Keep govt from falling into hands of elite

• Source: Global Times
• [22:06 March 04 2010]
• Comments

Illustration: Liu Rui

By Yao Yang

Between 1978 and 2009, China's average annual economic growth rate reached 9.7 percent and its per capita real GDP increased by more than 12 times, which is known as a "miracle."

China's economic success is often attributed to a supposedly effective authoritarian regime. But China's political system is not the authoritarian system as imagined by the West, but a highly flexible mixture, which also includes civil, social and democratic elements.

During the era of the planned economy, the regime was more authoritarian, but the economy was often stagnant. Many other authoritarian regimes worldwide have ended in failure.

The real key to China's success is its disinterested system of government. A disinterested government is one that maintains a neutral position when facing disputes between social groups, rather than being dominated by one social group.

In most developing countries, the elite class has a firm hold on the government, but this elite is not necessarily the most productive social group. When the government favors them, vital resources are often going to unproductive ends. The more neutral stance that the Chinese government took therefore promoted economic growth.

One important prerequisite for a disinterested government is social equality, meaning social stratification without exclusivity or rigid boundaries.

A typical example of social inequality is India's caste system. This is the most profound form of inequality. Political inequality and economic inequality are much more shallow and can be corrected by short-term measures.

In an unequal society, it is a rational choice for the government and powerful elite to establish alliance; while in an equal society, it is unnecessary and even dangerous for the government to establish an alliance with any group, because it can easily stir up joint resistance from other groups.

A series of revolutions in the 20th century and the imposition of the planned economy between 1952 and 1978 turned the Chinese society into a largely equal society, giving it an advantage over other developing societies. China's experience is more like that of European countries, especially France, Spain and Russia, where bloody revolutions have taken place. In this sense, China's economic growth over the past 30 years is "extraordinary" because Chinese society itself is "abnormal".

However, China is moving toward being more of a "normal" developing country and the main indication is the emergence of powerful groups and their control of government policies.

This is primarily reflected in the changes of the government itself. A major achievement of the reforms from 1980 to 2000 was the reduction of the government's role in economic activities. However, over the past few years, particularly after the 2008 financial crisis, the government's intervention in economic activities has been resurging.