Sample Capstone Project Paper on the Political Economy of China


China is one of the fastest growing economies, going by the global economic trends. However, the journey towards the current economic growth is subject to research, with regard to the communist political ideology in China. China’s political economy can be seen in terms of the political changes that have occurred over a number of years. Initially, the ruling communist regime adopted conservative economic stand point that never allowed the young Chinese entrepreneurs to participate in the political affairs. The main worry and discomfort came from the fact that the older conservative party leadership was afraid of the negative changes that such elites would bring to the party and the national leadership. However, there have been changes in the political economy of China after the leadership opted to allow for the co-optation processes in the country. It remains a fact that China has registered an increased economic growth out of the private sector participation. On the same note, the same private sector has continued to be the number one source of employment in the country.

On the same note, the normal working of the governmental institutions within China has undergone changes. In the current economic times, there need for the institutional linkages between various governmental entities has risen, with most scholars terming it as the best way towards achieving faster economic growth. This paper looks into how the process of linking institutions within China has helped to change the political economy of China. This paper uses some of the researches done by scholar in order to develop correct perspectives to the political economy of China, in terms of the co-optation and institutional linkages. This paper looks into the economic consequences that have come because of the political changes in China. It stands out that the linkage of the economic and politics of the country has contributed to the current state of the China’s political economy. According to this paper, China as a state remains the main architect of the political and social transformation of the country; therefore, the emergence of the private sector is because of this. Therefore, private sector may not have the required strength to keep the government and the political systems on check. This means that the vibrancy and involvement of the private sector in China’s political economy comes from the state’s initiatives. For this reason, this paper notes the tremendous growth of China’s economy with regard to the political initiatives by the ruling CCP to involve the private sector. It has been the major drive towards China’s economic growth in the recent past; however, it turns out that the initiative can only lead to the political stability but not an increased democratic space in the country.

Chinese Communist Party (CCP) and Private Entrepreneurs

The relationship between the ruling Chinese Communist Party (CCP) and private entrepreneurs has been under focus because of the increased economic participation of the private sector in China. As noted above, the country has registered economic growth in the past 20 years because of the increased activities of the private sector. According to Bruce J. Dickson (60-70), the Chinese Communist Party (CPP) introduced measures that allowed for the recruitment and involvement in the political affairs. The move to involve intellects and entrepreneurs was not supported by the majority of the aged communist party who felt that it could lead to the loss of party ideals.

The recent trend shows that China has embraced a system that combines Leninist political system and a market economy. In this system, it seems that the private entrepreneurs have taken the upper hand in carrying out the economic activities of the country’s economy. In 2001, Jiang Zemin, the leader and the president of China made a declaration that allowed businessperson in the country to have membership in the CPP, something that faced certain opposition from other party members. Nevertheless, it is important to look at the reason behind the declaration by the leader of the communist party that was formed to fight for the rights of farmers and other casual workers. It is obvious that most of the entrepreneurs grabbed the chance because of the benefits that it could bring to their operations. As noted in the introduction, the ruling party in China claims responsibility of championing political and social changes, meaning that joining the ruling party meant more privileges and opportunities for the entrepreneurs in the country. Such privileges include having an enabling economic environment for the development of the country.

According to Dickson 86-90), the relationship between the ruling party and entrepreneurs in China can only be seen in terms of the categories of cooperation. The decision to open the Chinese Communist Party (CCP) to the businesspersons and the country’s eliteshelped to benefit to both parties in growing the economy. For instance, businesses by the entrepreneurs who joined the ruling party got a boost from the huge loans they could access from public banks. The second benefit from the relationship has been seen in the linkages of the institutions within the country, helping to develop some shared values for the people. Another important benefit for the cooperation has been seen in the evaluation of public policiesin various sectors of the economy. On this note, arguments can be raised on the effect of the financial help from the state to the entrepreneurs with respect to increasing the democratic space within the country. According to most researches, businesspersons who receive financial support from the political entities are less likely to fight for more democracy within the country. This means that other than the benefits that accrued to the entrepreneurs may have less fight towards democracy in China.

On the other hand, Prybyla (88-89)indicates that size of businesses in China have a relationship to the fight for democracy. For instance, entrepreneurs who owned large businesses are easily inclined towards fighting for democracy and political freedom, something Dickson (84-86) notes to come from the need to change those policies that limit political growth in the country.

Economic Liberation verses Political Reform

The interaction between the private sector and the state is an important aspect of determining the state of an economy. In China, CCP, the ruling party has worked towards ensuring that the country’s economic system allows for the required growth. The increased economic growth in China can be attributed to, among other things, the liberated economy. The ruling regime encourages linkages between local government offices and the private sectors in a bid to remove barriers to the economic growth. However, the linkage between the political systems and the economic aspects does not come as a surprise given that China has been known to be a “socialist society”. In effect, it turns out that economic players would want to have links in the political system in order to access certain privileges. China is ruled by the political system that is closely guarded and maintained by those in power, something that also affects the ability to do business in the country. Therefore, the close working relationship between the government and the major economic players has led to the increased access to the markets for more economic activities.

A positive aspect of the economic liberation has been seen in the ability to formulate certain laws that affect business activities like arbitrary taxes. In order to avoid negative laws, economic liberation has also led to certain political reforms in the country, especially in legislations. For this reason, the government and the ruling party have a working relationship where they all check each other in a bid to encourage the country’s economy. In China, private entrepreneurs have a task of watching certain activities of the government and the party in order to allow for market expansion. However, the truth lies in the fact that private entrepreneurs cannot mount a challenge to the government because the ruling party is not ready to allow for laws and legislations that limit their authority over the people. According to Dickson, it is not possible to call for political reform and democracy without having a system with laws that protect basic rights of citizens.

Chinese entrepreneurs do not have the desire to acquire the autonomy that allows them to make effective challenge to the ruling government. As stated above, this comes from the fact that the economic liberation witnessed at present comes from the will and control of the ruling regime. Therefore, any meaningful changes in the economic system come because of the benefits that accrue from the cooperation and control of the market. In fact, decision of the ruling party to involve elites and entrepreneurs in the party affairs has led to economic liberation in a way that has encouraged political leadership to abandon their positions for business. Economic liberation has led to the desire for more entrepreneurs who want to be joined in the state and party affairs in order to enjoy the necessary privileges. Nevertheless, it is the state and the ruling regime that has the mandate and privileges of the choosing the right of admission (Dickson 84-86). This translates to the limited control that the private sector has towards pushing some specific agenda.

One party rule remains to be a serious indicator that the economic liberation in China has not led to the required political reforms in the country; even though the economy continues to grow. What is termed as economic liberation remains at the mercy of the ruling regime as seen in the leadership posts. During the reform era, most of the entrepreneurs came up with associations that were made to advance their agenda, just as in the Western countries. Someof these associations arePrivate Enterprises’ Association and the Industrial and Commercial Federation. Interestingly, none of these associations hastried working towards ending one party rule in China. A keen look at these associations indicates that the ruling CCP party has the control of these entities by the fact that office-bearers are all party members. This trend shows a negative trend that the economic liberation in China has no ability to help in expanding the political democratic space. The discrepancy between the economic liberation and political reforms is notable.

Dickson (78-80) notes businesspersons from developed regions of China tend have common viewpoints on different issues with the political class.This comes from the desire by such business owners to achieve economic growth rather than other issues. For instance, they tend to form collaboration with the government in order to expand the market instead of following agendas that may destabilize the government. For this reason, many of successful business executives may not fight for political reforms and democracy because of the political instability that may affect their businesses and investments. Collaboration with the government remains the best option because of the enabling development growth and political stability. On the same note, local leaders also work towards achieving economic growth while retaining their political authority on the people.


Future Political Reforms

The current situation shows that less has been achieved in terms of political reforms as influenced by the economic liberation. However, the situation does not seem to be hopeless for the future because the reform is gradual and will soon achieve the end. The private sector has not risen to enjoy the rights and privileges that it ought to because of the political influence from one rule. Though the reform has been slow, legislations that protect the rights of the private will soon lead to the realization that the sector can help achieve economic end for the benefit of the public. The current private sector associations can continue to believe in their ability to influence the choices made by the government towards bettering lives of the citizens.

CCP has managed to create a liberated economy for the development of China, something that works against criticism.Economic freedom has increased under this rule and the whole world can attest to this. However, this paper questions the ability of this regime to withstand more economic liberation. The regime has tried to create a market economy, but the question is raised whether it can withstand the same for long while still leading through monopoly. The co-optation initiatives have worked; however, as this paper and other studies show, it has helped to create an enabling business environment but not the required political changes. Developing a free market requires that citizens have the freedom to own property, without interference by the government, something that has not been achieved (Prybyla 87). Limited government means that the public have freedom to choose and conduct their business with less interference by the state. It is difficult to achieve such in a one-party system like the one by CCP. Nevertheless, it does not mean that democracy leads to absolute less governmental control of the public affairs.

The way things stand, CCP, the ruling regime maybe worried that the increased liberation in China may lead to the less control of the power. However, the fact remains that any slowdown in liberation will eventually lead to the lack of economic growth as witnessed at present, thus, destroying the nameand reputation of the regime. No matter what happens, the fact remains that economic liberation and political reforms are important in order to have sustained economic growth. At present, China has managed to maintain the economic growth while still under one party rule. As liberation continues, the private sector’s role is becoming clearer and may eventually lead to political reforms.


Works Cited

Dickson, Bruce J. The Institutional Links (Ch. 3) in Red Capitalists in China: The Party, Private

Entrepreneurs, and Prospects for Political Change, Cambridge, England: Cambridge University Press, 2003.

Dickson,Bruce J. The Politics of Co-Optation, (Ch. 4.) in Red Capitalists in China: The Party,

Private Entrepreneurs, and Prospects for Political Change, Cambridge, England: Cambridge University Press, 2003.

Prybyla, Jans. The Political Economy of Development in Communist China: China and the

Market, in Political Economy in Communist China, The Indian Journal of Political ScienceVol. 32, No. 4. (October—December, 1971), pp. 567-571.