Back at the end of the 1970s, not a single Western economist
foresaw that China would have the world’s fastest growing economy
over the next 25 years.
Their perspective of China was informed by the western economic
textbooks of the day. Here was a nation that lacked the criteria
thought to be the prerequisites for significant economic growth.
These were mature markets, private ownership of property and an
effective regulatory framework. But the miracle of China’s economic
development still rolled out.
In an effort to understand the Chinese miracle, some 60 Chinese
economists, politicians and legal experts gathered in
Shanghai-based Fudan
University from October 18 to 19. They had come to participate
in a top-level conference entitled “Political Economy: Walking
Towards a New Era”. The delegates were unanimous in their agreement
that Western economic theories on their own cannot provide a
satisfactory explanation of the current economic phenomena in China
and that the time has now come for China to have its own economic
theories.
Over the period of sustained growth, which has seen such
dramatic changes in China’s economic structure since 1979, several
outside influences have been pre-eminent in economic thought within
Chinese academic circles. First came the political economics of the
former Soviet Union, then 1980’s Western neoclassical economics
followed by a more recent emphasis on dealing costs and property
ownership.
Yet, Chinese economists were to be deeply puzzled when they
turned to these various economic theories to seek an explanation
for China’s economic phenomena.
Professor Chen Ping of the China Economic Research Center at Peking University
commented, “According to Western economic theories, a country like
China with its huge population should be one of those least likely
to take-off economically, but China did just that.”
It is Professor Chen’s view that a theoretical basis for the
driving force of China’s economic growth cannot be found in
classical Western economics. For example where is the explanation
of the incentive mechanism prior to ownership reform or of the
effects of regional differences on growth models?
“China seems to be following an economic development model which
depends on market forces and development. This is quite different
from the so-called Western economic model which relies on such
determinants as consumer demand and productivity gains,” added
Professor Chen.
“Unlike Western economists whose current focus is on fine-tuning
their economies, Chinese economists are faced with the consequences
of widespread systemic change. This may well provide a clear
pointer to the need to develop uniquely Chinese economic theory,”
noted renowned economist Wang Dingding.
“China’s economic growth depends largely on the energy that is
released when systems are reformed,” said Professor Yao Yang of the
China Economic Research Center at Peking University.
Chinese scholars question the categorization of a “socialist
economy in a transitional state” as applied by Western
economists.
For Prof. Shi Zhengfu of the New Political Economics Center at
Fudan University, what can be witnessed in China is not the
changing social economic system that is seen through Western eyes.
Rather it represents a new era of evolution into the unknown ready
to herald the birth of China-specific economics.
Professor Shi is of the opinion that China’s own economic theory
can be developed in relation to at least three characteristics of
the national economy. Enterprise structure frequently including an
element of public ownership; initial middle class economic success
followed up with social wealth redistribution mechanisms; proactive
intervention by local governments prepared to manage rather than
merely observe development.
“Economics in China should not merely replicate the old Western
economic studies. Our aim is to move away from Western economic
development models. Like American economists, we study what is new
and up-to-date,” said Prof. Chui Zhiyuan.
Though all the scholars present at the conference agreed on the
need to build China’s own economics, they also recognized that up
to now, the focus of Chinese economic study has been on criticism
of Western economics rather than on developing viable alternatives.
“The content of China’s economic study is new while the methods and
models are old,” commented Prof. Shi Jinchuan, vice-dean of the
Economics College at Zhejiang University.
Many scholars see the application of a case-study approach to
actual problems as the best way to identify the necessary Chinese
characteristics. Any breakthroughs in the specifics would in turn
point the way to generalities and theoretical advances. Prof. Zhang
Shuguang said, “The most meaningful path will be first to find
positive results and then apply these to help inform the regulatory
process.”
“No matter how things turn out in the end, the very fact that
Chinese economists are being called on to develop a new economics
with Chinese characteristics speaks for itself. After a long period
of rapid economic growth, Chinese economists have the confidence to
develop their own economic models,” concluded Stephen Green who
heads the Asian program of the Royal Institute of International
Affairs.
(China.org.cn by Zheng Guihong, November 3, 2003)