Serving the Market or Serving the Party: Neo-liberalism in China

Abstract

In 2003 the unashamedly pro-neoliberal Heritage Foundation ranked China as 127th out of 157 countries in a league table of economic freedom in 2003 — and ranked China as less free in 2003 than before it joined the WTO in 2000.¹ But while China is still far from a free market neo-liberal economy, neo-liberal ideas have become increasingly influential. In searching for a new basis of party legitimacy in the post-Mao era, liberal economic (but not political) ideas gained increasing credence amongst some key national leaders as liberalizing reforms were deemed to be successful in generating economic growth. But the desire to build a new economic system has often collided with embedded political interests — most notably the concern that a more efficient economy would generate large-scale unemployment and exacerbate existing inequalities. At the local level too, many officials have embraced and promoted the private sector as a means of generating personal wealth — albeit a private sector that they closely regulate to eliminate risk.