The so-called economic miracle in China has lasted several decades, despite much scepticism, doubt, and criticism, and despite many controversies, setbacks, and pitfalls. The success of China's economic development, which has transformed it from an underdeveloped socialist country to an emerging superpower in the global capitalist system, has never failed to arouse the greatest interest among observers both outside and inside China. This is not just because of the unprecedented speed, scope, and influence of the transformation, but also because of its unsettling “deviance” from the presumed “right” path portrayed as the earlier experience of the core capitalist countries. How could an economic miracle happen in a country where “proper” political conditions and market institutions have never been fully established and sustained? What are the “real” forces that have propelled such a profound yet puzzling transformation? Lynn T. White III's recently published book Rural Roots of Reform Before China's Conservative Change is one among many that try to answer these questions, but through an original approach that compares various regions.
By comparing the developmental paths of the metropolitan and highly central-controlled and taxed city of Shanghai with its surrounding more “marginal” Jiangnan rural region from the late 1960s to the early 1990s, White argues that “the causes of China's rise are political in ‘grassroots’ rather than Beijing politics” (p. xviii). In fact, it was exactly what happened in the local “grass roots” where Beijing's control was relatively weak – the Jiangnan rural region, for instance – that initiated or forced changes in places where central control/plan/taxation was much stronger – such as Shanghai.
To a large extent, Rural Roots contributes to the long-lasting debate about China's reform as a top-down or bottom-up process: is the reform a state-initiated and guided project, or a “silent revolution” emerging from the grass roots? White stands firmly with the latter stance by starting his book with a quotation from Deng Xiaoping, the officially eulogized chief architect of the reform, with emphasis added by the author: “what took us by surprise completely was the development of township and village industries […] [T]his is not the achievement of our central government”. He wants to contradict the top-down interpretation of the reform. The thirteen chapters then investigate various roles played by different actors during particular historical periods and in situational local contexts: farmers, rural cadres, non-state managers, country traders, planners, tax collectors, budgeteers, urban executives, bankers, technicians, long-distance traders, service providers, and migrants. For the author, they are the real agents of the transformation, and hence the subjects of the thirteen chapter titles.
That China's “rise” has rural roots and began in local polities in 1969–1976, instead of the official and widely accepted date of 1978, might be one of the most significant statements made in this book. Based on rich data and materials gleaned from a variety of resources, the author convincingly illustrates how the green revolution that happened during this period in the Jiangnan area led to quick rural industrialization there – not planned by the central state but initiated by rational local leaders; how such rural industrialization slowly weakened the centrally planned economy and challenged state enterprises (especially light industry in Shanghai); and how from there other aspects of China's later reform followed – new development and the expansion of markets, an export boom, inflation, bribes for procurement agents, government budget deficits, privatization, a fall in state control over migrants, a quick increase in non-state service providers, etc. It is through this storyline that the author argues that the rural industries developed in the grass roots during the late 1960s and early 1970s were not just precursors of China's reform, they were its beginning (p. 39). From there, capitalism became contagious (p. 16) and the market changed the party (p. 19). Such a new periodization of reform is significant since it greatly challenges the centralist way of thinking that applied to Chinese “reforms since 1978” largely initiated by the central state, and hence effectively supports the author's bottom-up argument.
Yet, it is exactly the role played by the central state in the reforming process that deserved more careful contemplation here. The central state, according to White's descriptions, has been almost predatory, if not just reactionary. It was because of the predatory grip of the central state through heavy tax extraction and strict planning that Shanghai, despite its advantageous resources as a metropolitan city with a relatively sound industrial base inherited from earlier development, was left behind by its surrounding Jiangnan region in almost every aspect of economic development, at least before the 1990s. Compared with the “rational” choices made by various grass-roots actors whenever they were given a chance (the real engine of reform, according to the author), the central state was generally “irrational” and inefficient, hence always hindering instead of promoting market reforms. But such unreserved embracing and application of the typical neoclassic tenet of “small state, big market”, opposing state and market to each other, needed more cautious justification. Even though we might acknowledge that the reforms have had a lot to do with the actions of millions of individuals pursuing their own interests, and that central policies have always been reactive, lumpy, and disjointed, the reforms could not be perceived as a purely fortuitous development. As Barry Naughton rightly concluded in his earlier monograph on the subject, “A limited number of crucial government decisions and commitments were required in order to allow reform to develop”.Footnote 1 Moreover, even the plan – the most “irrational” role played by the central state, according to White – might actually have contributed to the overall stability that is indispensable for any successful transitional political economy, especially during the earliest chaotic period. That stability actually guaranteed the continuance of reform and prosperity, albeit along with many pitfalls.
Furthermore, the transformation that happened in China is so multifarious and complicated that the relationship between market and state is far beyond an oversimplified antagonism; instead, it has always been uneven and entangled. Such entanglement has actually become even more obvious since Deng Xiaoping's southern-tour speech in 1992. Despite the author's declaration that post-Tiananmen state policies have since become more hostile towards market reform and local decentralization and hence more “conservative”, the state (at both central and local levels) has in fact actively promoted and even imposed market reform in a much deeper and wider way in China: for instance, large-scale bankruptcy and privatization of state-owned enterprises and rampant local real estate development through rapid land commodification happened only after 1992. While managing to tighten the political grip of the party, even the most recent more authoritarian and populist turn under Xi Jinping has never aimed to slow down the further development of the capitalist market economy in China. So, conservative change maybe, but only politically; economically, capitalism continues to stride forward.
