China’s Market-State Modality
Discussion
Nathan Gardels:
"Of all the major powers, post-Mao China stands out in taking control of its future without sacrificing the present. Over recent decades, it has both lifted hundreds of millions into general prosperity while, at the same time, swiftly conquering the key industries of a sustainable future, from green technology to artificial intelligence.
One has to admit that the Middle Kingdom’s mix of a long-term planning framework checked by robust market signals and bolstered by strategically deployed subsidies has worked. Indeed, it has worked too well: Its overproduction is spilling out and flooding world markets, threatening to displace domestic jobs and industry elsewhere.
China has not arrived at this point overnight. It has been a long time coming. In 1987, the ideology chief of the Communist Party politburo at the time, Hu Qili, told me in Beijing: “The market is not a feature unique to capitalism. Capitalism does not have the patent right over the market economy. What we are trying to create is a new and unprecedented modality where planning is combined with the commodity economy, where the state regulates the market, and the market guides the enterprises.”
The overall economy is steered by a one-party political system designed to reach consensus over long-term goals that have the decisive thrust to be carried out over many years without a break in continuity. Once set, the policy path is followed with relative discipline by a leadership and administration that, while not based on popular appeal to an electorate, is systemically accountable for realizing its set objectives.
When a key strategic goal is ordained by the Party, the state fosters a “whole dragon” approach in which start-up subsidies, sourcing, supply chains and production capacity are vertically aligned, making it one of the most powerful production ensembles in economic history.
The chief flaw of China’s system, of course, is closely linked to its strength. To keep the consensus from fraying, it overcompensates on the side of repressive order and control of freedom. It is the opposite of the open societies of the West, where the flaw lies within the strength of diverse participation and electoral competition: a growing inability to forge a consensus on long-term goals out of the cacophony of voices, the welter of contending interests and the immediate wash of fickle public opinion.
When all-out competitive partisanship destroys consensus among the body politic, the democratic transfer of power can mean a complete rupture of policies endorsed by most voters only four years earlier. Sticking to the course for the time it takes to reach fruition is not a reliable feature of this system."
(https://www.noemamag.com/when-the-present-eats-the-future/)