‘China’s Belt and Road Initiative and African Industrialisation’ (激活非洲工业化：“一带一路”能带来什么) was originally published in Wenhua Zongheng (文化纵横), issue no. 4 (August 2022).

Governments across Africa have long reached a consensus: ‘industrialisation is the essence of development’.^[1] Over the past half-century, African nations continuously pursued industrialisation, embarking on various paths to develop their own industrial sectors. However, neither the industrial policies of the 1960s and 1970s that emphasised self-reliance and import substitution, nor the structural adjustment programmes adopted in subsequent decades, characterised by market liberalisation and pushed by Western countries, have been able to help Africa achieve sustainable industrial growth and transformation. In the twenty-first century, African countries have redesigned their paths to industrialisation and development. Across the continent, governments have become more unified in their thinking, formulating the ambitious New Partnership for Africa’s Development (2001) and the Action Plan for the Accelerated Industrial Development of Africa (2007). However, the aims of these initiatives have yet to be realised. Although the absolute output value of manufacturing across sub-Saharan Africa has generally grown each year for the past two decades, the rate of growth has been slow, and consequently, the share of manufacturing in gross domestic product (GDP) has decreased (Figure 1).

<Figure 1: The share of manufacturing value added as a percentage of sub-Saharan Africa’s GDP from 1971 to 2018. Source: World Bank.>

The biggest challenge to industrialisation in Africa lies in the difficulty of integrating various elements into a system. Early on in the industrial revolution of the eighteenth century, the economist Adam Smith observed that the high productivity of industrialisation was mainly derived from the division of labour and collaboration, and the use of machinery in multi-step production processes to perform extremely simple actions in a highly efficient manner.^[2] This basic pattern is still applicable to manufacturing today, except that the depth and breadth of the division of labour and collaboration far exceeds that of the past. Today, the manufacture of any product – whether it is pins, shoes, hats, computers, or cars – requires a range of businesses and factories to cooperate with each other. The industrial chain contains many links related to the raw materials, tools and machinery, design, parts and accessories, approval of finished products, packaging, and sales; an individual enterprise may only be responsible for one or a few of these links, specialising to win market competition in a narrow area. Within each enterprise, the production process is also highly segmented: a production line often has hundreds of component processes, in which hundreds or thousands of workers operate simultaneously and a large number of machines and equipment are used. The closely interconnected system of modern industry requires every related party to complete their respective tasks in a precise and timely manner. Any absence or delay caused by any entity, individual, or even machine part in the production chain may disrupt the smooth operation of the entire manufacturing system. On top of this, the massive exchange and flow of materials requires large amounts of infrastructure and integrated management capabilities. Therefore, the development of modern industry cannot rely solely on individual enterprises or sectors, but depends on a country’s comprehensive production and circulation capabilities.

Historically, African countries have long been marginalised in the global economy, serving as a source of raw materials for Europe and North America. Most countries on the continent do not have a complete industrial sector and existing factories often have to import a large amount of machinery and parts from abroad. Local power and water supplies and infrastructure are often limited and unable to meet the needs of large-scale production. Meanwhile, poor and dilapidated transportation facilities, administrative inefficiencies, and political and geographical complexities often result in poor material exchange and circulation both within Africa and between the continent and other regions. Finally, due to a lack of practical experience and systematic training, there are deficiencies in the professional and technical skills of workers as well as the coordination and organisational capabilities of managers. These factors have constrained the deepening of the interconnected division of labour on the continent at multiple levels, and over time, the gap between African industrial development and that of other regions of the world has grown increasingly large.

How Has the Belt and Road Initiative Promoted Industrialisation in Africa

Most African economies still primarily depend upon traditional small-scale agriculture, relying on subsistence production. Only by advancing highly specialised and professionalised industrial production, coupled with appropriate market reforms, can productivity be significantly and sustainably improved. For a long time, China’s economy was also largely agricultural and experienced many hardships on the path to national industrial development. Since the launch of reform and opening up in the late 1970s, China has achieved explosive industrial growth, becoming the ‘world’s factory’. China’s successful experience in industrialisation has aroused great interest around the world, including among African countries. For China, this continuous industrial growth has further boosted the country’s demand for resources, labour, and markets. In the context of saturated European and North American markets as well as intense domestic competition, it is urgent for China to find new partners for cooperation and new opportunities for growth. Given the common interests and aspirations of China and other developing countries in pursuing industrial development, the Belt and Road Initiative (BRI) identifies industrial capacity as an important area for mutually beneficial cooperation. In this vein, the Forum on China-Africa Cooperation (FOCAC) has always emphasised industrialisation and industrial cooperation in its action plans. China’s industrial capacity cooperation with African countries has focused on three main aspects.

1. The construction of industrial parks. Given the generally low industrial level of African countries, there is an overall shortage of factors of production. To ensure that large-scale industrial production operates in a rapid and smooth manner, in some countries Chinese companies have invested in the construction of local industrial parks, introducing firms both upstream and downstream in the industrial chain for vertical collaboration, constructing basic infrastructure, and providing basic services to promote the formation of regional industrial clusters of interconnected firms, suppliers, and institutions. For example, in 2007, China Nonferrous Metal Mining Group (CNMC), a state-owned enterprise (SOE), established the Zambia-China Economic and Trade Cooperation Zone (ZCCZ) in Chambishi, Zambia, for deep processing of natural resources mined locally. The companies operating in the economic zone are mostly CNMC subsidiaries, covering various steps along the industrial chain of copper and cobalt resources, including mining, smelting, and processing. There are also several Chinese private enterprises and local Zambian private enterprises that have provided supporting services such as machine repair and logistics.^[3] This industrial park project has contributed to Zambia’s efforts to progress from simple resource mining and gradually ascend to higher value-added processing activities. In 2009, the ZCCZ launched a sub-zone on the outskirts of Zambia’s capital, Lusaka, clustering light industrial enterprises in food processing, brewing, and plastic products, among other sectors, based on the character of the urban economy. While there is no direct commercial connection between the companies in the sub-zone, the services provided by the zone (such as water, electricity, transport, and security) have decreased the cost of building a factory and greatly shortened the investment cycle (for example, without the services provided by the sub-zone, the application process for the industrial use of electricity alone could take several years). Small and medium-sized enterprises lacking international experience and large amounts of capital can also exchange information, saving a great deal in costs they would have incurred due to their inexperience and benefiting from strength in numbers.

2. The synergy of infrastructure construction and industrial investment. China is a global leader in both manufacturing and construction industries, and Chinese enterprises accounted for 61.9 percent of the entire African construction market in 2019.^[4] Chinese infrastructure construction provides necessary facilities in various sectors in Africa, such as energy and transportation, aiding industrial development. To play a sustainable role on the continent, these infrastructure projects must be combined with industrialisation. The main challenges for infrastructure construction in Africa are the large-scale investments required and the long-term horizons for repayment. In developing countries, sometimes the revenues generated by infrastructure projects are insufficient to maintain the operation of the facilities. In view of this, China and African countries have jointly planned industrial projects interconnected with infrastructure projects to improve the utility and return on these endeavours. Taking the Addis Ababa-Djibouti Railway as an example, in 2016, the Chinese government guided its enterprises to ‘combine large-scale infrastructure construction with industrial park and special economic zone development, striving to build an industrial belt along the railway for a harmonious interaction between large-scale infrastructure and industrial development’.^[5] Chinese private enterprises had already built two industrial parks near the Ethiopian capital of Addis Ababa but in recent years SOEs have played an important role. China Civil Engineering Construction Corporation has signed agreements with Ethiopia to build a series of industrial parks along the Addis Ababa-Djibouti Railway in Hawassa, Dire Dawa, Kombolcha, and Adama to make full use of the railway’s capacity. In addition, the state-owned China Merchants Group has participated in the construction of the Port of Doraleh, aiming to significantly enhance the port’s throughput capacity to cope with the increased cargo volume of the new railway. Similarly, to support the long-term development along the Mombasa-Nairobi Railway, China and Kenya have signed an agreement to upgrade the Mombasa port and establish a special economic zone near the port.

3. China’s industrial investment in Africa focuses on production that is suitable for local markets, and thus better synergised with local development and generating sustained momentum for industrialisation. Some economists have predicted that Africa will follow Asian countries in attracting global labour-intensive manufacturing, due to its lower labour costs, and embark on an export-led path to industrial development.^[6] However, in practice, African industries rely on imports for many inputs, such as raw materials, components, and spare parts. Without a developed ecosystem of suppliers and service providers, African factories face chronic issues, including administrative delays, traffic congestion, poor logistics, and unstable currency exchange rates, making the quality and timeliness of orders difficult to guarantee.^[7] In contrast, in Asia, there is a comprehensive and mature industrial network centred on Japan and China. Other countries in the region can find their own comparative advantages in this system and leverage their low labour costs to undertake industrial transfers. Due to the geographical distance, it is difficult for African countries to become integrated into Asia’s industrial network. Merely reducing production costs cannot compensate for the lack of support in other aspects, and foreign firms aiming to transfer production to the continent have only been able to maintain smaller scale operations in Eastern and Southern Africa that are difficult to expand.^[8]

Rather than pursuing export-led models, the industrial enterprises that have established a foothold for long-term operations in Africa and that are driving local enterprises to grow together, are mainly focusing on the domestic markets of African countries. Their production, supply, marketing, and sales are all rooted in the African continent. For example, Sun Jian (孙坚), a businessman from Wenzhou, China, toured Nigeria in 2010 and found that a large number of ceramic products in the country were imported from abroad. Sun saw a commercial opportunity. Because ceramics are heavy and fragile, they are not conducive to transportation; if they could be produced locally, the manufacturer would have a great advantage in the market. Sun quickly set up the Wangkang Ceramic Factory in Nigeria with $40 million, and the tiles produced were immediately popular among local consumers and quickly became short in supply.^[9] Over the past decade, the company has set up five large tile factories in Nigeria, Ghana, Tanzania, and Uganda, accounting for 25 percent of Africa’s ceramic tile production capacity. This example shows how industrial development can take place by closely examining the African market and identifying niche areas. Multinational companies often overlook the African market and rarely pay attention to the specific needs and interests of local consumers, with products exported to Africa often overpriced and outdated. Through closer economic and trade relations with African countries, Chinese companies have developed a keener awareness of the African market and spotted new trends. Chinese firms have set up factories locally to manufacture everyday products such as building materials, furniture, plastics, food, medicine, clothing, and footwear. Local production not only significantly reduces transport costs but also ensures that products are targeted and responsive to changing consumer preferences and market trends. These locally manufactured products have not replaced existing imports but filled gaps in the market.

Chinese enterprises can better understand African markets and seize industrial opportunities for two reasons: first, the many years of economic cooperation between China and Africa and, second, China’s strong industrial system. The founder of Wangkang did not originally engage in the ceramics industry, but when he spotted the business opportunity he quickly contacted suppliers of ceramic production equipment in China and was able to assemble production lines in Africa within a few months. Wangkang was able to rely on Chinese firms for installation, debugging, training, and maintenance services. China is the only country in the world that is home to all of the categories listed in the United Nations’ International Standard Industrial Classification of All Economic Activities, covering both high-precision technologies and traditional low-end industries.^[10] Due to the unstable power supplies and maintenance difficulties on the African continent, many newer types of precision machinery from Europe and the United States are not the best suited for use in African manufacturing. In contrast, some basic equipment made in China functions well in this environment, as well as being economical and durable. Industrial investments in the African market can use China’s comprehensive industrial system to provide strong support services for production activities in Africa. These factories obtain the main raw materials locally and sell their products on the local market, gradually forming an initial system of industrial production and circulation. Although these industries start small, they can drive the comprehensive cyclical development and are a more sustainable pathway to industrialisation.

This is exemplified by the rise of the local plastic recycling industry in Ghana. Initially, a company from China’s Fujian province began collecting the packaging discarded by locals after drinking bagged water, which could be processed and sold as plastic shopping bags. Although the work was difficult and tiring, the company was quite profitable because there was almost no competition. This news soon attracted many followers. Initially, more than ten Chinese companies followed suit, followed by local companies. Through their Chinese partners, these firms found machine and equipment suppliers and also entered this field. In the first six or seven years, the new entrants did not engage in fierce competition, but instead, worked together to increase the size of the industry ‘cake’ (把行业蛋糕做大, bǎ hángyè dàngāo zuòdà). The geographic range for recycling gradually expanded from the capital of Accra to the whole country and divisions developed in the industrial chain. Local companies are more familiar with the social environment, can better locate the dumping sites of discarded packaging, and have focused more on upstream recycling and primary processing, employing hundreds of waste collectors. Chinese companies have a better understanding of the machinery and production, and have increasingly invested in high-tech, back-end processing. In addition, many Chinese and Ghanaian companies have set their sights on other types of plastic recycling and processing. By identifying market opportunities, Chinese and Ghanaian firms have driven the development of an entire plastic recycling and processing chain and industrial cluster in Ghana.^[11]

Challenges and Solutions in Sino-African Industrial Cooperation

Relying on a unique model of collaboration and complementary economic structures, Sino-African industrial cooperation has made important achievements in the first two decades of the twenty-first century. Across the African continent, thousands of Chinese enterprises have invested in or co-built dozens of industrial parks, employing large numbers of local workers and driving the growth of related suppliers, service providers, and downstream businesses.^[12] China has established six national-level economic and trade cooperation zones in countries such as Egypt, Zambia, Nigeria, Mauritius, and Ethiopia, attracting over 300 enterprises and employing more than 30,000 local workers.^[13] However, long-term challenges remain in Africa’s pursuit of industrialisation, which pose a serious challenge to the sustainable growth of Sino-African industrial cooperation.

As discussed earlier, the key challenge in African industrialisation relates to the lack of systematic cooperation. Sino-African cooperation has made progress in resolving some coordination problems through the construction of infrastructure and industrial parks, the setting up of supply chains, and the connecting of markets. However, further industrial development will require far more than the supply of equipment or building of factories. To industrialise, developing countries must undergo a sea change in social structures and ideology. In each country or region, this process will be different, depending on local histories, cultures, and customs. For its part, when partnering with African countries, China must proceed with an understanding of local conditions and complexities. Chinese enterprises must appropriately navigate contradictions and conflicts that arise with local workers, indigenous communities, business partners, and governmental bodies. This will be particularly important as international tensions rise and foreign political forces attempt to inflame disputes and weaponise them for their own agendas.

Swedish economist and Nobel laureate Gunnar Myrdal pointed out, as early as the 1970s, that socio-economic systems have self-reinforcing characteristics. Due to social inertia, non-industrialised countries face a much greater difficulty in transitioning to industrial societies than developed countries face in continuing industrial development. A number of political, economic, social, and cultural factors work to keep these countries in a low-level equilibrium state.^[14] Singaporean-American economist Yuen Yuen Ang has argued that there is a ‘fundamental problem’ in development, in that a country’s economic prosperity often requires strong institutional support, ‘yet attaining these preconditions also appears to depend on the level of economic wealth’.^[15] This creates a ‘chicken-or-egg’ dilemma: many developing countries lack the resources to improve their institutional environment and, consequently, are unable to realise long-term, sustainable industrial development; in turn, the economy further declines and the institutional environment further deteriorates.

Overcoming this cyclical dilemma is essential to African industrialisation as well as the long-term success of Sino-African cooperation. To reverse this vicious cycle, it is necessary to simultaneously improve both the ‘chicken’ and ‘egg’ – that is, economic growth and institutional development – and promote a mutually reinforcing cycle. Only when all parties in the process of industrialisation are striving towards the same goal of promoting the sustainable growth of productivity can synergies form. However, this type of cooperation is difficult to achieve in practice. In the pursuit of industrialisation, most members of society are not oriented towards the long-term growth in productivity, but can only see local activities and pursue short-term benefits, and thus deviate from the overall goal. Determining how to promote widespread recognition of and commitment to industrialisation by all parties in society is an important issue for African countries to resolve to break past limitations and achieve continuous progress.

One of the major challenges in Sino-African economic and trade cooperation concerns the differences in perspectives and goals of various parties.^[16] The Tanzania-China Friendship Textile Company jointly operated by China and Tanzania is an illustrative example. The primary goals of the Chinese managers, on the one hand, are to improve enterprise productivity and profits; the Tanzanian managers appointed by the local government, on the other hand, are not only concerned with operational efficiency, but also with generating employment and tax revenue, as well as increasing purchases of locally-produced cotton.^[17] Similarly, in the construction of infrastructure and industrial parks, there are often differences in the goals of all the parties involved: for instance, Chinese companies aim to increase their profits, Chinese government officials seek to improve bilateral political relations, African government officials are concerned with fiscal revenues and employment opportunities, while local populations hope that projects are beneficial to their livelihoods and communities. Although these various goals are interrelated and compatible in many ways, differing priorities can lead to disagreements and conflicts. To reach consensus and synergise efforts, all parties must make appropriate adjustments to prioritise the larger goal of industrialisation over their respective individual goals, to find common ground while respecting differences, and to achieve mutually beneficial, ‘win-win’ results for all.

A similar process of adaptation to and integration of different perspectives has also occurred during the course of China’s reforms. At various times over the past four decades, the state has had to manage different tendencies in society, including conservatism, protectionism, and liberalism, through theoretical guidance and administrative management, and ultimately unify various sectors to strive for industrial development. The challenge in Sino-African international cooperation is that it includes multiple states, each with their own system of governance, and matters cannot be resolved through centralised leadership. The only path for cooperation is through equal-footed exchanges. In this regard, Sino-African partners should adhere to the progressive spirit of ‘crossing the river by feeling the stones’ (摸着石头过河, mōzhe shítou guòhé), in which they emphasise robust communication, a willingness to adjust and compromise, mutual understanding, and consensus. In the aforementioned example of the Tanzania-China Friendship Textile Company, the Chinese side respects Tanzanian interests and traditions, retains a large number of long-tenured employees, and actively dialogues with union organisations, while highlighting the market nature of the enterprise, introducing the piece-rate bonus system, and identifying areas to improve productivity.^[18] Similarly, in industrial park and infrastructure projects, Sino-African cooperation learns from China’s own rapid economic development in the past forty years but is not confined to a fixed mold, and is guided by a ‘win-win’ principle in the pursuit of long-term, sustainable economic growth, considering the needs of broader numbers of parties and willing to sacrifice some short-term commercial profits for broader political and social interests.^[19]

Of course, the exchange of ideas will not always lead cooperating parties to reach a mutual understanding. But in the long run, such exchanges are essential and are the most effective method to ensure the continuous and in-depth development of Sino-African cooperation. Ultimately, African industrialisation will only be realised by internal driving forces. This is a point emphasised by China in its partnership with African countries, based on its own development experience, and is an approach that differs greatly from Western countries.

The Character and Significance of the Sino-African Relationship

The West tends to take a condescending posture towards African development and industrialisation. Whether in its role as colonial ruler, suzerain, or donor, Western developed countries have often judged African countries according to their own political and economic systems, criticised Africa as ‘backwards’, and imposed their own models on the continent. For instance, in the era of the Washington Consensus, the United States and European countries often used coercive methods such as withholding aid and enacting sanctions to force African countries to implement Western free-market economic policies. Consequently, the Western approach not only has failed to integrate organically into African societies but has also promoted division and unrest, setting back African efforts to achieve comprehensive and sustainable industrial transformation.

In its own history and development, China has experienced similar external pressures and setbacks as African countries. Through its own exploration, China has found an effective path to industrialisation. Therefore, China has a different perspective and understanding than the West when it comes to the contradictions, challenges, and complexities faced by developing countries in the pursuit of industrialisation. In its relations with African countries, China emphasises the importance of economic development and the continuous growth of productivity. While constantly pursuing its own industrial upgrading and growth, China also hopes to promote common development with Africa, to escape poverty and underdevelopment, and no longer be controlled and oppressed by the West. To this end, China cooperates with African countries around the goal of improving productivity. It holds an open-minded and pragmatic attitude towards how African countries pursue economic transformation in their various, unique national conditions. Instead of imposing any policy on the African continent, China encourages each country to follow its own path of development and to not blindly follow any model. The BRI, which promotes infrastructure connectivity, trade, financial integration, complementary policies, and people-to-people exchanges, is guided by the principles of collaborative development and national sovereignty.

The unique approach of Sino-African industrial cooperation is not only necessary for economic growth, it is also guided by profound political thinking. In its cooperation with African countries, China, while emphasising economic development and market efficiency, does not ignore the political domain. China’s emphasis on productivity comes from its own practical experience in struggling against the domination of Western powers: only with a market economy and industrial development has the country been able to resist foreign influence and interference. This orientation is also consistent with China’s longstanding policy of supporting the independence and sovereignty of African countries and opposing Western hegemonism. In the contemporary period, international political support is more effective and sustainable through economic means. At the same time, the emphasis on equal exchange in Sino-African cooperation is not purely a political posture, but is guided by the fact that long-term cooperation and communication is necessary for the establishment of a new global market and industrial system that breaks free of the historic ‘chicken-or-egg’ vicious cycle.

As African countries advance on their paths to industrialisation, different social strata will be affected in drastically different ways and will have starkly different feelings and views about economic reforms. This is both a severe challenge and historic opportunity for Sino-African industrial cooperation. As Chinese infrastructure, industrial facilities, and other projects continue to develop in Africa, both sides will deepen their mutual understanding and integration through practice. From both an economic and political perspective, China and Africa share the same overall goal of promoting industrialisation and, therefore, can overcome temporary barriers and setbacks through communication and adjustment. In this gradual process, rich and extensive cooperation at multiple levels can help China and Africa build a closer and deeper connection and consensus.

Bibliography

Author’s Notes

‘How Targeted Poverty Alleviation Has Changed the Structure of Rural Governance in China’ (精准扶贫如何改变乡村治理结构) was originally published in Wenhua Zongheng (文化纵横), issue no. 3 (June 2020).

Unlike the Chinese government’s conventional poverty alleviation efforts, the targeted poverty alleviation (精准扶贫, jīngzhǔn fúpín) program, launched in 2013, has exhibited the distinct characteristics of campaign-style governance. This program set the eradication of extreme poverty as the central objective around which socioeconomic policy was coordinated in poor, rural areas. At the end of 2020, after eight years of arduous work, this goal was achieved.

To fulfil the designated aims of targeted poverty alleviation within the established deadlines, local governments vigorously mobilised human and material resources and implemented exceptional measures.^[1] In many localities, governments employed quasi-military methods to advance targeted poverty alleviation efforts, disrupting many existing conventions. Although campaign-style governance often features extraordinary measures and can yield extraordinary results, some research suggests that this style of governance is difficult to sustain into regular periods of governance. Regardless, campaign-style governance can still have an important impact on conventional governance structures.

This article will examine the impact that targeted poverty alleviation’s campaign-style governance has had and will have on rural governance. First, the article provides an overview of the existing problems in rural governance. Second, the article analyses the extent to which the campaign has changed the existing structure of rural governance. Finally, the article assesses whether the mechanisms of governance adopted under targeted poverty alleviation will be able to adapt to normal conditions after the campaign ends and have a lasting impact on rural governance. This article argues that, due to the success of targeted poverty alleviation in addressing weaknesses in rural governance and achieving its objectives, the campaign has the potential to effect long-term changes through institutionalisation of its practices and methodologies.

The Dilemmas of Rural Governance

Before the implementation of the targeted poverty alleviation strategy, both rural governance and poverty alleviation policies faced serious dilemmas. The repeal of agricultural taxes in 2006 led to the disintegration of rural society, numerous difficulties in the traditional systems of rural governance, and the detachment between the power and resources of community-level governments and their social responsibility.^[2] The distribution of poverty alleviation resources targeted primarily at counties and villages that were designated as poverty-stricken or poor produced awkward dynamics where local governments and village organisations vied for such designations to gain access to resources as well as imbalances in resource allocation, where poor households in undesignated villages were overlooked. As a result, tensions have existed to varying degrees between rural villages and between rural villages and the state.

Rural villages are often thought of as living communities, where rural residents maintain the village through practices based on shared values and reciprocity as well as strong local institutions. In the Chinese sociologist and anthropologist Fei Xiaotong’s (费孝通) conception of rural China and US political scientist and anthropologist James C. Scott’s depiction of the moral economy of the peasant, rural life is represented as largely distanced from the state. However, in reality, China’s villages have not been so distant from the state. While villages have featured characteristics of living communities, they have also existed under the rule of the state. Moreover, as the state’s governance capabilities have improved, it has tended to increasingly govern villages directly. The strength of the state’s rural governance has largely been determined by its ability to administer its rules and authority on the villages.

Small and large communities are often thought of as being in a zero-sum relationship, where state intervention reduces the autonomy of small communities and the autonomy of small communities minimises the state’s influence on villages. However, thus far in the twenty-first century, the relationship has not been so clear in China, as both small and large communities have struggled in rural governance.

As living communities, China’s villages weakened and even disintegrated in the decades following the rural reform initiated in the 1980s. The rural reform had two key elements: the implementation of the household responsibility system (包产到户, bāochǎn dào hù) in agricultural production and the establishment of village committees (村民委员会, cūnmín wěiyuánhuì). The first measure replaced the collective farming system implemented during the land reform process of the 1950s and allowed individual households to contract land and have greater autonomy over their agricultural production, laying the foundation for the market economy in rural areas. Meanwhile, the second measure aimed to rebuild the village community through villagers’ self-governance. However, the success of these two measures diverged significantly. On the one hand, land contracting and household production advanced continuously, with farmers’ individualisation being driven by the market economy and the greater autonomy and social mobility of village members; on the other hand, numerous difficulties were encountered with the village committees. These bodies were created to protect villagers, but amid the disintegration of village communities, village leaders in most areas either stopped serving as village organisers or took advantage of their positions to secure private benefits. The number of village organisations capable of providing leadership decreased significantly and villagers were often unable to hold village officials accountable; meanwhile, village officials also struggled to serve villagers and to effectively implement government policies intended to benefit farmers at the community level.

At the same time that small communities grew weaker, the state’s effectiveness in rural governance also decreased during the three decades following the rural reform, reaching a low point in the early twenty-first century. The repeal of agricultural tax collection in 2006 marked the beginning of the policy of ‘industry nurturing agriculture, cities supporting rural areas’ (工业反哺农业、城市反哺农村, gōngyè fǎnbǔ nóngyè, chéngshì fǎnbǔ nóngcūn), intended to direct more resources from the urban centres into rural areas to both advance their development and infrastructure as well as improve social welfare, through the implementation of various protections, subsidies, and grants for rural communities and individuals. In practice, however, the state struggled to realise these aims. Although transfer payments from the central government to poverty-stricken areas greatly increased and the state improved its provision of social welfare, the state struggled to define clear policy goals and to develop effective mechanisms to allocate resources to target populations.^[3] For example, subsidies aimed at encouraging grain production had a limited impact on farmers’ enthusiasm as the central government struggled to define grain-producing farmers and only granted subsidies according to the size of farmers’ contracted land. Similarly, the rural subsistence allowance system, intended to meet the basic living needs of low-income households, encountered several obstacles, including difficulties in collecting data on household income and identifying eligible households, along with corruption, with rural officials providing preferential treatment towards family members and friends and even using the allowance as a bargaining tool against farmers. As a result, the rural subsistence allowance was not efficient in being directed to those most in need. To put it simply, it was difficult for the state to realise its rural development and welfare goals through the existing administrative system.

The allocation of poverty alleviation resources should have been guided by precision and fairness, however, in practice, the allocation was influenced by many other factors. The central government focused on providing support to poverty-stricken areas, issuing special poverty alleviation funding to adjacent poor areas and those counties, villages, and households designated as key poverty-stricken targets. Following the Seven-Year Priority Poverty Alleviation Program, which aimed to lift 80 million people out of absolute poverty from 1994 to 2000, poverty alleviation resources were mainly channelled to the designated key poverty-stricken counties. This produced an adverse consequence, where rural counties competed against each other to be designated as poverty-stricken, a phenomenon referred to in China as ‘fighting to wear the “poverty hat”’ (争戴贫困帽子, zhēng dài pínkùn màozi); a few county governments even celebrated their entry into the list of poverty-stricken counties. Unfortunately, it was often the case that the identification of poverty-stricken counties or villages was not only a matter of low income or lagging development, but was also influenced by pressures from various and, at times, rival interest groups. With various interest groups and parties vying for resources, it was difficult to effectively realise poverty alleviation goals.

After completing its first ten-year plan for poverty alleviation from 2001 to 2010, the approach of the central government shifted, as it raised the poverty line significantly, first in 2010 and then again in 2013, and set a clear timetable to eradicate absolute poverty and complete the building of a moderately prosperous society in all respects by 2020.^[4] Under the new standard, the scope of poverty alleviation expanded greatly as the population considered impoverished increased more than five-fold, from less than 30 million people to 160 million people; the incidence of rural poverty similarly increased from less than 3 percent to over 17 percent; and the number of poverty-stricken counties increased to 832. In addition, the qualitative standard for poverty alleviation was also raised, now aiming for ‘two assurances and three guarantees’ (两不愁三保障, liǎng bù chóu sān bǎozhàng), meaning that, by 2020, the rural poor would be assured adequate food and clothing, and guaranteed access to the public education system, basic medical services, and safe housing, including running water and electricity (some localities also developed specific guarantees based on local conditions, such as a guaranteed supply of safe drinking water in arid areas). To lift such a large number of poor people out of poverty in a short amount of time, the state had to greatly increase the amount of resources that it allocated to the task. From 2015 to 2020, poverty alleviation funding from the central government increased on average by 20 billion yuan (approximately $2.8 billion) per year. More importantly, the types of poverty alleviation funding were diversified, including integrated funds, social funds, and various financial instruments. The total amount of resources invested by the state in poverty alleviation was unprecedented, although it generated new challenges for rural governance. However, realising the poverty alleviation goals was more complex and difficult than simply increasing incomes, and required fundamental changes to the system of rural governance in poor areas.

Rural Governance under Targeted Poverty Alleviation

In 2013, Communist Party of China (CPC) General Secretary Xi Jinping proposed the concept of targeted poverty alleviation. Shortly thereafter, in 2015, he specified that this policy required precision in the following six areas: first, in the identification of the poor, ensuring that the recipients of support were, in fact, those in need; second, in the alignment of projects and aid to the needs of the poor; third, in the provision and use of funding; fourth, in the implementation of measures appropriate for each household; fifth, in the dispatching of party officials to carry out poverty alleviation measures in individual villages; and, sixth, in the evaluations of whether poverty alleviation had met expectations. To ensure that targeted poverty alleviation was successful, a number of fundamental changes had to be made to the existing system of rural governance, including the creation of new system for information collection and analysis that was more transparent for villages and farmers; the establishment of a mechanism for direct governance by the state in villages, with a large number of officials assigned to be directly involved in the daily governance of villages; and the institutionalisation of mechanisms for villagers’ participation in public affairs. These changes have improved the state’s governance and provision of social welfare in rural areas.

The strategy of targeted poverty alleviation depended upon high-quality data collection. Beginning in 2014, detailed investigations were conducted to identify each poor household, their specific causes of poverty, and the specific poverty alleviated measures to implement; the information gathered was used to generate an electronic database with files on each poor household, village, county, and region across the country. Poor households were individually registered in the database and provided with a poverty alleviation handbook, containing a summary of their basic conditions and causes of poverty, their poverty alleviation plan, and the contact information for the official responsible for their household. The central government had previously tried to develop a poverty alleviation registration system, including a trial program in eight provinces in 2005, however, due to limitations in human and material resources as well as the state’s investigative capacity, these efforts were not successful. The large-scale administrative mobilisation under targeted poverty alleviation allowed this task to finally be completed.

The electronic registration system improved China’s poverty alleviation efforts in two ways. First, the more accurate identification of poor households and villages allowed resources to be better directed to the appropriate recipients and measures to be specifically targeted to recipients’ needs. Second, the data collected provided the central government with a more up-to-date picture of conditions at the community-level and, consequently, a better understanding of rural areas, helping its decision-making, formulation of specific policies, and evaluation of poverty alleviation efforts.

Some critics have argued that the digitisation of poverty alleviation governance has detached the process from village life and community-level governance, while others have pointed out that digitisation and technological mechanisms cannot address issues of community-level governance.^[5] In addition, due to the central government’s strong reliance on data in their decision-making, community-level poverty alleviation workers spent a significant amount of time engaged in administrative tasks related to data collection, such as filling in forms, which took away from their actual anti-poverty work and, in some areas, resulted in excessive formalism; this eventually prompted the central government to issue directives to reduce unnecessary data collection.

As targeted poverty alleviation progressed, however, the process of data collection, quality of the data obtained, and implementation of the data into governance all improved. First, by implementing procedural reviews to verify data after its initial collection, the data gradually became more accurate and objective. Second, the dynamic updating of data has also improved information quality. The goal of the registration system was to verify the general statistical estimates of the number of poor households, by conducting investigations on the ground. As targeted poverty alleviation advanced and the number of poor households decreased, the statistical estimates became less reliable, and the importance of precise household-to-household data increased. Since 2017, the poverty registration database has no longer been limited by the general statistical estimates and has been dynamically adjusted based on the findings of on-the-ground investigations. Third, the poverty alleviation registration system laid the foundation for information-based rural governance; going forward, as community-level governments gain further experience in data collection and are able to integrate data from different governmental departments and levels, information will play an increasingly important role in rural governance.

Information-based governance increased public transparency in rural areas, but was not able to improve the effectiveness of targeted poverty alleviation on its own; it was supported by a shift in the priorities of local governments and a greater distribution of resources to the community level. Following the rural reform of the 1980s that spurred China’s rapid economic development, local governments prioritised economic efficiency and focused their resources on rapidly developing sectors; meanwhile, the central government prioritised the development of urban areas and generally focused on the maximisation of Gross Domestic Product (GDP). The targeted poverty alleviation campaign sought to reorient governmental priorities, at both central and local levels, placing the eradication of poverty in poor areas at the top of the agenda. From the top down, local government and CPC leaders were directed to regard poverty alleviation as their principal task, which led to a shift in the aims, resource allocation, and work of local governments and party committees. With poverty alleviation being made the first priority in poor areas, economic development had to serve this end, rather than narrowly pursue growth.

Along with this reprioritisation, the central government increased its distribution of resources to lower levels of government. These resources have not only included funds and supplies, but more importantly, human resources. Greater numbers of personnel have been required to address the weak administrative organisation of poor villages and advance targeted poverty alleviation, as traditional local institutions lacked the capacity both to distribute large amounts of resources to households and villages and to implement the new methods of governance associated with the campaign. Village organisations in poor areas were severely understaffed, often with three officials at most, and thus, were incapable of managing large amounts of resources or administering complex procedures. Related to this, these organisations had a very deficient knowledge base, and were overwhelmed by the influx of new poverty alleviation concepts, methods, and technological processes, such as the large-scale data collection about poor households and the selection of industries and markets to invest in. In addition, most village officials were enmeshed in their community’s social relationships, resulting in biases which undermined objective decision-making; to fairly distribute the large amounts of poverty alleviation resources that poor villages received from the central government, external support was necessary.

To address the shortage of human resources in rural areas, increase the administrative capacity in lower levels, and strengthen rural governance, the CPC dispatched resident work teams (驻村工作队, zhù cūn gōngzuò duì) and first party secretaries (the lead party official in an area) to live in and assist poor villages. Since 2013, more than three million officials from higher levels of government, state-owned enterprises, and other public institutions, have been dispatched as part of 255,000 resident work teams to live in villages for at least two years and work on targeted poverty alleviation.^[6] Some researchers have questioned the impact of resident work teams, contending that they have lacked sufficient understanding of local situations and experience in agricultural production, and also faced resistance from local authorities; however, on the whole, the research indicates that resident work teams have brought more poverty alleviation resources into rural areas and gradually played a steering role in targeted poverty alleviation efforts.^[7]

The dispatching of resident work teams to poor villages under targeted poverty alleviation was a continuation of the existing policy of pairing assistance (对口帮扶, duìkǒu bang fú), under which lower levels of governments support each other. Rather than being tasked with merely providing assistance, the resident work teams were given the responsibility of realising poverty alleviation in their villages, including managing poverty alleviation resources, visiting poor households, carrying out registration and data collection, and implementing anti-poverty measures. Resident work teams were generally required to stay in their assigned village for more than twenty days each month, and therefore, participated in the entire process of poverty alleviation. To address initial difficulties that resident work teams faced in carrying out poverty alleviation governance, in 2015, the CPC began to assign first party secretaries in most poor villages to concurrently serve as the heads of their village’s resident work team. This measure ironed out the institutional difficulty of integrating resident work teams into village decision-making. Improving the social governance of villages became a critical responsibility of first party secretaries, perhaps even more important than their duty to promote the economic development of villages.^[8]

The large-scale movement of personnel to poverty-stricken villages exemplified the campaign-style governance of targeted poverty alleviation. While resident work teams differed in terms of their work, methods, and involvement in village affairs, from a broader, institutional perspective, through this mechanism the state was able to directly influence village-level governance. As such, targeted poverty alleviation did not merely consist of the central government channelling resources to rural areas, but rather was an extension of state power to the village level. From the identification of poor households to the setting of poverty alleviation standards, numerous measures formulated by the state were implemented at the village level.

Alongside greater state involvement in village administration, greater emphasis was also placed on villager participation. In theory, villagers’ self-governance was supposed to be the foundation of rural communities, from the establishment of village committees, elected and supervised by villagers, in the 1980s, to the central government’s promotion of community participation in poverty alleviation in the 1990s. In practice, however, many obstacles impeded the realisation of self-governance. For example, although village governance is based on a system of one person, one vote, political decisions were often intertwined with and influenced by the interests of families, factions, and other powers. Furthermore, due to the deterioration of rural communities as well as the lack of resources and supportive social environment, it was difficult to promote and safeguard democracy within villages. As a result, public participation in poverty alleviation was little more than a formality.

Targeted poverty alleviation strengthened the voices to villagers, especially those from poor households. First, enhanced public transparency and openness improved villagers’ participation, mainly through the identification of poverty-stricken households and the evaluation of poverty alleviation efforts. Designated poor households were given more poverty alleviation resources; although this has provoked disputes among villagers, especially when income differences were not evident, public transparency proved to be an effective remedy to these conflicts. Under targeted poverty alleviation, the confirmation of poor households required a public announcement and was subject to villagers’ approval. Villagers’ satisfaction was also an important factor in the evaluation of poverty alleviation efforts; here, villager participation was not abstract, but had a precise scope and form, encouraging high levels of participation. Second, and more importantly, the strict top-down inspections of poverty alleviation efforts created a channel for villagers’ opinions to reach upper levels of government, promoting accountability through the application of pressure from upper-level officials on lower-level officials (a mechanism of villager participation that differed from traditional models and conceptions). In the period of targeted poverty alleviation, villager participation and centralised authority were mutually reinforcing; the centralised authority strengthened the voice and participation of villagers through the application of pressure on local officials, while villager participation allowed the central government to evaluate local officials and ensure their aims were pursued at the community level.

Ultimately, targeted poverty alleviation established a new mechanism of rural governance in poverty-stricken rural areas, bridging the gap between official policy makers and the subjects of poverty alleviation policies. This mechanism led to the central government being better informed on conditions at the community level and, through top-down pressure, to greater participation for villagers, resulting in governmental policies being more thoroughly translated into grassroots actions and results.

The Potential for Lasting Changes in Rural Governance

The new mechanism of rural governance developed in the process of targeted poverty alleviation, played a crucial role in achieving the eradication of extreme poverty at the end of 2020 and effectively addressed long-standing rural political issues. However, whether these changes can be carried over from the targeted poverty alleviation campaign to conventional periods of governance and have a lasting impact on rural areas, depends on whether this mechanism can adapt to changing circumstances. There are three important factors that indicate that the structural changes in rural governance will endure.

First, the distribution of national administrative resources to lower levels of government is a major trend that will continue after the end of the targeted poverty alleviation. Prior to the campaign, the local talent pool and institutional structure in most villages were insufficient to support long-term development, and poor villages lacked the capacity to manage the influx of resources for poverty alleviation. In recent years, the state’s provision of administrative resources to rural areas has strengthened community-level institutions, supported the return of rural talents to their communities from urban areas, encouraged prominent villagers to participate in rural governance, and developed rural collective economies to help villages retain their developing talent and attract talent to return from cities. However, China is still in the process of rapid urbanisation; the rural population will continue to flow outwards, and the return of talents to rural areas has just begun. In this context, the distribution of administrative resources to lower levels is indispensable for maintaining rural social order and realising effective rural governance.

Second, the state will play an increasingly important role in rural areas, in terms of infrastructure construction and the provision of public goods. During the period of targeted poverty alleviation, the state has mainly focused its support on poverty-stricken rural areas, however, as part of the broader rural revitalisation strategy, more rural areas will benefit from the state’s resources. In this process, public transparency regarding recipient households and villages will remain important to avoid disputes and to prevent the distribution of resources from becoming influenced by local power struggles. As a result, it will be necessary for the state to build upon the poverty alleviation registration database and develop an general rural information system; for example, to identify the population living in relative poverty, information on both poor and non-poor households is needed because relative poverty can only be defined through a wide-ranging comparison across the rural population. In summary, as the state invests more resources in rural areas, it will increasingly need and rely upon information systems.

Third, rural development gravitates towards the areas where there are high levels of villagers’ participation in public affairs. In the context of a large outflow of young talent and an aging population, rural communities have been hollowed out; as such, strong institutional guarantees are required to secure villagers’ participation. The mechanism for villagers’ participation under targeted poverty alleviation was based on greater public transparency in rural affairs, the creation of an effective channel for feedback from the grassroots to top-level officials, and strict evaluation of and accountability for rural administrators. In this way, bottom-up participation was guaranteed by top-down support, although the process differed from traditional modes of villagers’ self-governance. Today, the objective is not to recreate traditional systems of village governance, but to develop mechanisms for participation that facilitate the effective distribution of state resources to rural areas. Therefore, participation must not be limited to the granting of superficial rights to villagers; more importantly, there must be concrete institutional guarantees that ensure villagers can and do participate.

The mechanisms of governance under targeted poverty alleviation have promoted important changes in rural governance, but they cannot simply be replicated going forward, in ordinary periods of governance. After successfully completing the tasks of targeted poverty, some formerly poverty-stricken counties have attempted to adapt the governance mechanisms of the campaign – in particular, the program of resident work teams – into their conventional system of governance. However, these efforts have encountered two main difficulties.

The first difficulty is the high cost of campaign-style governance measures. For instance, to complete the poverty alleviation registration system and ensure its high quality, more than two million staff were mobilised to work for eight months to just review the data. Meanwhile, the program of resident work teams required the redeployment of more than three million public servants to work full-time in villages, which not only incurred high costs in terms of subsidies, training, supervision, and the construction of accommodations, but also in terms of causing significant disruptions to the other governmental institutions, which had to undertake additional poverty alleviation responsibilities. In addition, the rotation of resident work teams between different villages made it difficult to ensure continuity in work and for officials to accumulate localised experience and knowledge. From both a financial and human resources perspective, the governance mechanisms of targeted poverty alleviation incurred a high cost and cannot easily be carried over in conventional periods of rural governance.

The second difficulty lies in the low level of institutionalisation of targeted poverty alleviation governance mechanisms and the challenges of balancing different governmental responsibilities. Campaign-style governance focuses on a single goal, adopting various and, at times, extraordinary methods to achieve this goal, some of which can be unsustainable and can even result in imbalances or unfairness. During the period of targeted poverty alleviation, the central task in poor areas was poverty alleviation, with a significant amount of human and material resources invested into meeting targets and shoring up weaknesses. This inevitably resulted in those tasks that fell outside of this objective, being overlooked. For example, following poverty alleviation registration, resources were often concentrated on registered poor households and, at times, the needs of other farmers were neglected. In some cases, poor households were relocated to situations where they would have a stable income and were not only provided with housing, but also with real estate to set up small businesses, giving them far more assets than the average farmer. The temporary and short-term measures employed in campaign-style governance are difficult to replicate in ordinary periods due to their lack of institutionalisation.

The governance mechanisms and extraordinary measures of targeted poverty alleviation need to be appropriately adapted to conventional governance, to continue promoting living standards and balanced development as part of rural revitalisation. In this process of adaptation, it is necessary to institutionalise the rural information system, the distribution of administrative resources to rural areas, and the participation of villagers, in a manner that reduces operational costs, while maintaining their advantageous features.

First, it is necessary to regularise and institutionalise data collection and analysis in rural areas. In the 1950s, the central government established an agricultural economic management system that collected and aggregated rural data for a number of decades, however, this data lacked objectivity and was eventually replaced by statistical sampling surveys. However, while statistical sampling can assist macro-governmental decision-making, it is not suited to micro-governance. Within the new framework of poverty alleviation registration, information systems from various governmental departments, such as civil affairs, public security, and finance, can and should be integrated to establish a unified rural information network, thereby systematising information-based rural governance.

Second, it is necessary to institutionalise the distribution of administrative resources to lower levels. The state must continue to provide financial and human resources to support rural governance, including incorporating rural service into the responsibilities of national civil servants. Currently, the central government distributes administrative resources to lower levels in various ways, the most common of which are the baocun (包村, bāo cūn) system of designating township officials as responsible for assisting the economic and social development of specific villages, as well as the dispatching of first party secretaries and resident work teams to poor villages under targeted poverty alleviation. The combination of these two measures, the baocun and resident work teams, could establish a sustainable village-level administrative system and promote long-term changes in the structure of rural governance. The village-level administrative system should not merely be considered to consist of the existing village officials and village organisations, but more broadly envisioned as the extension of the national administrative system to rural villages. Therefore, rotations in village governance should be systematically incorporated into the responsibilities of higher-level officials and civil servants, but in a manner that is sustainable and does not overburden institutions.

Third, it is necessary to institutionalise villager participation. Village committees should be strengthened as institutions for self-governance and as vehicles for villagers to participate in public affairs and democratic decision-making. On the one hand, the bureaucratisation of village committees must be reversed so that they can be more closely connected with the people and not simply function as extensions of the central government; on the other hand, the supervisory role of village committees and their coordination with village-level administrative authorities must be strengthened, so that they can become people’s organisations.

As a significant social mobilisation, campaign, and experiment, targeted poverty alleviation has innovated China’s rural governance model. The lasting impact of targeted poverty alleviation will depend not only on the changes that have already taken place but also on how these changes can be adapted and institutionalised into rural governance going forward.

Bibliography

Author’s Notes

Longway Foundation‘Socialism 3.0: The Practice and Prospect of Socialism in China’ (社会主义3.0——中国社会主义的现实与未来) was written collectively by a group of researchers at the Longway Foundation (修远基金), and originally published in Wenhua Zongheng (文化纵横), issue no. 2 (April 2015).

We Need to Talk About Socialism

Today, the concept of socialism is at the centre of fierce ideological battles, with supporters and opponents arguing vehemently with each other. These debates often remain at the level of ideas, with participants tending to put forward their conceptions of socialism based upon selective historical narratives and theoretical doctrines, while ignoring the reality that socialism is a historical process that has advanced alongside industrialisation. Over the course of several centuries, socialism has emerged as an alternative path of development to overcome the crisis of capitalist industrialisation, a path characterised by a pursuit of greater political and economic equality, and an exploration of the ideal of a community in ethics and culture. Socialism not only gave rise to states such as the Soviet Union and China, but also had a significant impact on the social democratic policies in Western Europe. However, with the collapse of the Soviet Union in the late twentieth century, the world socialist movement suffered a major setback, and the forms of the socialist state and the socialist mode of production required systematic reflection and revitalisation. Today, as the traditional capitalist welfare states have been dismantled or are facing multiple crises and the forms of material production undergo complex transformations, it is necessary to revisit and reassess the fundamental ideas and practice of socialism to activate its political dynamism.

As the global socialist movement waned, China’s socialist system underwent a self-transformation through reform and opening up. However, despite its achievements, it cannot be denied that socialism with Chinese characteristics faces serious challenges today.^[1] In China, there are doubts about the meaning of socialism and whether it is still necessary or even possible. This presents a dilemma for China – on the one hand, as a socialist country, we cannot avoid discussing socialism; on the other hand, we cannot get bogged down in conceptual disputes. Instead of becoming consumed by ideological battles, we should view socialism as an ongoing process and continuous effort to create a fairer and more just society in the face of the opportunities and challenges brought about by changes in production since the beginning of industrialisation.

Today’s discussions on socialism and the future forms that it may take, must place socialism in the context of existing historical processes, in the context of industrialised mass production, as illuminated by Karl Marx, and analyse the complex interaction between the ideal of equality and the material realities of production. In the case of China, the country’s socialist path must be examined in the context of its historical trajectory since the twentieth century – analysing the complex process through which socialism, as a foreign political concept, has been integrated with China’s political traditions as well as evaluating the lessons learned from China’s experiments in socialist construction – to grasp the reality and necessity of socialism. Furthermore, amid the increasingly complex changes in the forms of material production and the international political-economic structure, it is necessary to explore the changes in patterns of social organisation, factors of production, and the division of labour, that have been brought about by globalisation and the new industrial landscape, to determine the future direction of socialism.

Only on this basis can we effectively face the political and economic conditions in this time of great change, understand the political resources offered by socialism, and contemplate the path for China’s future development.

This article will trace the historical evolution and future direction of Chinese socialism. The authors describe the socialist practice during the Mao Zedong (毛泽东) era of 1949 to 1976 as China’s ‘Socialism 1.0’ and the subsequent exploration of the socialist market economy since the beginning of reform and opening up in 1978 as ‘Socialism 2.0’. Finally, amid the current period of global political and economic upheaval, the authors argue that China needs to develop a ‘Socialism 3.0’ to guide its future course that learns from and builds upon Socialism 1.0 and 2.0.

Socialism 1.0

1. The historical encounter between socialism and China’s rising consciousness of national salvation.^[2] China’s choice of the socialist path was not accidental. At the end of the nineteenth century, all major non-Western civilisations faced comprehensive challenges from the West. Through the advances of industrialisation, Western modern military forces were able to thoroughly defeat the fragile military backbone that was required to maintain order in these traditional agricultural empires. For the elites in these civilisations, this prompted anxiety and frustration, as they felt that their cultures had been superseded or destroyed; civilisational states such as China lost their sense of cultural superiority over the ‘barbarians’, or the neighbouring states and minority ethnicities. The West’s ‘hard ships and sharp canons’ (坚船利炮, jiānchuán lìpào) imposed on the world ‘major changes unseen in three thousand years’ (三千年未见之大变局, sānqiānnián wèijiàn zhī dàbiànjú ), forcing Chinese politicians and intellectuals to respond.^[3] Driven by the powerful material force of their industrialisation, the ‘advanced’ countries, led by the United Kingdom, continued to expand outward, shaping a new international order and new ‘rules of the game’. The transformation of the world order rendered all preceding conventions unviable.

Confronted by the Western powers that were armed by industrialisation, China had to determine how it could quickly industrialise to catch up with the West and protect itself. As Chinese politicians and intellectuals painstakingly explored a path for the country’s industrialisation during the late nineteenth and early twentieth centuries, the Western-led expansion of capitalism gradually moved from the phase of free trade to that of imperialism. The harsh logic of capitalism, wherein the weak are preyed upon by the strong, grew increasingly prominent. Within European countries, class conflict between labour and capital intensified, and social resistance movements surged, a dynamic which had a profound impact on China’s intellectual class at the time. The outbreak of the First World War prompted many Chinese scholars to reflect deeply on the inner dilemmas of Western civilisation. For the revolutionaries and thinkers of modern China, there were two aspects to this engagement: on the one hand, they sought to learn from the West to achieve their goals of modernisation and national prosperity; on the other hand, they remained vigilant to the poverty and inequality brought about by capitalist industrialisation. Figures such as the intellectual Yan Fu (严复) and leader of the 1911 revolution Dr. Sun Yat-sen (孙中山, Sūn Zhōngshān),^[4] were able to gain a broader vision for China’s development because they had ‘opened their eyes to see the world’ (开眼看世界, kāiyǎn kàn shìjiè) and they recognised the historical trends of progress and change; however, their intellectual and ideological foundations, laid in their youth, were deeply influenced by traditional Chinese culture, including the ancient Confucian ideal of ‘Great Unity’ (大同, dàtóng).^[5]

Thus, while learning from the West, Chinese thinkers also identified flaws in Western industrial civilisation and the possibility of constructing a social system that surpassed it. In particular, the rapid growth achieved by the Soviet Union’s socialist industrialisation in a short period of time was viewed as a realistic pathway for China to follow to catch up with the West. After the concept of socialism was introduced into China in the early twentieth century, many Chinese intellectuals found its foundational ideal of equality to be more in line with traditional Chinese ideals than Western liberalism. During this period, socialism had a strong appeal in China because it was not merely a set of lofty communal values, but a concrete example of a system that was capable of achieving industrialisation; both Western European social democracy and the Soviet Union’s state socialism had shown that they could develop a modern mode of production and achieve industrialisation.

In the 1920s and 1930s, after the disillusioning failure of the Great Revolution (1924–1927), Chinese intellectuals fervently discussed and debated socialist theory.^[6] Importantly, the evolutionary view of history imported from the Soviet Union – that human society proceeded from ‘primitive’ society, to slave society, to feudal society, to capitalist society, and finally to socialist and communist society – began to be consciously applied to the historical development of Chinese civilisation. This revolution in the conception of history became the premise of the eventual political revolution.

The task of catching up with the West eventually fell into the hands of the Chinese communists, who were strongly influenced by the October Revolution of 1917; this influence was not limited to Vladimir Lenin’s advanced organisational model of the vanguard party, but also in the practical example and specific methods that a backward country could utilise to pursue industrialisation. Thus, a profound integration took place in China, between the desire for industrialisation (driven by the growing consciousness of national salvation) and the plan to build a socialist state.

2. Mao Zedong’s socialist ideas and practice: the first attempt to adapt socialism to the Chinese context. During the late 1930s, Mao Zedong began to explore how to integrate China’s revolutionary and industrial aims with the historical trend of socialism in the world. In his works, The Chinese Revolution and the Chinese Communist Party (中国革命与中国共产党, Zhōngguó gémìng yǔ Zhōngguó Gòngchǎndǎng, 1939) and On New Democracy (新民主主义论, Xīn mínzhǔ zhǔyì lùn, 1940), Mao argued that China at that time was a semi-colonial and semi-feudal society and that the Communist Party of China (CPC) was the party to lead the socialist revolution.^[7] In Mao’s conception, the plan for China’s future development could be divided into two stages: first, the New Democratic stage, followed by the socialist stage, which would be reached only after the full development of New Democracy.^[8] Starting with the theory of historical stages of development developed by Joseph Stalin and others, Mao incorporated Lenin’s writings on imperialism and colonialism and ultimately constructed a historical view of the development of modern China: after passing through ‘primitive’, slave, and feudal societies, the country had entered a semi-feudal and semi-colonial stage, that it needed to transcend through a stage of democratic revolution, which was divided into the Old and New Democratic phases. This view of history served as the benchmark for the CPC to formulate and evaluate its policies: those policies which were deemed ahead of the historical schedule, so to speak, were considered left-leaning, while those lagging behind were deemed right-leaning.

Guided by this view of history, the generation of Chinese communists led by Mao pursued socialist industrialisation and socialist equality, two goals with a complex and even contradictory relationship.

The CPC now took up the responsibility for the country’s industrial development, following the failed efforts during the late nineteenth and early twentieth centuries such as the Self-Strengthening Movement (1861–1895).^[9] The party’s historical and socialist perspective on the question of industrialisation carried a stronger sense of equality, which generally transcended the consciousness of national salvation. After the founding of the People’s Republic of China (PRC) in 1949, the CPC’s model of industrialisation prioritised the development of heavy industry, which was considered necessary in latecomer countries that sought to catch up the development ladder and had been advocated since the Self-Strengthening Movement. This view was expounded upon in The Party’s General Line for the Transition Period (过渡时期总路线, Guòdù shíqí zǒnglùxiàn), a directive issued in 1953, in which Mao emphasised the need to concentrate efforts on developing heavy industry to establish the foundation for the nation’s industrial and defence modernisation.^[10]

The developmental strategy of prioritising heavy industry and ‘becoming stronger before getting richer’ (先强后富, xiānqiáng hòufù), is, in a way, inevitable for latecomer countries to adopt. However, industrialisation entails an extremely high cost, requiring the accumulation of a huge amount of capital; if sources of investment cannot be obtained and resources cannot be plundered externally, investments in heavy industry often need to be extracted from domestic rural areas. In the early years of the PRC, the only way to advance industrialisation was to re-concentrate the distributed land and increase the centralised management and distribution of agricultural surplus through the people’s commune movement. In addition to agricultural taxes, an instrument called the ‘state monopoly for purchasing and marketing’ (统购统销, tǒnggòu tǒngxiāo) redirected agricultural surplus to industry and cities. Industrialisation also required a large number of highly skilled workers, making it necessary to pour massive amounts of resources into building a modern education system – popularising primary and secondary education, developing institutions of higher education, and increasing the educated population from tens or hundreds of thousands to tens of millions. Therefore, facing the urgent need for industrialisation, China quickly ended its New Democratic phase and entered the initial stage of socialism. In 1953, the CPC adopted the general line of ‘one transformation and three reforms’ (一化三改, yīhuà sāngǎi), through which Socialism 1.0 was gradually established in the country, guided by the following political-economic principles: public ownership of means of production, the planned economy, and distribution according to work.^[11] Similar to the Soviet model, this was an efficient system of accumulation in the early stages of China’s industrialisation.

As the process of socialist industrialisation advanced, however, a contradiction between industrialisation and the goal of socialist equality became increasingly evident. The state-led industrialisation model that prioritised heavy industry inevitably required a large number of government officials, corporate executives, and professionals, with the numbers required expanding alongside industrialisation. As a result, the means of production became concentrated in the hands of the managers rather than the workers, leading to a tendency toward bureaucratisation. By the late 1950s, Mao realised that, as long as production continued to develop in this manner, it would continuously generate a managerial class within the system, managers with their own self-interests who would amass control of government and enterprise affairs and use their power to undermine public ownership. In other words, this bureaucratic class would use its position to manage the economy, offloading the costs of industrialisation onto ordinary people, especially the peasantry, while enjoying the benefits of industrialisation themselves.

Faced with this dilemma, Mao explored a new model of industrialisation that ‘allowed the people to manage the production processes directly’ through the campaign called ‘grasp revolution, promote production’ (抓革命促生产, zhuā gémìng cù shēngchǎn), which sought to make the otherwise contradicting goals of industrialisation and equality complementary to each other. In his comments on Stalin’s Economic Problems of Socialism in the USSR (1951), Mao pointed out that the socialist transformation of ownership of the means of production would not inevitably result in labour occupying a leading position within production.^[12] For Mao, public ownership of the means of production would not guarantee that China developed in a socialist direction, in which the working people ran their country, and so adjustments and experiments were needed at the level of cultural and political leadership – namely, it was necessary to break with the bourgeois legal regime. To this end, Mao pushed for a series of initiatives during subsequent decades, strengthening the guidance and supervision over cadres at the political level and conducting various experimental measures aimed at addressing this problem, including criticising the rank-based wage system, sending large numbers of cadres to engage in manual labour in the countryside and factories, commending policies which reorganised the division of labour, launching socialist education campaigns, and so on. Mao also proposed that the economy should ‘walk on two legs’ (两条腿走路, liǎngtiáotuǐ zǒulù), meaning that economic development could not rely solely on a state-led model and it was also necessary to conduct mass mobilisations to counteract the drawbacks that arose from this model’s reliance on technocrats to implement the directives of the centrally planned economy. This was exemplified by the emergence of policies that reorganised and disrupted the division of labour, such as the Angang Constitution (鞍钢宪法, Āngāng xiànfǎ) in 1960 and its practice of ‘two participations and one reform’ (两参一改, liǎngcān yīgǎi), commended by Mao.^[13] These efforts reflect Mao’s ongoing concern with ensuring that the country’s industrialisation proceeded in a socialist direction, his efforts to correct the imbalances brought about by industrialisation, and commitment to the idea of equality.

Overall, between the founding of the PRC in 1949 and the start of reform and opening up in the late 1970s, China gradually transformed into an industrialised country. During this time, China’s social structure remained relatively equal and social divisions were not so pronounced. However, although the development model of ‘becoming stronger before getting richer’ helped the country to achieve industrialisation, the population generally remained in poverty; the contradictions between the state-led model of industrialisation and the objective of equality became increasingly prominent in Mao’s era. On top of this, driven by the country’s century-long wave of radical thinking, Mao attempted to resolve these problems with the Great Leap Forward (1958–1962) and the Cultural Revolution (1966–1976), but both ultimately failed. Subsequent generations have continued to grapple with these twin pursuits of Chinese socialism, industrialisation and equality.

3. The internal dilemmas of Socialism 1.0. Since Marx, socialist theory has had the following core aims: to overcome capitalist private ownership and disorderly competition through public ownership and the planned economy, to eliminate exploitation, and to implement distribution according to work. However, for both the state-led socialist path initiated by Lenin and the social democratic path pursued in Western Europe, substantial adjustments to socialist theory were required. The socialism envisioned by Marx was supposed to be achieved in the developed capitalist countries, where the accumulation of social capital had reached a considerable degree, thus providing the conditions for a planned economy and distribution according to work. However, neither the Soviet Union nor China were developed capitalist countries, and so the first step in these countries was to determine how to quickly accumulate capital to lay the foundation for public ownership. By the beginning of the twentieth century, the centre-periphery structure of world capitalism had taken shape, which meant that socialist countries would not be able to rely on the world market to quickly accumulate capital. As a result, socialist countries often had to experiment with and, at times, rapidly overhaul their economic policies; a dynamic that was on display in the Soviet Union. During the civil war, Lenin’s ‘war communism’ – characterised by near total nationalisation of the economy and compulsory requisitioning of food products from the peasantry – was implemented from 1918 to 1921 in response to the state of emergency and the need to maintain political power. After the civil war ended, faced with the urgent need to increase productivity, Lenin had to make a number of radical changes (and, to some extent, compromises), implementing the New Economic Policy (1921–1928) and permitting the development of capitalism and a market economy, under state control. Meanwhile, Stalin took another, more costly approach, replacing the market with an organised bureaucratic system to undertake the heavy responsibility of planning and distribution.

In China, the initial stage of industrialisation was based, to a large degree, on the deprivation of the rural areas; one of the functions of the rural commune movement was to direct agricultural surplus towards industrialisation. Compared with the Soviet Union, however, China did not completely transfer the cost of industrial capital accumulation onto the rural areas. Mao, along with other leaders, called for the whole country to ‘tighten their belts’, that is, for the whole population to share in the cost of capital accumulation. Objectively speaking, in both the Soviet Union and China, the planned economy played a positive role precisely in the initial stage of industrialisation. During this stage, the economic and social structures were relatively simple, and thus it was possible for the state to formulate planned arrangements for production, exchange, distribution, and consumption. However, once industrialisation began to move beyond the initial stage, the industrial division of labour became increasingly complex and the production chain extended, leading to a rapid decline in the efficiency of planning, a ‘clogging of the pipes’ throughout the economic system, and an information crisis where there was insufficient feedback to make appropriate policy adjustments.

Although Mao had hoped that the prioritisation of people’s participation in the management of production would further the realisation of Marx’s conception of workers’ control of the means of production, these efforts met profound difficulties in reality. As industrialisation proceeds, the division of labour intensifies, not only in terms of industrial labour, but also the positions and functions of managers and scientific researchers. In addition, as industrialisation creates increasingly complex production, consumption, and distribution processes, the amount of information generated rapidly increases in comparison to agricultural society, requiring an organised bureaucratic system for information management. This bureaucratic system, as articulated by Max Weber and others, is necessary not only within production units but for the society as a whole. In this sense, in times of peaceful development, one of the collateral consequences of industrialisation is that a vanguard political party can rapidly divide into increasingly sophisticated bureaucratic components and into different political groupings. Mao hoped that this problem could be addressed by replacing the bureaucratic system with the people’s self-organisation. His confidence may have come from the CPC’s experience of the people’s war; through the practice of the mass line, the party was able to realise powerful social mobilisations and dynamic political processes that integrated the vanguard party with the people. Mao wanted to revive the organisational model of the people’s war during industrialisation to drive national development forward; however, this organisational model had been successfully implemented during a specific historical context, in which there was a strong popular sense of urgency due to the Chinese civil war (1927–1937; 1945–1949) and the War of Resistance Against Japanese Aggression (1937–1945). Following the victory of the revolution and the initiation of national construction, this sense of urgency gradually faded away. Furthermore, the conditions during the era of Socialism 1.0 were not conducive to help the people deal with the complexities of the country’s development, while the party’s and government’s bureaucratic systems distorted and disintegrated the self-organisation of the masses, whether deliberately or inadvertently. Therefore, Mao’s aims were in practice very difficult to realise.

Another problem that could not be solved at the time was to adjust the system of high accumulation during the early days of the PRC. After completing the initial stage of industrial accumulation, the next challenge facing a socialist state is to promote a stable cycle for expanded reproduction. This involves two tasks; first, it is necessary to adjust the proportion of accumulation and consumption reasonably, conduct fiscal and financial policy reforms, and generate sustainable power for economic growth. However, during Socialism 1.0, China’s fiscal and financial policies were relatively conservative, leading to insufficient money supply, which suppressed the expansion of consumption and thus resulted in a lack of motivation for industrial upgrading. Second, it is necessary to solve the problem of integrating the national economy into the international economic system. The modern system of mass industrial production depends upon inputs of resources and products that span borders and regions. It is difficult to sustain economic growth when relying solely on domestic investment and consumption; an effective economic cycle must be established through international trade to maintain vitality. As early as the 1930s, the Soviet Union attempted to attract capital and technology from the United States, which was in the midst of an economic crisis at the time and had an objective demand for capital output and industrial output. These conditions were favourable to promoting cooperation and the high-speed development of the Soviet economy. Subsequently, the Soviet Union committed to building the socialist camp, not only for political and security reasons but also to establish an economic cycle between the socialist countries. After the revolution in 1949, China joined the socialist camp and received a significant amount of Soviet capital and technical support, especially after the Korean War (1950–1953) (known in China as the War to Resist US Aggression and Aid Korea [抗美援朝战争, Kànɡměi yuáncháo zhànzhēnɡ]). This support enabled China’s basic industrialisation to proceed smoothly, however, the Soviet-led economic system also produced its own imbalances between countries. Eventually, Mao and the party’s leadership chose to break away from the Soviet system, as it broke away from the capitalist world economic system in 1949, which resulted in China’s economy being relatively closed for a long time.

In general, the vision of Socialism 1.0 can be summarised as follows: under public ownership, workers collectively managed the means of production, producing for their own material and spiritual well-being rather than for profit. In fact, the planned economy and system of public ownership created a system of accumulation in which the costs were shared by the people as a whole and completed basic industrialisation in a relatively short period of time. However, this economic structure also had some inherent limitations, related to the sustainability of internal development and difficulties in connecting with the external economic cycle. In the end, the mode of production and organisational capacity of China during Socialism 1.0 were not sufficient to truly realise the socialist ideals of equality and cooperation. This was the challenge facing Deng Xiaoping (邓小平) and other leaders, who would lead China into its next phase of socialism.

Socialism 2.0

1. The political economy of Socialism 2.0. Having experienced and participated in the construction of Socialism 1.0, Deng Xiaoping had a clear understanding of its problems. In contrast to Mao’s emphasis on the idealistic goals of ‘fighting selfishness and criticising revisionism’ (斗私批修, dòusī pīxiū), ‘being just and selfless’ (大公无私, dàgōng wúsī) and ‘serving the people’ (为人民服务, wèi rénmín fúwù), Deng Xiaoping was more inclined to a realistic stance, due to his lengthy involvement in frontline economic work. This orientation was on display during a 1979 meeting with foreign guests, when Deng stated that it was wrong to think that a market economy could only exist under capitalism, contending that socialism could also adopt a market economy and learn things from capitalist countries, such as business management methods.^[14] Deng’s strategy was to gradually transform the planned economy into a tool for macroeconomic regulation, to install the mechanism of a market economy, and to try to make the market economy compatible with public ownership and distribution according to work. This approach differed significantly from Socialism 1.0, in which the planned economy was an institutional foundation that was interrelated with public ownership and distribution according to work. In 1984, the Decision of the Central Committee of the Communist Party of China on Reform of the Economic Structure was passed at the Third Plenary Session of the Twelfth CPC Central Committee, the first breakthrough in the impasse between the planned economy and the commodity economy.^[15] Deng spoke highly of this decision, saying that it was a political economic framework that combined the basic principles of Marxism with China’s socialist practice.

Changes to the country’s basic economic system inevitably raised questions regarding the meaning and interpretation of socialism, namely what were its key elements and features? Although it was necessary on a theoretical level to clarify how these reforms were consistent with socialism, Deng proposed that the party should set aside theoretical debates, and instead focus on setting specific goals and mapping out the trajectory for the country’s new developmental direction. Therefore, in promoting economic reform, Deng made adjustments to the theory of historical stages of development that was adopted during the period of Socialism 1.0. In 1987, the thirteenth CPC National Congress proposed the idea that China, due to its historical underdevelopment, was in the ‘primary stage of socialism’ (社会主义初级阶段, shèhuì zhǔyì chūjí jiēduàn) in which the principle task was to develop the productive forces and set out a three-step economic development strategy to achieve a relatively good standard of life for the people and realise socialist modernisation by the centenary of the revolution.^[16] Subsequently, in 1992, the fourteenth CPC National Congress declared that China’s reform aimed to establish a socialist market economic system, which was indeed a change from the classical conception of socialism, by no longer insisting that a fully planned economy was necessary to ensure public ownership and distribution according to work. Corresponding adjustments were made to the theory of historical stages of development, gradually clarifying that it was necessary to build a socialist market economy during the primary stage of socialism. Together, these theoretical developments formed the basis of socialism with Chinese characteristics.

2. The challenges of Socialism 2.0. During the reform and opening up period, China’s industry has grown rapidly, due to the activation of domestic demand and access to foreign investment by joining the global market. With the support of domestic and international economic circulation, industrialisation has embarked on a sustained process of sovereign development and high-speed growth, moving past the phase of industrial accumulation and entering the stage of industrial upgrading.

According to Deng, in the socialist market economy, the market was only a means to realise the socialist vision of building a ‘moderately prosperous society’ (小康社会, xiǎokāng shèhuì) and attaining the ‘common prosperity’ (共同富裕, gòngtóng fùyù). However, with the rapid development of the market economy, this vision faced increasing problems.

First, Deng’s theoretical framework lacked the support of a compelling historical narrative, namely, it did not identify a clear path by which China’s socialist development would proceed, creating a weakness in the party’s new ideological paradigm. The socialist theory of Deng’s era added a new segment to the historical narrative outlined by Mao in On New Democracy, inserting the primary stage of socialism into the proposed transition of socialism to communism. However, this formulation of the primary stage of socialism failed to answer two critical questions: is there an advanced stage of socialism that follows the primary stage? And how will this path ultimately lead to communism? At that time, the party neither had the ability nor the resources to answer these questions and could only postpone the issue by not arguing over it.

Second, Socialism 2.0 also faced severe difficulties in terms of the basic economic system. The central concern with the theory of the socialist market economy was whether the market economy and socialism could be compatible with each other. Socialism, as a form of ownership, is characterised by collective and public ownership, whereas the market, theoretically, allocates resources, with the types of products and scales of production for different enterprises being based on the price signals determined by the forces of supply and demand. Therefore, in theory, various forms of ownership should be compatible with the market. Proponents of the socialist market economy contended that socialism could develop a market economy in place of the planned economy, while retaining the two basic elements of socialism: public ownership and distribution according to work. However, in practice, the market economy began to dissolve these two socialist principles. During the late 1980s, China’s commercial sector gradually privatised and, after 1992, a large amount of foreign investment poured into the country, and private ownership of production began to expand. In 1997, the CPC adopted the policy of ‘grasping the large and letting the small go’ (抓大放小, zhuādà fàngxiǎo), focusing on maintaining state control over the largest and most strategically important state-owned enterprises (SOEs), such as energy and banking, while relaxing control over smaller, non-strategic SOEs, such as light industry; reforms under this policy resulted in the basic privatisation of county-level state-owned enterprises (SOEs), a large loss of state-owned assets, the exposure of the working class to market forces, and the detachment of the party from its class base. At the same time, there was a shift from the principle of distribution according to work to distribution according to other factors, such as capital, land, and technology, that, due to their scarcity, often occupied a more advantageous position in market transactions than labour. The extreme prioritisation of economic efficiency magnified and abused the advantages of these other factors over labour. This would inevitably compress the proportion of surplus distributed among labour, leading to an increasing separation between workers and the means of production as well as a continuous deterioration of living conditions for workers (the latter trend being exacerbated by inadequate public services). If the cost of the first thirty years of industrialisation was evenly distributed among the whole population through the powerful will of the state, then the cost of the market-oriented reform of the following thirty years was borne more by ordinary people.

Socialism 3.0: Towards the Future

For China, both the practice of Socialism 1.0 in the first three decades following the revolution and that of Socialism 2.0 in the subsequent three decades demonstrate how socialist ideals and beliefs have been integrated with the country’s realities. This integration makes it irrational for China to pursue any radical departure from its socialist path. However, the challenge that China faces lies in the fact that there is no external model to draw upon to adjust Socialism 2.0. As the international political-economic landscape has evolved and the forms of production have undergone transformations, both the Western European path of social democracy and the US path of completely disavowing socialism have descended into crises due to their inherent contradictions. Therefore, the reform of China’s socialist path needs to be based on its own practice.

Focusing on China’s own practice does not mean separating the country from the external world. On the contrary, the fundamental reality of contemporary China is its profound integration with the external world. As such, discussions of socialism in China must take into account the background of global political and economic changes. Just as Marx made great efforts to analyse and understand the internal logic and operation of modern industrial capitalism in the mid-to-late nineteenth century, today it is necessary to deeply analyse and understand the internal logic and operation of the contemporary form of production and its transformation. Rational action can only be taken in accordance with the direction of this transformation, and at critical moments and junctures, relatively reasonable choices should be made based on the given historical conditions. For China, socialism cannot simply be limited to the governing manifesto of the ruling party, it should also be a concept and practical resource to rethink public participation and reshape a political community. Amidst the new world landscape and the rise of new forms of production, the new direction of socialism should be seriously considered.

The core tenets of Socialism 1.0 – the planned economy, public ownership, and distribution according to work – were built through reflection on and improvement of the mass production model. The basis of mass production is collective labour: workers gather in a common workplace and work with each other to operate the means of production to assemble and manufacture goods. The principles of Socialism 1.0 aimed to enable workers to control the means of production on the basis of collective labour in order to cast off the exploitation of the bourgeoisie, and improve the structure of work and the living conditions of the workers. Socialism 3.0 should explore new approaches to correct the abuses caused by capitalism’s dominant position in the global economy, with a focus on improving the living conditions of workers and increasing their control of the means of production, while acknowledging the necessity of a market economy. In China, it is necessary to limit the abuses of capital and to improve the status of labour in the production process, in line with the dynamics of industrialisation, and, ultimately, to build a more inclusive and fairer model of industrialisation. This goal obviously cannot be achieved by the spontaneous adjustment of the market and requires the state to ensure and maintain its leadership in the economic domain.

Since the beginning of the revolution, the Chinese state has exhibited a certain uniqueness, possessing multiple executive forces that penetrate the country’s economy, politics, and society. Even after the administrative reforms during Socialism 2.0, the state has continued to possess a certain economic initiative, not only in terms of its public policies but, importantly, the SOEs and the state-owned land system.

While undertaking such a daunting task, the country must also be vigilant of the further bureaucratisation that may arise from efforts to regulate production. To continue to lead the Chinese people, the CPC must effectively use its power and resources to restructure the relations of production and advance the interests of the working class, thereby winning the support of the people. In the era of Socialism 1.0, the CPC distributed the critical means of production – land – to the peasantry and generated the working class through industrialisation. As a result, the overall interests of the CPC and the people were aligned, and the party’s social foundation was solid. However, in the era of Socialism 2.0, the CPC introduced and developed the market economy and made efficiency the core principle to guide resource allocation, encouraging individuals to become rich. This approach catered to the ‘ever-growing material and cultural needs of the people’ (人民群众日益增长的物质文化需求, rénmín qúnzhòng rìyì zēngzhǎng de wùzhì wénhuà xūqiú) but also laid the groundwork for a serious crisis. Today, if the CPC seeks to rebuild its social foundation, it cannot merely make adjustments to its social welfare policies, it must also regenerate its class foundation by broadly improving the living conditions of the working class, achieving a more balanced distribution of income across the country, and raising the position of labour in the industrial system as well as limiting the abuses of capital.

In addition to the economic and social fields, it must also be recognised that the values and ideals inherent in socialism are an important resource for China as a political and cultural community. The reason why socialist ideas were rapidly accepted and spread in modern China is not only because they are closely related to the traditional Chinese ideal of ‘Great Unity’ (even today, many Chinese people derive their understanding of socialism from this cultural concept), but also due to the successful adaptation of the socialist narrative of historical stages of development to the Chinese context by Mao and others. It is precisely in this narrative that people’s acceptance of socialism achieved the unity of cognition and belief.

In a socialist country, the historical materialist narrative of development is both informative and enlightening. It can be said that this historical narrative plays a role in maintaining public faith in the political system and the trajectory of national development in non-religious countries like China, just as the Christian tradition plays a strong political role in the liberal democracies of the United States, Europe, and other Western countries. For a large country such as China, it is necessary to develop a common set of values and ideals that are reflected in real political and economic processes, rather than mere ideological propaganda. Under ever-changing historical conditions, China must mobilise its own cultural traditions and ideals to reshape and revitalise its common values to ensure the survival of the country and guide it in the correct direction.

Bibliography

Author’s Notes

The ‘special military operation’ launched by Russia against Ukraine, along with the attendant stalemate that has set in between the West and Russia, are landmark events that signal the approaching end of the globalisation wave that began in the 1980s. The absurd efforts of the United States to bully its allies into enacting murderous sanctions against Russia and to browbeat other countries into taking sides in this conflict, have brought the world to a state reminiscent of the deadly global struggles of the twentieth century ago. These developments pose a major challenge to China; the end of this wave of globalisation means that the country will no longer have the same external environment for development that it has enjoyed for the past forty years, and that the US will likely intensify its push to re-establish its domination over the international system and to decouple from China and Russia. The world has undergone a paradigm shift.^[1] In the face of a potential forced and complete decoupling from the United States and Western countries, China must take initiative and adjust its foreign strategic orientation, reprioritising the countries that it engages with in order to develop a new international order that would safeguard against the repercussions of this decoupling.

The Unspoken Rule of the International Order: The Centre-Periphery Power Structure

During the three decades since the collapse of the Soviet Union, relations between Russia and the West have vacillated. Initially, Russia pursued friendly ties with the US and Western countries, then it gradually grew apart from them, and now it has entered into a fierce confrontation. The evolution of this relationship reflects the political limits of globalisation. Unlike the romantic notions of globalisation that were ascendant following the end of the Cold War, in reality, this era saw the establishment of US hegemony and the dismemberment of the Soviet Union and the socialist camp. This process of globalisation and the US pursuit of global supremacy are two sides of the coin; they condition and promote each other. The inability of this system to promote international equality, with developed and developing countries locked into a relationship of dominator and follower states, means that it cannot continue endlessly. On the one hand, globalisation is abandoned, reversed, or redesigned when it backfires on its initiators, threatening their superiority; on the other hand, countries will continue to resist when powerful states relentlessly pursue domination.^[2] Russia’s special military operation against Ukraine was the result of the domineering nature of this round of globalisation, and has brought the US-dominated system to a standstill.

The decades-long eastward expansion of the North Atlantic Treaty Organisation (NATO) was the main reason for Russia’s preemptive strike. This military buildup was not only a security issue but also an economic issue, as part of US efforts to marginalise Russia. Russia’s efforts to leverage globalisation to achieve national development and become a central country in the world order, ran counter to the logic of US-led globalisation. Global capital, financial capital in particular, has mainly concentrated on Russia’s energy, grains, and minerals, sectors which it can exploit for extravagant profits. However, during the tenure of Russia’s President Vladimir Putin, the state has strengthened its grip on key sectors concerning national security and people’s livelihoods, and has sought to build a Eurasian economic union to create space for its own economic growth; all of this has upset foreign capital. NATO’s eastward expansion is a manifestation of capital’s control over politics to achieve market expansion. If Russia cannot respond effectively to the efforts to squeeze its development space and exacerbate its marginalisation, it will become even more deeply confined to being a producer of primary goods and lose access to great power politics, increasing the likelihood of a domestic political crisis, which Russian elites wish to avoid.

The power structure of the contemporary world order has been laid bare by NATO’s eastern expansion and the comprehensive sanctions regime imposed by Western countries on Russia. In the aftermath of the Second World War, the European colonial system began to fade out and, during the last half of the twentieth century, the world order became centred on the United Nations and international law, namely the principle of the sovereign equality of states. However, the hierarchical centre-periphery order of the European colonial system has not actually disappeared, but instead continues to exist in an implicit and hidden manner. The absolute power hierarchies which were enforced by colonial diktat have been replaced by an international order based on ‘common but differentiated’ responsibilities, in which states are sovereign equals on the surface but unequal in their actual operation of power.^[3] Although the United States and its allies refer to this international system as a ‘rules-based’ order where every nation is bound to observe the same rules, in fact, it revolves around the West rather than the UN and international law.

Post-war US hegemony is the modern incarnation of the global centre-periphery order. The international Group of Seven (G7), established in the 1970s, holds annual meetings at which Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States discuss not only the affairs of these seven countries, but also global issues for which they negotiate and determine international rules. The so-called rules-based order is indeed an order based on the rules made by Western countries and their allies. What matters here is who makes the rules. In this global system, the division of labour, money supply, industrial production, and rulemaking are the exclusive purview of a select few countries. The advantageous position of these countries would be broken up if other countries attempted to join their club, disrupting the rulemaking authority, monetary dominance, and technological superiority maintained through the intellectual property rights regime. China’s unexpected economic rise in recent decades has broken precisely this post-war centre-periphery world order, threatening the structural privileges of the Western countries, which had never imagined that China could enter the centre of the global stage (even if China is only approaching this position and has not yet arrived). As a result, the United States has labelled China as its ‘strategic competitor’ in recent years and demonstrated its willingness to use any means to halt China’s development.

Both NATO’s eastward expansion and Washington’s attempt to contain China suggest that the US and Western countries only seek to maintain and reinforce their own positions of power in the world order. The Russia-Ukraine conflict and the comprehensive Western sanctions against Russia have further underscored the truth about the global system: the majority of the world find themselves in the ‘countryside’ of the global periphery whereas only a select few countries sit in the ‘cities’ of the global centre, at the core of which is the United States. These countries do not wish to see the ‘countryside’ turn into ‘cities’, as they are. China and Russia hinder the global ‘city centre’ in two key aspects: on the one hand, due to their strong capacity to control capital, the two countries are the largest remaining territories in the world that have not been subject to the arbitrary domination of capitalist globalisation; on the other hand, their national strength is much greater than most countries and impedes efforts of the ‘city centre’ to further control the ‘countryside’ of the global periphery. During this wave of globalisation, China has departed from the ‘countryside’ for the ‘city’ with its strong economic growth and overall growth in national strength. The countries at the centre, despite their earlier enthusiastic praise for globalisation, are now leading ‘deglobalisation’ efforts, exposing the limits of the universality of the post-war international order. China and the other nations of the ‘countryside’ joining the ‘cities’ is simply intolerable to the central countries.

The Base of Support for Multilateralism Is in the Global South

Since the 1980s, China has pursued reform and opening up and promoted international cooperation, including, over the last decade, advancing a proposal for the building of ‘a community with a shared future for humanity’ (人类命运共同体, rénlèi mìngyùn gòngtóngtǐ). These efforts can be traced back to the ancient Chinese idea of ‘the great unity under heaven’ (天下大同, tiānxià dàtóng); however, this ‘great unity’ cannot be achieved by China’s desire alone. In the current context of all-out hostility from the US-led West towards Russia and China, the world can no longer be viewed in a mechanical manner and simply assumed to be united around peace and development. Instead, it is necessary to seriously consider the threats of competition, conflict, and war; even if war is excluded from the likely outcomes, it is clear that it is no longer possible for China to continue to pursue its path of development in the Western-dominated system of globalisation. As such, China must reassess its answer to the primary question in foreign relations: which countries are potential partners for China, now and in the future, and which countries will China find it difficult to establish or maintain partnerships with?

As a well-known Chinese idiom goes, similar things group together and similar people fit together (or, birds of a feather flock together). The same applies to nations; those nations which share similar experiences, contexts, and challenges are more likely to form an enduring cooperative relationship. Since the nineteenth century, the world has undergone a global transformation driven by three key components, industrialisation, rational state-building, and ideologies of progress, shifting from a polycentric world with no dominant centre to a highly interlinked and hierarchical core-periphery order in which the centre of gravity resided in the West.^[4] Between the mid-to-late nineteenth century and the early twentieth century, imperialism and globalisation were two sides of the same coin: imperialism has driven globalisation while globalisation reinforced imperialism. Together, these related processes have trapped the peripheral nations of the world in a prison of underdevelopment, from which it is extremely difficult to break free. The West, as the former centre of the international system and the birthplace of imperialism, produced both the modern colonial order as well as the system of US hegemony that has dominated the world since the mid-to-late twentieth century. Meanwhile, many revolutionary movements, namely the anti-colonial struggles of the past century, have fought to overcome the inequality and injustice of this global centre-periphery power structure.

In this unequal world order, the central countries do not fairly welcome peripheral countries to the centre and oppose revolutions in the periphery. Consequently, to liberate themselves from subordination and exploitation, peripheral countries have to work together and, occasionally, exploit the rifts between those states at the centre, tactically cooperating with central states when it can advance the struggle. Over the past century, during the Chinese Revolution and the consolidation of state power, the main external forces that China depended on for support came from the global periphery. In the first half of the twentieth century, the Communist Party of China (CPC) was a member of the Communist International, an alliance of state and nonstate actors among the colonised and oppressed peoples of the world. During the War of Resistance Against Japanese Aggression (1931–45), China joined the World Anti-Fascist War, upheld the anti-imperialist banner, and furthered the struggle to dismantle the unequal global structures created by imperialist states. After the People’s Republic of China (PRC) was founded in 1949, China placed a great deal of emphasis on cooperation with the countries of the Third World and supported the anti-colonial movements and post-independence development across Asia, Africa, and Latin America. Of particular importance was China’s active participation in the Bandung Conference of 1955 – an important step in the eventual creation of the Non-Aligned Movement in 1961 – where its proposal of the Five Principles of Peaceful Coexistence (和平共处五项原则, hépíng gòngchǔ wǔ xiàng yuánzé) for international relations was well received; the conference became a milestone in China’s relations with the Global South, where cooperation and solidarity gained positive momentum.^[5] It was with the support of peripheral countries that the PRC regained its rightful seat in the United Nations in 1971 and became a permanent member of the Security Council.

The mutual solidarity and support between China and the countries of Asia Africa, and Latin America has remained a key feature of China’s approach to international relations, which emphasises multilateral cooperation with developing countries of the Global South to defend national sovereignty and development in a joint struggle against the unequal and unjust international order structured by the central countries. Despite focusing on relations with peripheral countries, under the framework of ‘omnidirectional diplomacy’ (全方位外交, quán fāngwèi wàijiāo), China remains open to engaging and developing friendly cooperation with Western developed countries and other major powers. However, it should be noted that, in the past, the interaction and cooperation between China and the countries at the centre always bore two preconditions: on the one hand, China insisted on developing foreign relations premised on independence, equality, and mutual benefit, and opposed the existing power hierarchies in international relations; on the other hand, the central countries placed a ceiling on their collaboration with China, namely, the position of Western countries at the centre of the global power structure could not be altered. Whenever either of these two preconditions were not met, China, as a member of the developing world, faced serious challenges in deepening its cooperation with the Western countries, especially on political matters.

Adjusting the Geographic Priorities of China’s Foreign Relations

Over the last forty years, setting aside ideological differences and institutional disparities between countries, China has sought to work with all the other nations. Gradually, China’s international relations came to be guided by the following logic: the major powers are the key; surrounding areas are the first priority; developing countries are the foundations; and multilateral forums are the important stage. However, as the current era of globalisation comes to an end, this approach has increasingly encountered obstacles. The US-initiated process of decoupling from China in terms of economic, technological, knowledge, and people-to-people exchanges – a process that Washington has coerced other Western countries into joining – is unlikely to be reversed and instead, due to the Russia-Ukraine war, it could intensify even further.

Since its founding in 1949, the PRC has undergone several significant shifts in its foreign policy direction, all of which occurred in response to specific historical situations; from the advocacy of the Five Principles of Peaceful Coexistence in the early years of the PRC, to the Three Worlds Theory proposed amid the normalisation of the China-US relations in the 1970s, to the emphasis on developing partnerships with Western countries as part of the transition to reform and opening up after 1978. The contemporary situation is defined by, what China’s President Xi Jinping has called, ‘major changes unseen in a century’ (百年未有之大变局, bǎinián wèi yǒu zhī dà biànjú) and the increasing tendency of Western states to suppress challenges to their authority. Especially in the period since war broke out between Russia and Ukraine, Western states have revealed their willingness to gang up on, pressure, and contain developing countries, a feature of the current Western-dominated order that will undermine international relations for some time. China cannot help but be highly alarmed by the punitive measures that the West has imposed on Russia, as they could also be imposed on China in a similar manner in the future. For this reason, it is urgently necessary that China re-examines its multilateralist tradition and re-orients the geographic configuration of its foreign relations, strengthening its partnerships with developing countries of the Global South to foster a new international environment that is conducive to China’s national security and long-term development.

In 1974, Mao Zedong set forth his Three Worlds Theory, which categorised the countries of the world into three major groupings, each necessitating a distinct approach to engagement from China. The third grouping, the developing countries of the Third World, were the main focus of China, which itself was also part of the Third World; the Chinese government and people firmly supported the just struggles of all the oppressed peoples and nations. Drawing on China’s previous practices and experiences in foreign relations, the theory outlined spatial priorities for China’s ties with other countries and provided an important ideological guide to the country’s approach to South-South cooperation. This theory remains highly relevant and should guide the present-day reconfiguration of the spatial priorities of China’s foreign relations. Contrary to the emphasis placed on working with Western countries since reform and opening up began four decades ago, China now needs to foreground the advancement of the South-South project.

Whether it concerns diplomatic affairs, long-term development, or national rejuvenation, for a considerable period of time, China’s foreign strategic arrangements will have to prioritise engaging with countries of the Global South. China should configure its foreign relations and promote the construction of a new global order under the ‘three-ring’ (三环, sān huán) framework. The first ring refers to China’s neighbouring regions of East Asia, Central Asia, and the Middle East, which present important resource, energy, and security considerations; the second ring refers to the developing countries of Asia, Africa, and Latin America, with which China engages in trade, investment, and infrastructure projects, and to which China mainly delivers its foreign aid; finally, the third ring refers to the United States, European countries, and other industrialised countries with which China exchanges industrial products, technologies, and knowledge.

Within the new ‘three ring’ framework, China’s first and foremost priority in helping to build a new international system should be the first ring, namely East Asia, Central Asia, and the Middle East. To further promote East Asian economic integration and linkages with Central Asia and the Middle East, it is necessary to strengthen engagement and cooperation between Asian countries.. In recent years, by promoting economic diplomacy, China has made considerable progress in advancing East Asian economic integration and economic cooperation with many Asian countries. The latest breakthrough in East Asian economic integration was realised on 1 January 2022, when, after years of negotiation, the Regional Comprehensive Economic Partnership (RCEP) finally entered into force. However, economic exchanges among East Asian countries have been increasingly affected by extra-regional forces and security issues in recent years, with disputes over maritime rights in the South China Sea and Washington’s ‘Indo-Pacific’ strategy fuelling uncertainty in the region. To prevent external forces from exploiting internal problems in Asia, China should move away from the ‘GDP supremacy’, or a narrow focus on economic matters, which it prioritised previously in its foreign relations, and pay greater attention to political and security agendas in the region, promoting more security cooperation among Asian countries.

South-South Cooperation is the Material Basis of the New ‘Three Rings’

The material basis for the new ‘three rings’ framework is South-South cooperation, a concept that emerged in the late twentieth century regarding mutual interests, support, and solidarity among Third World countries.^[6] In the twenty-first century, a new foundation for South-South cooperation is being laid, making the concept more achievable in reality. The main reason for this is that, in recent decades, a number of developing countries in Asia, Africa, and Latin America have been able to industrialise or quasi-industrialise by ‘climbing up the borrowed ladder’, seizing the opportunities afforded by the wave of globalisation. Among these countries, a new global system of material production and circulation has taken shape, and is on track to eclipse the original ‘ladder’ of globalisation built by Western countries. This new global system has manifested in two important respects.

First, the share of developing countries in the global economy has changed significantly. In 1980, developed countries accounted for 75.4 percent of global GDP while developing countries accounted for less than 25 percent; however, by 2021, the former group’s share of global GDP had fallen to 57.8 percent while the latter’s share rose to 42.2 percent.^[7] The combined GDP of the BRICS countries (Brazil, Russia, India, China, and South Africa) plus Turkey, South Korea, and Indonesia, in purchasing power parity (PPP) terms, jumped from 21 percent of the global economy in 1992 to 37.7 percent in 2021, while the combined share of G7 countries declined from 45.8 percent to 30.7 percent in the same period.^[8]

Second, trade and reciprocal investment between developing countries have also become pivotal. From 1997 to 2010, trade between China and African states increased 22.4 times and trade with Latin American states increased roughly 22 times; and from 2010 to 2021, China-Africa and China-Latin America trade increased another 2 times and 2.5 times respectively.^[9] From 2000 to 2018, trade between China and Arab states ballooned from $15.2 billion to $244.3 billion, a 16-fold increase in less than twenty years.^[10] Other emerging economies, such as Brazil and India, have sharply increased their trade with developing countries. From 2003 to 2010, Brazil’s trade with Arab states increased four-fold, while its trade with African states increased five-fold, reaching a total of $26 billion, a figure higher than Brazil’s trade with traditional trading partners such as Germany and Japan; and from 2010 to 2019, Brazil’s trade with Arab and African states increased by 98 percent and 68 percent, respectively.^[11] Similarly, since 2001, India’s trade with African states has grown at an average annual rate of 17.2 percent and, from 2011 to 2021, it increased 2.26 times.^[12] India’s trade with Latin American states as well as the Middle East and North Africa region, has experienced similar growth. Trade volumes between developing countries are growing at a faster rate than the global average, while trading with developed countries continues to decline.

Within the developing world, a particularly important network of economic cooperation has emerged in Asia, centring around China. This is demonstrated in the following four trends:

1. Asia is once again the world economy’s centre of gravity. In 1980, the developing countries of Asia accounted for only 13.7 percent of global GDP, however, their share would rise to 24.7 percent in 2010 and reach 35.8 percent in 2021.^[13] For East Asian countries (including China, Japan, South Korea, and ten Southeast Asian countries), in 1980 their share of global GDP was only about 16.2 percent, but by 2020 it had more than doubled, reaching 30 percent.^[14] Meanwhile, among the fifteen member countries of the RCEP, by 2020, their combined population reached 2.27 billion, cumulative GDP hit $26 trillion, and total imports and exports surpassed $10 trillion, accounting for about 30 percent of the global total.^[15] According to HSBC, the cumulative size of the RCEP economies is estimated to expand to 50 percent of the world economy by 2030.^[16]
2. Global trade and investment are also shifting to Asia, with its share in global trade having steadily increased from 15.7 percent in 1980, to 22.2 percent in 1990, to 27.3 percent in 1995, to 26.7 percent in 2000, to 25.6 percent in 2001, and further to 36 percent by 2020. Today, Asia is the world’s leading trading region.^[17]
3. The level of intra-regional trade dwarfs that of extra-regional trade in Asia. Between 2001 and 2020, Asia’s total internal trade jumped from $3.2 trillion to $12.7 trillion, with an average annual nominal growth rate of 7.5 percent; during the same period, Asia’s share of total world trade increased from 25.6 percent to 36.0 percent.^[18] In 2020, Asia’s intra-regional trade has accounted for nearly 58.5 percent of its entire foreign trade.^[19]
4. East and West Asia are growing closer economically; the main destinations of Middle Eastern energy have shifted from the United States and Europe to East and South Asia.

Today, developing countries have formed the preliminary structure for a new global economic system, but further synergy between them is needed to achieve a higher degree of economic connectivity as well as greater political influence in the international arena and freedom from Western control and coercion. This past decade, China has become the world’s largest real economy (concerning the production and exchange of goods and services) and the second largest economy overall, as well as the largest trading partner of most countries in the world. In 2021, the global share of China’s manufacturing sector was nearly 30 percent. As the country that produces the most material goods in the world, China is in a similar position as the United States was in the post-Second World War period (at its peak, in 1953, the US accounted for roughly 28 percent of global industrial output). What China can and should do is to take initiative in driving a global strategy to improve the system of global material exchange among developing countries, that is, to truly realise South-South cooperation.

However, deficiencies still remain. Current trade and investment between developing countries still rely heavily on Western-led financial and monetary networks. If developing countries are to further enhance their economic and political autonomy, and if emerging economies are to gain levels of political influence in the world system commensurate with their economic scales, they must overcome their financial and monetary dependence on the West. Therefore, to build a ‘new three ring’ international system, developing countries must consider not only traditional geopolitical factors, but also the global systems of finance and information. In recent years, China has explored this by developing currency swaps with several emerging market economies. A higher-level and broader mechanism for financial and monetary cooperation should be created among developing countries. To this end, it is important to take advantage of existing platforms and mechanisms that can enhance South-South cooperation, including: upgrading and transforming the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) established by the BRICS countries to advance an autonomous international payment system; strengthening security and financial cooperation within the framework of the Shanghai Cooperation Organisation (SCO), particularly between China, Russia, India, and Iran cooperation (it should be noted that Russia is also a developing country and that the Chinese and Russian economies are highly complementary); further promoting East Asian economic integration under the framework of the Belt and Road Initiative (BRI), with special efforts to consolidate the achievements of the RCEP; building a common energy market in Asia, so that buyers in East and South Asia and sellers in the Middle East, Central Asia, and Russia can share the same energy trading and payment network; making proper use of the BRICS Summit mechanism, thus deepening South-South cooperation; and promoting the diversification of the international monetary system and the internationalisation of the RMB in the context of South-South cooperation, as well as supporting the international status of the euro while hedging against the hegemony of the US dollar.

One hundred years ago, the CPC leaders proposed the revolutionary strategy of ‘encircling the cities from the rural areas’ (农村包围城市, nóngcūn bāoweí chéngshì). In the present era of ‘major changes unseen in a century’, China and developing countries need to dismantle the centre-periphery world order, overcome the hostility of Western countries, and improve solidarity and cooperation within the global ‘countryside’. The deepening of South-South cooperation will create favourable conditions and mobilise resources for the construction of a new ‘three ring’ global system, which can ease international tensions and allow developing countries, including China, to take their rightful places at the centre of the world economic and political order. After more than forty years of reform and opening up, China must adjust its understanding of ‘opening up’ and transform its thinking about foreign relations. Of course, China should still try to maintain its cooperation with the West as long as possible and as long as they do not make the choice to go completely against China.

Note: This article was edited by Guo Jinze

Bibliography

Author’s Notes

Humanity is in the midst of a global upheaval, on a scale unseen in 500 years: namely, the relative decline of Europe and the United States, the rise of China and the Global South, and the resulting revolutionary transformation of the international landscape. Although the era of Western global dominance is often said to have lasted five centuries, precisely speaking this is an overstatement. In reality, Europe and the United States have occupied their positions as world hegemons for closer to 200 years, after reaching their initial stages of industrialisation. The first industrial revolution was a turning point in world history, significantly impacting the relationship between the West and the rest of the world. Today, the era of Western hegemony has run its course and a new world order is emerging, with China playing a major role in this development. This article explores how we arrived at the current global conjuncture examining the different stages in the relationship between China and the West.

Stage I: A Shifting Balance Between China and the West

The first encounter between China and Europe dates back to the era of naval exploration of the fifteenth and sixteenth centuries, during which the Chinese navigator and diplomat Zheng He (1371–1433) embarked on his Voyages Down the Western Seas (郑和下西洋, Zhèng Hé xià xīyáng) (1405–1433), followed by the Portuguese and Spanish naval expeditions to Asia.^[1] From then on, China has established direct contact with Europe through ocean passages.

During this period China was ruled by the Ming dynasty (1388–1644), which adopted a worldview guided by the concept of tianxia (天下, tiānxià, ‘all under heaven’).^[2] This belief system generally categorised humanity into two major civilisations: the Chinese who worshipped heaven, or the sky, and the West which, broadly, worshipped gods in a monotheistic sense.^[3] It is important to note that, in this era, the Chinese had a broad conception of the West, considering it to encompass all the regions which expanded northwestward from Mesopotamia to the Mediterranean Sea and then to the Atlantic coast, rather than the contemporary notion which is generally limited to of the United States, Canada, Australia, New Zealand, and Europe. On the other hand, Chinese civilisation spread to the southeast, from the reaches of the Yellow River to the Yangtze River Basin onward to the coast. The two civilisations would meet at the confluence of the Indian and Pacific Oceans, from which point there has been a complete world history to speak of. At the same time, however, tianxia put forward a universalist conception of the world, in which China and the West were considered to share the same ‘world island’. Separated by the ‘Onion Mountains’ (the Pamir Mountains of Central Asia), each civilisation was thought to have its own history, though there was not yet a unified world history, and each maintained, based on their own knowledge, the tianxia order at their respective ends of the world island.

Although the Ming dynasty discontinued its sea voyages after Zheng He’s seventh mission in 1433, some islands in the South Seas (南洋, nányáng, roughly corresponding to contemporary Southeast Asia) became incorporated into the imperial Chinese tributary system (朝贡, cháogòng). This constituted a major change in the tianxia order, compared with the prior Han (202 BCE–CE 9, 25–220 CE) and Tang (618–907 CE) dynasties in which tribute was mainly received from states of the Western Regions (西域, xīyù, roughly corresponding to contemporary Central Asia). More importantly, this southeastward expansion opened a road into the seas for China, as Chinese people of the southeast coast migrated to the South Seas, and with them goods such as silk, porcelain, and tea entered the maritime trade system. Compared with the prosperous Tang and Song (960–1279) periods, overseas trade expanded, with the Jiangnan (江南, jiāngnán, ‘south of the Yangtze River’) economy, which was largely centred on exports, being particularly dynamic; consequently, industrialisation accelerated and China, for the first time, became the ‘factory of the world’.

European nations did not have the upper hand in their trade with China, however they offset their deficit with the silver that they mined in the newly conquered Americas. This silver flowed into China in large quantities and became a major trading currency, leading to the globalisation of silver. Meanwhile, the introduction of corn and sweet potato seeds, native to the Americas, to China contributed to the rapid growth of the nation’s population due to the suitability of these crops to harsh conditions.

However, China’s involvement in shaping a maritime-linked world order also brought about unexpected problems for the country; namely, an imbalance between its economy, which penetrated the maritime system, and its political and military institutions, which remained continental. This contradiction between the land and the sea produced significant tensions within China, eventually leading to the demise of the Ming dynasty. Border conflicts in the north and northeast required significant financial resources, however most of China’s wealth at that time came from maritime trade and was concentrated in the southeast. Consequently, education thrived in this coastal region, resulting in scholar-officials (士大夫, shìdàfū) from the southeast coming to dominate China’s political processes and prevent tax reforms to better distribute wealth – instead, the traditional tax system was strengthened, imposing larger burdens on the peasantry.^[4] These tensions would eventually come to a head; taxation weighed particularly heavily on northern peasants who mainly lived off farming, leading to their displacement and becoming migrants who eventually overthrew the Ming regime. At the same time, military resources in the north were insufficient, leading to the growing influence of Qing rebel forces in the northeast and their opportunistic advances to the south, culminating in the establishment of the Qing dynasty’s (1636–1912) rule over the entire country.

The Qing dynasty originated among the Manchu people of northeast China, who had agricultural and nomadic cultural roots. As Qing forces marched southwards and founded their empire, they made great efforts to establish control over the regions flanking China from the west and north, an arc extending from the Mongolian Plateau to the Tianshan Mountains and to the Qinghai-Tibet Plateau. For thousands of years, these northwest regions were a source of political instability, with successive dynasties trying and failing to unify the whole of China. By integrating these areas into the Chinese state, the Qing dynasty was thus able to achieve this historic political aim of unification. This domestic integration also had an impact on China’s international position, with Russia now becoming the country’s most important neighbour as the overland Silk Road was rerouted northwards, via the Mongolian steppe, through Russia to northern Europe.

By the mid-to-late eighteenth century, these two ‘arcs’ of development, on the land and sea respectively, held equal weight but differing significance for China: the land provided security, while the seas were the source of vitality. However, both the land and sea developments contained contradictory dynamics: the regions of the northwestern steppe were not very stable internally while relations with neighbouring Russia and the Islamic world remained stable, on the other hand, the southeastern seas were stable internally but introduced new challenges for China in the form of relations with Europe and the United States. These land-sea dynamics have historically presented China with unique trade-offs and, to this day, they remain a fundamental strategic issue.

In contrast, European countries benefited more from direct trade with China, and rose to a dominant position within the new global order. During the sixteenth century, under the increasingly decadent Roman Catholic Church, ethnic nationalism brewed up in Europe, culminating in Martin Luther’s Reformation in Germany. Subsequently, Europe entered an era of nation-state building known as the early modern period, characterised by the break-up of the authority of the Roman Catholic Church and the establishment of the sovereignty of secular monarchies, which overcame some of the hierarchies and divisions created by the feudal lords and made all subjects equal under the king’s law. The first country to achieve this was England, where Henry VIII banned the Church of England from paying annual tribute to the Papacy in 1533 and passed the Act of Supremacy the following year, establishing the king as the supreme head of the English Church which was made the state religion. This is why England is recognised as the first modern nation, while the constitutional changes were secondary.

The Roman Catholic Church, facing a ruling crisis, sought to open up new pastoral avenues, and began to preach outside of Europe through the voyages of ‘discovery’. Christianity gradually became a world religion, one of the most important developments in the last five centuries, with missionaries finally making their way to China, after many twists and turns, in the late sixteenth century.

The Christian missionaries had prepared to spread their message of truth to the Chinese, who they had expected to be ‘barbarians’. However, to their surprise, they discovered that China was a powerful civilisation with a sophisticated governance system and religious traditions. Although not believing in the personal gods of the missionaries, the Chinese people had a system of moral principles, a highly developed economy, and an established order. This inspired some missionaries to develop a serious appreciation for China, including translating Chinese classics and sending the texts back to Europe, where they would have a notable impact on the Enlightenment in Paris.^[5]

During the Enlightenment, Western philosophers developed ideas of humanism and rationalism, including notions that human beings are the subject and a ‘creator’ does not exist; humans should seek their own happiness instead of trying to ascend to the kingdom of God; humans can have sound moral beliefs and relations without relying on religion; the state can establish order without relying on religion; direct rule by the king over all subjects is the best political system, and so on. It is important to note, however, that these Enlightenment ideals, which are said to have formed the basis for Western modernity, had been common knowledge in China for thousands of years. As such, the flow of Chinese ideas and teachings to the West through Christian missionaries can be considered an important, if not the only, influence in the development of Western modernisation. Of course, the Western countries have been the main drivers of global modernisation over the last two centuries, but the modernity that it advocates has long been embedded in other cultures, including China. It is necessary to recognise and affirm this fact to understand the evolution of the world today.

In short, during the first stage of world history, which spanned more than 300 years from the early-to-mid fifteenth century to the mid-to-late eighteenth century, an integrated world system began to form, with both China and the West adjusting, changing, and benefiting in their interactions. From the Chinese perspective, this world order was largely fair.

Stage II: Reversals of Fortunes Between China and the West

In the mid-to-late eighteenth century, Western countries utilised their higher levels of industrialisation to secure decisive military superiority, which they abused to conquer and colonise nearly the entire Global South. This brought the world closer together than ever before, but in a union that was unjust and, therefore, unsustainable.

Among the Western countries, England was the first to achieve an advanced stage of industrialisation, for which there was a special reason: colonisation. The British empire appropriated massive amounts of wealth from its colonies, which also served as captive markets for British manufactures. This wealth and market demand, along with England’s relatively small population, drove scientific and technological development, and ultimately industrialisation based on the mining of fossil fuels (namely, coal), and production of steel and machinery. During the eighteenth and nineteenth centuries, England would become the wealthiest and most powerful country in the world, with its wealth spreading to western Europe and its colonial settlements such as the United States and Australia. The thriving European powers violently conquered and colonised the outside world through military force including most of Africa, Asia, and the Americas, eventually reaching China’s doorstep in the early-to-mid nineteenth century. In the preceding centuries of peaceful trading with China, the Western powers accumulated a large trade deficit, which they now sought to balance through the opium trade. However, due to the severe social consequences of this drug trade, China outlawed the importation of opium in 1800; in response the Western powers launched two wars against China – the First Opium War (1839–1842) and the Second Opium War (1856–1860) – to violently open the country’s markets up. After China was defeated, various Western countries, including England, France, Germany, and the United States, forced China to sign unequal treaties granting these nations trade concessions and territories, including Hong Kong. As a result, the tianxia order began to crumble and China entered a period referred to as the ‘century of humiliation’ (百年国耻, bǎinián guóchǐ).

China’s setback was rooted in the long-standing imbalance between its marine-oriented economy and continental military-political system. First, China’s market relied heavily on foreign trade, but the Qing government failed to develop a sovereign monetary policy, resulting in the trade flow being constantly controlled by foreign powers. Silver from abroad became China’s de facto currency and, with the government unable to exercise effective supervision, the country lost monetary sovereignty and was vulnerable to the fluctuations of silver supplies, destabilising the economy. Second, China’s natural resources were over-exploited to produce large amounts of exports; as a result, the country’s ecological environment was severely damaged. Constrained by both market and resource limitations, China’s endogenous growth hit a chokepoint, as productivity plateaued, employment declined, and surplus populations became displaced, leading to a series of major rebellions in the early-to-mid nineteenth century. It was in this context that the West showed up at China’s doorstep.

Under the pressure of both domestic problems and external aggression, China embarked on the path of ‘learning from the outside world to defend against foreign intervention’ (师夷长技以制夷, shī yí zhǎng jì yǐ zhì yí), which has been fundamental theme of Chinese history over the past century or so. This formulation, despite having been ridiculed by many since the 1980s following the initiation of China’s economic reforms, epitomises the country’s strategy. On the one hand, China has closely studied the key drivers of Western power, namely industrial production, technological development, economic organisation, and military capability, as well as methods for social mobilisation based on the nation-state. On the other hand, China has sought to learn from other countries for the purpose of advancing its development, securing its independence, and building upon its own heritage.

Until the mid-twentieth century, however, this path did not yield significant changes for China, fundamentally due to its inadequate state capacity, which deteriorated even further after the Qing dynasty fell in 1911. In fact, several initiatives undertaken in the late Qing period to strengthen the state, generated new problems in turn; for example, the ‘New Army’ (新军, xīnjūn) which was established in the late-nineteenth century in an effort to modernise China’s military would turn into a secessionist force. Meanwhile, theories of development advocated by scholar-officials in this period, such as the concept of ‘national salvation through industry’ (实业救国, shíyè jiùguó), were impossible to implement due to the state’s inability to provide institutional support. As such, trade remained China’s fastest growing economic sector, which, despite bringing short-term economic benefits, resulted in China becoming further subordinated to the West.

However, by the time of the Second World War, which was preceded by China’s War of Resistance Against Japanese Aggression (1937–1945), the country’s international position began to improve, while the West experienced a relative decline. The Second World War and anti-colonial struggles for national liberation dealt a crushing blow to the old imperialist order, as the Western powers were forced to retreat, initiating a decline as they were no longer able to reap colonial dividends. Countries across Asia, Africa, and Latin America, including China, won their independence; meanwhile, the Soviet Union, stretching across Eurasia, emerged as a significant rival to the West. Amid these global convulsions, China’s weight on the international stage dramatically increased and it became an important force.

In this global context, China began its journey toward national rejuvenation, with two main priorities. The first priority was political; emulating the Soviet Union, China’s Nationalist and the Communist parties established a strong state, which had been the cornerstone of Western economic development, while the lack of state organisation and mobilisation capacity was the greatest weakness of the Qing dynasty in the face of Western powers. The second priority was industrialisation, which advanced in a step by step manner in three phrases.

The first breakthrough in industrialisation took place after the Chinese Revolution in 1949 and was made possible by the help of the Soviet Union, which exported a complete basic industrial system to China. Although this system had serious limitations, which came to a head by the 1970s and 1980s, it allowed China to develop a comprehensive understanding of the systematic nature of industry, especially the underlying structure of industrialisation, that is, heavy industry.

The second breakthrough in industrialisation came after China established diplomatic relations with the United States in the 1970s and began to import technologies from the US and European countries. During this phase, China focused on the development of its southeast coast, a region which had a longstanding history of rural commerce and industry. With the support of machinery and knowledge gained during the first round of industrialisation, the consumer goods sector in the southeast coastal areas was able to develop rapidly at the township level, the level of government which had the most flexibility. By absorbing a large amount of workers, the labour-intensive industrial system significantly improved livelihood for the people.

The third breakthrough in industrialisation, beginning at the turn of the century, was driven by the traditional emphasis for a strong state and a desire to continue the revolution, saw the government devote its capacity to building infrastructure and steering industrial development. As a result, China experienced continuous growth in industrial output and kept moving upwards along the industrial chain, creating the largest and most comprehensive manufacturing sector in the world. The global economic landscape thus changed dramatically.

Today, China is in the midst of its fourth breakthrough in industrialisation, which revolves around the application of information technology to industry. In the current period, the United States is worried about being overtaken by China, which has prompted a fundamental change in bilateral relations and ushered in an era of global change.

In short, at the heart of the second stage of world history were the shifting dynamics between China and the West. For more than 100 years since the early nineteenth century, the Western powers were on the upswing while China experienced a downturn; since the Second World War, however, the trends have reversed, with China on the rise and the West declining. Now it appears that the critical point in this relationship is approaching, where the two sides will reach equivalent positions, exhausting the limits of the old world order.

Stage III: The Decline of the US-Led Order

In the wake of China’s rise, the old, Western-dominated world order has been overwhelmed, however, the real trigger for its collapse is the instability resulting from the fact that the United States has been unable to secure the unipolar global dominance which it pursued after the end of the Cold War.

Historically, the Roman empire could not reach India, let alone venture beyond the Onion Mountains; in the other direction, the Han and Tang dynasties could have hardly maintained their power even if they had managed to cross this range. The structural equilibrium for the world is for nations to stay in balance, rather than be ruled by a single centre.

Even the immense technological advances in transportation and warfare have been unable to change this iron law. Prior to the Second World War, the Western powers had penetrated nearly all corners of the world; despite their competing interests and the force needed to maintain their colonies, this system of rule was, in a way, more stable than the current order by distributing power more broadly across the several countries. Meanwhile, in the postwar period, the Soviet Union and the West formed opposing Cold War blocs, with each camp having its own scope of influence and balanced, to an extent, by the other.

In contrast, following the end of the Cold War, the United States became the sole superpower, dominating the entire world. The United States, as the most recently established Western country, the last ‘New World’ to be ‘discovered’ by the Europeans, and the most populous of these powers, was destined to be the final chapter in the West’s efforts to dominate the world. The United States confidently announced that their victory over the Soviet Union constituted ‘the end of history’. However, ambition cannot bypass the hard constraint of reality. Under the sole domination of the United States, the world order immediately became unstable and fragmented; the so-called Pax Americana was too short-lived to be written into the pages of history. After the brief ‘end of history’ euphoria under the Clinton and Bush administrations, the Obama era saw the United States initiate a ‘strategic contraction’, seeking to unload its burdens of global rule one after another.

In addition to external costs, Washington’s fleeting pursuit of global hegemony also induced internal strains. Although the United States reaped many dividends from its imperial rule by developing a financial system in which capital could be globally allocated, this came with a cost; as a Chinese saying goes, ‘a blessing might be a misfortune in disguise’ (福兮祸所依, fú xī huò suǒ yī). The boom of the US financial sector, along with the volatile speculation that feeds off it, has caused the country to become deindustrialised, with the livelihoods of the working and middle classes bearing the brunt. Due to the self-protective measures of emerging countries such as China, it was impossible for this financial system to fully extract sufficient external gains to cover the domestic losses suffered by the popular classes due to deindustrialisation. Consequently, the US has developed extreme levels of income inequality, and become sharply polarised, with increasing division and antagonism between different classes and social groups.

Deindustrialisation is at the root of the US crisis. Western superpowers were able to tyrannise the world during the nineteenth century, including their bullying of China, mainly due to their industrial superiority, which allowed them produce the most powerful ships and cannons; deindustrialisation causes the supply of those ‘ships and cannons’ to become inadequate. Even the US military-industrial system has become fragmentary and excessively costly due to the decline of supporting industries. The US elite realises the gravity of this problem, but successive administrations have struggled to address the issue; Obama called for reindustrialisation but made no progress due to the deep impasse between Republicans and Democrats, a dynamic that inhibits effective government action, which Francis Fukuyama termed the ‘vetocracy’; Trump followed this up with the timely slogan ‘Make America Great Again’, promising to make the US the world’s strongest industrial power once more; and this intention can also be seen in the incumbent Biden administration’s push for the enactment of the CHIPS and Science Act and other initiatives aimed at boosting domestic industrial development. However, as long as US finance capital can continue to take advantage of the global system to obtain high profits abroad, it cannot possibly return to domestic US industry and infrastructure. The United States would have to break the power of the financial magnates in order to revive its industry, but how could this even be possible?

In contrast to the deindustrialisation which has taken place in the United States, China is steadily advancing through its fourth breakthrough of industrialisation and rising towards the top of global manufacturing, relying on the solid foundation of a complete industrial chain. Fearing that they will be surpassed in terms of ‘hard power’, the US elite has declared China to be a ‘competitor’ and the nature of relations between the two countries has fundamentally changed.

The US elite have long referred to their country as the ‘City upon a Hill’, a Christian notion by which it is meant that the United States holds an exceptional status in the world and is a ‘beacon’ for other nations to follow. This deep-seated belief of superiority means that Washington cannot accept the ascendance of other nations or civilisations, such as China, which has been following its own path for thousands of years. China’s economic rise and, consequently, its growing influence in reshaping the US-led global order is nothing more than the world returning to a more balanced state; however, this is sacrilegious to Washington, comparable to the rejection of religious conversion for missionaries. It is clear that the US elite have exhausted their goodwill for China, are united in pursuing a hostile strategy against it, and will use all means to disrupt China’s development and influence on the world stage. Washington’s aggressive approach has, in turn, hardened the resolve of China to extricate itself from the confines of the US-led global system. Pax Americana will only allow China to develop in a manner which is subordinated to the rule of the United States, and so China has no choice but to take a new path and work to establish a new international order. This struggle between the United States and China is certain to dominate world headlines for the foreseeable future.

Nevertheless, there are several factors which decrease the likelihood that the struggle will develop in a catastrophic manner. First, the two countries are geographically separated by the Pacific ocean; and, second, although the United States is a maritime nation adept at offshore balancing, it is much less capable of launching land-based incursions, particularly against a country such as China which is a composite land-sea power with enormous strategic depth. As a result, US efforts to launch a full-scale war against China would be nonviable; even if Washington instigated a naval war in the Western Pacific, the odds would not be in its favour. On top of these two considerations, the United States is, in essence, a ‘commercial republic’ (the initial definition given for the country by one of its Founding Fathers, Alexander Hamilton), meaning that its actions are fundamentally based on cost-benefit calculations; China, on the contrary, is highly experienced in dealing with aggressive external forces.^[6] Altogether, these factors all but guarantee that a full-frontal war between the two countries can be entirely avoided.

In this regard, the shifting positions of China and the United States vary greatly from similar dynamics in the past, such as the evolving hegemony on the European continent in recent centuries. In the latter context, the narrow confines of Europe cannot allow for multiple major powers, whereas the vast Pacific Ocean certainly can. This situation constitutes the bottom line of the relationship between the two countries. Therefore, while China and the United States will compete on all fronts, as long as China continues to increase its economic and military strength and clearly demonstrates its willingness to use that power, the United States will retreat in the same rational manner as its former suzerain, Britain, did. Once the United States withdraws from East Asia and the Western Pacific, a new world order will begin to take shape.

Over the past few years, China’s efforts in this respect have paid off, causing some within the United States to recognise China’s power and determination, and adjust their strategy accordingly, pressuring allied countries to bear greater costs to uphold the Western-led order. Despite the posturing of the Western countries, there is, in fact, no such ‘alliance of democracies’; the US has always based its alliance system on common interests, of which the most important is to work together, not to advance any high-minded ideal, but to bleed other countries dry. Once these countries can no longer secure external profits together, they will have to compete with each other and their alliance system will promptly break up. In such a situation, the Western countries would return to a state similar to the period before the Second World War; fighting each other for survival rather than to carve the world into colonies. This battle of nations, although not necessarily through hot war, could cause the Western countries to backslide to their early modern state.

The willingness of the United States to do anything in its pursuit of profit, has led to the rapid crumbling of its value system. Since former President Woodrow Wilson led the country to its position as the leader of the world system, values have been at the core of the US appeal. At that time, Wilson held sway with many Chinese intellectuals, though disillusion soon followed; meanwhile, today, the myth of the ‘American dream’ and universal values of the United States remains charismatic to a considerable proportion of Chinese elites, however, the experience of the Trump presidency has torn the mask off these purported values. The United States has openly returned to the vulgarity and brutality of colonial conquest and westward expansion.

In addition, the current generation of Western elites suffers from a deficit in its capacity for strategic thinking. Many of the leading strategists and tacticians of the Cold War have now died, and amid hubris and dominance of the two decade ‘end of history’ era, the United States and European countries did not really produce a new generation of sharp intellectual figures. Consequently, in the face of their current dilemmas, the best that this generation of elites can offer is nothing more than repurposing old solutions and returning to the vulgarity of the colonial period.

This kind of vulgarity may be shocking to some, however it has deep roots in US history: from the Puritan colonists genocide against indigenous peoples in order to build their so-called ‘City upon a Hill’; to many of its founding fathers having been slave owners, who enshrined slavery in the Constitution; to the Federalist Papers which designed a complex system of separation of powers to guarantee freedom, but coldly discussed war and trade between countries; and to the country’s obsession with the right to bear arms, giving each person the right to kill in the name of freedom. Thus, we can see that Trump did not bring vulgarity to the United States, but only revealed the hidden tradition of the ‘commercial republic’ (it is worth noting that, in the Western tradition, merchants also tended to be plunderers and pirates).

Today, the United States has nearly completed this transformation of its identity: from a republic of values to a republic of commerce. This version of the country does not possess the united will to resume its position as leader of the world order, as evidenced by the strong and continued influence of the ‘America First’ rhetoric. The rising support among certain sections of the US population for such political vulgarity will encourage more politicians to follow this example.

The world order continues to be led by a number of powerful states, but is in the midst of great instability as efforts to strengthen the European Union have failed, Russia is likely to continue to decline, China is growing, Japan and South Korea lack real autonomy, and the United States, due to financial pressures, is rapidly shedding its responsibilities to support the network of post-war global multilateral institutions and alliances and instead seeks to build bilateral systems to maximise its specific interests. Put simply, the world order is falling apart; presently, the relevant questions are related to how rapid this breakdown will be, what an alternative new order should look like, and whether this new order can emerge and take effect in time to avoid widespread serious global instability.

China’s Role in Reshaping the World Order

A new international order has begun to emerge amid the disintegration of the old system. The main generative force in this dynamic is China, which is already the second largest economy in the world and is a civilisation that is distinct from the West.

China is one of the largest countries in the world and its long history has endowed it with experiences that are relevant to matters of global governance. With its immense size and diversity, China contains a world order within itself and has historically played a leading role in establishing a tianxia system that stretched over land and sea, from Central Asia to the South Seas. Alongside its rich history, China has also transformed itself into a modern country over the past century, having learned from Western experiences and its own tradition of modernity. By sharing the wisdom of its ancient history and the lessons of its modern development, China can play a constructive role in global efforts to address imbalances in the world order and build a new system in three major ways.

1. The restoration of balanced global development. The classical order on the ‘world island’ (世界岛, shì jiè daǒ, roughly corresponding to Eurasia) leaned toward the continental nations, while the modern world order has been largely dominated by Western maritime powers. As a result, the world island became fractured, with the former centre of civilisation becoming a site of chaos and unending wars. Pax Americana was unable to establish a stable form of rule over the world island, as the United States was separated from this region by the sea and was unable to form constructive relations with non-Western countries. Therefore, the United States was only able to maintain a maritime order, rather than a world order. It relied on brutal military interventions into the centre of the world island, hastily retreating after wreaking havoc and leaving the region in a perpetual state of rupture.

Conversely, China’s approach to the construction of a new international order is that of ‘listening to both sides and choosing the middle course’ (执两用中, zhí liǎng yòng zhōng). Historically, China successfully balanced the land and sea; during the Han and Tang dynasties, for instance, China accumulated experience in interacting with land-based civilisations, meanwhile, since the Song and Ming dynasties, China has been deeply involved in the maritime trade system. It is based on this historical experience that China has proposed the Belt and Road Initiative (BRI), of which the most important aspect is the incorporation of the world island and the oceans, accommodating both the ancient and modern orders. The BRI offers a proposal to develop an integrated and balanced world system, with the ‘Belt’ aiming to restore order on the world island, while the ‘Road’ is oriented towards the order on the seas. Alongside this initiative, China has built corresponding institutions, such as the Shanghai Cooperation Organisation (SCO).

2. Moving beyond capitalism and promoting people-centred development. The system on which Western power and prosperity has been built is capitalism, rooted in European legacies of the merchant-marauder duality and colonial conquest, driven by the pursuit of monetary profits, managing capital with a monstrously developed financial system, and hinging on trade. Under capitalism, the Western powers have viewed countries of the Global South as ‘others’, treating them as hunting grounds for cheap resources or markets. Although the Western powers have been able to occupy and spread capitalism to much of the world, they have not been able to widely cultivate prosperity, too often tending towards malicious opportunism; for those countries that do not profit from colonialism, but suffer from its brutal oppression, the system is nonviable. As a result, since the Western powers took charge of the world in the nineteenth century, the vast majority of non-Western countries have been unable to attain industrial or modern development, a track record which disproves the purported universality of capitalism.

The ancient Chinese sages advocated for a socioeconomic model that Dr. Sun Yat-sen, a leader in the 1911 revolution to overthrow of the Qing dynasty and the first president of the Republic of China, called the ‘Principles of People’s Livelihood’ (民生主义, mínshēng zhǔyì) which can be rephrased as ‘the philosophy of benefiting the people’ (厚生主义, Hòushēng zhǔyì). This philosophy, which values the production, utilisation, and distribution of material to allow people to live better and in a sustainable manner, dates back over 2000 years, appearing as early as the Book of Documents (尚书, shàngshū), an ancient Confucian text. Guided by this philosophy, a policy of ‘promoting the fundamental and suppressing the incidental’ (崇本抑末, chóngběn yìmò) was adopted in ancient China to orient commercial and financial activities towards production and people’s livelihood. Today, China has rejuvenated this model and begun to share it with other countries through the BRI, which has taken the approach of teaching others ‘how to fish’, emphasising the improvement of infrastructure and advancement of industrialisation.

China, which is now the world’s factory and continues to upgrade its industries, is also driving a reconfiguration of the world’s division of labour: upstream, accepting components produced by cutting-edge manufacturing in Western countries; downstream, transferring productive and manufacturing capacity to underdeveloped countries, particularly in Africa. As the world’s largest consumer market, China should access energy from different parts of the world in a fair and even manner, and promote global policies which emphasise production (‘the fundamental’) and minimise financial speculation (‘the incidental’).

3. Towards a world of unity and diversity. When the European powers established the current world order, they generally pursued ‘homogenisation’, inclined to use violence to impose their system on other countries and inevitably creating enemies. The United States, influenced by Christian Puritanism, tends to believe in the uniformity of values, imposing its purported ‘universal values’ on the world, and denouncing any nation that differs from its conceptions as ‘evil’ and an enemy. During ‘the end of history’ period, this tendency was exemplified by the so-called War on Terror which launched invasions and missiles throughout the Middle East. Despite this preoccupation with homogenisation, the US-led order is being unravelled by rampant polarisation, broken apart by intensifying cultural and political divisions.

China, on the other hand, tells a different story. For millennia, based on the principle of ‘multiple gods united in one heaven’ or ‘one culture and multiple deisms’, various religious and ethnic groups have been integrated within China through the worship of heaven or the culture, thus developing the nation and the tianxia system of unity and diversity. Universal order or harmony can neither be attained through violent conquest nor through the preaching and imposition of values to change ‘the other’ into ‘self’, but rather by recognising the autonomy of ‘the other’; as emphasised in The Analects of Confucius (论语·季氏, lúnyǔ·jìshì), ‘…all the influences of civil culture and virtue are to be cultivated to attract them to be so; and when they have been so attracted, they must be made contented and tranquil’ (修文德以来之，既来之，则安之, xiūwén dé yǐlái zhī, jì lái zhī, zé ānzhī). By and large, it is along this path of harmony in diversity that China today conducts international relations.

China should understand the building of a new international order through the lens of revitalising the tianxia order, and its approach should be guided by the sages’ way of ‘harmonising all nations’ (协和万邦, xiéhé wànbāng) to pacify the tianxia. The process of constructing a new international order, or a revitalised tianxia order, should adhere to the following considerations:

1. A tianxia order will not be built at once but progressively. A Chinese idiom can be used to describe the China-led process of forming a new global system: ‘Although Zhou was an old country, the (favouring) appointment alighted on it recently’ (周虽旧邦,其命维新, zhōu suī jiù bāng, qí mìng wéixīn). Zhou was an old kingdom that was governed by moral edification; its influence gradually expanded, first to neighbouring states and then beyond, until two thirds of the tianxia paid allegiance to the kingdom and the existing Yin dynasty (c. 1600–1045 BCE) was replaced by the Zhou dynasty (c. 1045– 256 BCE). In approaching the construction of a new international order and revitalising the concept of tianxia, China should follow this progressive approach to avoiding a collision with the existing hegemonic system. The concept of tianxia refers to a historical process without end.

2. Virtue and propriety are the first priority in maintaining the emerging tianxia system. A tianxia system aims to ‘harmonise all nations’, not to establish closed alliances or demand homogeneity. China should promote morality, decency, and shared economic prosperity in relations between nations and international law. What distinguishes this approach from the existing system of international law is that, in addition to clarifying the rights and obligations of each party, it also emphasises building mutual affection and rapport between nations.

3. A tianxia order will not seek to monopolise the entire world. The world is too large to be effectively governed by any country alone. The sages understood this and so their tianxia order never attempted to expand all over the known world at the time, nor did later generations; for instance, Zheng He came across many nations during his voyages to the Western Seas, but the Ming dynasty did not colonise and conquer them, nor did he include them all in the tributary system, but instead allowed them to make their own choices. Today, China does not seek to impose any system onto other countries; with such moderation, the struggle for hegemony can be avoided.

4. A new international order will consist of several regional systems. Instead of a world system governed by one dominant country or a small group of powers, a new global order will likely be made up of several regional systems. Across the world, countries with common geographies, cultures, belief systems, and interests have already begun to form their own regional organisations, such as in Africa, Asia, Latin America, the Middle East, and the Atlantic states; China should focus on the Western Pacific and Eurasia.

The concept of regional systems shares some similarities with Samuel Huntington’s division of civilisations, however, importantly, it does not necessitate any clash between them. As a large country and land-sea power, China will likely overlap with multiple regional systems, including both maritime- and land-based regional systems. China, which literally means ‘the country of the middle’, should serve as a harmoniser between different regional systems and act to mitigate conflict and confrontation; in this way, a new international order of both unity and diversity can emerge.

A new architecture of global governance will be built gradually, with layers nested upon each other from the inside out. To this end, China’s efforts should begin in the innermost layer to which it belongs, East Asia. Traditionally, China, the Korean peninsula, Vietnam, Japan, and other countries in this region formed a Confucian cultural sphere; however, after the Second World War, despite these nations successfully modernising, relations between them have deteriorated due to the pressures of foreign powers, such as the United States and Soviet Union. China’s efforts to reorganise the world order must start from here, by revitalising this shared heritage, developing coordinated regional policies based on the ‘Principles of People’s Livelihood’, and demonstrating improved standards of prosperity and civility for the world. As the achievements and strength of such regional efforts grow, the power of the United States and its world order will inevitably fade out, and the process of global transformation will rapidly accelerate.

After the inner layer of East Asia, the next-most nested layer, or middle layer, that China should focus on is the heart of the world island, Eurasia. Central to these regional efforts is the SCO, in which China, Russia, India, and Pakistan are already member states, Iran and Afghanistan are observer states, and Turkey and Germany can be invited. Due to its economic decline and weakening global influence, Russia is likely to increase its focus on its neighbouring regions, namely Central Asia, and to participate more actively in the SCO, including assisting in efforts to promote harmonious relations and development in the region and minimising conflict. The stability of Eurasia is key, not only to the security and prosperity of China, particularly its western regions, but to overall global peace.

Finally, the outermost layer for China is the institutionalised BRI, which connects nations and regions across the world. Proposed by President Xi Jinping in 2013, to date China has signed more than 200 BRI cooperation agreements with 149 countries and 32 international organisations.

Concluding Remarks

The evolution and future direction of the world order cannot be understood without examining the shifting relationship between China and the West over the past five centuries. In the early modern era, the Western powers were inspired by China in their pursuit of modernisation; in the past century, China has learned from the West. The reemergence of China has shaken the foundations of the old Western-dominated world order and is a driving force in the formation of a new international system. Amid the momentous changes in the global landscape, it is necessary to recognise the strengths and limits of Western modernity, ideologies, and institutions, while also appreciating the Chinese tradition of modernity and its developments in the current era. For China, this requires a restructuring of its knowledge system, guided by a new vision which is inspired by classical Chinese wisdom: ‘Chinese learning as substance, Western learning for application’ (中学为体，西学为用, Zhōngxué wèi tǐ, xīxué wèi yòng).

Bibliography

Author’s Notes