context: Xi Jinping's 'New Era' commits the PRC to programs contrary to the direction of the reform era, argues Yao Yan 功姚洋 Peking University National School of Development dean. His stark analysis, at variance with the upbeat official messaging, appeared in a Hong Kong academic journal not widely circulated in the PRC.
Yao Yang 姚洋 discusses evolution of the PRC political and economic landscape over three distinct periods: the planned economy era, the first two decades of reform (1978-97) and the subsequent two decades (1998-17) leading up to the 'New Era' declared in the 19th Party Congress in 2017.
planned economy era
The planned economy era, characterised by state-guided construction, was an abnormal period in which the Party sought to modernise the country rapidly. The focus was on societal transformation projects, establishing party control at every level, and pushing for industrialisation through agricultural collectivisation and socialist transformation of urban industries. The achievements included major progress in industrialisation, women's liberation, education and healthcare. However, this period also witnessed major mistakes, such as the Great Leap Forward and the Cultural Revolution.
first two decades of reform (1978–97)
The first two reform decades focused on opening the economy, emancipating political thought, and reverting to Chinese tradition. Deng Xiaoping 邓小平 led the way in shifting from a planned to a market economy, focusing on correcting negative aspects of the planned economy, allowing for free development in society, and introducing pragmatism and meritocracy in governance. This period marked a departure from class struggle and a return to 'seeking truth from facts.'
next two decades (1998-2017) and the New Era
The subsequent two decades are seen a time to enjoy the dividends of the initial reform period while reverting to a 'developing country' normality featuring by political oligarchy, economic cliques, and social development. The New Era, as declared in the 19th Party Congress (2017), aimed to address issues like corruption, income inequality, and disorganised party structures. Strong state intervention is, argues Yao, required in this phase, reminiscent of the planned economy era, but a cohesive doctrine for this New Era is yet to emerge.
contemporary China as a normal developing country
Yao deems the contemporary PRC a 'normal developing country' with political oligarchy, nepotism and political-business alliances. He notes that despite economic growth and modernisation, certain aspects of traditional political structures persist, hindering effective governance and promoting corruption.
He argues that China, two decades after the initiation of reforms, has transitioned into a 'normal developing country.' It identifies several key features characterising such nations
- political oligarchy and patronage politics
- spread of political-business cliques
- rampant corruption
- serious income inequality
Yao argues that these characteristics, suppressed during the planned economy era, gradually matured over the two decades after reform. The entry into the World Trade Organisation marked a period of rapid growth, exacerbating income inequality and providing a breeding ground for corruption. The completion of crucial reforms and a lack of consensus on further reforms led China into a phase of returning to the normal state of a developing country.
Specific developments during this phase include
- widening income gaps
- rapid spread of corruption
- fragmentation of CPC power
- rise of political-business cliques
- excessive marketisation
The PRC’s reversion to a normal developing country was due, concludes Yao, to ideological emancipation and post-reform social transformation. While presenting challenges, this normality also expands personal and social freedom, retaining the achievements of the initial reform era. Discomfort within society during this transition is acknowledged.
Yao discusses the PRC’s 'New Era' challenges and transformations following two decades of reform. A series of tasks is faced:
- combatting corruption
- addressing fragmentation of Party organisations
- breaking political/business cliques
- correcting excessive marketisation
- eliminating poverty and achieving ‘common prosperity’
He reflects on the historical cycles and compares the Chinese experience with the theories of Strauss and Howe, proposing that China's current phase corresponds to a correction period rather than a crisis, with the state attempting to solve problems accumulated since the reform era. Yao concludes by emphasising the non-linear nature of history and the interplay of forces that shape societal development. The New Era's measures, though challenging, are seen as a necessary correction to address accumulated issues. The broader context and historical perspective are crucial to understanding China's trajectory in this period.
In conclusion, the PRC has transitioned from deregulation to increased regulation, entering the 'New Era' with a historical mission to address accumulated issues from the reform era. Unlike Mao's era of construction, the New Era is not expected to be a climax of construction. Correcting these issues is a challenging, lengthy task as many Chinese, including officials accustomed to a relaxed environment, may not fully understand the correction work. The rapid and assertive approach in recent years has led to severe consequences, impacting public confidence in the Party and necessitating time for reconciliation.
The absence of a clear doctrine in the New Era poses challenges, particularly as the socialist market economy, established during reform and opening, conflicts with Marxist teachings still officially endorsed by the Party. Efforts to 'sinicise' Marxism have been counterproductive, reinforcing its presence. The New Era underscores the need for bold doctrinal innovation, potentially involving the abandonment of certain Marxist doctrines.
The broader societal direction in China remains undetermined: yet to be resolved are key doctrinal issues
- the conclusion of the primary stage of socialism
- the institutional form of a socialist market economy
- the role of the private economy.
Yao calls for the Party to develop a new state doctrine rooted in common values, human nature, and governance requirements to gain lasting philosophical legitimacy beyond utilitarian arguments based on economic gains. The path forward requires courage, a departure from old theories and a wholehearted embrace of Chinese political traditions.