China's Economy Being Affected By Communism - Year 11 - Essay

2680 words - 11 pages

Tom Fish MT
Question: Has China’s single-party system been the main contributing factor to the country’s recent rapid economic growth?
Justification of the title/question
I chose this question because we all hear about the importance of China in the news and we saw how Xi Jinping was treated very well on his state visit to the UK last year, perhaps because the UK wishes to cultivate a profitable relationship with the world’s second largest economic power (in addition to the ‘special’ one it has with the biggest economic strength still, the USA), and encourage both investment in the UK and exports to China. Economics and politics are joined together it seems in most countries. Whenever we have an election it seems that all parties focus on emphasising what they would do to boost the economy. In China, this can’t happen as there is only one party. Therefore, the situation invited further investigation.
In China, the government operates in a single party state. This means that the political landscape of the People’s Republic of China is dominated by one party and one party only - the Communist Party of China (CPC). The communist party therefore forms each government. In fact, there are no ‘governments’ as clearly defined periods of rule in a western democratic sense, with government being a continuous operation. The CPC is the founding and ruling political party of modern China. Elections exist within the National People’s Congress to choose a leader but it is highly likely that only one name will be on the ballot, and that the party will have already chosen its leader previous to any poll taking place. Also, if anyone does challenge the party or a leader’s authority then they are ruthlessly put down. The one party system in China has been in place since 1949. Mao Zedong, as the leader of the CPC, was very close to the Soviet Union and wanted China to become a powerful socialist state too. He made some drastic changes to Chinese society, mainly to help the huge rural population. When Mao Zedong died in 1976, Deng Xiaoping emerged the following year as the dominant figure to take his place. Under this man, China undertook far-reaching economic reforms. In 1997, Deng Xiaoping died, aged 92. However, his legacy touches all our lives today, given the impact of his free market reforms.
The first two decades after the founding of the People’s Republic of China in 1949, were marked by periods of significant growth in Gross Domestic Product (GDP). People believe that this represented the success of the first five-year plan, which significantly increased the quality and pace of the productivity and industrialization in the country. However, by 1978 a change in policy was critical if there was to be rapid growth in the economy. The economic reform encouraged the formation of rural enterprises and private businesses, it relaxed state control over some prices, and liberalised foreign trade and investment. While before 1978 China had seen an already impressive annual growth of 6% a year, post-1978 China saw an average real growth of more than 9% a year. In several peak years, the economy grew more than 13%. Per capita income has nearly quadrupled in the last 15 years.
China’s rapid economic growth therefore is undeniable, as is the continuous controlled period of government by the Communist party. Are they linked? Can the economic miracle be wholly attributable to the unopposed rule of the CPC?
In China, the one party system is organised in such a way that at the top of the government, people are all state officials and party officials. The party and the state have different jobs but they are all working for one communist aim. Elections are held from time to time but they are pointless because voters are not changing the party, only the personnel within the party. China is communist at all levels. In the UK we have a multi-party system, a Conservative government is currently in power but opposed by the Labour Party, the Liberal Democrat Party, the Scottish Nationalist Party and so on. Since 1979 the UK has had Conservative, Labour and coalition governments, whilst China has had the same party in power since 1949.
1979 was a significant year, Deng Xiaoping initiated free market reforms, this was to be the start of the ‘miracle’.
The CPC has ruled unchallenged since 1949; its decision-making attracts little criticism because there is no other party to oppose it. Its policies are not scrutinised by opposition parties as there are none. It is accountable only to itself although it would undoubtedly state that it is only accountable to the Chinese people.
There are many examples to show the recent rapid economic growth in China. China is rich in human resources, with a population of 1.1 billion. Due to mechanisation in agriculture a significant number of the 500 million engaged in rural labour will migrate from the Chinese countryside in search of work in the next 20 years. The CPC has encouraged such migration. Workers have been needed in order to drive industrial and manufacturing output, which has been at the heart of the CPC’s plans for growth. Wages in other East Asian countries earn up to 10 times more than Chinese workers. This has boosted China’s exports and increased the profit margins. The female participation in the workforce is high in China in the manufacturing industry. The one child policy played along with this because it meant that women were not spending as much time as other mothers around the world with their children because they only have one child. This resulted in a much larger workforce. This is directly attributable to the CPC being the only party of government. The one child policy has only just officially changed in 2015, after 36 years. A multiparty state system would not necessarily have seen such a policy enacted, and certainly it would have been abandoned at some point with a change of government. This shows how the one party system can have an impact on society, and that one effect of the one child policy was to boost the labour-force in the first twenty years of its policy life, which in turn boosted sustained growth. The export-led growth has been a strategy which the CPC has really worked at; its aim was to be exporting more than it was importing and they have definitely succeeded in this. The commodities boom was fuelled by Chinese demand for raw materials, in order to manufacture more and more, and export more and more.
The CPC has been able to plan for major infrastructure initiatives across a vast country, without worrying about fighting elections or of a four or five year timescale. The CPC is able to plan and finance such massive projects knowing that it will always be overseeing them and bringing them to fruition, with the personnel it chooses in place. Since the 1990’s China has been developing its energy base, with the building of new nuclear and hydroelectric power plants. China’s investment in infrastructure is huge. The government has improved the railway lines (only in a one party authoritarian state could the government develop its own high-speed train engines by copying those it initially bought from Germany’s Siemens conglomerate without fear of reprisal). China’s rivers are now accessible all year round and China now has five of the ten largest container ports in the world. The size of China’s economy currently sits at $11.29 trillion (2016).
The 200 million people who have been lifted out of rural poverty over the last forty years according to the UNHDI figures have contributed to China’s growth by working in its factories, power plants and steel mills . China is going to build sixty six new airports between 2016-2021 meaning that the tally of new airports in China will increase to 272. The newest airport in Beijing will have seven runways. Whilst China is building sixty six new airports the UK is still deciding on an extra runway at Heathrow. Perhaps this point more than any other illustrates how decisions can be made which impact growth. The one party state system has meant that the free market policy has been left to gather pace and momentum without the hindrance of barriers put on its way by opposition parties, pressure groups and other self-interested parties. A famous pressure group against the third runway at Heathrow is called ‘Plane stupid’. One cannot imagine the CPC allowing such a group to stand in its way. This is the strength of the one party system when it comes to ‘getting things done’.
Education in China is another good example of how decades of one policy put into place by the CPC has contributed a big part to China’s importance globally. Literacy levels have risen dramatically since the 1990s and now stand at 95%. China has both large numbers of unskilled workers and a growing number of skilled workers, for instance China runs a government scheme which trains 600,000 new engineers every year. If all aspects of the market have been directly boosted by CPC central policy, one can see how uninterrupted direct investment and focus have played a major part in China’s emergence as a preeminent economic power.
China’s move to free market economics has given economic rights instead of political rights. The CPC retain the political right to rule and has given its people economic freedom rights in exchange, (‘bread today, freedom tomorrow’). As a result, its people have embraced this human right (economic) like no other, and made money. The real GDP growth however is falling from 10.4% in 2010 to 7.8% in 2012 and to 7.3% in 2014. The IMF predicted (and was correct) that China’s real GDP growth will slow to 6.8% in 2015 and to 6.3% in 2016. These are still mightily impressive figures, but the CPC is learning how to manage slower growth.
The one party system has had its problems of course. One party systems can breed rulers who trouble the people and are driven by ideological madness or personal power. Mao’s great leap and cultural revolution is good as an example, costing nine million lives and setting back economic and social development for decades. When Chinese leaders make mistakes they aren’t punished, and they are told to change these failures into successes. Often the easiest way to do this is actually to declare policies as great successes anyway, and to defy anyone to be critical – which doesn’t happen. We have seen how the ‘one child policy’ has contributed to China’s economic growth by encouraging migration (fewer family members to help in the fields) and female participation in manufacturing (with women only spending a relatively short time at home as a mother), which boosted production. However, that policy has left a legacy of not enough workers to satisfy demand in recent boom years; the economy could gave grown even more if the policy had been overturned much sooner. Furthermore, with no state pension scheme, China’s vast elderly population cannot be looked after sufficiently well by its children – one child cannot afford the burden. The one party system therefore allows bad policy to linger, unchallenged, affecting the lives of millions.
It has been argued that the CPC have done a deal with the workers – economic freedoms for political freedoms. Yet the CPC social contract does not offer economic freedom. Workers have preciously little economic freedom to compensate for the lack of political freedom. They are not allowed to live where they want, they do not have secure property rights to the land which they live on or the farmland they cultivate. If these freedoms were addressed as a matter of urgency it is highly likely that productivity would rise accordingly. The CPC offers a smokescreen of economic freedoms. If they moved to a fuller, free-er market economy then growth would increase.
The CPC, it is said, has driven the surge in China’s economic growth through its capital investment in large, wide-ranging projects over many years, which can only be achieved in a single party state. However, recent studies show that at least 50% of the growth achieved in China’s economy is down to an increase in worker productivity rather than capital investment. It is the worker involved in non-state employment who has become much more productive, incentivised by the free market and its rewards. The CPC is still wary of the private sector, and does not give it its full backing, far from it, and therefore this major factor (worker productivity) in boosting China’s economy cannot be credited to the CPC.
China’s super-population neighbour, India, has grown rapidly as well. Both have one billion-plus populations, have experienced major growth in the industrial and manufacturing sectors, and have seen massive migration to the cities. Indeed, in 2015-16 India’s economy was growing marginally faster (7.6%, ‘The Economist’) than China’s. The big discussion point here with regard to our title, is that India is the world’s biggest democracy, with a multi-party system. Therefore, it seems implausible that we should credit China’s one party system as the prime driver of growth.
In conclusion, we have seen how the CPC’s single-mindedness in carrying out the economic market reforms first introduced in 1978 by Deng Xiaoping have created a manufacturing and trading superpower almost without equal, except for the USA. Certainly, the manner in which 200 million people have been taken out of rural poverty and put to work could only have been achieved in an authoritarian, single party state. Why can we say this? Because it’s not been achieved anywhere else. The decades of infrastructure projects, whether road and rail networks, airports, the building of super-cities, mega-polises such as Shanghai and Guangzhou, and the investments in natural resource extraction in Africa, have been financed, managed, and made to happen by the CPC – without opposition, which could have been political or social. It has been the commitment to the reforms by the CPC that have given the workers confidence enough to become much more productive. India is a multi-party state, but its economy is a third of the size of China’s despite its recent growth rate, and it still has far, far more of its population in poverty and illiterate. China’s CPC has made mistakes, such as not shelving its one child policy much sooner, but the commitment and support, financial and political, it has given to its economy is there for all to see. There is of course a link between being a one party state and the economic growth achieved, but the evidence is enough to indicate that the CPC’s unchallenged power and position has been probably a major, if not the major reason behind China’s rise to economic superpower status.
China’s economic rise: history, trends, challenges and implications for the United States. Federal publication, Cornell University. Written by Wayne W Morrison. October 21st 2015. This source is a detailed, reasonably long and provides the reader with good and reliable knowledge.
Weforum: a brief history of china’s economic growth. World Economic Forum. Written by Tomas Hirst from the Pieria magazine. Thursday 30 July 2015. A good overall source including key facts, not very detailed, but then it is a brief, a basic source providing me with a quick and easy, understanding summary of china’s economy.
International Monatery Fund. Why is china growing so fast? Written by Zulia Hu and Mohin S Khan. Forbes Magazine. June 1997. A very good source providing me with both sides of the argument, knowledgeable with clear stages. The writers of the source have very high qualifications showing that they are reliable.
 What factors affect economic growth in China. Written by Malin Jondull Assbring. Spring 2012. This source showed me what and why the factors affected china however some parts of it were not so reliable, I found out that some f the calculation were wrong but generally the source provided me with good answers and good evidence to back it up. The least reliable source I have read though.
Tom Fish MT

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