# China’s Long March Back to Stagnation - Link: https://www.thailand-business-news.com/china/123575-chinas-long-march-back-to-stagnation - Published: 2024-01-24T18:02:12+07:00 - Author: Debin Ma --- **Abstract: **China’s economic success is often credited to its embrace of market forces and the private sector, which played a central role in the “reform and opening- up” initiated after Mao Zedong’s passing four decades ago. By retreating from those earlier policies and commitments, Chinese leaders created the conditions for the setbacks and stagnation that we are seeing today. --- OXFORD – As the world grapples with the implications of ominous shifts within China, MIT economist [Yasheng Huang](https://www.project-syndicate.org/columnist/yasheng-huang), an astute long-term observer of the Chinese economy, has produced a well-timed book. In [_The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline_](https://yalebooks.yale.edu/book/9780300266368/the-rise-and-fall-of-the-east/)_,_ he combines a close examination of contemporary China with an ambitious (sometimes overly so) assessment of the country’s recent and distant past. ADVERTISEMENT * [What Made the Miracle?](https://www.thailand-business-news.com/china/123575-chinas-long-march-back-to-stagnation#what-made-the-miracle) * [Deng’s Last Stand](https://www.thailand-business-news.com/china/123575-chinas-long-march-back-to-stagnation#dengs-last-stand) * [The Long History](https://www.thailand-business-news.com/china/123575-chinas-long-march-back-to-stagnation#the-long-history) * [The Test of Time](https://www.thailand-business-news.com/china/123575-chinas-long-march-back-to-stagnation#the-test-of-time) * [The Uses of History](https://www.thailand-business-news.com/china/123575-chinas-long-march-back-to-stagnation#the-uses-of-history) Like Huang’s other writings, _The Rise and Fall of the EAST_ has a crisp, punchy, and occasionally satirical tone. Unflinching in his criticism of the current Chinese regime’s failings, Huang champions China’s great reformers, including politically fallen ones. Given the current political climate in China, it is a courageous book. Huang shows, with great conviction, that China owes its economic miracle to its embrace of market forces and the private sector, which formed the core of the “reform and opening- up” that began four decades ago, following the death of Mao Zedong. By retreating from those earlier policies and commitments, Chinese leaders created the conditions for the setbacks and stagnation that we are seeing today. Building on the title’s acronym, the book’s chapters unfold like an array of mirror images alternating between past and present, and between China and the West. Students of contemporary China, especially those from outside the country, will be well rewarded by the intimate and updated portrayal of the events and personalities of recent decades. But the book is also richly historical, with two parallel narratives: a shorter history of the last 40-70 years (thus including the pre-reform Mao era), and a longer one going back two millennia. It is through this long-term perspective that Huang unveils the causes of not just 40 years of remarkable growth, but also its recent reversal into stagnation under the current regime. As an economic historian, I applaud this grand historical narrative. Despite some pitfalls and detours, Huang brings unusual interpretative depth to the matter. ## What Made the Miracle? Whether the modern Chinese miracle was driven by the market or the state remains a fundamental question. For the last decade, an ever-clearer tilt toward the latter has led to a subtle but decisive official rewriting of the ideological and political history of the last 70 years. History, for the current regime, is not about understanding the past; rather, it has become a tool to legitimize the past decade’s ideological turn back toward greater party and state control. Those previous four decades of reform and opening-up coincided with dazzling double- digit economic growth, leaving many to believe – with a sigh of relief or even amnesia– that the Mao era was firmly in the past. But the events of the past decade show that not everyone shared that belief. And when those with a different view include the men at the very top, the consequences for China and the world can be profound. Huang presents his own position unequivocally, proclaiming the market to be the ultimate driving force of China’s economic growth miracle. In his “shorter” history, he – like other staunch supporters of the market view – gives credit to the ideological and intellectual dynamism of the 1980s as the origin of China’s transformation. By gradually “growing out of the [five-year] plan,” to use historian Barry Naughton’s [phrase](https://www.cambridge.org/core/books/growing-out-of-the-plan/4500F9826731A4765F9B6C2EFCE7AD53), China achieved marketization, de-collectivization, greater ideological and intellectual openness, and even political reform. The latter, though often fitful, kicked in to gear to dismantle the rigid Mao-era state controls over society and personal lives, while all the economic changes lifted hundreds of millions of Chinese out of abject poverty. ## Deng’s Last Stand In recounting this history, Huang offers vivid portrayals of Hu Yaobang, Zhao Ziyang, Wan Li, Hu Qili, and other colorful and bold reform leaders. He shows how the 1980s, brimming with optimism, culminated in a massive nationwide plea for further liberalization. This was the cause championed by the students who gathered in Tiananmen Square and in towns and cities throughout the country in the spring of 1989. The subsequent military crackdown was China’s most severe retreat from liberalizing reform since the late 1970s. Nonetheless, the reform project was relaunched in dramatic fashion in 1992, and by the same paramount leader who had ordered the Tiananmen crackdown three years earlier. An increasingly frail, diminutive, and barely audible Deng Xiaoping undertook a whirlwind southern tour from Shenzhen – a fishing village that was being transformed into a manufacturing and export hub – to Shanghai. A dynamic, freewheeling economic powerhouse in the pre-Communist era, Shanghai had become a heartland of communist conservatism. But now, the Communist Party of China (CPC) leadership was championing radical reform measures. Deng’s last stand for reform ushered in the decades of explosive growth that propelled China to global prominence as the world’s second-largest economy. But Huang gives more credit to the 1980s than to the subsequent two decades. Somewhat downplaying the achievements of politicians such as Jiang Zemin, Hu Jintao, and even the charismatic premier, Zhu Rongji, he views those who followed Deng as more ideologically statist. As someone who came of age as a college student in the 1980s, I share Huang’s nostalgia for the uplifting mood of that era. But does a mood always represent reality? It is easy to forget just how much poorer China was in the 1980s. Back then, the average Chinese had very little cash and almost no foreign currency. Most had never traveled abroad – or even dreamed of doing so. The economy was dominated by a massive state sector. There was little to no genuine recognition of private property, even in rural areas, despite the famous Household Responsibility System, nor was there much access to foreign contacts. Because the 1980s generation was starting from such a low level, they had plenty of stars to gaze at. But intellectual imagination alone does not change reality. Poverty constrains not just material well-being but also civil liberties. Revisiting China in the mid-1990s and after, I found a country making huge strides in marketization, privatization, and openness. While it was more ideologically subdued, with few speaking openly about political reforms, there was also a quietly emerging civil society. Years of spectacular growth had swept away the lingering Mao-era constraints that had remained in the 1980s. True, corruption also became far more rampant after the 1980s. But that is a familiar byproduct of rapid wealth creation and rising inequality. Moreover, the larger point remains: China’s unprecedented economic growth took off _after_ the 1989 Tiananmen crackdown. ## The Long History Lest this brief critique of Huang’s “shorter” history fail to do full justice to the book, we must turn to his “longer” foray through two millennia of Chinese history. Here, he makes a truly herculean effort to explore the historical origins and continued resilience of Chinese autocracy. Projecting the full sweep of Chinese history onto contemporary events necessarily requires a highly selective account of past events and personalities, and Huang performs this task admirably. Though unorthodox, the unusual historical weight that he accords to China’s two shortest dynasties, the Qin (221-206 BC)** **and Sui (581-618 AD), is both insightful and illustrative. The Qin were the first to unify China under a system of direct administrative rule (through a county system), and the short-lived Sui initiated the _Keju_ civil-service examination system. These two institutions remain the pillars of Chinese autocracy to this day. Huang also offers a curious analysis comparing the lives of the Ming Emperor Wanli( 1563-1620) with his near-contemporary Henry VIII (1491-1547) of England. The result is a portrait of contrasts. Though Wanli was one of China’s meekest emperors, he faced very few external constraints, whereas the notoriously temperamental and despotic Henry encountered many. Such sweeping historical narratives always run the risk of succumbing to clichés. The implication is that the difference between China and the West is a matter of autocracy versus democracy, absolutism versus constraint, state versus society, centralized versus decentralized, and innovation versus conformity. Though simplistic, dichotomy helps to guide Huang’s search for patterns in China’s long history. In one chapter, he revisits the thesis advanced by the British historian of science Joseph Needham that China was the world’s most advanced technological leader during the Medieval era. To test this claim, Huang shows how a massive database of technical innovations covering a thousand years supports his contention that periods of fragmentation and decentralization were the most innovative in Chinese history. Given that the reconstructed database was an amalgam of disparate inventions, varying definitions, and indeterminate categories, his sweeping conclusion will give readers pause – and leave some professional historians gasping for air. ## The Test of Time Huang also revisits the birth and evolution of that remarkable Chinese institution, the _Keju_ examination (the first letter of his EAST acronym). Although only a tiny percentage of the male population ever made it through this rigidly hierarchical system, the _Keju’s_ lasting impact has been massive – politically, economically, culturally, and socially. In Huang’s brilliant and insightful telling, the system has been both a blessing and a curse since its introduction. That said, Huang does make some missteps. For example, his claim that the _Keju_ decayed during the Qing era is contradicted by a mountain of literature showing that it was, in fact, tuned to near perfection as an instrument of social control and political indoctrination. That is how a small ethnic minority of Manchus managed to maintain their rule. Huang contends that the selling of _Keju_ titles – or, to be more exact, positions in the hierarchy of the examined – eroded the institution under the Qing. But the sale of official titles was strictly regulated, and it became rampant only during the crisis years of the 1860s Taiping Rebellion, when some 20-30 million people were killed. As soon as the Taipings were defeated and peace restored, the practice was reined in. If anything, the fact that selling positions in the hierarchy generated such a strong backlash confirms that the _Keju_ was still held in high regard. Even stranger is Huang’s claim that Qing rulers were less enamored with the _Keju_ because Han Chinese (particularly from southern provinces) outcompeted Manchus. In reality, the Manchus already had a favorable ethnic quota and never had to contend with the vast, hapless majority of Han Chinese. (When the Qing fell in 1911, it was partly because of those Manchu privileges.) For Huang, the _Keju _system represents a common thread tying the ancient to the modern. According to the landmark “tournament theory,” local and regional governments promoted economic growth during the modern reform era because the central government had used criteria such as GDP performance or other quantifiable political, economic, and social indicators to evaluate and incentivize regional bureaucrats. Huang sees the _Keju_ exam as the historical equivalent to such indicators. But this approach is conceptually confusing, because the _Keju_ was not an indicator of bureaucratic performance but rather a screening device to supply rulers with bureaucrats from a pool of successful candidates. True, rulers did develop other criteria, such as the eighteenth-century classification of counties by their relative geographic importance, difficulties with administration, taxation, and degree of public order. But these measures show that imperial rulers’ overriding concern was with political stability; the idea of GDP or GDP growth would have meant nothing to them. ## The Uses of History Huang’s book is the latest installment in a broader trend: China scholars are increasingly turning to history to develop a more enduring understanding of China’s place in the world. But when one’s emphasis is on historical origins and the persistence of institutions, one must be mindful of the need to avoid historical determinism. History is highly mutable, and the past will always be open to multiple interpretations. And interpretations themselves reshape the past and present. More importantly, change and transformation cannot be interpreted by examining events within China alone. China had been at a crossroads before, not least during the second half of the nineteenth century, when Western imperial powers oversaw an earlier, forcible “opening-up.” Spurred by the gradual but profound recognition of its own backwardness, China moved toward constitutional monarchy in the 1898 ‘Hundred Days’ Reform and the 1901-11 late-Qing Constitutional Reforms. Then, after 1911, the fall of the Qing ushered in a short-lived experiment with parliamentary politics in the Republican era. Why did those experiments fail? More importantly, how did communism – a term few people had heard of in the 1920s – become the dominant ideology by the late 1940s? While much of this history still needs to be assessed and reassessed, it is clear that such profound ideological and political changes must be understood in the context of the rise of Meiji Japan and Bolshevik Russia. ### Related**Posts** ### 󠀁[Time to Rewrite Energy Rules: Unavoidable Transition for Thailand](https://www.thailand-business-news.com/environment/329524-time-to-rewrite-energy-rules-unavoidable-transition-for-thailand)󠁿 ### 󠀁[The Changing Map of Growth: Why East Asia and the RCEP Are More Important Than Ever](https://www.thailand-business-news.com/opinion/328474-the-changing-map-of-growth-why-east-asia-and-the-rcep-are-more-important-than-ever)󠁿 ### 󠀁[Bangkok Needs to Stop Treating Every Flood as an Exceptional Event](https://www.thailand-business-news.com/opinion/332200-bangkok-needs-to-stop-treating-every-flood-as-an-exceptional-event)󠁿 ### 󠀁[Beyond Recovery: Hong Kong’s Next Economic Challenge](https://www.thailand-business-news.com/hong-kong/330278-beyond-recovery-hong-kongs-next-economic-challenge)󠁿 The same goes for the 1980s, which Huang describes with such warmth and nostalgia. China’s ideological shift must be understood as a response to the rapid economic growth of its defeated rivals: Japan in World War II, South Korea in the Korean War, Taiwan in China’s Civil War, and the still-colonized (or humiliated) territory of Hong Kong. Add Singapore’s newfound prosperity under Lee Kuan Yew, and there was more than enough evidence to shock the Chinese psyche. After 30 years of isolation, China had fallen woefully behind again. I well remember the gloom that hung over China in the summer of 1989, immediately following the Tiananmen Square crackdown. It stood in stark contrast to the euphoria in the former Soviet republics and Eastern and Central Europe following the fall of the Berlin Wall later that year. There was a widespread sense that authoritarianism was bound to fail, and democracy certain to win. The end of history was nigh. But now, China’s remarkable economic transformation and the lasting legacy of “shock therapy” in Russia and Eastern Europe seem to have cast doubt on those earlier triumphalist assumptions. Similarly, for all the euphoria that surrounded the Arab Spring, those popular uprisings soon gave way to renewed authoritarianism. Indeed, that was just when China was beginning its own return to greater state and party control. While I do not subscribe to a single view on the merits of authoritarianism or democracy as an engine of economic growth, I agree with Huang that China owes its 40 years of unprecedented growth to markets, not the state. Meanwhile, we in the West owe it to ourselves to gain a better understanding of what really happened in China and what underlies sustainable progress before exporting our ideological conviction. **Yasheng Huang, **[**_The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline_**](https://yalebooks.yale.edu/book/9780300266368/the-rise-and-fall-of-the-east/)**( Yale University Press, 2023).** **_Debin Ma, Professor of Economic History and a fellow of All Souls College at the University of Oxford, is the co-editor, most recently, of _**[**T**he **Cambridge Economic History of China**](https://www.cambridge.org/core/series/cambridge-economic-history-of-china/DCB7118D56309A50EF020677F6E71A0F)**_( Cambridge University Press, 2022)._** **Copyright: Project Syndicate, 2024. [www.project-syndicate.org](http://www.project-syndicate.org)