Capitalism in China

“While it is too optimistic, as Silver and Arrighi have claimed, to say that ‘China appears to be emerging as the only poor country that has any chance in the foreseeable future of subverting the Western-dominated global hierarchy of wealth’. . .” (63). Why is it too optimistic?

     Sociologists have not kept pace with China’s burgeoning economy and rapidly changing social structure.  Clearly, Dr. So is correct when he refers to the future “imperial path” that China will continue to take: “State developmentalism has become so successful that it has greatly empowered the Chinese nation in the world economy” (62).  Why should they change course?  As much as the West hates to admit it, China has very quickly emerged as a formidable world economic power.  During the last five years, China’s economic growth probably has surpassed every country in the world.  According to the National Bureau of Statistics of China, the country’s Gross Domestic Product increased at an average annual rate of almost 13% during the five years ended December 31, 2010.  It is difficult to argue with success.

     Obviously, China’s economic success has come at the expense of liberty.  The freedom we enjoy in the West probably will never be duplicated in China.  On the other hand, China never experiences the political gridlock characteristic of our government, which failed to prevent the near economic collapse that seems inconceivable in China.  China’s rulers have proven to be very resourceful and adaptable during the last 30 years.  As Dr. So correctly points out, “the Chinese experience is characterized by trial and error, midcourse corrections, and reversals of policy . . .” (62).  But China’s rulers seem to be aware of the possible negative consequences of rapid economic growth, which is why they implemented in 2006 a “new policy of ‘building a new socialist countryside’ and a ‘harmonious society’” (55).  If the Chinese state can effectively balance economic growth and modernization (infrastructure) with social development and worker benefits (health care, education, increased wages, improved working conditions, retirement benefits, etc.), China could very well eclipse the United States during the 21st century and dominate the world stage.

     The Chinese Communist Party has exhibited intelligent flexibility in spurring the country forward, an “ongoing process” that seems to be working.  But if allowed to spiral out of control, labor unrest could derail China’s economic engine, which has been fueled by cheap labor, no independent unions, and a seemingly bottomless pool of impoverished migrant laborers.  Last summer, employers (mostly foreign companies) responded to a spate of wildcat strikes and protests by selectively increasing wages and improving benefits for workers, who are more aware of their rights and more willing to stand up for their rights.  Eventually, however, it appears that the central government will have to intervene to establish a nation-wide minimum “living” wage and a formal process of collective bargaining between labor and management.  Otherwise, increasing social instability will undermine prospects for continuing economic growth.

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