Thinking Aloud: “Is China the New Idol for Emerging Economies?”

Aug. 13, 2015 by Darius 

It is common so-called wisdom to believe that the breakup of the Soviet Union ended any challenge to the inevitable march of capitalist markets and democratic reform throughout the world.  Indeed, for much of the time since, no single cohesive ideology has challenged the Western free market ideology.  In her TED Talk, though, Zambian economist Dambisa Moyo argues that a new ideology is indeed rising to compete with the West in the developing world: China’s state-controlled capitalism, allowing economic liberalization and growth while maintaining political restraint.

Moyo argues that for many in the developing world, democracy and representative government take a back seat to more mundane everyday concerns like food, shelter, and jobs.  Economic well-being is seen as being more immediately important than political well-being.  The Chinese model offers a potential easier route to economic development.

China’s own economic success under its system has been remarkable.  As Moyo details, 300 million Chinese have been lifted out of poverty in the past 30 years.  At the beginning of the same period, only 28% of Chinese had access to secondary education.  Today, that number is closer to 82% of Chinese.  Infrastructure, in particular, has been an area of breathtaking growth—85,000 kilometers of roads have been constructed in China.  China has even showed it can export infrastructure to less-developed places, especially Africa.  Critically, however, the Chinese model shows that political change need not come with economic development: the Chinese government remains a clique of Communist Party bureaucrats, just as it was in the 1970s.

As a result, many countries in the developing world look to China as an example of what they want.  Moyo argued that that may not be a bad thing at all.  Instead, she claimed that democracy is not a prerequisite for economic growth, but rather vice versa:  one study found evidence that the lifespan of a democracy was very closely linked to the per-capita income of its residents.  According to that study, any “democratic” country with a per-capita income under $6,000 was likely to eventually collapse.  Moreover, according to Moyo, functionally, “democracy” is not all it’s cracked up to be.  According to Freedom House, 70 percent of countries that are democracies also place restrictions on freedom of speech and freedom of movement—while they are democracies, they may not be liberal.  Moyo believed that if a strong middle class is developed, even according to the Chinese approach, liberal reforms will often follow.

Moyo urged the West to cooperate with China’s growing role in the developing world.  Through a combination of the Western and Chinese approaches, tailored to each country specifically, she believed that we can put another major dent into global poverty.

You can see the whole TED talk at http://www.ted.com/talks/dambisa_moyo_is_china_the_new_idol_for_emerging_economies.

 

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