My Take | How ‘shock therapy’ came back to haunt the West
- Rapid neoliberal reforms destroyed the post-Soviet economy while its avoidance paved the way for China’s rise. The differences in economic outcome contributed greatly to Russian resentment and grievance
Chinese communist leaders love to dwell on “the century of humiliation” by the Western powers; likewise on wartime atrocities committed by the imperial Japanese army. In this, there are superficial similarities with the well-known revanchism that’s built into the rhetoric and foreign policy of Vladimir Putin.
If we understand revanchism at its most literal as the fight for the recovery of lost territory or status, the Russian invasion of Ukraine has been its most brutal and consequential realisation. There is, however, no such equivalent in the repertory of Chinese foreign policy. We can argue forever whether Taiwan is the Asian Ukraine. But at the end of the day, Beijing does not share the same sense of grievance or victimhood as Moscow at the hands of the West. And that makes all the difference in terms of rational calculations and diplomatic adjustments.
Unfortunately, in Western capitals, China and Russia are now routinely lumped together. But for those Westerners who seek a more peaceful outcome with China, it must be remembered that the sources of antagonism against the West is much more deep-seated in Russia than in China. For easy conceptualisation, I will distinguish between Russia’s revanchist nationalism and China’s triumphalist nationalism below.
To shock or not to shock
Those sources of antagonism against the West are rooted in the two countries’ histories, world views and even civilisations. But its more recent cause can be traced directly back to the collapse of the Soviet Union. It’s well known how under the pressure and advice of Washington and neoliberal institutions such as the International Monetary Fund, the post-Soviet government adopted shock therapy with devastating consequences for the country.
What has not been so widely known is that around the same time as Russia, China came very close to adopting shock therapy, as a quick if harsh method to reform its economy. Instead, the leadership under Deng Xiaoping ultimately adopted gradual marketisation under the strong guiding, rather than diminishing, hand of the state. A new book, How China Escaped Shock Therapy: The Market Reform Debate, by University of Massachusetts economist Isabella Weber, examines precisely this question.