The quiet revolution
China and Globalization: The Social, Economic and
Political Transformation of Chinese Society by
Reviewed by Sreeram Chaulia
China's relentless march of rapid economic growth and
reduced poverty qualifies as a quiet revolution in the
contemporary world. American sociologist Doug Guthrie's new
book challenges neo-liberal dogmas and makes the case that
this revolution was successful because it was state-led and
It is an account of how the forces of globalization played
out locally in the world's fastest-growing and sixth-largest
China's economic rise is "the result of methodical and
careful government policies" (p 8), state guidance and
upheaval that introduced policies that constructed a market
system, vindicating the theory that economic processes are
Deng Xiaoping's reforms from 1978 introduced controlled
modifications to the structure of the socialist economy,
"leaving the state apparatus intact while slowly unleashing
forces" (p 38). The Chinese government's strategy was to
allow economic actors to learn the rules of capitalism
rather than withdrawing and assuming that they knew them
Paralleling the household responsibility system in the
countryside, in urban China, the planned output of an
enterprise was cropped and the market part was permitted to
grow. By granting autonomy to local officials and factory
managers, incentives were stimulated. Today, rather than
dealing with the central government, foreign investors often
prefer building long-term alliances with the provincial
Contrary to International Monetary Fund and World Bank
boilerplates, rapid and complete privatization of property
was not part of China's success story. Township and village
enterprises resembled business organizations, but property
rights still resided in the hands of local governments.
State-owned enterprises remain a massive force in the
The institution of lifetime employment and pensions ("iron
rice bowl") was carefully dismantled by the state, but this
was tempered by labor contracts and labor arbitration
commissions (LACs) to give workers recourse against
employers. Establishment of special economic zones
facilitated colossal inflows of foreign capital into China,
dwarfing that of Japan in comparable development periods.
The late premier Zhao Ziyang's coastal-development policy
laid the foundation for China to emerge as the third-largest
trading economy by 2004.
Besides export-oriented foreign direct investment (FDI),
China also attracted investors wanting to capture the
gigantic internal market. Guthrie remarks that the country's
transition was the product of a "struggle between a
government that wants to stay in power and an international
community that wants access to a billion consumers" (p 235).
Technology transfer and new management practices were two
gifts of FDI to China. Joint ventures between Chinese firms
and multinational corporations taught the former about
global market principles. Concrete changes in organizational
structure that resulted from state-orchestrated reform could
be attributed to the innovation, experimentation and
imagination of industrial managers who were under high-level
governmental offices or exposed to contact with foreign
Premier Zhu Rongji furthered Zhao's vision, knowing "that
China's only hope was to put corporate investors of advanced
capitalist nations at ease" (p 238). Zhu forced Chinese
companies to comply with international accounting standards,
another measure of how the state saw itself "in partnership
with Western multinationals" (p 146).
Zhao and Zhu pushed China toward rational economic processes
and rule of law. As many as 700 national and 2,000 local
laws were enacted in the 1980s and 1990s, enabling an
explosion of suits against the government. A rights-based
labor regime flourished in the ethos of legalism, with
workers winning about 60% of cases against employers brought
The dramatic ascent of litigation in Chinese society even
caused political dissidents to sue the government for
violation of constitutional rights.
Chinese social mores were remade by the economic reforms.
Steady migration of young women to urban and coastal areas
affected the structure of rural families. New elites
rediscovered traditional dowries and wedding ceremonies. The
state's strict "one-child policy" shrank family sizes and
increased female infanticide and girl-child abandonment.
The Chinese Communist Party's (CCP's) control over society
receded with reforms. By admitting private capitalists and
intellectuals into the party, the signal was sent that
business groups could no longer be ignored in Chinese
The dependency of individuals on their work units and
superiors was eliminated, even as corruption rose among
local bureaucrats. Managers of large firms distanced
themselves from guanxi (using connections to
accomplish tasks) and drew closer to market imperatives of
price, quality, rules and regulations.
Individual life chances swung powerfully because of the
economic reforms. University-degree holders and those with
foreign-language skills were highly rewarded. Citizens
positioned to match the multinationals' ways of doing
business benefited the most. Female access to education and
contribution to household income improved significantly, but
not enough to trump gender inequalities.
Incomes in rural areas were only 40% of urban incomes, while
disparities between coastal and inland and western and
eastern areas widened. Breakdown of the hukou system
(household registration) spurred mass migration to cities.
Freedom to be mobile throughout the economy gave workers the
chance to "vote with their feet", but also engendered a
floating population of more than 100 million that was
vulnerable to mandatory removal from shantytowns. An
underclass of rural migrants "begs for a living in China's
booming metropolises" (p 214).
Guthrie asserts that the China of the late 1990s was
politically much freer than the closed society of the Mao
Zedong era. Depletion of the CCP's monitoring capacity and
independence of individuals in workplaces were the two
underlying mechanisms that boosted the 1989 Tiananmen Square
Reforms gave birth to an economically secure and autonomous
middle class. Promotion of private enterprises by the state
fostered an autonomous public sphere and civil society as
well. Many private companies materially supported the 1989
Alternative sources of information became available to the
people as the Chinese government improved access to
television, fax and telephone. Guthrie comments that the
Internet "is a new frontier for outright resistance and
organization of popular movements" (p 275). The Chinese
state's fear of losing control over the telecommunications
sector has clear political connotations.
As reforms progressed, China's legislature (National
People's Congress - NPC) acted with greater independence,
and sometimes opposition, to the party-state. The NPC and
local councils encouraged election of non-party candidates
to government positions.
At the village level, adults had the right to vote, stand
for election and run committees of self-governance. Urban
Chinese participated in elections to local council deputies,
boycotted unfair elections and filed complaints to officials
- all pointing to creeping democratic changes from below.
Guthrie calls for stronger US engagement with China since
"reformers need greater external impetus to overcome
domestic obstacles" (p 327). Reform-minded Chinese elites
leverage global economic integration to transform their
As the second-largest purchaser of US Treasury Bonds and the
host of billions of US corporate investments, China already
has the means to ensure a cooperative United States that is
bound to be non-hostile.
Guthrie's main argument that transitions from socialism are
better if engineered by a visionary state brings the debate
back to whether developing countries need undemocratic
polities to grow economically.
The discipline with which Chinese society fell in line with
new market-friendly rules in the 1980s deserves comparative
analysis with similarly placed democratic countries.
Were Chinese reforms fruitful because they were merely
state-driven or because they were
authoritarian-state-driven? Guthrie has completely missed
the angle on the inverse relationship between democracy and
growth in newly industrialized countries.
China and Globalization: The Social, Economic and
Political Transformation of Chinese Society by Doug
Guthrie. Routledge, New York, 2006. ISBN: 0-415-94991-2.
Price: US$29.95, 398 pages.
(Copyright 2006 Asia Times Online Ltd. All rights reserved.
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