From the TUC

China: A Reflection

02 Oct 2013, by in Economics

It is now four days since I returned from East Asia. I’ve had time to readjust to the time zone, slept a lot (in my own bed, too!) and I am now in a reflective space. Generally, I’m thinking about China, how far it has come and where it might go. Specifically, I’m thinking about the Chongqing Model and the Guangdong Model. Perhaps that last sentence needs an explanation.

The big surprise of my trip to China was Guangzhou. Formerly known as Canton and famous for its food (which I managed to sample), I had imagined that Guangzhou, the capital of Guangdong, and its near neighbour Shenzhen, would be mighty industrial cities, full of factories the size of which would be hard to comprehend without seeing them. Guangdong is, after all, in the Pearl River Delta, the place where China’s spectacular reforms first began. I was only in Guangzhou for one night and I suspect if I’d had time to look around, I’d have found those things, but Guangzhou is a modern, cosmopolitan city. Its citizens have a quiet confidence that you can see in their eyes: this is a city having its moment and it was great to see.

I was a little surprised at the shopping opportunities of Guangzhou: companies like Prada, Rolex and Chanel were well in evidence. There’s nothing particularly wrong with that, all those stores have outlets in London too, but I couldn’t help worrying that, as in the West, a big gap is developing between the rich and the rest in China. At the height of his reforms, the Chinese leader Deng Xiaoping had famously said that some in China would “get rich first”, but he also said that those getting rich had a responsibility to help the rest up the ladder behind them. Standing back, I admire that China has reformed at its own pace (so long as it does reform), believing that this gives it a chance to avoid some of the wilder excesses of neo-liberal capitalism. But I was starting to worry about whether those excesses would be avoided and whether Deng’s call for greater eventual equality would be heeded.

Before going to Guangzhou, I spent six days in Beijing. While there, the prison sentence of Bo Xilai, the disgraced former Politburo member, who hailed from Chongqing, was announced. I had wondered how openly the whole Bo Xilai story would be discussed in China, but it was on news bulletins, in newspapers, some of my interviewees mentioned it and, in the bookshop at Hong Kong Airport on Saturday evening, about a dozen books, all (sadly) written in Chinese, were available.

Bo Xilai had promoted the so-called Chongqing model of development which, as these things are, is pitted against the Guangdong model. If the latter goes hell for leather for growth, the former shows more concern for wealth distribution. It also focuses more on state owned enterprises and Bo himself has been described as a neo-Maoist. I know very little about Bo Xilai and I’m not going to express either pro- or anti- views here, but I wonder who has described him as neo-Maoist. If that’s a true description, fine, I don’t think it is the right route for China. But free market liberals have a habit of finding these descriptions for those that disagree with them from the left (witness some of the comments about Ed Miliband over the last week) and I’d rather not take such descriptions at face value.     

The Guangdong model or the Chongqing model seems to be held up as the choice facing China. This may be problematic. As a lifelong social democrat, I believe the growing inequality in the West is one of the biggest challenges we face. This is not the politics of envy, it is simply about values: I think it is impossible to develop the fairness and the tolerance of, say, Northern Europe when such inequality exists and I think the Northern European model is a better model, promoting societies that are more likely to be at ease with themselves.

So if the Guangdong model is breeding such inequality, I hope it can be reformed. Does that make me a neo-Maoist? I hope not. I hope China can find a model of economic reform that allows it to balance the need for growth with better wealth distribution.  

When my Chinese hosts asked me what I thought about China, my main response was that I thought it had an opportunity to find its own development path, in line with its own culture. I still believe that. I hope China takes its chance.