Exploring The Secret Of China's Economic Success

Chinese President Hu Jintao reviews military troops during the 60th-anniversary parade in Beijing. i i

Chinese President Hu Jintao (second car from left) reviews military troops during a parade in Beijing marking 60 years of Communist Party rule in China, Oct. 1. The celebrations are intended to showcase the nation as a global power. AFP/Getty Images hide caption

itoggle caption AFP/Getty Images
Chinese President Hu Jintao reviews military troops during the 60th-anniversary parade in Beijing.

Chinese President Hu Jintao (second car from left) reviews military troops during a parade in Beijing marking 60 years of Communist Party rule in China, Oct. 1. The celebrations are intended to showcase the nation as a global power.

AFP/Getty Images

China showcased its growing military and economic power Thursday with a huge and carefully staged parade marking 60 years under Communist Party rule.

Chinese President Hu Jintao, riding in an open-top limousine, participated in Thursday's ceremony, as his predecessors had at previous anniversaries. "Comrades, you've worked hard," Hu shouted to the troops.

"We serve the people!" the soldiers roared back. China's elite troops, its latest cruise missiles, and its new early-warning aircraft marched, rolled or flew past Hu in Tiananmen Square.

The parade's message was that the Communist Party has succeeded in mobilizing China for modernization.

PLA soldiers wait to march in parade. i i

Chinese People's Liberation Army soldiers prepare to march in the National Day parade in Beijing on Thursday. AFP/Getty Images hide caption

itoggle caption AFP/Getty Images
PLA soldiers wait to march in parade.

Chinese People's Liberation Army soldiers prepare to march in the National Day parade in Beijing on Thursday.

AFP/Getty Images

The country's economy has continued to grow quickly despite the global recession. This has some observers wondering whether China's authoritarian political system has given it an advantage in promoting economic development.

Scholars such as Wang Zhengxu, a senior research fellow at England's University of Nottingham, see a pattern.

"In the early stage of economic takeoff, you normally need a strong government that can mobilize resources, that can concentrate government priority to the sectors that are important for the economy," he says. "In that case, a one-party or a more centralized system will have an advantage."

But Wang says it is the policies that matter more than the type of government.

Wang says that Taiwan, Hong Kong, South Korea and Singapore all saw their economies take off during the 1960s and '70s not because of their authoritarian regimes but because they pumped up exports and integrated into the world economy.

Before China adopted these types of policies, its economic path was erratic, says Minxin Pei, a professor of government at Claremont McKenna College in California.

"A centralized political system, especially one that is not accountable to its own people, can make horrendous mistakes. The Great Leap Forward cannot take place in a democracy," Pei says.

The Great Leap, begun in 1958, was Communist Party Chairman Mao Zedong's attempt to rapidly transform the country's agriculture and industry into a modern collective system. It ended in a famine that killed tens of millions.

Tsinghua University historian Qin Hui argues that authoritarian systems are also good at concentrating economic gains in the hands of a powerful few. This forces average citizens to save more and consume less, he says.

"Given equal GDP growth, I believe that under a democratic system more people will get a bigger share of that growth," he says.

A float with a portrait of the late Chinese leader Deng Xiaoping i i

A float with a portrait of the late Chinese leader Deng Xiaoping passes by Tiananmen Square during the National Day parade in Beijing on Thursday. AFP/Getty Images hide caption

itoggle caption AFP/Getty Images
A float with a portrait of the late Chinese leader Deng Xiaoping

A float with a portrait of the late Chinese leader Deng Xiaoping passes by Tiananmen Square during the National Day parade in Beijing on Thursday.

AFP/Getty Images

Democratic systems encourage higher levels of consumer spending, Qin says. In the case of the United States, this has led to unsustainable levels of borrowing, mostly from China.

In that sense, the different political systems of the U.S. and China have contributed to the current imbalance in the world economy.

Of course, some American observers admire China's high savings rate. And they envy its government's ability to dictate important policies and sweep aside any objections.

But Qin says these people don't really understand China.

"Whether on the left or the right, they're just using China as an example to prove their own arguments," Qin says.

In other words, some Americans use China as a proxy for criticizing their own political system, which they see as paralyzed by vested interests and partisan bickering.

Envy of authoritarianism and disenchantment with democracy have been around almost as long as democracy itself, Qin points out. It happened back in the 1930s, when fascism gained a few prominent admirers in economically depressed America.

Pei notes that authoritarian regimes are expert at dazzling foreign visitors with their giant spectacles — such as Thursday's parade or last year's Olympics in Beijing — and with their massive infrastructure projects.

"China can build the world's largest airport terminal, but China cannot really make sure it delivers milk that is safe to drink," he says.

And while authoritarian regimes tout their successes, Pei says, they tend to squelch any discussion about the human and environmental costs of their blunders.

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