China And The Keynesian Theory - Essay Example

China And The Keynesian Theory The end of the Second World War also led to the emergence of Bretton wood institutions, which advocated for the use of the dollar, in regard to currency exchange rates. For purposes of regulating their markets, the majority of states were able to adopt the principles contained in the Keynesian theory. This principle advocate for the intervention of the government, in the economic system of the state. China is one of the countries that advocated for the use of the concepts of the Keynesian theory, for purposes of controlling its national economy (Harvey, 2005). This is until 1978, with the market reforms of Deng Xiaoping, in China. This is because of the failures of the Keynesian theory to protect the market economies of the majority of the developed states. This includes the United States. These countries were only able to experience economic growth, during the 1950s, to the 1960s. However, after the 1960s, the economies of these countries began to collapse, experiencing an increase in unemployment, and stagflation. This made economic experts, and policy formulators to demand a new economic system (Harvey, 2005). Neo-liberalism was a preferable theoretical framework, and it advocates for a minimum intervention by the government, in the economic affairs of the state. Deng Xiaoping supported neo-liberalism, and he led this movement in China, and this is through the market reforms that he had begun in the country. Furthermore, his visit to the United States in 1979 was in a bid to understand the manner in which a neo-liberal state was able to function (Brinkley & Dancy, 2011). The United States was one of the leading neo-liberal states, and its economy was improving because of the adoption of the principles of neo-liberalism. Deng also saw the need of introducing market reforms, based on neo-liberalism, because of the high level of growth, of the economies of the Asian tigers. The Asian Tigers are Hong Kong, Taiwan, South Korea, and Singapore (He, 2003). This is because of the opening up of their markets, and a thriving international trade that was occurring within these countries. China was alarmed by their increased growth, mainly because some of these countries were its rivals, and China was viewing some of them as its provinces, and this includes Hong Kong and Taiwan. Deng came to power after the demise of Mao, who was a major proponent of a planned economic system in China. Under this system, the resources of the government were distributed in accordance to plan, and not demand. This system did not have the capability of satisfying the various needs of people, and this is because of the existence of surplus and shortages in various areas of the country. The major advantage of this planned system is that there was the equitable distribution of wealth. This is as opposed to the enacted market reforms that were able to create an elite group of people, who were very rich, leading to the introduction of the class system in China. This is one of the major problems affecting the Chinese people, where there is a group of people who are very rich, and they own industries and companies, hence generating a lot of wealth. The class system is also seen in the manner which people are treated, where the poor are able to work in industries, under very bad conditions, and with poor pay. Cheap labor is one of the reasons why most companies prefer to set up, manufacturing units and plants in China. This is all thanks to the neo-liberal revolution that was led by Deng, and whose effects were being seen and felt by the time 1980s, was ending (Selden, 1993). This was depicted by the privatization of the national resources of the government, and reallocation of these resources. These policies were able to create a huge economic gap, and this is because of people, who could afford to purchase nationalized resources, become extremely rich. Most of these people were senior government employees and leaders of the Chinese communist party. This lead to the development of an economic structure that was unhealthy, with 1% of the population becoming political-economic elites. These are people who had a political influence, as well as an economic influence (Harvey, 2005). The effects were further seen on the percentage of the middle class, and the poor. 80% of the populations become poor, and 15%, were middle class. This is an indication that the reforms led to a decline in the living standards amongst the Chinese. However, He (2003) explains that the market reforms of Deng were a continuation of the planned economic system that was advocated by Mao. This is because it was able to lead to the development of three types of elites. These are the political, intellectual, and economic elites. Each of these elites had different resources under their control; hence this is an aspect of a planned economic system. This is not true, because the rates of poverty are very high in China, and with very few people, becoming super-rich. This is an indication, of unequal economic growth, and this was not a characteristic of the planned economic system, that was characterized by equal economic growth. In the 1990s, China was able to open up its markets to the world, therefore engaging in the import and export trade. This is one of the major reasons that led to the rise of China, becoming the second biggest economy in the world, surpassing that of Japan. Japan was experiencing a slump in its economic growth. It is therefore prudent to denote that the market reforms that were led and initiated by Deng are the most important policies that have led to the rise of China. With the rise of China, the Chinese media was also experiencing some elements of reform. However, it played an important role, in making the Communist Party, to have a grip on the Chinese politics, and its recognition as a single party state. The media played a role in the reconstruction of the social relations in China. Particularly, the Chinese media played a role in reconstructing the class relations in China. Zhao (2008) explains that the state was able to re-invent its power through propaganda, which was made possible by controlling and censoring the media. Furthermore, the media is viewed as an agent of capital accumulation. Furthermore, the governments, whose members are from the Communist Party, are in a bid of maintaining control over the ideological and cultural arena of China. To achieve this objective, the government is adopting measures of rationalizing, synergizing and controlling the media. For instance, in 2009, China was able to ban the social media site of Facebook (Bass, 2009). Other social media sites that have been banned in China include Twitter, Instagram, Gmail, and Google. This is because this site helped in the promotion of a free flow of information. With a free flow of information, the Chinese government would not have a control over the type of information that it wants its citizens to consume (Zhao, 2008). This would make it easy for the government to lose the ideological and cultural war, whose aim is to keep the Communist Party, into power. Furthermore, the party and the government have commercialized the media. This is for purposes of helping the party to maintain control of information. The party aims at achieving this, by creating other special branches of the media, which can compete with the main media, in regard to profit accumulation or generation. This is an aspect of controlling the media, for purposes of controlling the flow of information that can help the party to efficiently disseminate its propaganda. References: Bass, S. (2009, July 08). China’s Facebook status: Blocked. ABC News. Retrieved from http://abcnews.go.com/blogs/headlines/2009/07/chinas-facebook-status-blocked/ Brinkley, D. &Dancy, J. (2011, January 19). From the archives: 1979 China visits U.S. NBC News. Retrieved from http://www.nbcnews.com/video/nightly-news/41157239#41157239 Harvey, David. 2005.A Brief History of Neoliberalism. New York: Oxford University Press. He, Qinglian. 2003. “A Listing Social Structure.” In One China, Many Paths, edited by Chaohua Wang, 163-188. London: Verso. Selden, M. (1993). The social origins and limits of the Chinese democratic movement, The political economy of Chinese development (pp.206-230). Armonk, NY: M. E. Sharp, Inc. Zhao, Y. (2008). Communication in China. U.K.: Rowman& Littlefield Publishers, Inc. Read More