By Yuksel Gormez Source: CRI Published: 2016-6-30
20th Century has been a phenomenal Century not only for China or Asia but for the whole World from many perspectives. It was not only Two World Wars that have changed the direction of the History from many angles but also it was the contemporaneous change of paradigms in terms of industrialisation and welfare enhancement. Empires disappeared and hegemonic powers interchanged. Against all odds; mass destruction did not stop progressive development and so called welfare state was not a dream at the end of the tunnel anymore after all.
China was at the core of change in the beginning of 20th Century. The Last Dynasty has obviously lost the capacity to govern China as it failed to address destructive imperialist intentions on stealing the wealth of China. Resources has been stolen by using unequal and unfair fire power by the West; which did not stop even under democratic trials by Sun Yat Sen. Worse followed bad for another half a Century. Global conjecture has been against the resurrection of glorious China for many more decades because of following Japanese invasion and the devastating internal conflicts for another half a decade. One may argue that before Communist Party of China (CPC) rose to Power, China tried almost all available governance regime alternatives to eliminate structural problems and bring China back to sustainable growth path. From this perspective; we may argue that CPC was not only the last but the best chance for Chinese people to catch up long-missed industrial revolution gap and design and develop a harmonious society that will enjoy fruits of life after almost two centuries of unfair global repression.
From the political economy point of view; one side effect of any revolution is surely the transition and consolidation of power. This has never been easy without any pain and suffering. After all; neither manpower nor capital was plenty enough to trigger high and sustainable growth rates for China in the first and second decades of the CPC. Resources were limited and governance models had to be redesigned, remodelled and reorganised. Worse than that; the so called external technical assistance from friendly countries with favourable industrial capacity did not come at the right time with the right amount leading to certain delays on industrialisation initiatives to close the welfare differentials with developed world such as Great Leap Forward. Surely, global conditions were not favourable when such drastic measures have been taken to trigger growth because of regional conflicts around Asia, be it Vietnam or Korea wars. Nevertheless; we should accept the fact that those initiatives were the backbones of human resource capacity built-up processes for the future.
The CPC never hesitated to fight against structural problems that have been keeping China underdeveloped. Even radical decisions have been taken such as One-Child Policy to stop uncontrollable birth rate. Massive sacrifices were observed as a side effect for such radical decisions. Strategies such as finding the truth from the facts and feeling the stones when crossing the river have been widely employed to optimise experimental learning by doing. As a one step further; pragmatism has been included to the main structural reforms philosophy by arguing that the best cat is not the black or white cat but the one that catches the mice. The ultimate target has been to eliminate hunger, prevent poverty and bring China back to a welfare state position.
When the reform and opening up policy has been declared to its full throttle, global conditions have somehow becoming favourable as well. Cold War was near to collapse and glasnost and perestroika created a new stimulus for further globalisation. The CPC was leading China to be an integral part of global community by attracting the manufacturers of the World to produce in China. The whole program has been the most successful economic policy in the last couple of centuries on contestable bases and with the World Trade Organisation membership in 2001, China became an indispensable part of global supply chains.
China is now a ten trillion dollar economy. But, per capita economic indicators has been lagging behind to reflect a truly welfare economy. The next challenge for the CPC will be to bring per capita welfare of Chinese people to welfare society levels. In the world of contestable economic performance, we can argue that the CPC can deliver this if we judge the future from historical performance. Avoiding potential policy mistakes by sticking to dedicative structural reforms for sustainable growth will surely help the CPC to outperform average global welfare enhancement for a better life for all in China.
The author is a Senior Economist, Central Bank of Turkey, Research and Monetary Policy Department, and a Senior Fellow of Chongyang Institute for Financial Studies, Renmin University of China.