This analysis first appeared in Caixin
BEIJING - The recent government shutdown in the United States prompted a chorus of comparisons in China of the two countries' political systems. The general sentiment? "The American model of democracy is not the only way. The Chinese style may be another option."
But the comparison is inappropriate because it is based on two false assumptions. First, there is the belief that the political institution is the only variable that affects economic growth. Second, the idea that rapid economic growth is always positive.
Herbert Simon, the late American Nobel laureate in economics, explained that the factors that lead to growth are a subject that should be studied scientifically. Simply declaring growth a good thing is a value judgment, not a scientific one.
In the face of rapid economic growth, people might have different views. For example, those who haven't seen their share of the benefits from growth may be more inclined to focus on the corruption that accompanies it.
We can of course agree that "American democracy is not the only way." After all, the only country that exercises American democracy is indeed the United States itself. There are no two identical democratic states in the world. But we must also remember that "democracy" is a principle, which can be applied in many ways.
More than 2,000 years
As for China's institutional evolution, it follows a unique path linked to its traditions. At the heart are two different approaches: one is Confucian constitutionalism, the other is social constitutionalism. The Confucian culture has more than 2,000 years of history, compared to the socialist imprint of just the past 64 years. Whatever impact these two principles together can have on China remains to be seen.
The crucial point that people often ignore is the interruption of Confucianism by socialism, in particular between 1949 and 1978, before China's reform and opening-up. A variety of Chinese Communist Party movements landed fatal blows upon the Confucian tradition. It will take a lot for Chinese society to reconnect with this ancient tradition.
What has resulted is a form of schizophrenia in modern-day China. For instance, when talking about the nation's current position, Confucianism becomes part of China's long history to be flaunted. When faced with problems, the current preliminary stage of socialism is largely blamed. All aspects of incompletion or imperfection in Chinese society are due to this particular "Chinese condition," and a failure to reach any level of conciliation.
Naturally, apart from Confucianism and socialism, "Chinese-style capitalism" is to be closely noted. Ronald Harry Coase, another Nobel Prize laureate who died recently, wrote How China Became Capitalist, co-authored with his student Wang Ning. Coase and Wang argue that China's development is destined to follow the usual rules of capitalism, such as the clarification of property rights, the opening of markets, and trade with other countries.
Meanwhile, the subsequent economic development has left its mark on both socialism and Confucianism. Not only has it raised living standards, but it has also given Chinese people the chance to open their eyes to see the world and absorb the latest experiences in other capitalist countries to apply in their own lives. This is a brand new factor that has not been part of either socialism or Confucianism.
Universal principles
Still, the underlying principles for China's development are universal. It was by opening up that China imported technology as well as managerial experience that are forcing state-owned enterprises to reform, as well as market competition that led to survival of the fittest.
The Chinese economy has come all this way one step at a time. Rural areas' living improvements owe a debt to the market and urbanization, as well as grassroots democratization. Where local elections have been implemented, though inevitably sometimes with electoral fraud, villages now enjoy on the whole more public services than those without elections.
So whether it is the definition of property rights or the opening-up to economic development or direct voting rights, no particularity exists in China's development. Successful experiences are bound to be emulated and spread out further.
What direction should China's reform take is the crucial question. On one hand, there is the model of the Shanghai Free Trade Zone, where local competition spurs reform and Chinese companies can expand internationally while foreign enterprises enter China and push local businesses to raise their efficiency.
For China to open up it requires the overcoming of both the narrow-minded "traditional theory" and the closed-minded "special condition theory." Saying that America is no good does nothing to prove China's value.
