The Myth of the China Model

The economic stagnation in America over the last four years has led many to question the effectiveness of democratic systems of government. Sluggish to respond, paralyzed by gridlock, and torn apart by partisanship, the Western democracies have shown their flaws in spades. By contrast, the past several years have seen China continue its staggering economic growth. Thoroughly undemocratic, the giant of the East overtook Japan in 2010 to become the world’s second largest economy and now boasts a GDP second only to the United States. Its annual growth rate stood at 10.7 percent for the last quarter, compared to the rather low 3.0 percent growth of the United States.
It is tempting to look to China as a possible source of inspiration for Western nations as they seek to rebuild from the economic downturn. It is a common claim that China could become the new model for economic growth, while the traditional democracies fade into the past. But China’s model is ultimately flawed and suffers from long-term structural weaknesses. While The Economist and other publications may herald the dawn of a dominant China, democracies should look to themselves, not the East, to find solutions for the future.
Red Book, In the Black
Like the United States, China enjoys its own particular brand of national ideology. The Communist Party of China (CCP) has total control of the government, and there is generally little outward opposition to the status quo. Its authority allows the government to implement policies unilaterally. The Chinese government exercises sole control over a large number of state-run ventures and is able to pursue nationally-directed agendas without the distractions of other interest groups vying for special treatment.
Professor David Lampton, the Director of the Chinese Studies Program at John Hopkins School of Advanced International Studies, explained to the HPR that while economic success and governance are not always directly related, the Chinese system has had significant impact on the nation’s long-term economic growth. “The regime’s emphasis on stability has, in part, accounted for the high rates of not only domestic investment, but foreign investment as well,” Lampson asserted. As Lampton expressed, stability and predictability are important factors for investment, and China’s dedication to both helped nurture the economic power it has today.
Many experts caution, however, that centralized authority in China may also be a point of weakness. As Professor Daniel Lynch, an executive committee member of USC’s US-China Institute, explained, China’s swift action in the wake of the worldwide recession likely helped it weather the economic crisis. Roughly 50 percent of China’s GDP consists of investments, such as the planned high-speed rail network. What is unclear, however, is whether these investments were profitable. “China preempted the reduction in GDP by unleashing a huge fiscal and monetary program starting in November 2008,” stated Lynch. “As a result, they have built a lot of infrastructure that is not necessary.”  These “bridges to nowhere” will likely cost China more down the road. While decisions in the West are often slow, the speed with which China is able to respond does not always translate to optimal policy choices.
China’s Troubled Future
Despite economic growth, there is less satisfaction among the Chinese populace than one might expect. The country’s loyalty to the Communist Party of China largely depends on the government’s continued success. As Dani Rodrik, professor at the Harvard Kennedy School explained, people in China generally have same ideals and aspirations as individuals in the West. As such, Rodrik argued, “The Chinese government has essentially imposed a quid pro quo” in which the government provides a rapid rate of the growth and the citizens do not question the government.
Historically, very few countries have managed to rise above middle-income levels without democratization. Without significant strides towards democracy, the very system questioned under the Chinese model, China may find itself floundering in middle-income territory. Another pressing issue is the looming demographic challenge as a middle-aged workforce begins to age. In addition, as Michael Szonyi, professor of Chinese history at Harvard University, points out, the nation’s distorted sex ratio is a large concern for China. There are 119 males to 100 females born in China annually, which could reduce the size of the next generation, making it difficult to maintain a large workforce.
Why West Has Won
With the long-term viability of the China model in doubt, many experts believe that Western nations need to continue to embrace democracy.  The democratic process, while flawed, enjoys a historically good track record by allowing for self-correction between government initiatives and market forces.
The safeguards of elections, free speech, and protest in particular contribute to long-term sustainability. These “safety valves,” while not always efficient, do insure that problems are corrected. As Rodrik explained, the real problems of the last several years are generally related to a distrust of our own democratic system. Lobbyists and special interest groups are increasingly able to set the agenda, while the traditional self-correction mechanisms are devalued, especially when it comes to the economy. “Markets work best when they work along with governments,” Rodrik stated. “Markets and governments are not against each other, but they are just two sides of the same coin.”
Democracies, therefore, have to revitalize this connection between the government and the markets. While China maintains large control over its economy, Western nations’ balance between state regulation and economic freedom ultimately appears the better bet.
A New Order
Many experts thus suggest that China will find a way to introduce gradual democratization on its own terms, and that Western democracies may influence the eventual form of Chinese governance. Lampton explained, “Most Chinese, and indeed many in the political elite itself, are looking for a mixed political solution in which a gradually pluralizing, progressively more liberal China emerges, but one that maintains political order, high growth, and expanded liberty.” This new China will take time to emerge and, according to Szonyi, in the short term, “China will be more demanding, more vocal, and will seek to reframe international order toward its own interest.”
As for the United States and the other democracies, Lampton is optimistic about the future of the broader laissez-faire democratic model, “The United States was once a well-governed nation state, capable of making long-run strategic decisions and marshalling public and private resources to achieve important objectives…In the past, we did that in a democratic context and we need to rediscover the genius we seemingly have misplaced.  The answer for us is not in China, it is within ourselves.”
Caroline Cox ’14 is the Campus Blog editor. Acky Uzosike ’13 is a contributing writer.