP. To view exports as the sole engine of development in modern China is therefore to repeat the classic mistake of liberals who see trade, rather than production, as the heartbeat of economic growth.
Well worth reading in its entirety.
In 2000, state investment was reoriented to focus on the poor inland areas of central and western China, and the new government of Hu Jintao and Wen Jiabao has declared its intent to alleviate rural poverty. A common interpretation is that these measures are designed to head off growing social unrest due to glaring inequality.It is true that state spending creates jobs and income in the short term, but measures such as rural electrification and road building are ultimately designed to incorporate poor areas still ‘off the grid’ more fully into the circuits of capital, thus increasing the size of the home market and the effective demand for China’s domestic industries.