Wednesday, February 5, 2014

China's multiple experiments - This time is no different

It is no hyperbole to claim that the Chinese Communist Party has been pursuing the most ambitious and far-reaching economic, social, and political experiment in human history. In fact the country has been the canvas for the most elaborate experiment ever with a massive group of human beings. While its carefully calibrated and strongly guided economic and financial policies get much of the attention, the scale of the other dimensions are equally staggering.

The Party's careful balancing act with political reforms, social experiments with managing the country's demography, rapid urbanization, religious freedom, and so on are premised on the Platonic belief that it is possible for a group of "enlightened" leaders to micro-manage the comprehensive development of a nation.

Most commentators, for reasons which I think are a great example of how cognitive biases can overwhelm even the most objective of people, have given the Platonic guardians presiding from Zhongnanhai the benefit of doubt in being able to pull of their objectives. I can understand this to some extent with economic reforms, though even there the challenges are simply too formidable, to be wished away.

But history is replete with too many examples to inform us that the consequences of the non-economic social and political experiments are most certainly likely to be deeply undesirable. Times has this latest China fact,
In 2000, China had 3.7 million villages, according to research by Tianjin University. By 2010, that figure had dropped to 2.6 million, a loss of about 300 villages a day... China’s top leadership has equated urbanization with modernization and economic growth. Local governments are also promoting it, seeing the sale of rural land rights as a way to compensate for a weak tax base. Evicting residents and selling long-term leases to developers has become a favored method for local governments to balance budgets and local officials to line their pockets. Numerous local officials are under investigation for corruption linked to rural land sales.
There is nothing I see which necessitates the belief that "this time is different".

Update 1

Andrew Sheng and Xiao Geng points to the latest round of re-calibration in long-term growth strategy by the Chinese government - the decision to lower growth rate expectations to a "new normal" of 7% and attendant policies to support this recalibration. They describe the Chinese development trajectory as an "adaptive learning process which shapes every economic, diplomatic, military, and social policy", and which is "characterized by experimentation, assessment, and adjustment". This is a adaptation of Deng's strategy to "cross the river by feeling the stones". 


KP said...

Dear Gulzar,

It is interesting to read a post that views development not purely as a GDP enhancing effort.

More interesting is your turn away from a purely incentive based economic explanation of the misalignment.

Whether the view of what is appropriate is crowd-sourced (democracy) or leader led - the danger now is that clearly the excluded have little voice in the development's made on their behalf.

To me, this post is an oblique reference to what is happening in India. China simply boggles through numbers and makes a pointed example - but democracy in India has not been very different.

I am waiting for an example of somewhere in India where large scale infrastructure development based on land has left the displaced population better off - by design - rather than the few who skim off gigantic rents in alignment with politicians and bureaucrats.

My belief is that in the past 10 years there is a better chance that the misery at least gets noticed briefly, I suspect that things were worse when just after freedom we embarked on large scale development.

Anthropological (Development anthro) studies the few that I have seen only point to large scale disaster, albeit silent.

regards, KP.

Gulzar Natarajan said...

Thanks KP for that insightful comment...

I am fully with you, that for all the power-point presentation examples of best-practices in land/infra development in India, there are none that have genuinely addressed the rehabilitation needs of the land losers... apart from government failures, corporate greed (absolutely no concern whatsoever about those displaced from the lands handed over to them and now being operated by them) is to blame. in fact, in states like Andhra Pradesh, all the major Indian corporates, especially from software, have been able to acquire large tracts of land, far in excess of their requirements...

the good thing, as you rightly point out, is that the social movements and (to some extent) media have played an important role in highlighting them... but the danger is that we could now swing to the other extreme and populist political environment plays along with it...

China, on the other hand, is a disaster on a scale far higher than India, just waiting to explode...