Ryan Manuel: Will it be Hot Economics and Cold Politics Domestically in China Too?

From eastasiaforum.org:

The second is that a downturn in growth may have different repercussions to those imagined. At the moment there is a school of thought arguing that, should the economy tank, the (central) Government will suffer a loss of legitimacy.

Accepting Sun’s argument means this is not necessarily the case. Should there be a downturn in growth, expect much of the blame to be placed on local government officials and not the centre. As with labour market disputes today, the centre will argue that it is holding China together, but that, as the mountains are high and far away, any blame for inefficiency can be put on local cadres.

There is, of course, an international stake in this. A Chinese state open to trade and ‘western influence’ is generally considered a Chinese state likely to also adopt more liberal political values. This may not be true.

Moreover, if, under a downturn, the centre is forced to place the blame on local interests, we may see a turn away from free market principles. This, particularly given the need to bring China into the tent as much as possible, would be harmful for the global community.

Ryan Manuel is a Rhodes scholar, a doctoral student at Merton College, Oxford.

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