Abstract
The chapter explores a case which may induce political scientists, economists and political economists to review the theories on growth, innovation and democracy, around which their disciplines have been organized. Today, China is the most complete representation of the “entrepreneurial state”, the system which may be indispensable to unfold the potential of the industrial revolution which is defining the twenty-first century. The chapter starts from an analysis of the characteristics of the great leap made by the Empire of the Middle in terms of economic growth, reduction in poverty and innovation. It examines the main challenges—from China’s environmental degradation to the high debt, competition from newer economies and the trade war with the USA. It moves to assess how China is addressing them and it underlines that the key of China’s approach is the original use of technologies as a tool to address the problems of its middle-income society. It inquires about the characteristics that make the Chinese central planning apparatus and the Communist Party overcome the obsolescence that killed other communist experiences. A brief comparison between China and Asia is carried out to understand whether China is part of an Asian regional model. The chapter draws conclusions and provides ten recommendations about five assets to preserve and five vulnerabilities to defeat, around which China may design its evolving strategy to become a “moderately prosperous country” in the next few years.
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Notes
- 1.
These country cases will be discussed in Chapter 5.
- 2.
The other four are: Laos, Vietnam, North Korea and Cuba.
- 3.
Amongst other Gulf States, Saudi Arabia does, in fact, have direct elections of city councils.
- 4.
As far as the Vatican is concerned, we will elaborate further on the similarities between the political leaderships of the Catholic Church and of the Republic of the People of China.
- 5.
Equatorial Guinea’s GDP did enjoy an exceptional financial windfall following the discovery of a huge oil reservoir along its coast whose growth effect was magnified by its small population (about one million people). Incidentally, in this African country, the benefit of the windfall was almost totally appropriated by its political leader—Teodoro Obiang Nguema Mbasogo, president since 1979 when he ousted his uncle in a military coup—and by his comrades and family, and by the oil multinationals exploiting the oil. Conversely, since the 2007 financial crisis, the country’s GDP growth rate has dropped to zero.
- 6.
The 1993 ‘Rising Sun’ starring Sean Connery and Wesley Snipes which told the story of a crime connected with the acquisition of an American semiconductor company from a Japanese multinational.
- 7.
In the forty years between 1960 and 1989, Japan’s economy grew five times: an extraordinary result and yet smaller than China’s which managed to make its economy ten times bigger between 1990 and 2018. But China started from a much lower level of development which may make its results more or less remarkable (considering our argument on the not unavoidability of the “catching up”).
- 8.
By surpassing the UK, China realized Mao’s ambition for the country, set 40 years before with the start of the “great leap forward”, which turned into a disastrous “great leap backward”. What Mao had not realized with his ideological mobilization was achieved through pragmatism and practice-based policies by Deng Xiaoping and his political heirs.
- 9.
However, by the same standard today, Italy has dropped out of the top ten.
- 10.
Since 1979, the progression of GDP per capita has been even more impressive. As a matter of fact, since 1979, the “one child policy” artificially slowed population growth to a level lower than the one prevailing in the West. Therefore, China’s advantage as GDP per capita vis-à-vis OECD countries ends up being even higher than the one on GDP overall volumes.
- 11.
At the Institute of Geographical Sciences and Natural Resources Research within the Chinese Academy of Sciences
- 12.
The third Plenary Session of the 11th Central Committee of the Communist Party of China.
- 13.
Interview with Xu Xiujun, Executive Director, and Chengyi Peng, Researcher, Institute of World Economics and Politics, 6 March 2018, Beijing.
- 14.
Interview with Ma Tian, Secretary of the CCP, Huopu, Sichuan Province, 24 June 2018.
- 15.
Interview with Zhang Guangping, Deputy Director General, International Poverty Reduction Centre, Beijing, 26 June 2018.
- 16.
Interview with William Cheng and his team, Senior Expert at Alibaba Research Institute, Beijing, 8 March 2018.
- 17.
As a matter of fact, on 10 September 2018, Jack Ma himself announced that he will leave his position as Alibaba’s chairman to return to the teaching business where he came from before founding Alibaba: this intention appears different from just doing philanthropy as in Bill Gates’s case.
- 18.
Expanded global competition between China and the USA helps to better understand Trump’s aggressive stance on placing escalating barriers on trade between the two countries.
- 19.
Brief examples are: canal construction by French kings in the eighteenth century; the spatial transformation of Paris by Baron Haussmann under Napoleon III in the late nineteenth century; the theory of mercantilism that, between the sixteenth and eighteenth centuries, placed government in control of the economy to ensure that legal provisions spurred exports.
- 20.
Interview with Liu Jianxiong, Associate Professor, Institute of Economics, Chinese Academy of Social Sciences, 1 March 2018.
- 21.
Romano Prodi is Professor of Economics and Industrial Policy at the University of Bologna. He was twice Italy’s Prime Minister (from 1994 to 1996 and from 2006 to 2008) and President of the European Commission from 1999 to 2004 (under his presidency the EU achieved two successes—the introduction of the EURO and the enlargement to the Eastern European countries formerly controlled by the USSR). He has extensively visited and written about China. We discussed with him the book in the last month of writing and editing.
- 22.
Interview with Meichen Zeng, Senior Assistant to President, Chendong Li, Manager/Assistant to President, Terence Wang, Senior Specialist, Hanergy Holding, 23 July 2018, Beijing.
- 23.
The sixth ring road is the expressway circling Beijing that runs for 220 km around the city at an average distance of 20 km from the centre.
- 24.
Some city councils (amongst them Shanghai and Beijing) only award new number plates to citizen residents who do not already possess one, through a lottery (in Beijing) or an auction (in Shanghai). Restrictions apply to drivers with a number plate (according to the last number on the plate, they cannot drive one of the five weekdays), while non-residents can only travel at certain hours and up to a maximum number of days in a year. Incentives are also being developed alongside fines: people who forgo their rights to use their car are awarded symbolic monetary rewards, and a sophisticated system of monitoring with cameras is in place.
- 25.
Interview with Ji Feifeng, Research Development of China Development Bank, 19 July 2018, Shanghai.
- 26.
Interview with Liu Xu, Deputy Director General, Chinese Academy of Macroeconomic Research, 7 March 2018, Beijing.
- 27.
- 28.
Conversely, the USA is not following Dewey’s message as the country did under Franklin D. Roosevelt with the launching of the New Deal policies characterized by a trial-and-error approach (Nanetti 2017).
- 29.
Interview with Professor Wang Yiwei, Deputy Director of Institute of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, 8 March 2018, Beijing.
- 30.
As for a paradox, this is especially true in the USA and UK where neither a Communist Party nor a Socialist Party ever sit in DC or Westminster. Both Bernie Sander and Jeremy Corbyn were, in fact, amongst the very few of their respectively Democratic Party and Labor Party to self-declare themselves socialist. And yet the former almost defeated Hillary Clinton in the nomination campaign to challenge Trump in the 2016 US presidential election, and the latter is the leader of the Labor Party who is leading the polls in the UK. We, however, would argue that although they are also symptoms of a wide malaise, they still do not represent an elaboration of Marxism into an entirely new context.
- 31.
One explanation of Putin’s strong leadership is his success in foreign policy, through which scores of Russians have perceived their country as regaining its rightful place in the world. Also, Russia’s nationalism maintains the memory of the confrontation with the Nazi–Fascist regimes of the West, a paradigm that has been resurrected by the growth of European populist movements.
- 32.
Interview with Zhang Yansheng, Principal Researcher of China Center for International Economic Exchanges, Beijing, 8 March 2018.
- 33.
Interview with Rong Pan, Deputy General Manager, and Yan Song, strategic development supervisor, iFLYTEK; Beijing, 18 July 2018.
- 34.
Roger James Goodman is Nissan Professor of Modern Japanese Studies at the University of Oxford and the sixth Warden of St Antony’s College, Oxford. St Antony’s is the college where most of this book was conceived and written.
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Grillo, F., Nanetti, R.Y. (2018). China: Advantages and Risks of the Entrepreneurial State. In: Democracy and Growth in the Twenty-first Century. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-02014-9_3
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