The Chinese Reform Experience: A Critical Assessment

The consensus among economists is that China’s post-1978 market reform policies have produced one of the world’s greatest economic success stories. Some progressives believe that China is now capable of serving as an anchor for a new (non-U.S. dominated) global economy. A few claim that the reform experience demonstrates the workability (and desirability) of market socialism. This article is critical of these views. Its four main conclusions are as follows: first, the reforms have led to the restoration of capitalism, not a new form of market socialism. Second, the gains attributed to the reforms have been seriously overstated. Early successes were largely due to the economic foundation established during the pre-reform Mao era. Moreover, the reform process has begun to undermine this foundation, increasing the country’s dependence on foreign investment, technology, and markets. Third, the reforms have produced an increasingly exploitative growth process, one that generates considerable wealth for a minority at unacceptably high cost for the majority. Finally, the reforms also produced a growth process whose logic led it to become enmeshed in, and dependent upon, a broader process of transnational restructuring, one controlled by transnational capital. As a result, China is not only incapable of serving as an anchor for an alternative global economy, its accumulation dynamics actually contribute to the strengthening of existing structures of power and the global imbalances and tensions they generate. JEL classification:O53, P30, F23