China: The Impact of Reform & Development
By Chris Walker
From Mao to Deng
By the time Deng Xiaoping came to power and began to “open” the Chinese
economy, Mao Zedong’s policies has already placed a terrible strain on
China’s environment. According to Mao nature was nothing more than
another oppressive force to be overthrown and stated that it was to be
“conquer[ed] and change[d]” in order for “man…[to] attain freedom from
nature.” This conception of the irrelevance of ecological systems was
to inform the strategy of the “Great Leap Forward.” During this era of
mass mobilization, there were huge land reclamations, which resulted in
massive destruction of forests, wetlands, lakes and rivers. In just 24
months, the building of factories was to skyrocket and the number of
factories increased from 17,000 in 1957 to 310,000 in 1959. While this
fumbling toward “progress” was occurring, infant mortality jumped to
330 per 1000 and anywhere from 35 – 50 million people starved to death.
Clearly, there were very real limits to the pace of progress and food
production. Nature did not care that a new “revolutionary” people were
now making demands on her.
It was also during this era that the mass media emerged as an adjunct
of state power, willing to delude and deceive its readers at the behest
of the ruling party. One example is that of images of children sitting
atop wheat crops, apparently thick enough to hold their weight, which
began to circulate. Later it turned out that the photographs were
falsified, but the movement toward to catastrophe, wasted lives, lost
wealth and social disintegration was already underway. By the time Mao
Zedong died in 1976, he had exacted a toll on the environment of
staggering proportions. In addition to these degradations, the state
terror exercised during the “Cultural Revolution” had traumatized and
pacified the Chinese people. Deng Xiaoping had inherited a
dysfunctional nation.
It has been argued that after Mao, the population was ready to dispense
with rigid communist ideology and pursue a more pragmatic course. While
this may be correct, most of the changes Deng was prepared to make were
strictly economic, and the broader issues such as authoritarian rule,
propaganda, censorship and the use of state violence to coerce the
population, were to remain highly functional. Additionally, the assault
on the environment was only going to intensify.
Deng’s primary shift was his move from Maoist “self-sufficiency” as a
guiding principal, to integration with the global economy – his “open
door” policy. Unlike his predecessor, Deng was willing to use
international credit, which was to be paid back with coal and petroleum
exports, in order to draw foreign capital into China. Another
significant reform was the decentralization of China’s trade
administration. Originally, the central government controlled a dozen
or so foreign trade corporations, which in turn controlled all
international trade relations. By the mid 1980’s the ministry of
Foreign Economic Relations has approved the creation of 800 trading
corporations, each with a designated specialty. By decentralizing
trade, and integrating China into the global economy, Deng established
the necessary framework for investment and development to occur.
Evidence for this is the per capita GDP increase of over 10 fold from
1981 to 2002.
To provide inducement to foreign capital for investment, Deng developed
“special economic zones” along China’s southeast coast. Tax provisions
and a massive supply of cheap labor made these areas an investors
dream. Consequently, foreign investment jumped from $430 million in
1982 to $53 billion in 2002.
Deng also made major changes to domestic manufacturing, which had a
rather contradictory nature. State owned corporations that were engaged
in large scale manufacturing, could employ over ten thousand workers at
just one site. These organizations covered the social needs of workers
such as education, health and retirement. Deng choose to dissolve state
owned corporations, scrap social benefits and developed a new
manufacturing model – the “township and village enterprise.”
The TVE was to become the main engine of the Chinese economy and
simultaneously addressed three major issues. Rural to urban migration
could be stemmed by bringing jobs to the countryside. The vast untapped
rural labor pool could be used to flood the global market with
inexpensive consumer goods, bringing even more foreign capital into
China. Lastly, the expense of paying social benefits and pensions could
be dropped enabling that money to be spent on nation building.
The problem with this seemingly perfect solution to China’s economic
growth is manifested on two fronts, the social and the environmental.
Dissolving SOE’s has helped create an unemployed migrant workforce,
which at present ranges from 70 – 130 million. This ticking time bomb
is involved in various low-level conflicts on a daily basis. With no
work, no social benefits and no prospects for a better future, this
group is a major source of social instability. For those lucky enough
to have a job the situation is not much better. Out of the entire urban
workforce, nearly half of all workers have no pension or benefits and
nationally only six or seven of China’s 31 provinces have solvent
pension funds. On the other front, environmentally, China’s growth, and
the TVE model specifically, has been a disaster.
The high cost of development
While GDP and investment broke annual records year after year, record
levels of environmental degradation were reached as well. The rate of
desertification has climbed in recent years to about 3,436 km annually.
In terms of deforestation, a major contributor to the Yangtze disaster,
some regions have been reduced to less than 4% coverage. Meeting the
global demand for furniture had led to half of China’s forest bureaus
reporting that trees were being felled at unsustainable rates and 20%
have reported that they have already exhausted their resources. To put
it quite plainly, not only is production going to slow down as
recourses become increasingly scarce and costly, deforestation on this
level represents a real financial liability that has already cost China
some $20 billion. Now, the idiocy of taking out a loan at 28%, in order
to buy stock that grows at a rate of 20% is self-evident - but to
understand why China is on this suicidal path, one has to look at
China’s political economy.
The TVE model for development and production has one major drawback –
there is no governing body capable of enforcing basic environmental
controls. Local and provincial authorities have jurisdiction over
business development and consistently push off environmental
considerations in favor of production. By some estimates, half of
China’s pollutants originate in these facilities, and flow freely into
the biosphere. In addition to these problems, because of China’s lack
of environmental standards, it has become a preferred destination for
investment for the most environmentally damaging industries such as
petrochemical plants and semiconductor factories – exasperating the
problem. There is simply no legal framework in existence that is
capable of addressing this issue. There is also little hope of any
grassroots action in pressing for reform. The Boston Globe ran a story
December 25, 2006, which contained the following information:
In May, when Fu Xiancai, 47, a farmer in Chongqing, spoke to foreign
journalists about the inadequate compensation given to people displaced
by the dam, he was assaulted by thugs after being called in to visit
the local police station, and beaten so badly he is now paralyzed. A
police investigation declared that Fu's injuries were caused when he
accidentally fell down a hillside.
When the state reserves the right to assault it’s citizens, then lie
about it, there is no hope of peaceful legislative reform and quite
frankly, with unemployment and starvation very real issues the Chinese
citizen must deal with, environmental concerns cannot take priority.
Therefore, the onus falls back on China’s leaders, who thus far have
shown no interest in addressing these issues. With 8 – 12% of China’s
GDP being lost every year to environmental problems, dwindling natural
resources, and a collapsing biosphere, China cannot afford to ignore
the environment any longer. If China’s economy contracts, it may very
well be faced with another revolution. If China does nothing to avert
this impending environmental disaster, its economy most certainly will
contract, and again, social chaos will ensue.
Humanity and its Host
In his essay, “Language as a Natural Object” Noam Chomsky introduces an
interesting dualism of “problems” and “mysteries.” He suggests that in
the same way knowledge of prime number lies beyond the domain of what a
laboratory rat can understand, some domains are closed to human
inquiry, as part of our genetic heritage. He claims that this should
not be a cause for distress, but rather should be a conscious part of
any rational inquiry. Understanding or anticipating the scope and
limits of knowledge at any given time is critical if we are to advance
the various sciences and humanities. This is something we should bear
in mind when contemplating humanity and its role in the natural order.
The question not yet answered is as follows; is the human species a
parasite on the natural world, incapable of evolving toward a more
egalitarian state? At present evidence exists that would seem to
suggest that “higher intelligence” is a sort of misnomer, and that
humanity is nothing more than an aggregate of hungry mouths and violent
tendencies. At the same time, there is evidence that suggests that
humanity has existed, in a culturally advanced state, with proper
regard for the biosphere and presently, is moving toward a more just
state. What I propose is that this question, while currently
unanswerable by empirical means, is not a mystery, but is in fact a
question that will be answered in time via the choices we make and the
opportunities we miss. For the student of today, the question of how to
transform this violent, degraded world into a rationally organized,
ecologically sound civilization should be foremost in their mind. In
face of great uncertainties, it is critical that we hold fast to a
vision of better world, and then take concrete action toward
manifesting that world. Particularly in the west, where the state no
longer has the privilege of killing its citizens who are bold enough to
admonish its suicidal policies. For us to miss this opportunity would
be a grievous error.
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Bibliography:
Chang, Gordon. The Coming Collapse of China, New York, NY: Random House, 2001.
Chomsky, Noam. New Horizons in the Study of Language and Mind, New York, NY: Cambridge, 2000.
Huchet, Jean-Francois. The Emergence of Capitalism in China, New York, NY: The New School, 2006.
Lardy, Nicholas. Foreign Trade and Economic Reform in China, New York, NY: Cambridge, 1992.
Economy, Elizabeth. The River Runs Black, Ithaca, NY: Cornell, 2004.
