Rather than following the Western capitalist model that led to a “middle-income trap”, China is building a new system of high-tech socialism, based on “high-quality growth”, rejecting the neoliberal trap.
By Elias Khalil Jabbour; Published in the Geopolitical Economy Report
Chinese Premier Li Keqiang presented a government work report at the annual meeting of the National People’s Congress on March 5 that outlined new strategic directions for his country’s economy.
Li projected economic growth of 5% in 2023, with the target of creating 12 million urban jobs. It was a great show of strength by Beijing in the face of growing hostility from the so-called “West”.
The report represented a rare point of certainty in a world increasingly marked by uncertainty, instability, and war.
Li also that stated that Beijing’s goal is not simply growth for growth’s sake, but more specifically “high-quality” growth.
“Currently our development is focused on providing for people’s basic needs”, Li explained, but “going forward, the focus will be shifted toward delivering a life of better quality for the people”.
This means that, while “Western” economies are expecting stagnation and even negative growth, China’s growth can help prevent the world from entering a recessionary spiral.
China is increasingly a central factor to take into account, as it is a country with the ability to affect the supply and demand structures of the entire planet.
China is the largest trading partner of 140 countries, and it contributed to 38.6% of global economic growth from 2013 to 2021.
But in the “West” there is little understanding of what is behind China’s capacity to set goals and achieve them.
A narrative has emerged in the “Western” media that China’s current 5% growth rate is only “modest”, in comparison to the time when its economy grew at more than 10% per year.
But this is a great demonstration of a misunderstanding of how an economy with China’s characteristics works.
For over 40 years, China grew at much higher averages than the rest of the world, gradually establishing itself as a commercial, industrial, and financial power.
In recent decades, Beijing has built an immense productive and financial machine, centered on 96 state-owned conglomerates, with a system of public financial engineering based on gigantic development banks.
Among the major developments that we can highlight in China, one of the most important it what we call “high-tech socialism”.
That is, over the past few decades, waves of institutional innovations have shaped a unique economic system, based on the public sector and an economic planning base composed of 2 million project engineers and economists, who use technological innovations – such as 5G, Big Data, artificial intelligence, and quantum computers – to inaugurate new, superior forms of economic planning.
This should lead us to think about how various historical forms of socialism depend on their present material conditions and levels of technological development.
Yet many Western “analysts” claim that China is simply following the same path they did, and is on the verge of falling into a “middle-income trap”.
In fact, it was the capitalist world that fell into the neoliberalism trap.
China has created the objective conditions to reach the point where it is today by its power of choice. Beijing can choose how much it will grow, and how it will grow.
It is this background that explains both the pragmatic growth target of 5% and Beijing’s commitment to what it calls “high-quality growth”.
China’s plan is to grow based on science, technology, and innovation, to more equitably distribute income, regulate private capital, preserve the environment, and show the world that there is not a single political and economic model.
We stressed that Chinese economic dynamics are characterized by the inauguration of new, superior forms of economic planning.
This, in our view, is the basis for the concept of “high-quality growth” and the future of the Chinese economy.
Much has been said about Beijing’s model of the socialist market economy. But little has been said about the growing role of the forecasting and planning capacity that China has created over the past few decades.
In the last 10 years, for example, around 200 million people have moved from rural areas to cities in China. This has been accompanied by a series of contradictions, and the state has actively made plans to respond to them.
In China, this process is guided by thousands of men and women dedicated to creating the conditions that minimize the adverse effects of these contradictions.
Chinese socialism inaugurates a stage where reason is transformed into a tool of government, and where all the intelligence of the country is mobilized for national objectives, such as generating millions of urban jobs per year.
Chinese planning, supported by technological innovations, may be the highest degree achieved of human intelligence applied to the aspirations of a society.
The impact of this process on the world is immense. It places China as a kind of “guardian” of the world’s economic health, generating trends by which each country can create its own development strategies in the midst of a complex and unpredictable international reality.
China’s impressive economic performance exposes, visibly, the bankruptcy of the “Western” neoliberal economic model. And the story is far from over.
