China at 75 – and beyond

On October 1, the People’s Republic of China completed 75 years of its establishment. These 75 years have seen China shake off rampant poverty and backwardness to become a major mover and shaker of the globe under the leadership of the Communist Party of China (CPC).

I spent a few years in Shanghai, China’s largest and most open and advanced city, and had an opportunity to look at the Chinese all-round development at close quarters. In my view, more than anything else, China’s rise is rooted in the Yin-Yang philosophy.

Originating in the ancient Chinese school of Taoism, the Yin-Yang is represented by a circle consisting of two parts: a black portion encapsulating a white dot – called Yin – and a white portion containing a black dot, which is known as Yang. The Yin-Yang dialectically describes how in both natural and social orders opposite forces – life and death, day and night, strength and weakness, the negative and the positive – need and balance each other.

Two classic validations of the Yin-Yang philosophy are the ascendency of capitalism in the 20th century and the resounding success of the Chinese development model. When faced with the communist threat, which in the post-World War-II international order seemed capable of taking the entire European continent, capitalism, which is inherently an anti-worker system, responded by incorporating some elements of its adversary.

The capitalist response to the changing circumstances started with pro-worker legislation in Western countries and culminated in the rise of the welfare state. Beginning with the collapse of the Soviet Union in 1991, in the end, it was communism that was wiped out from Europe.

On the other hand, China overcame the state-market contradiction by adopting the philosophy of ‘Socialism with Chinese Characteristics,’ under which a closed and socialist economy was gradually and carefully opened to both the market forces and foreign competition without giving away overall state control. The experiment has had spectacular success and converted an agrarian economy into an industrial powerhouse, where the CPC continues to call the shots. This makes Socialism with Chinese Characteristics one of the most powerful political philosophies of all times and easily the most potent of the current era.

The birth of the People’s Republic of China was the result of a more than two-decade long civil war between the Nationalists headed by Chiang Kai-shek and the Communists led by the incomparable Mao Zedong. Having forced the Nationalists, who were, and continue to be, backed by Washington to flee to the small southern island of Taiwan, the CPC was faced with the formidable challenge of shaping up a war-torn economy according to socialist ideals.

The party set three initial goals: putting in place a socialist economy; introducing sweeping land reforms; and making China an industrial power on the fashion of the USSR, another and a highly successful socialist country at that time. Under the leadership of Mao and his comrades and with popular support and revolutionary zeal, the party and the state embarked on pursuing those goals.

China unveiled its first five-year plan in 1952 and the second in 1958 – the five-year plans continue to be the Chinese government’s main blueprint for economic development to date. Under those two plans, communal ownership of land in rural areas and state ownership in cities were put in place.

To give momentum to industrialization, a policy named ‘The Great Leap Forward’ was announced. Although this policy has generated a lot of adverse criticism for being ‘too ambitious’ and pursued in a ‘haphazard’ way, it can’t be denied that it laid the foundations of the subsequent industrial development in China. The technical and economic assistance from the USSR in initial years of the PRC was also of valuable help.

Until the demise of Mao Zedong in 1976, China remained a socialist, and a largely closed, economy, trading only with the USSR and a few other socialist states. Starting in 1949, the United States and its European allies had put China under an economic embargo. So, there was no way China could trade with the West. The embargo was lifted in 1972 after US President Nixon’s historic visit to China, which was facilitated by Islamabad. It took Washington another seven years to establish full diplomatic relations with the People’s Republic.

Deng Xiaoping, who succeeded Mao as the nation’s paramount leader, sensed that if China were to register sustained and fast growth, its socialist economy must open up to both the country’s private sector and foreign businesses, without relaxing in any manner the stringent political controls, and allowing economic egalitarianism to take a backseat if necessary. In Deng’s own words, “Development is the absolute principle”. Thus was born Socialism with Chinese Characteristics, or simply ‘market socialism, and with that started China’s unmatched development saga. Here are some of the numbers:

In 1960, the size of the Chinese economy was only $60 billion, which increased to nearly $18 trillion in 2003. China’s share in global economic output racked up from 4.4 per cent in 1960 to 17 per cent in 2023. Per capita income rose from a paltry $90 to over $12,000, while exports scaled up from $21 billion to $3.2 trillion during this period, making China ‘the factory of the world’ and the globe’s largest exporter.

While Chinese economic achievements have been marvelous, they have begotten several imbalances as well. The development has largely been confined to the coastal regions or East China, while western regions remained far behind. Income inequalities also widened, domestic consumption was stifled and environmental considerations were largely swept aside.

When the current Chinese leader Xi Jinping assumed power in 2012, he decided to address those imbalances. Hence, a new development paradigm was introduced called ‘Socialism with Chinese Characteristics for a New Era’.

Quality of development assumed more importance than mere quantity of development; shoring up domestic demand and the citizens’ standard of living took priority over increasing exports and corporate profits, and the neglected regions began to get the government’s attention. As a signal to China’s commitment to maintaining ecological equilibrium, the authorities announced to peak carbon emissions by 2030 and make the country carbon free before 2060.

In 2020, China eliminated extreme poverty, which probably no other country has been able to do. Now, the leadership’s next goal is to make China a developed nation by 2049, which will mark the first centenary of the establishment of the PRC.

Currently, China is facing quite a few socio-economic challenges, such as depopulation, rising share of the old in total population, increasing cost of production and economic slowdown. Many believe China is currently at the same stage of development that Japan was in the 1990s before its economy stagnated at the start of the century. Beijing is facing an additional challenge which Tokyo didn’t: the strategic rivalry with Washington, resulting in a trade war between the two largest economies of the globe and American sanctions on high-tech Chinese enterprises for allegedly spying for the government.

Over the years, the Chinese leadership has demonstrated their one undisputable trait: pragmatism. Instead of being a prisoner of the past or being swept away by the heat of the moment, they have been prepared to logically and empirically review their philosophies and policies and change them if warranted by the circumstances or necessitated by the march of history, as Chinese would call it. Likewise, the Chinese nation has proved itself to be remarkably resilient, disciplined, and focused.

On the basis of my little understanding of the Chinese culture and system, I feel disposed to stating that the Chinese will be able to overcome the various challenges they’re facing and continue their saga. Best wishes to them on their country’s 75th anniversary.

The writer is an Islamabad-based columnist. He tweets/posts @hussainhzaidi and can be reached at: hussainhzaidi@gmail.com