China's Age of Abundance: Origins, Ascendance, and Aftermath (Book Excerpt)
What Did China Do Right?
China's economic surge in the past four decades stands as a monumental event in human history, worthy of comparison with the Renaissance, the Enlightenment, and the Industrial Revolution. It is surprising and somewhat disheartening that this perspective has not yet firmly taken root in the public consciousness. Few events have improved the lives of so many people - nearly one-fifth of the global population. The rapid pace of this transformation, exemplified by a 25-fold increase in per capita income, challenges even the most significant milestones of Western history.
But did anyone, including the Chinese leaders, expect it to happen? Aside from its enormous size, it is unique from other successes in recent history? Who made it happen? Below is an excerpt from China's Age of Abundance: Origins, Ascendance, and Aftermath, published in April this year by Cambridge University Press.
The author is Feng WANG, Professor of Sociology, University of California, Irvine.
Book description
Between the 1980s and the present day, China has experienced one of the most consequential economic transformations in world history. One-fifth of the Earth's population has left behind a life of scarcity and subsistence for one of abundance and material comfort, while their nation has emerged as a preeminent economic and political power. In a systematic historical and sociological analysis of this unique juncture, Wang Feng charts the origins, forces, and consequences of this meteoric rise in living standards. He shifts the focus away from institutions and policies to offer new perspectives based on consumption among poorer, rural populations as a driver of global economic change. But is this 'Age of Abundance' coming to an end? Anticipating potential headwinds, including an aging population, increasing inequality, and intensifying political control, Wang explores whether this preeminence could be coming to a close.
Reviews
‘Wang uses a lens of consumption patterns to superbly tell a unique history of China’s economic rise, deconstructing the myth of a ‘China development model’ in the process. Wang also interrogates what will happen to China’s age of abundance as population ageing and structural welfare imbalances inflict their toll, and why the rest of the world should care. Rich in its globally comparative probing, this lively book speaks to a diverse readership.’ Rachel Murphy - University of Oxford
‘Clear and insightful, Wang Feng's Age of Abundance offers a fresh and intriguing perspective on China's epic economic rise - and the challenges ahead.’ Michael Shuman - the Atlantic Council
‘This book grounds the so-called ‘Chinese miracle’ in a combination of demographic and political circumstances that were certainly unusual, but very much understandable – at least with the benefit of Wang Feng’s very capable guidance. Showing us both how so much of China’s cheap labor became good labor and how it was kept artificially cheap even after it became highly productive, he helps us see how the country’s spectacular growth happened, why its benefits have been shared so unequally, and why rapid growth has now become so difficult to sustain. An excellent, highly readable, overview of one of the most important phenomena of our time.’ Kenneth Pommeranz - University of Chicago
‘Will China resume economic growth, surpass the United States, and become the leading global economy? Or has the Chinese economy peaked, with serious obstacles that will obstruct China’s rise? Any attempt to address this debate needs to consider this impressive new book by Wang Feng, which provides novel perspectives on the origins of China’s post-1978 boom and measures of where the country stands today in terms of consumption levels, health indicators, educational attainment levels, and much else; all providing the basis for a sober assessment of China’s future.’ Martin K. Whyte - Harvard University
‘What should one make of China-of its extraordinary rise, its enormous global ambitions, and its future-now that the breathtaking first phase of its ascendance seems to have ended and forces of gravity linked to its aging population and increasingly outdated economic and political models are taking over? There are few more important questions in today’s world and few, moreover, that are harder to answer. One of the most impressive attempts to address these questions that I’ve come across in years is a slim new book that isn’t the product, as one might expect, of an economist, historian, or political scientist. This work, China’s Age of Abundance: Origins, Ascendance, and Aftermath, is of course informed by all of these fields but is written by Wang Feng, a Chinese-born sociologist at the University of California, Irvine.’ Howard W. French source: Foreign Policy
Excerpted from China's Age of Abundance: Origins, Ascendance, and Aftermath by Feng Wang. Copyright © 2024 by Cambridge University Press. Reprinted by permission.
Surprise
Regardless of its portrayal, the China miracle at the turn of the twenty-first century was not expected. Within four decades, over one-fifth of humanity left behind a life of subsistence, scarcity, and misery and moved to one of the abundance and material comforts. In the four short decades between 1979 and 2019, the size of China’s portion of the world’s total economic output shot up from less than 2 percent to over 16 percent. With the arrival of the age of abundance, China reemerged as a preeminent global economic and political power, a status that had eluded it for centuries.
An economic miracle indeed, yet its emergence came largely as a surprise. It repeatedly amazed the leaders who presided over this part of history. As China’s leaders set new and ambitious goals, those goals were surpassed repeatedly. Surprises came not because these leaders were timid or unambitious; to the contrary, mobilizing a nation with ambitious and grandiose goals was a constant political recipe. And yet these ambitious leaders continually underestimated the size of the economic boom.
Leaders in China were not the only ones who were surprised. The Chinese abundance eluded the world’s most elite scholars specializing in the study of economics. Veteran analysts, living both in and outside of China, did not fully anticipate the arrival of China’s age of abundance. Some of the world’s leading economists outside of China also failed to anticipate the enormity or the rapidity of China’s rise to prosperity.
This book offers a brief history of this extraordinary chapter in China’s, as well as the world’s, history. It offers an account of China’s ascendance to material prosperity, or its age of abundance, and its future trajectory.
China’s age of abundance was by no means preordained. A combination of unique forces and historical junctures led to this happy outcome. On the eve of its economic takeoff, China had not only a large but also a healthy and literate population. Living at the margins of subsistence and in the wake of the decade-long Cultural Revolution that had only worsened material scarcity, the Chinese people were eager and ready to improve their lives. That energy, coming from the bottom of society, was allowed and assisted to burst out by a generation of reform-minded leaders, in particular, Deng Xiaoping who was able to galvanize and navigate the country with his unique background, authority, determination, and political acumen as well as his artistry.
China has by no means reached the end of its economic rise at the time of writing. Yet its rapid growth rate peaked a decade ago and has been on a steadily declining slope since. The onset of slowing down is not accidental. Nor is it temporary. The driving forces, as this book documents, have started to show signs of warning. Along with the headwinds that have accumulated over time, the age of abundance, remarkable by both its rapid rise and its length, is already largely history. Wealth will expand and prosperity is likely to persist, but the fast ascendance is clearly over.
To fully appreciate China’s remarkable decades of rising to abundance, this book traces the origins of China’s economic rise prior to its takeoff, follows its trajectory, and offers a new interpretation. In contrast to studies that rely on monetary measures such as income or capital investment to track and showcase economic ascendance, this book uses changes in measures of consumption as vital markers to profile improvements in the standard of living. In contrast to attributing China’s abundance to its cheap labor, this book makes the argument that what China had was good labor, and that labor was made cheap in part by its unique institutional arrangements created under its socialist planned economy era, arrangements that subjected the population to different life chances. And in contrast to prevalent narratives that focus on reforms and privilege the roles of leaders, this book follows and highlights the forces at work from the bottom of society that improved living standards, the forces that made China’s miraculous era possible.
Three pivotal transformations defined China’s path to material abundance. They were, respectively, private farming, rural industrialization, and rural to urban migration. None of these three movements, as this book will document, was a state-initiative. Instead, they were all born out of the strong desires of the population, who were desperate and determined to improve their lives. Such grassroot initiatives were often resisted by the government at first, before being accepted and embraced by them.
Four arguments hence organize the core contents of this book:
1. China’s material abundance was not fully anticipated. It came as a surprise to those living within and outside the country, to those guiding the process from the top, and to those participating and experiencing it from below. The ascendance to abundance came with full of twists and turns. Historical junctures, large and small, were the critical drivers.
2. The ascendance to prosperity was built on two distinct legacies: a population that already had gained improvements in health and literacy, and a population divided into two types of citizens, who were living under increasing material scarcity thanks to decades of socialism. The notion that China’s boom was due to its “cheap labor” misses the essential qualities of the Chinese population that made the abundance possible.
3. The Chinese path to prosperity was similar to those in other industrialized economies. It was essentially a process of industrialization and urbanization. It was a process, however, with Chinese characteristics. A legacy of the socialist planned economy era, China’s rural population did not have the same freedom as those in other nations undergoing the industrialization process. The Chinese process consequently had two distinct but interconnected phases: first, in situ industrialization in the countryside, followed by massive migrations to cities.
4. The age of abundance has come to an inevitable end. China entered the age of abundance due to a fortunate congruence of historical factors. The most important of them were a large and divided population, the tragedy of the Cultural Revolution, and the unique leader Deng Xiaoping. These conditions, historical, are not replicable. With the increase of consumption outpacing income growth and an accelerating population aging process, the vast surplus accumulated during China’s age of abundance is already shrinking.
As its age of abundance draws to a close, China faces headwinds that have gathered force over time. China’s achieved prosperity is unlikely to disappear. Nor will the strong headwinds. The era of massive migration supplying exploitable labor has reached its end. China’s population is aging at an accelerating and irreversible rate, exacerbated further by numerous families having only one child. Abundance also came with a sharp rise in economic inequality, which has already quickly shifted from income to wealth stratification and reset the starting lines for the next generation. Hundreds of millions of migrants in Chinese cities continue to live the life of secondary citizens, a fate unlikely to be reversed in a generation or more. The return to tightened political control, made possible in part by a complacency accompanying material prosperity, could also once again send China down a road of economic stagnation and social suffocation. China’s age of abundance is therefore now largely a subject of history
……
Touching an Elephant: What Did China Do Right?
How could generations of China’s leaders, as well as many of the world’s most renowned economists, including the most enthusiastic, fail to anticipate fully the rapid rise of the Chinese economy?
To begin with, telling the story of China’s material ascendance could be compared with the fabled parable of the blind men touching an elephant. China’s economic success story resembles a gigantic elephant, one roaming through domestic and global terrains. As the parable goes, many parts of the elephant can be touched; but each story, although factual, only contains part of the whole picture. An attempt to offer a full description is likely to be futile. The size and the complexity of the Chinese economy, the variations within such a large country, and changes in the domestic and international environments over the decades deny an easy and comprehensive portrait.
Yet the size and the complexity of this elephant have not deterred the brave men and women who have tried to touch it, to make sense of this gigantic story. As the most significant economic story in the last century, and one of the few in the last millennium, there is no shortage of scholarly investigation and punditry. Models have been created and schools established. A copious body of literature already exists on this remarkable chapter of human history, a chapter that transformed the lives of more than one-fifth of humanity in a short four decades. Much more will no doubt be written. The “rise of China” is a topic that will no doubt be explored continuously for decades and beyond.
With few exceptions, and understandably, interpreting China’s ascendance often starts at the head of the elephant. Detailed accounts and attributions are abundant on how the reforms were designed and growth was led by the government and its advisers.26 China’s economic transformation began and unfolded under the banner of “reform and opening up.” The most consequential transformation was no doubt the dismantling of the planned economy system under socialism and reestablishing a market-based economic system. Studies of China’s transformation therefore have overwhelmingly centered on reforms, and in particular, on the prominent roles of two seemingly contrasting institutions: state and market.
The state-centered narratives focus on China’s political leadership, on the design and implementation of reform blueprints. They credit the Chinese government with following a gradualist reform strategy, in contrast to the “shock therapy” used in many other former socialist economies, an approach that led to widespread economic misery, social discontent, and political chaos. Such narratives also point to the government’s role in setting up Special Economic Zones, attracting foreign capital investment, promoting an export-oriented growth model, reforming state-owned enterprises while maintaining strong state ownership, control, and regulations, and for designing explicit industrial policies. As China’s economic dominance increased, such narratives, which the economist Yingyi Qian labels as “the School of Chinese Characteristics,” have gained more currency.
In contrast to this “Chinese uniqueness” narrative, an alternative and common narrative favors the “universal principles” for a market economy and for economic growth. Instead of government intervention and control, this narrative advocates the central role of the market, rather than that of the government. After all, the institutional goal of China’s reforms was to establish a market economy. China has ascended economically simply because it followed the “universal principles” of the market: privatization of state enterprises, attracting foreign investment, deregulation, trade liberalization, protecting property rights. In sum, China’s successes do not depart in general from the prescriptions of the so-called Washington Consensus.
The market, however, does not exist in a political or social vacuum. Nor does state or political power. Market and state could simply be seen as two faces of the same elephant head. The market, as argued by the classic work of Karl Polanyi, is embedded in or even created and protected by the state. China’s transformation from a socialist planned economy to a market-based economy indeed serves as a fantastic example of how the state initiated and navigated a complicated and often painful process.
Neither the state nor the market is static over time; they are embedded in each other. As markets are recreated and developed, the role of the state is also transformed. These two institutional forces therefore coevolve and coadapt. Such an interactive and balanced approach was adopted in studies of rising income inequality over two decades ago, and it is also the approach of a more recent interpretation of China’s economic growth, of how China “escaped poverty.” Rather than focusing on design and theoretical formulations, the latter study concludes that “China escaped the poverty trap by constructing a set of underlying conditions that focused on an adaptive, bottom-up search within the state for localized solutions.”
The large body of institutional analyses focusing on reforms, while informative and important, tend to leave little space for changes experienced by the common people and forces at the basis of society that made the changes possible. China was successful in its gradualist reform approach largely because its economy continued to grow, and it eventually grew “out of the plan.” Growth delivered continued improvements in the population’s standard of living. Improvements in living standards in turn generated support for sustained, though often painful, reform efforts.
The new and growing segment of the economy was market-based. Both in employment and in economic output, the market-based sector caught up and further surpassed the planned economy sector. A new economic system was born. “China’s reforms were gradual, ” notes a study of gradualist reform strategies, “not merely in the matter of pace but also in moving from the margins of the old industrial system toward its core. Unleashing a dynamic of growth and reindustrialization, gradual marketization eventually transformed the whole political economy while the state kept control over the commanding heights.”
As this book shall document, much of the initial growth that delivered improvements in living standards, from diet and clothing to housing, came from the non-state sector, in particular from the vast Chinese countryside. Similarly, that reindustrialization also sprung up from the Chinese countryside. Moreover, it was the massive migration of the rural population into cities that propelled and defined the fastest economic growth decade, the 2000s.
In contrast to the vast literature that has already been devoted to reforms or institutional changes, this book focuses on growth. It is not a book about designs or reforms. Rather, it is about outcomes and processes. This book profiles China’s age of abundance by documenting how its population’s living standards improved. It also offers an account of the underlying forces and the process of this material ascendance. The book pays particular attention to two factors suggested as answers to the question “What did China do right?”: initial historical conditions and contemporary constraints. It traces China’s growth to some of its origins, highlights the unique historical conditions and junctures and offers an interpretation of the underlying forces. In doing so, this book joins studies that attempt to understand this chapter of Chinese history by showcasing “how development actually happen[ed].” It is “less about why reform worked and more about how reforms worked.” Just as observed by Yingyi Qian, China’s success “is less about the goal of reform than the reform process itself.”
In doing so, this book is just another blind person’s report on touching the elephant. Rather than starting from the elephant’s head or its shoulders, though, this account starts from the foot: the Chinese population. It is the population who created “the China miracle” and formed the foundation of this gigantic elephant. The population defined here is not the political leaders or economists who resided in Beijing or the academics who advised the Chinese leaders from Washington DC to Geneva. It is the ordinary Chinese people, especially those in the countryside, who were the majority of the country’s population at the start of China’s economic ascendance.
Excerpted from China's Age of Abundance: Origins, Ascendance, and Aftermath by Feng Wang. Copyright © 2024 by Cambridge University Press. Reprinted by permission.
Feng Wang’s book talks at
Columbia University Weatherhead East Asian Institute
Lieberthal-Rogel Center for Chinese Studies at the University of Michigan
