President Xi Jinping hailed China’s political system as a model for developing nations at the 19th National Congress of the Communist Party on October 18, 2017. The proclamation of the “China model” exemplifies the growing role that China plays in the international sphere. This comes as the United States is retreating from international engagement under the leadership of President Trump, creating space for greater Chinese engagement. President Xi has expressed a strong willingness to fill this role.
The United States must accept the plurality of political models and maintain a cooperative approach toward international financial institutions that does not punish countries based on their economic systems. Doing otherwise is morally wrong because it forces developing countries to adopt the American model without regard for their best interests.
The China model is based on meritocracy, state-led capitalism, adaptability, and experimentation, presided over by a single ruling party. Chinese leaders are internally selected by the National People’s Congress after rising through the ranks of the Chinese bureaucracy. President Xi Jinping, for example, served as the governor of Fujian, party-secretary of Zhejiang, and vice president of the People’s Republic of China before he became the General Secretary of the Chinese Communist Party. This hierarchical system promotes bureaucrats based largely on their official merits and accomplishments, creating a highly intelligent and experienced bureaucracy.
President Xi Jinping speaking at the COP21 Summit in Paris in 2015
China’s shift from communism to a “socialist market economy” in the 1980s invited foreign investment into the country while maintaining state control over the economy. This system more closely reflects state-led capitalism because it allows private industry to flourish, but it asserts control over state-owned enterprises in industries such as banking and telecommunications. Strong state involvement in certain industries gives the state greater control over the economy, allowing for the rapid growth of China’s economy.
Chinese leaders have demonstrated China’s adaptability by shifting its economic model in response to new challenges and a changing economic landscape. The export-led economic model rolled out by Deng Xiaoping in 1978 led to immense economic growth. Later, this model was challenged by the slowing economic growth and the inequity of economic distribution in China’s society. In response, China has taken several measures to adapt to these changes, such as focusing more heavily on developing its technology sector and increasing spending on public goods.
Policy experimentation is built into the Chinese system to allow the central government to test new policies before rolling them out to the rest of the country. This is inherent in the China model because China’s strong central government does not have to work within a rigid federal system or worry about upcoming elections. Chinese leaders are given the freedom to conduct localized experiments and then generalize successful policies to the rest of the country. Experimentation was key to the transition of China’s economy from communism to state-led capitalism. In the 1980s, China created several special economic zones to test out new economic policies that met with great success and were later adopted across the country.
The American model or “Washington Consensus” is based on liberal democracy and market-led capitalism. This model is armed with financial institutions such as the International Monetary Fund and the World Bank that promote the American model by requiring developing countries to meet certain conditions in order to receive loans. These conditions often prescribe economic policies that reflect the American model such as market liberalization and privatization. This system of conditional financial assistance must be made more flexible to allow for a diversity of economic systems.
IMF leaders meet with then-Secretary General Ban Ki Moon at the IMF/World Bank Spring Meetings in Washington, D.C.
Conditions attached to loans given by international financial institutions must not contain stipulations about the donor country’s political or economic systems. These conditions give the loaning institution greater control over the donor country to ensure that loans will be repaid. However, demanding that a donor country change its political model to gain access to funds is immoral and unproductive. Instead, only minimal conditionality with no long term political or economic restructuring should be allowed.
The narrative that countries develop in a linear progression eventually leading to an ideal system, whether it reflects the Chinese or the American model, is false. Advocating for this result is unreasonable because it restricts the choices available to developing countries. The United States must acknowledge that China offers a strong model for developing nations that presents opportunities that the American model lacks. However, the Chinese system is also riddled with corruption and human rights violations. These drawbacks emphasize the fact that the China model should not be adopted wholesale. President Xi emphasized this point when he stated that “no one political system should be regarded as the only choice.” This position should be embraced by the United States because it will grant developing countries the agency to recognize the strengths of each system in order to make the best decision for their countries. This will produce more suitable and sustainable governance in developing countries that will contribute to a more stable world.
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Marika Miner is an M.A. candidate in Asian Studies at George Washington University’s Elliott School of International Affairs. She has interned at the State Department and the U.S.-China Business Council. Her research interests include East and Central Asia.