BOOK
REVIEW The quiet
revolution China and Globalization:
The Social, Economic and Political Transformation
of Chinese Society by Doug
Guthrie
Reviewed by Sreeram
Chaulia
China's relentless march of rapid
economic growth and reduced poverty qualifies as a
quiet revolution in the contemporary world.
American sociologist Doug Guthrie's new book
challenges neo-liberal dogmas and makes the case
that this revolution was successful because it was
state-led and gradual.
It is an account of
how the forces of globalization played out locally
in the world's fastest-growing and sixth-largest
economy.
China's economic rise is "the
result of methodical and careful government
policies" (p 8), state guidance and managed social
upheaval that introduced
policies that constructed a market system,
vindicating the theory that economic processes are
fundamentally political.
Deng
Xiaoping's reforms from 1978 introduced controlled
modifications to the structure of the socialist
economy, "leaving the state apparatus intact while
slowly unleashing market
forces" (p 38). The
Chinese government's strategy was to allow
economic actors to learn the rules of capitalism
rather than withdrawing and assuming that they
knew them intuitively.
Paralleling the
household responsibility system in the
countryside, in urban China, the planned output of
an enterprise was cropped and the market part was
permitted to grow. By granting autonomy to local
officials and factory managers, incentives were
stimulated. Today, rather than dealing with the
central government, foreign investors often prefer
building long-term alliances with the provincial
bureaucracy.
Contrary to International
Monetary Fund and World Bank boilerplates, rapid
and complete privatization of property was not
part of China's success story. Township and
village enterprises resembled business
organizations, but property rights still resided
in the hands of local governments. State-owned
enterprises remain a massive force in the Chinese
economy.
The institution of lifetime
employment and pensions ("iron rice bowl") was
carefully dismantled by the state, but this was
tempered by labor contracts and labor arbitration
commissions (LACs) to give workers recourse
against employers. Establishment of special
economic zones facilitated colossal inflows of
foreign capital into China, dwarfing that of Japan
in comparable development periods.
The
late premier Zhao Ziyang's coastal-development
policy laid the foundation for China to emerge as
the third-largest trading economy by 2004.
Besides export-oriented foreign direct
investment (FDI), China also attracted investors
wanting to capture the gigantic internal market.
Guthrie remarks that the country's transition was
the product of a "struggle between a government
that wants to stay in power and an international
community that wants access to a billion
consumers" (p 235).
Technology transfer
and new management practices were two gifts of FDI
to China. Joint ventures between Chinese firms and
multinational corporations taught the former about
global market principles. Concrete changes in
organizational structure that resulted from
state-orchestrated reform could be attributed to
the innovation, experimentation and imagination of
industrial managers who were under high-level
governmental offices or exposed to contact with
foreign companies.
Premier Zhu Rongji
furthered Zhao's vision, knowing "that China's
only hope was to put corporate investors of
advanced capitalist nations at ease" (p 238). Zhu
forced Chinese companies to comply with
international accounting standards, another
measure of how the state saw itself "in
partnership with Western multinationals" (p 146).
Zhao and Zhu pushed China toward rational
economic processes and rule of law. As many as 700
national and 2,000 local laws were enacted in the
1980s and 1990s, enabling an explosion of suits
against the government. A rights-based labor
regime flourished in the ethos of legalism, with
workers winning about 60% of cases against
employers brought before LACs.
The
dramatic ascent of litigation in Chinese society
even caused political dissidents to sue the
government for violation of constitutional rights.
Chinese social mores were remade by the
economic reforms. Steady migration of young women
to urban and coastal areas affected the structure
of rural families. New elites rediscovered
traditional dowries and wedding ceremonies. The
state's strict "one-child policy" shrank family
sizes and increased female infanticide and
girl-child abandonment.
The Chinese
Communist Party's (CCP's) control over society
receded with reforms. By admitting private
capitalists and intellectuals into the party, the
signal was sent that business groups could no
longer be ignored in Chinese politics.
The
dependency of individuals on their work units and
superiors was eliminated, even as corruption rose
among local bureaucrats. Managers of large firms
distanced themselves from guanxi (using
connections to accomplish tasks) and drew closer
to market imperatives of price, quality, rules and
regulations.
Individual life chances swung
powerfully because of the economic reforms.
University-degree holders and those with
foreign-language skills were highly rewarded.
Citizens positioned to match the multinationals'
ways of doing business benefited the most. Female
access to education and contribution to household
income improved significantly, but not enough to
trump gender inequalities.
Incomes in
rural areas were only 40% of urban incomes, while
disparities between coastal and inland and western
and eastern areas widened. Breakdown of the
hukou system (household registration)
spurred mass migration to cities.
Freedom
to be mobile throughout the economy gave workers
the chance to "vote with their feet", but also
engendered a floating population of more than 100
million that was vulnerable to mandatory removal
from shantytowns. An underclass of rural migrants
"begs for a living in China's booming
metropolises" (p 214).
Guthrie asserts
that the China of the late 1990s was politically
much freer than the closed society of the Mao
Zedong era. Depletion of the CCP's monitoring
capacity and independence of individuals in
workplaces were the two underlying mechanisms that
boosted the 1989 Tiananmen Square movement.
Reforms gave birth to an economically
secure and autonomous middle class. Promotion of
private enterprises by the state fostered an
autonomous public sphere and civil society as
well. Many private companies materially supported
the 1989 mobilization.
Alternative sources
of information became available to the people as
the Chinese government improved access to
television, fax and telephone. Guthrie comments
that the Internet "is a new frontier for outright
resistance and organization of popular movements"
(p 275). The Chinese state's fear of losing
control over the telecommunications sector has
clear political connotations.
As reforms
progressed, China's legislature (National People's
Congress - NPC) acted with greater independence,
and sometimes opposition, to the party-state. The
NPC and local councils encouraged election of
non-party candidates to government positions.
At the village level, adults had the right
to vote, stand for election and run committees of
self-governance. Urban Chinese participated in
elections to local council deputies, boycotted
unfair elections and filed complaints to officials
- all pointing to creeping democratic changes from
below.
Guthrie calls for stronger US
engagement with China since "reformers need
greater external impetus to overcome domestic
obstacles" (p 327). Reform-minded Chinese elites
leverage global economic integration to transform
their country's institutions.
As the
second-largest purchaser of US Treasury Bonds and
the host of billions of US corporate investments,
China already has the means to ensure a
cooperative United States that is bound to be
non-hostile.
Guthrie's main argument that
transitions from socialism are better if
engineered by a visionary state brings the debate
back to whether developing countries need
undemocratic polities to grow economically.
The discipline with which Chinese society
fell in line with new market-friendly rules in the
1980s deserves comparative analysis with similarly
placed democratic countries.
Were Chinese
reforms fruitful because they were merely
state-driven or because they were
authoritarian-state-driven? Guthrie has completely
missed the angle on the inverse relationship
between democracy and growth in newly
industrialized countries.
China and
Globalization: The Social, Economic and Political
Transformation of Chinese Society by Doug
Guthrie. Routledge, New York, 2006. ISBN:
0-415-94991-2. Price: US$29.95, 398 pages.
(Copyright 2006 Asia Times Online Ltd. All
rights reserved. Please contact us about sales, syndication and republishing
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forces" (p 38). The
Chinese government's strategy was to allow
economic actors to learn the rules of capitalism
rather than withdrawing and assuming that they
knew them intuitively. 
