Sunday, June 23, 2024

Sinophobia and China’s development model: Part 1

By Shiran Illanperuma and Dr. Vagisha Gunasekara

While the U.S. and other Western nations are mired in multiple crises of COVID-19, economic recession and systemic racism, their well-oiled global propaganda machine continues to manufacture consent for a New Cold War on China.

The Western media is not without critical analysis of “Sinophobia Inc.” – a term coined by a Chinese diaspora group to describe an information industrial complex where Western state and corporate funded media and think tanks flood the public with negative portrayals of China.  However, such critical analysis of US foreign policy does not find much space in the Sri Lankan media.

Rather, there is a pronounced appetite for Sinophobia, especially among Sri Lankan elites who uncritically regurgitate reports designed to justify regime change and military buildup against China. These reports are picked up, cited, and amplified by local journalists, academics and media outlets, and then entrenched in the public consciousness.

From the now debunked “debt-trap” narrative, to more recent outlandish claims of “Chinese colonialism”, the intent appears to be to turn public opinion in Third World countries against China. This simultaneously denies Third World countries alternative partners for trade, investment and finance, while weakening an emergent China’s global standing.

Perhaps more sinister is a tendency by liberal elites to either co-opt China’s development model from the Right – by characterizing it as purely a victory of neoliberal economics – or to refute it from the Left – by advancing allegations of inequality, pollution, racism, and authoritarianism. This focus on China’s development is in some ways a more potent weapon as it seeks to prevent the rise of more Chinas from among developing nations such as ours.

This article is the first of a multi-part series where we discuss aspects of China’s development model, particularly on questions of inequality, pollution, racism and authoritarianism. To be clear, this is not a series about ‘defending’ China, but about interrogating liberal imperialist hegemony, which has run out of intellectual steam to rationalize China’s objective successes.

Poverty eradication and inequality 

China recently announced that it had eradicated extreme poverty a decade ahead of the United Nations Sustainable Development Goals for 2030. The state has lifted over 770 million people out of poverty in the last 40 years – contributing to about 70 percent of global poverty alleviation.

Critics argue that China’s poverty line is lower than the World Bank’s 1.90 US dollars a day, and therefore the claim of extreme poverty eradication is inflated. However, poverty is not just a function of income but also of purchasing power. China’s poverty line is adjusted for inflation every year, with 2010 as the base point. If China used 2011 as a base point, as the World Bank does, the current poverty line of 6.95 Yuan per day would convert to 2.30 US dollars – well above the World Bank standards.

Of course, inequality still persists in China. Only a naïve, ahistorical pundit would be surprised that “China still has massive inequalities”. It would be foolish to think that the effects of 180 years of semi-feudalism, semi-colonialism, and the Opium Wars, could be overturned in 70 years, amid embargo and military encirclement. 

At the 19th National Congress of the Communist Party of China (CPC) in 2017, President Xi Jinping stated: 

“As socialism with Chinese characteristics has entered a new era, the principal contradiction facing Chinese society has evolved. What we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life… The more prominent problem is that our development is unbalanced and inadequate. This has become the main constraining factor in meeting the people’s increasing needs for a better life.”

Inequality in China is therefore an issue at the heart of contemporary political and scholarly debate in the country itself. The embrace of market reforms has objectively helped the country develop its productive forces, but at the cost of rising inequality which the government now seeks to address through demand-side reforms.

The data on inequality in China indicates that such rhetoric is being matched by concrete policy interventions. Urban income inequality is on an overall downward trend since 2008. According to a report from the International Labour Organization (ILO), the average minimum wage in urban China tripled between 2004 and 2014. Real wages in urban China are growing faster than in India, Indonesia, and even the G20. 

However, since 2004, there has been a growing divide between labor productivity and wages, possibly due to rapid productivity gains as China leads the Fourth Industrial Revolution. Still, labor share (the ratio of compensation of employees over gross value added), which declined from over 50% in the early 2000s to 48% in 2008, is once more on the rise and currently at about 51%.

Inequality between rural and urban China is high because productivity gains have been highest in the urban areas where manufacturing grew in proximity to ports and international supply chains. Historically, the rise of colonial maritime trade was at the expense of landlocked trade routes in interior China. This is one of the many reasons that China has invested heavily in roads, railways, and the New Silk Road.

China spent 77.17 billion US dollar on targeted poverty alleviation programmes between 2016 and 2020. The government expanded coverage of subsidies, pension schemes and medical insurance in rural areas. China now has a 90 percent rate of home ownership, which is slightly higher in rural areas (96%) than in urban areas (87%). Basic medical insurance covers some 99.9% of the poor population. Meanwhile, access to tap water among rural residents increased from 70% in 2015 to 83% in 2020.

That said, inequality has to be considered not just at the domestic national level, but also in the context of the global economy. In terms of GDP purchasing power parity, China surpassed the United States in 2017 according to a World Bank report. China’s moves to close the technological gap with the advanced countries are essential for increasing developing countries’ access to more affordable capital goods.

The Communist Party China learned through experience that perfect equality in the context of high poverty and no modern technology was not a desirable goal in itself. The Reform and Opening Up, including the contradictions that came with it, may have not been necessary had China been as resource rich as the Soviet Union, or if the colonial powers that plundered it had voluntarily ended their blockade and paid stiff reparations.

Orientalism of liberal imperialism

On April 29th, 2021, China successfully launched into space the core module of its space station. This is a remarkable achievement for a country that was founded 70 years ago and had to be rebuilt from scratch after decades of war, humiliation and chaos. The long and arduous journey of the people of China has delivered the results that they wanted, and continues to do so.

Third World liberal elites tend to exaggerate the market reforms introduced by Deng Xiaoping, mistakenly comparing it to Sri Lanka opening up the economy in 1977. In doing so, they disregard the continuities in pre- and post- Reform China, including the enduring popularity of the CPC, the strength of the Marxist-Leninst state, and most importantly, the Chinese people who have made heavy sacrifices to achieve economic progress.

Think tanks and media institutions linked to liberal imperialist agendas have saturated the public domain with research on China’s development, in an effort to downplay the success of their unique system. Yet they remain silent on the utter failure of the system exported by the West, via the World Bank and IMF, to countries like Sri Lanka. China has been willing to share its experience, but has so far not forcibly exported its model.

Although liberal imperialists claim virtues of reasoned argument, neutrality, fact checking, and providing space to contrary views, these clearly take a back seat when discussing issues in which imperialism is invested. Liberal imperialism remains orientalist at its ideological core. For them, the testimony of 90 million CPC members does not warrant the same coverage as a handful of “China watchers” sitting comfortably in the heart of the empire.

Shiran Illanperuma is a Journalist and Researcher in Economics

Dr. Vagisha Gunasekara is an Academic and Researcher in Political Economy

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