Fall 2013 | Emerging Markets Journal | Page 5

will discuss two relatively recent

theories: the Beijing Consensus
and the China Model. The former
theory, developed by Joshua Cooper
Ramo, aims to
provide a method
of understanding
the policies that
China implemented
in order to support
its growth. China
Model has many
connotations, but is
commonly used as a
phrase to describe the political and
economic policies of the Peoples
Republic of China after the death of
Mao Zedong and end of the Chinese
Cultural Revolution.
Overall, the Beijing Consensus
is
structured
around
three
main
tenants:
innovation-led
productivity,
sustainable
and
equitable distribution of wealth, and
direct opposition to the Washington
Consensus (a list of policies
that the United States follows
and implements in its economic
planning). To learn more about the
Beijing Consensus, we interviewed
Professor Scott Kennedy, author
of The Myth of the Beijing
Consensus and expert in the
area of Chinese policy. Kennedy
explained a few flaws in the Beijing
Consensus and why he published
a paper disregarding Ramos claim
in 2010. Kennedy cited that China
has not been fully supportive of
innovation, instead depending on
technological innovation of more
developed countries. China has
not increased equality rather
income inequality has risen, with
policies even dictating growth over
equality. Instead of opposing the
Washington Consensus, China has
in fact implemented policies such
as liberalization of trade, a major

component of the Washington

Consensus. So the question arises,
what factors have transformed
China into the economic and

manner. While China has not

employed privatization, an element
of the Washington Consensus,
it replicated many aspects of the
competitive environment
provided by privatization,
which ultimately led to its
notable economic growth
During the last few
years, China created
its own type of policy,
deviating
from
the
extremes
of
both
capitalism and socialism.
Chinas success can be attributed
to both its socialist and capitalist
economic policies, which are
collectively known as the China
Model. Ultimately, while the Beijing
Consensus helps explain parts of
Chinas growth, the countrys rapid
development since it opened itself
up in 1979 is more complex than a
single theory can explain.

Chinese political and economic

policies cannot be encompassed in either
socialism or capitalism, requiring a
broader ideology.

political power it is today?

Professor Kennedy and other
scholars often refer to Chinas recent
policies as socialism with Chinese
characteristics
or
capitalism
with
Chinese
characteristics,
highlighting the China Model. These
terms effectively portray Chinese
political and economic policies,
as it cannot be encompassed in
either socialism or
capitalism, requiring a
broader ideology.
Professor Kennedy
referenced Professor
Barry Naughton of
the University of San
Diego, who believes
reforming markets
rather than ownership
structureremains
one of the keystones
of Chinas success. The
country
encourages
internal competition
by investing ahead
of demand in areas
like
infrastructure.
Both Kennedy and
Naughton are of the
opinion that in a more
competitive climate,
publicly- and privatelyowned
companies Real change in gross domestic product since 1990.
IMF/SOURCE
behave in the same