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WORK TITLE: Unlikely Partners
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PSEUDONYM(S): Gewirtz, Julian Baird
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WEBSITE: http://www.juliangewirtz.com/
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http://www.hup.harvard.edu/results-list.php?author=21944 * http://www.rhodeshouse.ox.ac.uk/rhodes-scholars-elect-class-of-2013/julian-b-gewirtz * https://www.ft.com/content/4e86b05a-c900-11e6-9043-7e34c07b46ef
RESEARCHER NOTES:
PERSONAL
Male.
EDUCATION:Harvard College, A.B. (summa cum laude), 2013; University of Oxford, Ph.D. candidate.
ADDRESS
CAREER
Writer, historian, poet, and economist.
AWARDS:Rhodes Scholarship.
WRITINGS
Contributor to magazines and newspapers, including the Wall Street Journal, Washington Post, Financial Times, Foreign Policy, and Foreign Affairs. Contributor of poems to magazines and journals, including AGNI, Boston Review, Nation, The New Republic, Ploughshares, and Yale Review. Contributor of essays and poetry criticism to periodicals, including the Economist, Washington Post, Los Angeles Review of Books, and VICE.
SIDELIGHTS
Julian Gewirtz is a writer and historian currently completing his Ph.D. in history at the University of Oxford. He is attending Oxford as a Rhodes Scholar. As a young academic, he specializes in Asia, specifically on China and Chinese economic history. His work on Asia has appeared in numerous major newspapers and periodicals, including the Wall Street Journal, Washington Post, Financial Times, and Foreign Policy. He holds an A.B. degree, summa cum laude, from Harvard College.
In addition to his scholarly work in history, Gewirtz is also a poet. His poetry has appeared in journals such as AGNI, Nation, New Republic, Ploughshares, and The Yale Review. He has published poetry criticism, as well as essays, in the Economist, Washington Post, Los Angeles Review of Books, and VICE.
Gewirtz’s first book-length examination of Chinese economic history is Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China. “With China’s economic rise now into its fourth decade, it is easy to forget how shaky its footing was at the start of its ascent. It began not just in poverty, but beset by basic uncertainty about how to develop,” noted a reviewer in the Economist. Gewirtz’s book addresses these early years of economic expansion and reform. It “vividly brings to life China’s economic debates from Mao’s death in 1976 until 1993, by which time the country’s direction was clearer,” commented the Economist reviewer.
In the book, Gewirtz examines in significant detail the concepts, domestic and foreign relationships, and actions that allowed the Chinese government to expand economically and pave the way to becoming a global superpower. He shows how collaboration between Western economics and Chinese sources created an environment in which Chinese reformers could work internally to launch important economic changes and initiatives. “The claim is not that Westerners were responsible for China’s development,” the Economist reviewer observed. Rather, the beginning of Chinese economic ascent in the 1980s occurred through the efforts of dedicated Chinese reformers, from the highest levels of government on down.
Gewirtz pays particular attention to a singular event that had profound effects on the thinking of Chinese economic reformers. This involved a weeklong river cruise down the Yangtze River on board a ship named the on board the S.S. Bashan. From the outside, the cruise might have not looked like it would have much impact. However, it was ordered directly by Chinese premier Zhao Ziyang. Further, involved numerous individuals who were in charge of Chinese economic reform as well as several prominent foreign economists.
The cruise on the Bashan was a “deliberately secluded setting” that brought together reformists and an “intellectually diverse array of foreign economists, including Kornai, Brus, the Scottish economist Sir Alec Cairncross and the American Nobel laureate James Tobin,” Gewirtz told New York Times interviewer Edward Wong. Tobin provided a basic introduction to macroeconomics. “Kornai proposed that China build an economic system in which enterprises would respond to market pressures but the state could still manage macroeconomic policy and regulate the market. The cruise also offered the Chinese officials—few of whom had lived in a modern market economy—a chance to see how prominent international economists thought about problems and advised on policy.” In total, the Yangtze River cruise “was perhaps the single most important of the many intensive intellectual exchanges that Zhao oversaw and was frequently referenced in deliberations at the time,” Gewirtz told Wong.
Gewirtz’s “account of China’s transition from Marxist central planning to “socialist market” economics is masterful: detailed, balanced, and illuminating,” commented a Publishers Weekly contributor. “This book provides important insights that explore the implications of China’s rise in the twenty-first century as it reminds us that the origin of China’s current prosperity is not nationalism but internationalism,” stated H-Net website reviewer Hiroki Takeuchi.
BIOCRIT
PERIODICALS
Economist, January 5, 2017, “Western Takeaway,” review of Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China.
Financial Times, January 6, 2017, Jonathan Fenby, review of Unlikely Partners.
New York Times, January 25, 2017, Edward Wong, “The Little-Known Role of Western Economists in Building a Post-Mao China,” interview with Julian Gewirtz.
Publishers Weekly, November 28, 2016, review of Unlikely Partners, p. 63.
ONLINE
Harvard University Press Website, http://www.hup.harvard.edu/ (August 28, 2017), biography of Julian Gewirtz.
H-Net, https://networks.h-net.org (July, 2017), Hiroki Takeuchi, “Takeuchi on Gewirtz,” review of Unlikely Partners.
Julian Gewirtz Website, http://www.juliangewirtz.com (August 28, 2017).*
Julian Baird Gewirtz is completing his doctorate in history at the University of Oxford, where he is a Rhodes Scholar. A Chinese speaker, he is the author of Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China (Harvard University Press, 2017), which The Economist called "a gripping read, highlighting what was little short of a revolution in China’s economic thought." His writing on Asia has appeared in publications including the Wall Street Journal, the Washington Post, the Financial Times, Foreign Policy, and Foreign Affairs.
Julian's poems have been published by AGNI, Boston Review, The Nation, The New Republic, Ploughshares, and The Yale Review, and have received recognition from the Academy of American Poets and Best New Poets 2016 (selected by Mary Szybist). His poetry criticism and nonfiction essays have appeared in The Economist, the Washington Post, the Los Angeles Review of Books, and VICE magazine.
Julian received his A.B. degree, summa cum laude, from Harvard College in 2013.
Julian Gewirtz
Julian Gewirtz, a 2013 graduate of Harvard College, is a Doctoral Candidate at the University of Oxford and a Rhodes Scholar.
The Little-Known Role of Western
Economists in Building a Post-Mao
China
Sinosphere
By EDWARD WONG JAN. 25, 2017
The period of “reform and opening up” that began in December 1978 under the
Chinese leader Deng Xiaoping is widely seen as the foundation of today’s China, with
its socialist market economy. The influence of Western economists on Chinese
experiments at that time is a little-known aspect of the history. Julian Gewirtz’s
“Unlikely Partners: Chinese Reformers, Western Economists, and the Making of
Global China,” published this month by Harvard University Press, looks at some of
the ideas and relationships that paved the way for China’s transformation. In an
interview, Mr. Gewirtz, who is a Rhodes scholar and doctoral candidate in history at
the University of Oxford, discussed the lessons for China and the United States
today.
Which foreign scholars had the most influence on Chinese policy
makers in the Deng era?
The Chinese engaged with an extraordinary range of foreign economists. Some
of the most influential had grown up in socialist systems and knew firsthand about
transitions away from central planning. These people included the Hungarian
Harvard professor Janos Kornai, the Czech émigré Ota Sik and the Polish-born
Oxford don Wlodzimierz Brus. But Deng Xiaoping also called for the study of “the
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successful experiences of capitalist countries.” Thus, economists such as the
American Nobel laureates James Tobin and Milton Friedman were also invited to
China for high-level engagements.
The Chinese learned a great deal from these foreign economists, but they did
not seek simply to copy Western ideas. So-called “influence” in this period was a
process of constantly negotiated receptivity and debate about new ideas. And the
Chinese side was firmly in charge.
Which personal relationship between foreign and Chinese thinkers
in this period did you find to be the most interesting?
I was particularly interested in the close relationship between Kornai and the
leading Chinese reformer Wu Jinglian. They met at a conference in Athens in 1981,
the year after Kornai published his seminal book “Economics of Shortage.” Wu was
immediately impressed by the relevance to China of Kornai’s ideas about chronic
shortages and how the “investment hunger” of state-owned enterprises distorts an
economy.
They continued to meet and share ideas, and Wu used Kornai’s ideas to shape the
policies of the mixed system that still governs China’s economy today, dubbed a
socialist market economy.
These personal stories remind us that people operating under real-life
constraints, rather than disembodied ideas or historic “forces,” are what make
history. Kornai and Wu remain friends and even celebrated their birthdays together
in Beijing in 2008.
A large part of your narrative centers on a 1985 cruise down the
Yangtze River on board the S.S. Bashan. What happened there?
The S.S. Bashan was the deliberately secluded setting of a weeklong conference
that brought together many of those tasked with leading China’s reforms and an
intellectually diverse array of foreign economists, including Kornai, Brus, the
Scottish economist Sir Alec Cairncross and the American Nobel laureate James
Tobin. The World Bank and Chinese officials planned the conference at the direct
8/12/2017 The Little-Known Role of Western Economists in Building a Post-Mao China - The New York Times
https://www.nytimes.com/2017/01/25/world/asia/china-economy-julian-gewirtz.html 3/5
orders of Premier Zhao Ziyang, who met with the group in Beijing before they
headed off on the cruise.
Tobin taught what was essentially Macroeconomics 101. Kornai proposed that
China build an economic system in which enterprises would respond to market
pressures but the state could still manage macroeconomic policy and regulate the
market. The cruise also offered the Chinese officials — few of whom had lived in a
modern market economy — a chance to see how prominent international economists
thought about problems and advised on policy. It was perhaps the single most
important of the many intensive intellectual exchanges that Zhao oversaw and was
frequently referenced in deliberations at the time. It’s an event that’s emblematic of
the broader pragmatic, eclectic open-mindedness of this period.
How much credit should historians give to Deng for the economic
transformation that took place in China starting in the 1980s?
Deng has deservedly received a great deal of credit for China’s extraordinary
transformation, but historians are showing that this account is incomplete. One
figure who doesn’t get the credit he deserves is Zhao Ziyang, who was premier and
then general secretary of the Chinese Communist Party. Zhao oversaw and directed
the development of many market-oriented policies that powered growth, and he set
out a vision of a system in which, as he put it in 1987, “the state manages the market,
and the market guides the enterprises.” But Zhao was removed from power in 1989,
just before the Tiananmen tragedy, because he opposed imposing martial law.
Today, his name almost never appears in print in China. The party takes credit for
his achievements or attributes them to Deng.
Of course, we should never forget that while these policies and leaders mattered
greatly, the engine of China’s transformation was the ingenuity and hard work of the
Chinese people.
You note that the Chinese state and Communist Party under Xi
Jinping have promoted hostility toward Western ideas and values. What
perspective does the history you examine lend to this?
8/12/2017 The Little-Known Role of Western Economists in Building a Post-Mao China - The New York Times
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Xi’s regime has taken deeply troubling steps to wall off academia, the media, the
professions, the internet and much of society. This history suggests that the costs of
these policies may be high. Over the past 40 years, the exchanges between the U.S.
and China have not just been in economic goods and services, but also in economic
ideas. That openness to new ideas from around the world has greatly benefited
China’s quest for greater wealth and power.
Without that openness, China will miss out on exactly the kind of interchanges
that Deng and reformers of his era believed were essential to China’s success. Worst
of all, it intensifies the chilling effect on thinking and policy making within China,
discouraging experimentation and innovation when it is urgently needed.
Xi’s recent remarks at Davos presented China as the world’s new champion of
“openness” and “globalization.” But, in fact, China’s leaders are not encouraging
Chinese openness to foreign ideas. And China’s economy is still far less open to
foreign investment than the U.S. and many other countries.
On the other side, we have seen harsh criticism of China from
Donald J. Trump and his appointees, particularly Peter Navarro, the
trade council director. Does history have lessons to apply to this?
Recent history certainly suggests that stronger measures are overdue to help
correct economic imbalances and especially the lack of access to many segments of
the Chinese market that U.S. companies experience. But the worst-case scenario is a
series of drastic measures that devolve into a mutually catastrophic trade war. The
U.S. should seek to remedy China’s unfair trade practices and destabilizing security
provocations while projecting strength and protecting its interests and values in the
Asia-Pacific, but not in a spirit of demonizing China or undermining important
cooperation between our two countries.
Even after President Trump’s withdrawal from the Trans-Pacific Partnership,
the U.S. should seek to develop its role in Asia’s regional economy, but not in a spirit
of excluding China. The United States needs to work with China to solve nearly every
major global problem, and our prosperity is still inextricably intertwined, even if
some in President Trump’s circle would prefer to think otherwise.
8/12/2017 The Little-Known Role of Western Economists in Building a Post-Mao China - The New York Times
https://www.nytimes.com/2017/01/25/world/asia/china-economy-julian-gewirtz.html 5/5
One of the basic assumptions underpinning U.S.-China relations has been that,
on the whole, openness and interconnection lead to stability and prosperity. The
Trump presidency seems to be fundamentally challenging that. As we discuss
China’s tightening environment, I think it would be wrong not to acknowledge that
Americans are also facing an unprecedented challenge to our own commitment to
openness and interconnection. So we must make the case for those values at home at
the same time that we make it around the world.
Follow Edward Wong on Twitter @comradewong.
Get news and analysis from Asia and around the world delivered to your inbox every
day with the Today’s Headlines: Asian Morning newsletter.
Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China
Publishers Weekly. 263.48 (Nov. 28, 2016): p63.
Copyright: COPYRIGHT 2016 PWxyz, LLC
http://www.publishersweekly.com/
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Julian Gewirtz. Harvard Univ., $39.95 (400p) ISBN 978-0-674-97113-4
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Debut author Gewirtz's account of China's transition from Marxist central planning to "socialist market" economics is masterful: detailed, balanced, and illuminating. After the death of Mao Tse Tung in 1976, successor Deng Xiaoping encouraged the Chinese Communist Party (CCP) to "emancipate the mind" from outdated ideology. Without any clear plan in mind, Chinese economists embraced Deng's aphorism--"crossing the river by feeling for the stones"--and began to study both capitalist and socialist economies, looking for objective economic laws that would enrich China. Gewirtz patiently chronicles this halting, frequently frustrating, process. Before even instituting change, progressives had to rewrite party ideology to make free markets compatible with Marxist thought. Economists punished during the Cultural Revolution were returned to the CCP and encouraged to study previously forbidden foreign economic theory. Powerful conservatives in the CCP often slowed or halted progress. And any signs that liberalization threatened political control (such as the 1989 Tiananmen Square protests) placed reform in jeopardy. Economist Zhao Ziyang, a key figure, spent the remainder of his life under house arrest after opposing martial law. This is a revelatory account of China's economic evolution, its debt to Western economic thought, and its love-hate relationship with capitalism. (Jan.)
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Unlikely Partners by Julian Gewirtz — how openness drove China’s economy
The role of foreign expertise in setting the stage for the country’s rise
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JANUARY 6, 2017 by: Jonathan Fenby
China’s rulers have always been keen to craft history to suit their purpose, from the way imperial dynasties besmirched their predecessors to the present-day distortions and obfuscations of the Communist party narrative. Just how revealing a light this submerged past can shine upon the present is demonstrated by Julian Gewirtz in Unlikely Partners, a fluent account of the partnership between Chinese and foreign experts in the “golden age” of the 1980s that helped set the stage for the country’s ascent as a global power.
The co-operation stemmed from Deng Xiaoping’s injunction to “learn how to use . . . foreign things”, not only in the form of manufacturing technology but also in the realm of ideas, testing out new notions as the country “crossed the river by feeling for the stones”. The paramount leader understood that growth propelled by economic reform after the disasters of the Mao era was the way to make China a great power and enable the Communist party to claim the legitimacy it lacked from the ballot box. But, as his protégé, Zhao Ziyang, prime minister and then party general secretary, confessed: “My earliest understanding of how to proceed with reform was shallow and vague . . . I did not have any preconceived model or a systematic idea in mind.”
To fill that void, a group of Chinese economists working under Zhao’s aegis enlisted advice from eminent foreigners including monetarists and Keynesians, Nobel Prize-winners and the important figure of János Kornai, the Hungarian Harvard expert on the flaws of command economies. There was stiff opposition from conservatives in a top-level struggle that Gewirtz, a young Oxford university-based academic, describes in vivid detail. On one crucial occasion in the summer of 1985, the Chinese reformers and the foreigners, including Kornai, the American James Tobin and Alec Cairncross from Britain, held a week-long conference on a luxury cruise ship between Chongqing and Wuhan for discussions, which the president of the Chinese Academy of Social Sciences think-tank said were sure to “actively influence China’s economic reforms”.
Though the repression of the Tiananmen protests four years later brought a conservative backlash and Zhao’s disgrace, the ideas developed in the 1980s continued to shape policy. This exchange was not, of course, the only contribution to the process. Without cheap labour, mobilisation of savings, welcoming export markets and the vitality of people freed to make money, China would not have fulfilled Deng’s vision.
But what this book lays out is a fascinating example of the power of international collaboration. It was not simply a matter of foreign ideas being imported and taken up by the reformers. Multiple influences were at work in what Gewirtz describes as a “contested process that gave agency to Chinese reformers, rather than the inevitable trajectory towards modernization-as-Westernization”. The context was Deng’s primary political purpose of buttressing Communist power by developing “a socialist market economy” in which the party reserved the right to intervene.
That has become even more the case under the administration of Xi Jinping. Indeed, the “core leader” has taken over activities that Deng had wanted devolved to the government, notably in the growing influence of party bodies in formulating economic policy. This lays bare the basic contradiction, as structural reforms that China needs are blocked by the insistence of the party and its chief to defend their grip. One result has been heightened nationalism, seen in the campaign against “hostile foreign influences” and the promotion of self-reliance. The reforms of the 1980s are depicted as springing from “the soil of China”. As for Zhao, he has been airbrushed out of the story; when he died in 2005, the 59-word obituary in Chinese media referred to him only as “comrade” and made no mention of his career.
Some of the heirs of the Deng economic revolution have survived in official positions, but they are now on the back foot. If Gewirtz shows how partnership between figures from very different systems can thrive, that is not the way Xi’s China works.
Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China by Julian Gewirtz, Harvard RRP£29.95/$39.95, 416 pages
A new edition of Jonathan Fenby’s ‘Will China Dominate the 21st Century?’ will be published by Polity in February
Takeuchi on Gewirtz, 'Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China'
Author:
Julian Gewirtz
Reviewer:
Hiroki Takeuchi
Julian Gewirtz. Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China. Cambridge: Harvard University Press, 2017. 416 pp. $39.95 (cloth), ISBN 978-0-674-97113-4.
Reviewed by Hiroki Takeuchi (Southern Methodist University)
Published on H-Diplo (July, 2017)
Commissioned by Seth Offenbach
Reformers and Internationalists Are Likely Partners
In Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China, Julian Gewirtz argues that a coalition of Chinese reformers and Western economists made it possible for the post-Mao economic reform to emerge in the 1980s. Although “Foreign Minister Wang Yi recently claimed that ‘socialism with Chinese characteristics’ was ‘grown out of the soil of China,’ and former vice premier Zeng Peiyan ... fully credits [the development of the socialist market economy] to ‘Chinese Communists’” (pp. 10–11), according to Gewirtz, the Chinese socialist market economy was rooted in Zhao Ziyang’s effort to import ideas from Western economists. Moreover, at each crucial point of the power struggle between the reformers and the conservatives (i.e., anti-reformers), the reformers were enabled by their coalition with internationalists. This book provides important insights that explore the implications of China’s rise in the twenty-first century as it reminds us that the origin of China’s current prosperity is not nationalism but internationalism.
When Chairman Mao Zedong died on September 9, 1976, his successors were easily able to blame the Marxist doctrine–obsessed economic policies for the ongoing economic stagnation. As Andrew Walder writes in China under Mao: A Revolution Derailed, “the most famous instances of the devastation that defined Mao’s legacy were the Great Leap Forward of 1958–1960 and the Great Proletarian Cultural Revolution, now the official name for the entire decade from 1966 to 1976,” and “Mao’s destructive impulses left a China in disarray, essentially forcing his successors to start over again.”[1] The consensus on the need for reforms led to the resolution publicized in 1981 that brought “decisive ideological closure to the Maoist period” (p. 96). Although Mao’s successors easily reached a consensus on the need to reform, they found it difficult to agree on what reform policies to implement and how to implement them.
Once Deng Xiaoping came back to office and Hua Guofeng gradually lost his authority, the division over post-Mao economic policies took center stage within the power struggle in domestic politics.[2] On the one hand, reformers like Zhao, brought into the premier position by Deng in September 1980, tried to push forward drastic market-oriented reforms by loosening state control over society and opening the national economy to the outside world. On the other hand, conservatives led by Chen Yun, as well as Hu Qiaomu and Deng Liqun, tried to maintain a command economy, pay greater attention to political ideology, and limit interactions with the outside world. As shown in Chen’s famous “bird cage” theory, the conservatives argued for maintaining a command economy by reforming it, insisting that the market economy should be constrained in the command economy like a bird kept in a cage. By contrast, the reformers insisted that the market economy should be the primary system of the national economy. Although Deng Xiaoping supported the reformers, he had to walk a tightrope to maintain a balance of power between the conservatives and the reformers.
Gewirtz argues that interactions with Western economists empowered the reformers when they had to confront the backlash from the conservatives, writing that “foreign economists were the active partners of CCP [Chinese Communist Party] reformers during the ‘golden age’ of reform” (p. 13). This book has at least two important implications. First, it “returns Zhao Ziyang to the center of the action” in the Chinese political economy of the 1980s. Without casting doubts on Deng Xiaoping’s role as the architect of the post-Mao reform, it highlights Zhao as a driver of the reform. Second, it shows that Zhao advanced the reform by bringing ideas from foreign scholars, which would “undermine the CCP’s portrayal of the reforms as a largely internal process, proof of the CCP’s ingenuity and wisdom” (p. 10). The second implication is important considering the current debates over Chinese politics now that “a pervasive theme of top Chinese leaders has been to decry with newfound intensity ‘hostile foreign influences’ that are ‘exporting ideology’ to the professions and even the bureaucracy in China ... [and] Xi [Jinping] himself used the phrase ‘hostile foreign forces’ repeatedly in internal speeches since he came to power” (p. 13).
Although this book focuses on the coalition of reformism and internationalism, it also reveals the coalition of conservatism and nationalism as an opposing force in Chinese politics. When opposing reformist policies, the conservatives often use nationalist rhetoric. Miyamoto Yūji—former Japanese ambassador to China—suggests that the Chinese leadership is divided into reformist internationalists (kokusai kyōchō kaikaku-ha) and conservative hardliners (taigai kyōkō hoshu-ha) over how to respond to internal issues, such as maintaining social stability, as well as external issues, such as responding to globalized world politics.[3] Although both groups agree that maintaining social stability is most important to achieve the utmost goal of regime resilience, they have exactly opposite views on how to achieve this goal. Reformist internationalists argue that to maintain one-party rule, China should implement economic reform to achieve sustainable economic growth, which would then bring social stability. Conservative hardliners argue that China should keep the rent-seeking mechanism, which supports corrupt vested interests under state capitalism, to maintain one-party rule. Reformist internationalists also insist that China should be committed to cooperative foreign policy in order to appreciate a peaceful international environment and benefit from the interdependent relationship of the global economy. By contrast, conservative hardliners insist that China should adopt an abrasive and nationalist foreign policy and project its power even if it causes friction in international relations.
In the 1980s Deng Xiaoping proclaimed that China should adopt a cooperative foreign policy and implement domestic economic reforms. He even introduced the concept of “keeping a low profile” (taoguang yanghui) as a pillar of Chinese foreign policy and argued that China should not project its power, but should focus on economic development. Although Deng’s absolute principle was maintaining one-party rule, he supported reformist ideas and policies even though he purged those who were sympathetic to the demand for democratization. For example, Deng expressed his frustration with conservatives when he ousted Hu Yaobang in 1987, as Gewirtz says: “Although he had agreed that Hu had to go, Deng wanted to stress that his overall goals remained intact. He went even further, announcing a break with Chen Yun’s economic ideology” (p. 184). Interestingly, Deng used Hu’s purge as an opportunity to undermine Chen’s conservatism, empowering Zhao to implement the reform.
Zhao indeed faced backlash. Conservatives revealed their nationalist and xenophobic position, as Gewirtz describes: “In pushing for reversals of Zhao’s policies, senior conservative leaders specifically targeted Zhao’s engagement with foreign ideas” (p. 214, emphasis added). Moreover, the confrontation between reformist internationalists and conservative nationalists suggests that the reformers sought ideas while the conservatives relied on ideology. Of course, “Deng Xiaoping was absolutely unwilling to let this ferment of new ideas and policies undercut the authority of the CCP” (p. 48). At the same time, Deng and the reformers desperately needed “to adopt a remarkable new policy: to travel far and wide, across national borders and ideological boundaries, to seek new ideas” (p. 28).
The Tiananmen Incident in 1989 reminded Deng of what many leaders had learned before him—that the market economy would lead to increasing popular demands to the government, wherein people’s dissatisfaction with corruption, inequality, and inflation results in demands for democratization. However, even though “in the early 1990s, after the disaster at Tiananmen, the CCP would shift its line and ensure that economic reform and political reform were conceptually separated,” Deng “attempted to signal internally that his commitment to economic reform remained paramount” (pp. 219, 227). In the meantime, conservative nationalists were then empowered: “because Hu Yaobang was now dead and Zhao was under house arrest, conservatives dominated the remaining senior Party leadership after Tiananmen” (p. 227).
Interestingly, although Zhao was purged in 1989, “reformers [brought] back many of the substantive policies he had advocated for the Chinese economy in the 1980s and for which he and his Western-influenced ‘brain trust’ had been attacked—albeit without full acknowledgment of their supposedly treacherous origins” (p. 230). For example, when “the conservatives criticized the pre-1989 reforms as dangerously decentralizing and stressed the importance of the continued centralization of economic policy,... Zhu Rongji seized this moment to assert his role as an economic czar with the skills to replace Chen Yun and the reformist credentials to please Deng” (p. 242). Zhu’s economic policy advisors Wu Jinglian and Zhou Xiaochuan “acknowledged clear ‘influences’ from other market economies” in Zhu’s reformist economic policies (p. 255).
Jiang Zemin was different from Zhao or Zhu. His commitment to reformism and internationalism was much weaker. For example, when Milton Friedman visited China in October 1993, “unlike Zhao, Jiang did not engage with Friedman; instead he delivered what Friedman perceived as a pro forma speech about the successes and challenges of CCP management of the Chinese economy,” and Gewirtz quotes Friedman writing “I conjecture that Jiang did not really want to hear what we had to say” (p. 257). As a result, “the dominant narratives of the reform era in today’s China sideline the international intellectual exchange” since Jiang came into office (p. 261).
Jiang had good reason not to be committed to reformist internationalism. He came into office just after the Tiananmen Incident and his primary goal was to prevent the market economy from leading to increasing popular demands for democratization. Thus, he used the cooptation strategy, which encouraged former officials and former state-owned enterprise managers to become nominally private entrepreneurs.[4] At the same time, it formed the state capitalist system where the CCP champions the collusive rent-seeking mechanism by distributing the rent to various societal groups, which has since overshadowed the Chinese economy.[5]
In short, since the 1990s the CCP has used the collusive rent-seeking mechanism under the state capitalist system as a tool to maintain popular support for one-party rule, and hence has to keep creating the economic rents to be distributed. However, the CCP now faces a new dilemma: real economic reform, which would undermine the rent-seeking mechanism, will be necessary to sustain economic growth. It will be necessary to adopt cooperative foreign policy, so that China can maintain good relationships with its trading partners like the United States and Japan. Reformist internationalists as well as conservative nationalists have understood this logic. However, they have completely opposite stakes in the real economic reform, and therefore internationalism became a source of contention within the CCP.
This book successfully reveals the inconvenient truth for conservative nationalists: the reformist ideas brought by Western economists empowered the Chinese reformers in the 1980s and provided the foundation for today’s economic prosperity. In other words, internationalism worked as a gaiatsu (literally “foreign pressure”) to implement reformist policies.[6] In the meantime, after the 1989 student movement “conservative leaders in China launched a new Patriotic Education Campaign” (p. 234), which launched another nationalist movement and strengthened the conservative-hardliner coalition. Desired economic policy will not be made unless it is politically feasible. Thus, to make China committed to domestic economic reforms and behave as a responsible stakeholder in international relations, reformist internationalists must be supported. When Chinese reformers were able to interact with Western economists, they were able to implement reformist policies and make China’s foreign policy more cooperative.
Today, President Xi Jinping’s nationalist slogans, such as the “China dream” (Zhongguo meng) and the “great restoration of the Chinese nation” (Zhonghua minzu weida fuxing), make other nations doubt China’s intention to use its power as a responsible stakeholder. Although China is eager to expand its influence in the world, it does not seem to feel any responsibility for whether its behavior will be influential on stability and security in the Asia-Pacific region. Now, as the US influence in Asia retreats under the Donald Trump administration, I am afraid that the region will become destabilized unless reformist internationalists overcome the power struggle of the Xi administration.
Notes
[1]. Andrew Walder, China under Mao: A Revolution Derailed (Cambridge, MA: Harvard University Press, 2015), 4, 5.
[2]. On the transition to Deng, see Richard Baum, Burying Mao: Chinese Politics in the Age of Deng Xiaoping (Princeton, NJ: Princeton University Press, 1994).
[3]. Miyamoto Yūji, “Chūgoku ‘shin no kaikaku-ha’ to renkei o” [Japan should cooperate with “real reformists”], Nihon Keizai Shimbun, December 26, 2013.
[4]. On nominally private entrepreneurs, see Jie Chen and Bruce J. Dickson, Allies of the State: China’s Private Entrepreneurs and Democratic Change (Cambridge, MA: Harvard University Press, 2010).
[5]. On the implications of Chinese state capitalism, see Yasheng Huang, Capitalism with Chinese Characteristics: Entrepreneurship and the State (New York: Cambridge University Press, 2008).
[6]. The term gaiatsu was frequently used during US-Japan trade negotiations in the 1980s and 1990s. See Leonard J. Schoppa, Bargaining with Japan: What American Pressure Can and Cannot Do (New York: Columbia University Press, 1997).
Printable Version: http://www.h-net.org/reviews/showpdf.php?id=48966
Citation: Hiroki Takeuchi. Review of Gewirtz, Julian, Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China. H-Diplo, H-Net Reviews. July, 2017.
URL: http://www.h-net.org/reviews/showrev.php?id=48966
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
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Western economists and China’s rise
China’s reformers took the lead, but with plenty of intellectual input from former ideological foes
Print edition | Books and arts
Jan 5th 2017
Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China. By Julian Gewirtz. Harvard University Press; 389 pages; $39.95. To be published in Britain on January 31st.
IN 1985 James Tobin, a Nobel laureate in economics, delivered a talk at a conference in China. Mao had died less than a decade earlier and modern economic concepts, shorn of socialism, were still unfamiliar to many in the country, including the interpreter on this occasion. Struggling to find the right words, she burst into tears. Two conference participants stepped aside after Tobin spoke and, on the spot, devised the Chinese term for “macroeconomic management”. Future interpreters would have it easier.
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Chinese officials and academics, especially those with a reformist bent, were acutely aware of their tenuous grasp on economics at the time. Five years earlier, Deng Xiaoping, the country’s paramount leader, had put it bluntly when meeting Robert McNamara, president of the World Bank: “We have lost touch with the world.”
With China’s economic rise now into its fourth decade, it is easy to forget how shaky its footing was at the start of its ascent. It began not just in poverty, but beset by basic uncertainty about how to develop. There was even disagreement over whether development, in so far as it entailed market forces, was the right goal.
The oft-told story is that the Communist Party forged ahead with policy experiments—“crossing the river by feeling for the stones”, as the Chinese reformers’ saying goes—and, little by little, found the ingredients for growth. There is much truth to this. But the role of Western economists in helping shape that journey is missing. “Unlikely Partners” by Julian Gewirtz, a doctoral candidate in Chinese history at Oxford (and an occasional reviewer for these pages), fills that gap. It vividly brings to life China’s economic debates from Mao’s death in 1976 until 1993, by which time the country’s direction was clearer.
The claim is not that Westerners were responsible for China’s development. A large constellation of Chinese reformers deserves the credit for that. Indeed, one of the book’s virtues is that it puts the spotlight on Zhao Ziyang, the Communist Party chief who wound up under house arrest after the 1989 Tiananmen protests. Mr Zhao has been written out of official histories, but his consistent support for bold thinking was critical to China’s success.
Nevertheless, to understand how China found its way, it is also necessary to recognise the influence of foreign ideas. In some cases the impact was immediate. The concept of special economic zones, which enabled coastal regions to flourish, began with a Chinese vice-premier’s trip to western Europe in 1978, where he saw export-processing zones.
More often, the impact was diffuse. Academics trained in Marxist economics lapped up translated versions of Western textbooks. American professors came for weeks at a time to teach econometrics. Chinese institutions invited a succession of Western economists to give talks and then sifted through their ideas for those that were actually relevant to China.
The Chinese were most receptive to economists who themselves hailed from planned economies and understood their flaws but also knew that sudden changes were impractical. Ota Sik, from Czechoslovakia, inspired a phased-in pricing strategy in the early 1980s, whereby China gave enterprises ever more control over setting prices. The biggest star was Janos Kornai, a Hungarian economist who moved to Harvard after writing a seminal book in which he identified shortage as the chronic problem of socialism. What came to be called “Kornai fever” gripped the study of economics in China in the late 1980s, and his book sold more than 100,000 copies.
The World Bank also had a big hand in China’s take-off. The bank has a tainted reputation from that era, when it was seen as pushing a “Washington consensus” agenda of liberalisation that harmed Latin America. Much less attention is paid to its subtler positions in China in the 1980s. It carried out two major studies of the economy (the first of their kind), became China’s largest source of foreign capital and, responding to Chinese requests, provided reams of useful policy advice.
Mr Gewirtz’s book does not attempt to provide a definitive account of China’s economic rise. It dwells in the world of ideas, tracing the arc of debates. Little attention is paid to what was actually happening on factory floors or in farm fields. But it is still a gripping read, highlighting what was little short of a revolution in China’s economic thought.
Reading the book today, it is tempting to conclude that China is ignoring a basic lesson from its success: that being open to foreign ideas served it so well. Under Xi Jinping, officials rail against “Western values”. Yet there is also a less gloomy conclusion. China’s path has never been linear: reformists and conservatives have constantly jostled for the upper hand. But voices for openness have ultimately prevailed. And the gains that China has made in its understanding of economics and, more fundamentally, in the lives of its people will not be easily undone.
This article appeared in the Books and arts section of the print edition under the headline "Western takeaway"