Chinese modernization extends beyond the ‘Washington Consensus’

By DAVID GOODMAN / 02-23-2023 / Chinese Social Sciences Today

Modernization is of course an important concept in the social sciences. At heart it relates to social, economic, political, cultural, and environmental improvements for a society and values of individuals in that society. The concept has been dominated by specific examples, notably those of the European powers and the US. The model of Chinese modernization provides an attractive alternative to the Western path, away from the “Washington Consensus.” The Chinese example offers new development ideas for other developing countries, and certainly it is attractive to other countries.

Spectecular achievements

The essence of modernization would be a concentration on economic modernization. China has realized unprecedented rates of economic development that have amazed the world since 1978. Compared with many Western countries, China has done better in diversifying its economy through the operation of a dual economy: the state and the non-state/private economy, with considerable interaction between the two. This is a unique feature of Chinese modernization that may make some of the social and welfare aspects of development easier and faster to implement. 

The most spectacular of China’s development in the past decades have been advances in health, education and services. In general the remarkable development has benefited from political and social stability, encouraging individual initiative on the national level, and access to the benefits of globalization. One crucial difference between China and other countries is China’s recognition of the need to “do the best according to local circumstances.” This is crucial in shaping the development environment for modernization. 

Misguided neo-liberal myth

Modernization requires both a strong market and a strong state. The market allocates resources best and the state ensures adequate regulation. For a long time, the European and US modernization has been based on private capital accumulation but the state has played a more significant role in parts of Asia such as China. Different from modernization in Western countries, the Chinese government ensures that resources access and distribution is appropriate for all and not just the wealthy. The development of the Welfare State idea in some Western countries recognizes this to some extent.

Pitifully, in practice Western countries have since 1980 veered towards neo-liberal policies that have run down the state’s welfare function. The problem with neo-liberalism and an overemphasis on the private economy is that public good often falls by the way. The principle of neo-liberalism is that all money-making activities are good. That is self-evidently false and goes against the rule of social evolution. In some Western countries, chasing economic development without thinking about social welfare provision is misguided.

Western modernization based on the “Washington Consensus” means that the biggest lobbies get the policy they ask for. Public interest is not a driver of national policy in quite the same way. It can only be considered public interest in that case if one accepts the neo-liberal myth of all money-making being good for everyone. It is not. Money making is inherently exploitative, and when social productivity is created in this way it leads to even greater inequalities of wealth and inequalities of opportunity. In fact, remarkably, inequality has increased dramatically since 1980, which caused a series of governance dilemmas. In the words of a US pop song “there is nothing surer, the rich get richer and the poor get poorer.”

Tradition of unity and discipline 

The cultural tradition in China which emphasizes unity and discipline is admirable. The Chinese society has shown a strong sense of national identity in carrying out modernization, which is very difficult in Western countries. China is acting in the right direction, although the road ahead is tough. Facing a world with uncertainties, Chinese modernization also provides new opportunities for global development. We have every reason to expect that the future of Chinese modernization will bring benefits to the entire world.

David Goodman is director and professor of China Studies Centre at the University of Sydney. 

Edited by BAI LE