‘China model’ is only the latest in a long line of touted economic models – and it won’t be the last

  • Chris Rowley says debate on whether the Chinese development model can and should be replicated is not new. Successful economic models, be it a company’s or country’s, have all been recommended as the system to beat in their heyday
PUBLISHED : Friday, 28 December, 2018, 10:47am
UPDATED : Friday, 28 December, 2018, 10:42pm

China’s growth and inexorable rise to become one of the world’s top two global economic powers is now apparent to all. Some of the results of this rise are well known. They include the vast numbers of people lifted out of poverty, the spread of social security and health care, and the expansion of China’s economic and political reach.

China’s economic rise has gone hand in hand with a variety of proclamations from the state. These range from the earlier neo-Confucianist “harmonious society” to its replacement, President Xi Jinping’s “Chinese dream”. They portray China as a leader in a globalised and seemingly more peaceful world order.

Given these developments and political assertions, it is interesting to look at the debate on the “China model” of economic development, one that is not just unique and based on particular characteristics, but also somehow transferable to other countries. Indeed, this was the topic of a university debate at the Oxford Union recently.

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We can question the view of there being a globally transferable and applicable “China model” on several levels.

First, what is it? Not only are the operational elements of this model ill-defined and opaquely measured, but are any of them necessary and sufficient?

Second, there are the conditions that are particular to China. One of China’s biggest advantages is its sheer size, in terms of population, which bestows its companies with a huge competitive advantage. For instance, Alibaba, Tencent and other Chinese tech giants have massive captive markets and so they do not have to compete overseas to be a success. Being a domestic giant in China is in itself a success.

Moreover, the political and state system is crucial to the “China model”. Such one-party rule may be less tolerable and more difficult to replicate in other countries. So, these elements may not exist in other countries which may toy with the idea of adopting a “China model”.

Third, debates on the universality of any system are not new. Throughout history, notions of such convergence and universalism around the “one best way” has preoccupied theorists and scholars, with a range of systems from different countries being seen as exemplars.

Some may recall Francis Fukuyama’s famous 1992 book, The End of History and the Last Man. This was seen as positing the final stage of socio-economic development to be Western liberal democracy, which was then seen as unstoppable, after the fall of the Berlin Wall, the collapse of the Soviet empire and the end of cold war.

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There are many more examples of the erstwhile global model. The early 20th century saw the rise and spread of Fordism – characterised by mass production and consumption – as a system to follow. The post-war period brought similar ideas propounded by American hegemony, such as in the 1960 book, Industrialism and Industrial Man, by Clark Kerr and his colleagues. The 1970s saw France, with its indicative planning, as an exemplar.

Meanwhile. the American model continued to be promoted, with works, such as In Search of Excellence: Lessons from America’s Best-Run Companies by Thomas Peters and Robert Waterman in 1982. This boiled down 43 company stories into eight basic principles of management.

Yet, by then, many commentators’ focus had shifted from what they saw as the decrepit, stagnant and conflict-filled West to the rising East, in particular the economic miracle of Japan, which by the 1970s was the third-largest economy in the world and by the 1980s had become an economic behemoth rivalling the US itself. So, we had works like Ezra Vogel’s famous 1979 book, Japan As Number One: Lessons for America, explaining how Japan had developed into the world’s most competitive industrial power and solved the problems plaguing Western countries.

A modern variant of the universally applicable system came with so-called “Japanese management practice”, which was seen as something transferable. In 1991 came the The Machine That Changed the World by James Womack and his colleagues. This expounded the universalist ideas of lean production and Toyotaism, almost like a global religion. Of course, the bursting of the Japanese “bubble economy” put paid to the hagiography of all things Japanese.

So, we should see the debate about the “China model” in context. It is simply the end of a long line of similar ideas, the latest incarnation of universalism, fashionable for now.

Professor Chris Rowley is a visiting fellow at Kellogg College, University of Oxford and professor emeritus, Cass Business School, City, University of London. He is a leading figure in the study of employment and human resource management, and business and management in Asia