19 January 2021
For Youths

BCYC Knowledge Exchange Collective – China’s Political Economy

On 28 Nov 2020, Business China Youth Chapter (BCYC) conducted the sixth instalment of the Knowledge Exchange Collective (KEC) series, an interactive platform for members to share and discuss topics or trends in relation to Singapore and China. In this instalment, BCYC member Li Muhan shared his views on Chinas political-economic imperatives from the establishment of the Peoples Republic to the present day.

Understanding Chinas Political Economy: Beijings Perspective

Muhan shared that the conventional means of assessing political economy employed by the West often fall short in providing a holistic picture of Chinas political economy given the uniqueness of the latters political structure and historical experience. Maoist-era programmes such as the Down to the Countryside Movement and Third Front Movement are typically viewed by Western pundits as developmental aberrations fuelled by ideological fervour. It may be argued, however, that domestic paradigms at the time such as oversupply of urban labour and international isolation in the face of Soviet and American bipolarity should be considered when evaluating the validity of said policies.

The foundational years of the People’s Republic was fraught with difficulties from within and abroad. Industrial cities struggled to provide sufficient jobs for the burgeoning urban population, while the countryside faced an acute shortage of agricultural labour. As such, more than 25 million students from the cities were mobilised to rural regions to be re-educated” by peasants, sacrificing the prime of their youth to toil on the fields. At the same time, the Sino-Soviet split in 1960 left China fending for itself in a world divided between the Cold War superpowers, which led to the ambitious Third Front project that sought to shift the bulk of China’s industrial capacity from Manchuria and the coastal regions to inland provinces. These herculean projects, despite their tremendous economic and human cost, ultimately sustained the fledgling nation’s sovereignty in an era of zero-sum alliances demarcated by ideological affiliation.

Beijing’s political-economic considerations today remain largely congruent with previous administrations in its domestic priorities, best exemplified by the delicate balance that the Party strives to maintain in the realms of economic development and ideological superstructure. The ruling party derives its legitimacy from sustaining the nation’s economic prosperity, though this invariably leads to a more engaged citizenry with a greater appetite for political liberalisation. In addition, the government constantly finds itself adjusting the official narrative to accommodate market-led reforms whilst preserving the core principles of “Socialism with Chinese characteristics” at the same time. These contradictions reflect the unique developmental trajectory and challenges faced by Chinese leaders, and foreign observers should consider these dimensions when attempting to assess the state of China’s political economy.

Assessing Chinas present and future developmental imperatives

Muhan also shared that China’s political and economic ascendance has caused considerable unease among global powers, with the United States being increasingly wary of its potential rival across the Pacific. Unfavourable trade terms and tariffs directed at China has led Beijing to review its export-led growth model of past decades in favour of a dual circulation” development model, which places greater emphasis to boost domestic consumption to achieve sustained economic growth despite fluctuating externalities.

As standards of living continuously rise throughout the nation, the desire for greater political enfranchisement will likely increase in prominence as the educated middle class aspires for more substantial political liberties. Having witnessed the political turmoil and subsequent economic chaos of the 1980s and 90s that swept across the former socialist bloc, Beijing is fully aware of the perils associated with laissez-faire political liberalisation propagated by the West with inadequate regard for domestic realities. The Chinese approach is thus defined by a cautious commitment to ensuring that the contradiction between the base (economic concerns) and the superstructure (political priorities) are kept in check, with the latter taking precedence in determining the nation’s overall development. The Four Confidences”, prominently featured in China’s domestic agenda, presents an outline to the premises on which Beijing will consider possible further reforms: only a robust internal environment coupled with sturdy domestic institutions will convince the Chinese leadership on the feasibility of liberalisation while containing the associated risks.

As the inheritors of the worlds oldest continuous civilisation, the Chinese weltanschauung is distinct in the sheer timeframe by which policies are envisioned to effect, with many conceived to actualise over decades or even generations. It may thus prove helpful to acquire a more comprehensive understanding of Chinas philosophical traditions, domestic considerations, and ultimately Chinas historical experience in recent centuries to fully and accurately assess the political-economic paradigms of this East Asian civilisation.

About Business China Youth Chapter

Business China Youth Chapter (BCYC) is a voluntary group of youths that envisions to be the leading Singapore-based community and inspires youths to be China-savvy and facilitate connections with China. Supported by Business China, BCYC has a vibrant calendar of activities which serve the needs of the BCYC community.

To join Business China Youth Chapter, please email bcyc@businesschina.org.sg.

This article is contributed by Business China Youth Chapter Member Zhai Zihan.