Xiao ong, Zhang
Book
China's Mode n Economic S a ec a : A Weal h-Powe
Dialec ic
Rou ledge S udies in he Mode n Wo ld Economy
P o ided in Coope a ion wi h:
Taylo & F ancis G oup
Sugges ed Ci a ion: Xiao ong, Zhang (2025) : China's Mode n Economic S a ec a : A Weal h-Powe
Dialec ic, Rou ledge S udies in he Mode n Wo ld Economy, ISBN 978-1-040-26302-0, Rou ledge,
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China’s Mode n
Economic S a ec a
This compelling explo a ion del es in o P esiden Xi Jinping’s ambi ious
e o s o es o e China o i s his o ical ole as a global leade h ough inno a-
i e economic means. B idging he philosophies o Mao Zedong and Deng Xi-
aoping, Xi’s app oach is a unique syn hesis o Ma xis -De elopmen alis ideas,
aiming o con e China’s accumula ed na ional weal h in o g ea powe s a us.
A he hea o his na a i e is a weal h-powe dialec ic, shaping he pe -
o mance and challenges o China’s mode n economic s a ec a . The book
ch onicles he op imism o Xi’s i s e m, he o e each and subsequen e-
enchmen o his second, all se agains he backd op o a slowing domes ic
economy and in ensi ying s a egic compe i ion wi h he Uni ed S a es. Despi e
hese hu dles, he Chinese go e nmen con inues o expand i s a senal o eco-
nomic ools and ini ia i es, showcasing esilience and adap abili y.
This book o e s an insigh ul look in o how Xi Jinping’s enu e migh
be emembe ed as a pinnacle in China’s Ma xis -De elopmen alis economic
his o y. This book is a mus - ead o anyone in e es ed in unde s anding he
in ica e s a egies behind China’s ques o global p eeminence.
The Open Access e sion o his book, a ailable a h p://www. aylo an-
cis.com, has been made a ailable unde a C ea i e Commons [A ibu ion-
Non Comme cial-No De i a i es (CC-BY-NC-ND)] 4.0 license.
Zhang Xiao ong is a p o esso in he Depa men o Poli ical Science and
In e na ional Rela ions and Di ec o o he China and Cen al Asia S udies
Cen e a KIMEP Uni e si y, Kazakhs an. He ob ained his PhD in poli ical
science om he Uni e si é Lib e de B uxelles (ULB) in Belgium.
The Go e nance o Economic De elopmen
In es men , Inno a ion, and Compe i ion in China
Anson Au
The Economics o Russia’s Wa in Uk aine
Impac Analysis o Economic Policy and Finance
Na aliya S uk, Ma yana P okop and Oleksand a S uk
Cybe secu i y, Law and Economics
The Case o India
Edi ed by D . Gagandeep Kau , D . Na end a N. Dalei,
D . Sushan a Kuma Mahapa a and D . Vinay Kandpal
In e na ional Economic Policy o he Polyc isis
Edi ed by Kon ad Raczkowski and Pio Komo owski
Mega-Regional T ade Ag eemen s and India
Balancing Economic and S a egic Conce ns
Pankhu i Gau
Weal h-Powe Dialec ic
China’s New Economic S a ec a
Zhang Xiao ong
Sus ainable Heal h P omo ion P ac ices and he Global Economy
Edi ed by Ben Y.F. Fong and Wang-Kin Chiu
Rou ledge S udies in he Mode n Wo ld Economy
Fo mo e in o ma ion abou his se ies, please isi : www. ou ledge.com/Rou ledge-
S udies-in- he-Mode n-Wo ld-Economy/book-se ies/SE0432
China’s Mode n
Economic S a ec a
A Weal h-Powe Dialec ic
Zhang Xiao ong
Fi s published 2025
by Rou ledge
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© 2025 Zhang Xiao ong
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Names: Zhang, Xiao ong (College eache ), au ho .
Ti le: China’s mode n economic s a ec a : a weal h-powe dialec ic /
Zhang Xiao ong.
Desc ip ion: Abingdon, Oxon ; New Yo k, NY : Rou ledge, 2025. | Se ies:
Rou ledge s udies in he mode n wo ld economy | Includes bibliog aphical
e e ences and index.
Iden i ie s: LCCN 2024033831 | ISBN 9781032218700 (ha dback) | ISBN
9781032218717 (pape back) | ISBN 9781003270379 (ebk)
Subjec s: LCSH: China--Economic policy--2000- | China--Economic
condi ions--2000-
Classi ica ion: LCC HC427.95 .Z435286 2025 |
DDC 330.951--dc23/eng/20240828
LC eco d a ailable a h ps://lccn.loc.go /2024033831
ISBN: 9781032218700 (hbk)
ISBN: 9781032218717 (pbk)
ISBN: 9781003270379 (ebk)
DOI: 10.4324/9781003270379
Typese in Times New Roman
by KnowledgeWo ks Global L d.
Lis o Tables iii
Abs ac ix
Acknowledgmen s x
In oduc ion: China’s New Economic S a ec a
in he Making 1
0.1 The Concep o “Majo Coun y Economic
Diplomacy” 2
0.2 China’s Majo Coun y Economic
S a ec a in he Making 4
0.2.1 China’s Cu en Na ional Condi ions
and S age o De elopmen 4
0.2.2 China’s Regime Cha ac e is ics 6
0.2.3 China’s Ci iliza ional Cha ac e is ics
and His o ical Dep h 6
0.3 Majo Challenges P e en ing China om
P ac icing G ea Powe Economic S a ec a 7
0.4 S uc u e o This Book 8
1 China’s Classic Economic S a ec a :
Con ucius-Mencius Philosophy 11
1.1 Classic Chinese Though s on S a ec a –
Con ucius-Mencius Philosophy 11
1.2 Con ucius-Mencius Though s on Economic
S a ec a 15
1.3 The T ibu e Sys em: China’s Classic
Ins i u ion o Economic S a ec a 16
Con en s
i Con en s
1.4 His o ical Ini ia i es o China’s Economic
S a ec a 21
1.5 Majo Challenges o China’s
Classic Economic S a ec a 22
2 China’s Con empo a y Economic S a ec a :
A Ma xis -De elopmen alis Syn hesis 26
2.1 Ma xis Economic S a ec a : Mao Zedong’s
Way 28
2.2 De elopmen alis Economic
S a ec a : Deng Xiaoping’s Way 33
2.3 A Con inua ion o Deng Xiaoping’s Way:
Economic S a ec a o Jiang Zemin
(1989–2002) 36
2.4 A Con inua ion o Deng Xiaoping’s Way:
Economic S a ec a o Hu Jin ao
(2002–2012) 40
3 Hu Jin ao’s Time: The O igin o China’s New
Economic S a ec a 45
3.1 Rise o China’s Economy 45
3.2 Hu Jin ao’s De elopmen alis Economic
S a ec a 46
3.3 Hu Jin ao’s E o s in T ansla ing China’s
Weal h o Global In luence 48
4 Xi Jinping’s New Economic S a ec a (2012–2017):
Ma xis -De elopmen alis Syn hesis Based on
Con ucius-Mencius Philosophy 55
4.1 Xi Jinping’s New Economic S a ec a
(2012–2017): Ma xis -De elopmen alis Syn hesis
Based on Con ucius-Mencius Philosophy 58
4.1.1 Xi Jinping’s De elopmen alis App oach
o Economic S a ec a 58
4.1.2 Xi Jinping’s Ma xis App oach
o Economic S a ec a 61
Con en s ii
4.1.3 Xi Jinping’s His o ical App oach
o Economic S a ec a Based on
Con ucius-Mencius Philosophy 63
4.2 Xi Jinping’s Majo -Coun y Diplomacy
wi h Chinese Cha ac e is ics (2017–2022) 64
4.2.1 A Case S udy: Xi Jinping’s
App oach o he US 65
4.3 Xi Jinping’s Go e nance Re olu ion 67
5 Xi Jinping’s Economic S a ec a in he E a o D ama ic
Changes Unseen in a Cen u y (2018–2023) 71
5.1 China’s Diploma ic Con on a ion wi h he Wes 72
5.2 China’s S ained Economy 74
5.3 Xi’s Economic S a ec a : Challenges,
Re enchmen , and Resilience 77
Conclusion: The Weal h-Powe Dialec ic: Fundamen al
o China’s Economic S a ec a 84
6.1 Th ee App oaches o China’s Economic S a ec a 85
6.1.1 Empe o Zhu Di’s App oach o
Economic S a ec a 85
6.1.2 Mao Zedong’s App oach o
Economic S a ec a 86
6.1.3 Deng Xiaoping’s App oach o
Economic S a ec a 86
6.2 China’s Pos -1978 Economic S a ec a Model:
Ma xis -De elopmen alis Comp omise 87
6.3 Xi Jinping’s G and Syn hesis:
Ma xis -De elopmen alis S a ec a
Enligh ened by Con ucius-Mencius 88
6.4 O e s e ch: The Bigges Challenge o Xi Jinping’s
Majo -Coun y Economic S a ec a 88
Index 91
2 China’s Mode n Economic S a ec a
weal h had accumula ed o an ex en ha i needed o be wielded mo e e ec-
i ely o enhance China’s global in luence.
0.1 The Concep o “Majo Coun y
Economic Diplomacy”
Since P esiden Xi Jinping began implemen ing “Majo Coun y Diplomacy
wi h Chinese Cha ac e is ics” in 2013, he concep o “majo coun y eco-
nomic diplomacy” was acco dingly de eloped and implemen ed. “Majo
coun y economic diplomacy” is, in simple e ms, economic diplomacy as
p ac iced by majo coun ies (o g ea powe s). Speci ically, i e e s o he
ac , a , and p ocess o weal h-powe con e sion by a g ea powe o ealize
and main ain i s s a us as such.1 G ea powe economic diplomacy is gene ally
cha ac e ized by h ee main ea u es: he migh , he will, and he in luence o
a g ea powe .2 Below is a de ailed explana ion o hese h ee main ea u es o
g ea powe economic diplomacy, h ough which we can assess whe he Xi’s
China is p ac icing so-called g ea powe economic diplomacy.
Fi s , he migh o a g ea powe . A g ea powe is a coun y ha is mili a ily
and economically powe ul, pa icula ly i s mili a y migh . A g ea powe can
wield subs an ial powe esou ces in he exe cise o economic diplomacy. I
has s a egic la i ude and oom o powe maneu e s o impose o coun e sanc-
ions. Bu he eali y o in e na ional ela ions is ha no coun y is “all-migh y”
in all a eas o powe . E en he Uni ed S a es is no an “all- ound champion”
wi h powe esou ces in all sec o s. The Uni ed S a es enjoys global sup emacy
in mili a y powe , bu no in he economic ield. The e o e, a measu e o a g ea
powe is also i s abili y o channel powe esou ces ac oss ields, as well as he
deg ee and e iciency o he mu ual ans o ma ion o powe esou ces om
di e en sou ces. Robe Keohane and Joseph Nye, in hei book Powe and
In e dependence, add ess his issue by saying: “Mili a ily and economically,
s a es will domina e a a ie y o o ganiza ions and a a ie y o issues by link-
ing hei own policies on some issues o o he s a es’ policies on o he issues.
By using hei o e all dominance o p e ail on hei weak issues, he s onges
s a es will, in he adi ional model, ensu e a cong uence be ween he o e all
s uc u e o mili a y and economic powe and he pa e n o ou comes on any
one issue a ea. Thus, wo ld poli ics can be ea ed as a seamless web” (Keohan
and Nye, 2002). The unde lying message is ha g ea powe s can link issues
o edeploy powe esou ces om one issue a ea o ano he , he eby ensu ing
hei dominance in a pa icula a ea o in e es . The au ho a gues ha g ea
powe economic diplomacy in ol es equen poli ical and economic in e -
ac ions, and he e o e, economic diplomacy can be de ined as, “ he wo-way
con e sion be ween weal h and powe ” (Zhang, 2013).
Second, he will o a g ea powe . Apa om economic in e es s, ma-
jo coun ies ha e s a egic in e es s, poli ical ambi ions, and a s ong sense
o s a egic planning. Economic diplomacy is “ he ac , a , and p ocess o
In oduc ion 3
ans o ming weal h and powe mu ually h ough s a egy, ac ics, and ins i u-
ional design by a na ional go e nmen in i s ex e nal ela ions” (Zhang, 2013).
I emphasizes ini ia i e and long- e m planning. Gene ally, based on i s own
s ong weal h base and mo i a ed by i s ambi ions and goals, a g ea powe has
s ong demand o he wo-way ans o ma ion o weal h and powe , and he e-
o e, a s onge will o such ans o ma ion han he medium- and small-sized
coun ies. The in ensi y, speed, and scale o such ans o ma ion a e much
highe in a g ea powe han in a small na ion o a middle powe . All hese
equi e he g ea powe o plan ahead and c a o wa d-looking economic
diplomacy. Eme ging powe s, on he o he hand, mus ca ch up wi h he es ab-
lished powe s. Fo example, he Uni ed S a es caugh up wi h B i ain in he la e
19 h o mid-20 h cen u ies, and Japan caugh up wi h he Uni ed S a es in he
1970s and 1980s. Con e sely, incumben powe s use all a ailable esou ces o
cu b ising powe s. As g ea powe s a us is a sca ce esou ce, compe i ion o
such s a us is concei ably in ense. The inal esul is o en ha one will be he
lose , wo se-o , and in a mo e supp essed posi ion han be o e (Zhang, 2007).
Thus, g ea powe economic diplomacy mus ollow he poli ical ambi ions
o he g ea powe . G ea powe economic diplomacy is essen ially abou se ing
he s a egic in e es s o he g ea powe h ough economic s a ec a , and he s a-
egic in e es s o a g ea powe lie in pu suing i s goals, pa icipa ing in he powe
shi in he in e na ional sys em, and ac i ely shaping he wo ld o de .
Thi d, he in luence o a g ea powe . G ea powe s usually ha e in luence
beyond hei own egions. Ba y Buzan, an Ame ican schola , sugges s ha
he in luence o a g ea powe can span mo e han one egion, and he in lu-
ence o a supe powe can ex end o he en i e in e na ional sys em (Buzan,
2011). The e o e, g ea powe economic diplomacy emphasizes he acquisi-
ion o ans- egional in luence, discou se powe , con ol, and decision powe .
A p esen , he economic diplomacy o he Uni ed S a es, he EU,3 and China
all con ain a global pe spec i e and global in luence. No wi hs anding he
impac o he global inancial c isis, US economic diplomacy s ill main ains
a global oo p in . I ad anced he nego ia ions o he T ans-Paci ic Pa ne -
ship (TPP) in he Asia-Paci ic egion, which was la e canceled by P esiden
Donald T ump. The Uni ed S a es also diploma ically in e ened in he
Russia-Uk aine con lic in Eu asia, imposing economic sanc ions on Russia,
and consolida ed i s ole in NATO o ansa lan ic ela ions. Addi ionally,
i nego ia ed he T ansa lan ic T ade and In es men Pa ne ship (TTIP)
ag eemen wi h he Eu opean Union, which was again canceled by P esiden
T ump. Following he adop ion o he Lisbon T ea y, he EU es ablished he
Eu opean Ex e nal Ac ion Se ice (EEAS) and p oposed en s a egic pa ne -
ships o s eng hen ies wi h o he majo powe s and eme ging economies.
The EU ac i ely pu sued egionalism, exempli ied by he US-EU T ansa -
lan ic F ee T ade Ag eemen nego ia ions, and s eng hened i s economic ies
wi h eme ging economies in Asia. Du ing his pe iod, China’s economic di-
plomacy p og essed om a ocus on domes ic (“in e io line”) o in e na ional
4 China’s Mode n Economic S a ec a
(“ex e io line”) a ai s, expanding i s in luence o A ica, La in Ame ica, and
Eu ope.
In summa y, g ea powe economic diplomacy is cha ac e ized by being
guided by he ambi ions o a g ea powe . I is based on he s eng h o such
powe s and d i en by he p ima y aim o acqui ing o main aining hei s a us
as g ea powe s. The s a egic goal o g ea powe economic diplomacy is
achie ed h ough ans o ming na ional weal h in o in e na ional powe and
in luence, a he han ice e sa.
0.2 China’s Majo Coun y Economic
S a ec a in he Making
Du ing P esiden Hu Jin ao’s enu e (2002–2012), China’s s a us as a majo
coun y was wi hou se ious dispu e, bu he ex en o which China’s economic
s a ec a con o med o he model o g ea powe economic s a ec a de ined
abo e emains open o discussion. In he au ho ’s iew, China’s economic s a e-
c a be o e Xi Jinping had he s eng h o a g ea powe and p ac iced weal h-
powe ans o ma ion on a la ge scale and ac oss sec o s, along wi h a ce ain
deg ee o in e na ional in luence. Howe e , i lacked a key elemen : he co e
objec i es o g ea powe economic s a ec a . One mus ques ion whe he he
p ima y objec i e o China’s economic diplomacy was ocused on powe an-
si ion among g ea powe s and shaping he in e na ional poli ical and economic
o de , o on domes ic economic and social de elopmen . Du ing Hu Jin ao’s
enu e, he Chinese o icial s a emen s sugges ed ha he p ima y goal o
China’s economic diplomacy was domes ic economic and social de elopmen ,
pa ing he way o a comp ehensi e deepening o domes ic e o ms (Wang,
2013b). In his sense, p io o Xi Jinping’s leade ship, China had no ye demon-
s a ed he policy o s a egic eadiness o implemen ing g ea powe economic
s a ec a and lacked he s ong will and clea ambi ions cha ac e is ic o a g ea
powe . Howe e , unde Xi Jinping’s leade ship, he e was a signi ican shi ,
wi h a g owing emphasis on he co e objec i e o China’s majo -coun y eco-
nomic s a ec a being o os e powe ansi ion and o build a new in e na ional
o de . Thus, Xi Jinping’s app oach o economic s a ec a is close o wha can
be quali ied as “g ea powe economic s a ec a ”, bu i is no he e ye .
When Xi Jinping ook o e China’s s a ec a om Hu Jin ao, he inhe i ed
bo h ad an ages and challenges in cul i a ing a ue sense o g ea powe eco-
nomic s a ec a . O e ime, hese elemen s played ou and had a ious e ec s
on Xi Jinping’s ambi ion o mo e China o he cen e o he wo ld s age.
0.2.1 China’s Cu en Na ional Condi ions
and S age o De elopmen
When implemen ing economic s a ec a , China mus conside i s cu en
s age o de elopmen , na ional condi ions, and public opinion. Xi Jinping is no
In oduc ion 5
excep ion. To a la ge ex en , he p ima y goal o he Chinese go e nmen ’s eco-
nomic s a ec a emains o se e China’s economic and social de elopmen and
o imp o e people’s li ing s anda ds since 1978, when China s a ed e o m and
opening-up. On he p inciples o China’s economic diplomacy, he hen Chinese
Comme ce Minis e Gao Hucheng a gued in 2014 ha “we mus adhe e o he
s a egic policy o ha ing diplomacy se e economic goals” (Gao, 2014).
Du ing Xi Jinping’s i s e m (2012–2017), China’s majo economic di-
plomacy ini ia i es, such as he BRI, high-speed ail diplomacy, and nuclea
ene gy diplomacy, we e all closely linked o domes ic de elopmen . The land-
based Silk Road Economic Bel was designed o de elop he wes e n egion
(especially Xinjiang) and o ed ess he cu en imbalance in de elopmen
be ween he eas e n and wes e n egions. The Bangladesh-China-India-My-
anma (BCIM) Economic Co ido and he China-Pakis an Economic Co i-
do (CPEC) a e aimed a de eloping China’s sou hwes e n egion, imp o ing
he egion’s anspo a ion and communica ion in as uc u e, s imula ing
economic de elopmen in he bo de a eas, na owing he de elopmen gap
ac oss egions, and enhancing bo de de ense. High-speed ail diplomacy
aims o expo he excess domes ic manu ac u ing capaci y o high-speed ail.
China has high expec a ions o he high-speed ail in imp o ing na ional
mode niza ion, echnology sophis ica ion, economic s eng h, in e na ional
compe i i eness, and independen inno a ion capaci y and has igo ously in-
es ed in he sec o . As a esul , he mileage o high-speed ail oads buil by
China in unde a decade has exceeded ha o newly-buil high-speed ailways
by de eloped coun ies in he Wes o e he pas 50 yea s. The excess capaci y
made i impe a i e o China o adop high-speed ail diplomacy and o expo
i s highly-scaled high-speed ail echnology and manu ac u ing capaci y.
This is e idence o a dual pu pose in China’s economic s a ec a , which
shi s be ween economic de elopmen and he a ainmen o s a egic goals
as a g ea powe , wi h he o me being he cen al objec i e. This is neces-
si a ed by China’s basic na ional condi ions o s ill being a de eloping coun y
a he p ima y s age o socialism. In g ea powe economic s a ec a , eco-
nomic and poli ical in e ac ions and weal h-powe ans o ma ion a e o en
a odds. When economic s eng h is a gi en ac o , ha ing he economy se e
poli ics will likely a ec economic g ow h. Con e sely, ha ing poli ics se e
he economy can unde mine he pu sui o g ea powe s a us. In ac , o
a long ime, China’s economic diplomacy p io i ized se ing he domes ic
economy, wi h i s p ima y goal being o os e economic and social de elop-
men a home. Going o wa d, i emains o be seen whe he he p ima y goal
o China’s economic diplomacy will pi o o using economic s eng hs o pu -
sue in e na ional powe s a us. Despi e Xi Jinping’s leade ship, his app oach
has no undamen ally changed, as China has no ye achie ed he s a us o a
ully de eloped coun y. In ac , a e Xi came in o powe , China’s economy
slowed down, necessi a ing a ocus on domes ic economic and social de elop-
men o e compe ing o global leade ship in i s economic diplomacy.
6 China’s Mode n Economic S a ec a
0.2.2 China’s Regime Cha ac e is ics
The s ong leade ship o he Communis Pa y o China (CPC) and i s e i-
cien and powe ul go e nmen a e conduci e o he implemen a ion o g ea
powe economic s a ec a . This is he second ea u e o China’s economic
s a ec a . In s a k con as o China, he US go e nmen has expe ienced
epea ed “shu downs” due o budge a y cons ain s. Due o bipa isan disa-
g eemen s in Cong ess, he as - ack au ho i y o b oke ing ade deals has
been e mina ed, which se iously unde mined he c edibili y o he Uni ed
S a es in TPP and TTIP nego ia ions. The IMF e o m bill was also epea -
edly shel ed by Cong ess.4 All o hese ha e g ea ly se back he in e na ional
in luence o he Uni ed S a es. The US sys em is known o he sepa a ion
o powe s, pa isan igh ing, and cong essional cons ain s. F om his o ical
expe ience, a s ong US execu i e and a weak Cong ess would make s ong
US economic diplomacy. On he con a y, a s ong Cong ess and a weak
execu i e will cons ic i s economic diplomacy. Ame ican schola Fa eed
Zaka ia ound ha he Uni ed S a es did no p oac i ely ans o m i s weal h
in o in e na ional in luence du ing he 1865–1889 pe iod when i s economic
powe was ising apidly. Ins ead, he Uni ed S a es adop ed agg essi e o -
eign diplomacy and apidly expanded i s o e seas in e es s du ing 1889–1908.
Why? Zaka ia’s explana ion is ha he g ow h o go e nmen powe and he
ealiza ion by key policymake s o he ela i e s eng h o go e nmen powe
we e he main easons why he Uni ed S a es mo ed om unde -expansion o
ac i e expansion. This is hough -p o oking and helps us o be e ecognize
he egime cha ac e is ics o China’s economic s a ec a – he s ong leade -
ship o he CPC, ac i e s a e leade ship, and an e icien and asse i e go e n-
men . This is an impo an eason o he no able p og ess o China’s economic
s a ec a . Since Xi Jinping ook o ice as Gene al Sec e a y, China’s diplo-
macy has aken on a new look o p og essi eness and inno a ion, as Wang
Yi, China’s Fo eign Minis e p oudly claimed (Wang, 2013c). Du ing Xi’s
ule, China elied on i s egime and ins i u ional s eng hs o u he imp o e
op-le el design and d i e he implemen a ion o economic s a ec a . One
signi ican ea u e o Xi’s economic s a ec a was ha he placed he CPC in
he d i ing sea , wi h he Pa y leading all aspec s.
0.2.3 China’s Ci iliza ional Cha ac e is ics
and His o ical Dep h
The ounda ion o China’s economic diplomacy wi h i s own cha ac e is ics
includes Xi Jinping’s “co ec concep o igh eousness and economic bene-
i ”, which ad oca es balancing igh eousness and bene i in engagemen wi h
de eloping coun ies wi h g ea e weigh on igh eousness (Wang, 2013a). I
also includes he comme cial cul u e ha alues e hics o e p o i and cau-
ions agains p o i ee ing and egoism (Gao, 2014). Zhang Qian’s mission o
In oduc ion 7
he Wes e n Regions led o he es ablishmen o diploma ic ies be ween he
Han Dynas y and he coun ies in he Wes e n Regions and lou ishing iend-
ship along he ancien Silk Road. I also b ough he ci iliza ion, knowledge,
and p oduc s o he Wes e n Regions back o China. In Chinese his o y, he e
we e also Admi al Zheng He’s se en oyages o he Wes e n Ocean, which
is oday’s Indian Ocean. These embodied he Con ucian spi i o “accom-
moda ing people om a a , building ha mony wi h all na ions, and sha ing
peace a ound he wo ld”, and acili a ing economic engagemen and com-
modi y ade. This con as s sha ply wi h he sla e ade and colonial ule
by he Wes e n powe s h ough hei powe ul ships and cannons (Resea ch
Cen e o Economic Diplomacy, Wuhan Uni e si y, 2014). China’s dis inc-
i e ci iliza ional iden i y and he i age ha e helped he coun y cha a pa h
o economic diplomacy di e en om ha o o he g ea powe s – o engage
wi h o he coun ies om a ci iliza ional pe spec i e and o ca y ou majo -
coun y economic diplomacy mo e e ec i ely.
0.3 Majo Challenges P e en ing China om
P ac icing G ea Powe Economic S a ec a
In i s ansi ion o g ea powe economic s a ec a , China aced wo majo
challenges du ing bo h Hu Jin ao and Xi Jinping’s enu es.
Fi s , domes ic cons ain s. The domes ic in e es s o g ea powe s a e
compound and mul i ace ed, and compe ing na ional objec i es, ic ion,
and cons ain s among di e en in e es g oups, powe play among di e en
go e nmen agencies, popula p essu e, and he collision o di e en schools
o hough may all con ibu e o he deple ion o China’s exis ing s eng hs.
Fo example, ci il socie y has inc easingly become a majo ac o in China’s
economic diplomacy. A he apex o he Eu opean deb c isis, when Eu ope
lacked liquidi y, Wenzhou, a Chinese ci y, also plunged in o a p i a e sec o
c edi c isis due o a lack o liquidi y, and p i a e en e p ises wen bank up .
As o he ques ion o whe he China should bail ou Eu ope o Wenzhou,
public opinion was o e whelmingly in a o o Wenzhou (Bai, 2011), which
added o he complexi y o decision-making by he Chinese leade ship.
China’s aid o Macedonia’s school bus p ojec , a ou ine aid ope a ion, also
igge ed hea ed discussions on he in e ne . One use said, “I am no agains
helping o he s, bu I can’ s and ha ou own schoolchild en a e iding in
sc apped buses and se iously o e loaded ans!” (Phoenix In o, 2011) These
ci il p essu es ha e aised a new ques ion o he go e nmen : will o eign
diplomacy and in e nal a ai s become incong uen , and which should come
i s ? Rega dless o he answe , he cu en deba e i sel has al eady placed
cons ain s on he ex e nal p ojec ion o China’s economic powe .
Second, o e s e ch and deple ion o powe esou ces. His o ical expe i-
ence sugges s ha squande ing powe esou ces will lead o he decline o
g ea powe s. Acco ding o Paul Kennedy, he decline o a g ea powe is
8 China’s Mode n Economic S a ec a
he esul o mili a y o e expansion and lack o inancial esou ces. S a egic
o e expansion (e.g., enc oaching on la ge e i o ies and expensi e wa s) can
lead o he decline o a g ea powe (Kennedy, 2013). The e is a limi o he
ans o ma ion o weal h in o powe ; o e -expendi u e o weal h and mili a i-
za ion will in i e he decline o he s a e. The Ame ican poli ical scien is Jack
Snyde , in his book My hs o Empi e, also men ions ha empi es o en ha e
he my h ha na ional secu i y can only be p ese ed by o e -expansion. This
no ion is he main d i e behind he o e -expansion o all he indus ialized
powe s, ye i is p ecisely his agg essi e policy ha has unde mined na ional
secu i y (Snyde , 2007). The main eason why o e -expansion unde mines
na ional secu i y and in e es s is he ine icien con e sion be ween weal h
and powe , was ing oo much weal h wi hou acqui ing he expec ed powe .
The collapse o he So ie Union was la gely due o i s insu icien economic
base o suppo diploma ic, s a egic, and mili a y expansion. I was a ailu e
o So ie economic s a ec a and a iumph o Ame ican economic s a ec a .
The e o e, in economic s a ec a p ac ices, he e iciency o weal h-powe
con e sion is c i ical o he ise and all o g ea powe s. The his o y o he ise
and all o g ea powe s has epea edly demons a ed ha o e consump ion
o weal h and mili a iza ion will lead o he decline o na ional powe . Xi Jin-
ping’s economic s a ec a ma ks a signi ican depa u e om his p edecesso s
and isks o e s e ching. Since he came o o ice, China’s economy has s a ed
o slowdown. Consequen ly, he e is a need o China o explo e “sma ways”
o ans o m weal h in o powe in an a o dable and sus ainable manne .
0.4 S uc u e o This Book
This book concen a es on China’s economic s a ec a du ing Xi Jinping’s e a.
Howe e , o ully comp ehend Xi’s app oach, i is essen ial o explo e he oo s
o China’s economic s a ec a in he classical age, speci ically he Con ucius-
Mencius pe iod. Fu he complica ing his analysis is he ac ha Xi’s philoso-
phy o economic s a ec a ep esen s mo e o a con inua ion han a b eak om
he con empo a y economic s a ec a philosophy o Mao Zedong and Deng
Xiaoping, which blends Ma xis and De elopmen alis ideas. In essence, Xi’s
economic s a ec a can be seen as a syn hesis: a Ma xis - De elopmen alis
app oach in used wi h insigh s om Con ucius and Mencius.
This book is di ided in o i e chap e s. Chap e 1 del es in o China’s clas-
sical economic s a ec a , examining he p inciples o Con ucius and Men-
cius. Chap e 2 explo es he pos -1949 Economic S a ec a Model in China,
cha ac e ized as Ma xis -De elopmen alis wi h Chinese Cha ac e is ics.
Chap e 3 sheds ligh on Hu Jin ao’s economic s a ec a (2002–2012), ac-
ing he o igins o China’s new economic s a ec a . Chap e 4 analyzes Xi Jin-
ping’s economic s a ec a du ing his ini ial e m om 2012 o 2017. Finally,
Chap e 5 examines Xi’s second e m (2017–2022) and he ini ial wo yea s
In oduc ion 9
o his hi d e m (2022–2023), p o iding insigh s in o he e ol ing na u e o
his economic s a egies.
The Conclusion chap e inds ha China’s economic s a ec a has e ol ed
h ough h ee dis inc app oaches: (1) The app oach o Empe o Zhu Di, who
ini ia ed Admi al Zheng He’s oyages ac oss he Indo-Paci ic, symbolizing
a pe iod o explo a ion and ma i ime p owess. (2) Mao Zedong’s app oach,
oo ed in Ma xis ideology and in e wined wi h China’s classical his o y, ep-
esen ing a blend o ideological e o and his o ical con ex . (3) Deng Xiaop-
ing’s app oach, cha ac e ized by a de elopmen alis philosophy, ocusing on
economic g ow h and mode niza ion as he p ima y d i e s o s a ec a . This
chap e concludes ha he ema kable economic ascen o China since 1978
can be a ibu ed o a unique blend o Ma xis ideology and de elopmen alis
economics, a comp omise o ged wi hin he CPC. This comp omise main-
ained Ma xism as he dominan ideological amewo k while simul aneously
emb acing economic libe alism as he d i ing o ce behind China’s s a ec a .
Howe e , he “Ma xis -De elopmen alis Comp omise”, a concep p e ailing
since Deng Xiaoping’s e a, is now being challenged. The e is a g owing isk
o o e ex ension in China’s new economic s a ec a , pa icula ly in he con-
ex o China’s economic slowdown and he Co id. Ul ima ely, he ension in-
he en in he con e sion be ween weal h and powe (weal h-powe dialec ic)
emains one o he mos signi ican challenges o China’s ise. Tha is exac ly
why his book is i led China’s Mode n Economic S a ec a : A Weal h-Powe
Dialec ic.
No es
1 In he a icle “The Cons uc ion o a Theo y on China’s Economic Diplomacy: A
P elimina y A emp ” (see Diploma ic Re iew, 2013, Issue 6), Zhang Xiao ong de-
ines “economic diplomacy” as “ he ac , a , and p ocess o a coun y’s go e nmen
subjec i ely and ac i ely ans o ming weal h in o powe and ice e sa h ough
s a egic, ac ical, and ins i u ional design in in e na ional in e ac ions.” He e,
“weal h” e e s o economic s eng h, economic esou ces (such as oil, aw ma e i-
als, o eign exchange ese es, o e seas in es men s, he s eng h o Chinese en e -
p ises, e c.), economic means, and economic gains. “Powe ” e e s o a posi ion o
ad an age one pa y has o e ano he , which can o ce he o he pa y o accep i s
opinions and asse ions and make hem do hings hey o iginally did no wan o do
o had no planned o do. I is necessa y o poin ou ha powe is no necessa ily
poli ical o mili a y powe ; i can also be economic powe , cul u al powe , o powe
in any ield. This book adop s his de ini ion o economic diplomacy and p o ides a
co esponding de ini ion o “majo -coun y economic diplomacy”.
2 I is wo h no ing ha in China’s o icial na a i e, “majo coun y” is p e e ed o e
“g ea powe ”, since he la e e okes associa ions wi h g ea powe compe i ion in
he 19 h cen u y.
3 The Eu opean Union is a so e eign body composed o 27 so e eign s a es and plays
an impo an ole in he cu en mul ipola con ex . A e mo e han hal a cen u y
o in eg a ion, he EU’s main policy ools o economic diplomacy, such as ade
policy, de elopmen aid, and enla gemen , ha e la gely become compe encies o
10 China’s Mode n Economic S a ec a
he EU, implemen ed uni o mly in o eign ela ions by he EU headqua e s. Fo ex-
ample, he Eu opean Commission is esponsible o nego ia ing he “T ansa lan ic
T ade and In es men Pa ne ship Ag eemen ” wi h he Uni ed S a es and bila e al
in es men ea y nego ia ions wi h China. A he same ime, Eu ozone coun ies
implemen a uni ied mone a y policy and conduc uni ied inancial diplomacy. In
his con ex , we belie e ha he EU can be conside ed a g oup o g ea powe s, and
i s economic diplomacy can be seen as ha o a g oup o g ea powe s. In ac , he
EU’s o e all economic diplomacy is o en s onge and mo e e ec i e han ha o
gene al g ea powe s. To be e unde s and he economic diplomacy o g ea pow-
e s, we ca ego ize he EU’s economic diplomacy as a ype o g ea powe economic
diplomacy.
4 On Ma ch 26, 2014, I a ended a memo able deba e in he Uni ed S a es. One side,
consis ing o he US go e nmen and he Democ a ic Pa y, p oposed sol ing he In-
e na ional Mone a y Fund (IMF)’s assis ance o Uk aine and IMF quo a e o ms as
a package deal. The o he side, he Republican-con olled House o Rep esen a i es,
opposed bundling IMF e o m wi h he Uk ainian aid. Ul ima ely, he Democ a s
we e o ced o comp omise, and he wo issues we e sepa a ed.
Re e ence Lis
Bai, M. (2011) Sa e Eu ope Fi s o Wenzhou i s ?. 7 Oc obe . A ailable a : h ps://
www.guancha.cn/indexnews/2011_10_08_60320.sh ml
Buzan, B. (2011) “The Inaugu al Kenne h N. Wal z Annual Lec u e: A Wo ld O de
wi hou Supe powe s: Decen e ed Globalism”, In e na ional Rela ions. 25(3), p. 4.
Gao, H. C. (2014) “Le he Chinese D eam Ligh up a Be e Wo ld: Lea ning and
Implemen ing Xi Jinping’s Though s on Economic Diplomacy” [Qiushi] 1 Ap il.
Kennedy, P. (2013) “In oduc ion”, The Rise and Fall o G ea Powe s (Pa 1) (in
Chinese). Beijing: Ci ic P ess.
Keohan, R., and Nye, J. (2002) Powe and In e dependence (in Chinese). T ansla ed by
Men, H. H. Beijing: Beijing Uni e si y P ess.
Phoenix In o. (2011) “China’s F ee Aid o Macedonian School Buses Spa ks Online
Deba e” [Phoenix In o] 27 No embe . A ailable a : h p://news.i eng.com/main-
land/special/gsyeyxiaochechehuo/con en -3/de ail_2011_11/27/10929244_0.sh ml
Resea ch Cen e o Economic Diplomacy, Wuhan Uni e si y. (2014) Ad oca ing he
‘Zheng He Spi i ’ and Implemen ing he ‘Zheng He Ini ia i e’ o Vigo ously P omo e
he Cons uc ion o he Ma i ime Silk Road. Ap il.
Snyde , J. (2007) My hs o Empi e (in Chinese). Beijing: Beijing Uni e si y P ess.
Wang, Y. (2013a) Explo ing he Pa h o Majo -coun y Diplomacy wi h Chinese Cha -
ac e is ics,” Speech a he Luncheon o he Second Wo ld Peace Fo um. 27 June.
Wang, Y. (2013b) Speech a he Symposium “New S a ing Poin , New Concep , New
P ac ice: China and he Wo ld 2013”. A ailable a : h p://li e.people.com.cn/no e.
php?id=357131213185739_c dzb_004
Wang, Y. (2013c) “The Success ul P ac ice o Majo -Coun y Diplomacy wi h Chinese
Cha ac e is ics – Fo eign Minis e on China’s Diplomacy in 2013” [People’s Daily]
19 Decembe .
Zhang, X. J. (2007) The Road o he Re i al o G ea Powe s. Beijing: People’s Pub-
lishing House.
Zhang, X. T. (2013) “The Theo e ical F amewo k o China’s Economic Diplomacy: A
P elimina y A emp ”(in Chinese)”, Fo eign A ai s Re iew. (6), p. 53.
DOI: 10.4324/9781003270379-2
This chap e has been made a ailable unde a CC-BY-NC-ND 4.0 license.
China’s Classic Economic
S a ec a
Con ucius-Mencius Philosophy
1
Economic s a ec a , unde s ood as he con e sion o powe in o weal h, has
been p ac iced by all dynas ies and empi es h oughou human his o y. China
is no excep ion; i has no only engaged in economic s a ec a bu also de el-
oped sys ema ic heo ies o i o e ime.
China’s p ominen examples o economic s a ec a p ac ices include
Zhang Qian’s mission o he Wes e n Regions (139 BCE–126 BCE), he T ib-
u a y Sys em (202 BCE–19 h cen u y CE), and Admi al Zheng He’s oyages
(1405–1433 CE).
His o ically, China’s o eign policy la gely elied on i s economic sup em-
acy. Ancien China’s economy was he s onges in he wo ld o a long s e ch
o ime. In 1700, China’s GDP accoun ed o 22.3% and in 1820, 32.9% o he
wo ld’s o al (Angus, 2007).
The ancien Chinese app oach o economic s a ec a signi ican ly di e ed
om he pa adigms o Wes e n g ea powe s du ing mode n imes (1492 CE–
1914 CE), such as me can ilism, libe alism, impe ialism, o Ma xism (Zhang,
2023, pp. 28–43). The co e philosophy unde pinning China’s classical eco-
nomic s a ec a , oo ed in Con ucian e hics, ocused no on p o i bu on
mo ali y and he sus enance o he T ibu a y Sys em, which p e ailed o o e
2000 yea s (202 BCE o he end o he 19 h cen u y CE). In essence, ancien
Chinese economic s a ec a aimed a upholding a mo al-based in e na ional
o de , ein o ced h ough he T ibu a y Sys em.
This chap e ocuses on classic Chinese hough s on economic s a ec a
and i s his o ical p ac ices (see Table 1.1), as well as i s challenges.
1.1 Classic Chinese Though s on S a ec a –
Con ucius-Mencius Philosophy
“S a ec a ” in Chinese is ansla ed as “治国理政”. In Chinese, “治国理政”
(zhì guó lǐ zhèng) di ec ly ansla es o “go e n he coun y and manage poli-
ics”. “治” (zhì) means “ o go e n” o “ o ule”. “国” (guó) e e s o “coun y”
o “na ion”. “理” (lǐ) means “ o adminis e ” o “ o manage”. “政” (zhèng)
pe ains o “poli ics” o “go e nmen ”.
18 China’s Mode n Economic S a ec a
me chan s who seized hese oppo uni ies o ade ac i i ies, he eby p o-
mo ing economic exchanges be ween China and neighbo ing coun ies.
3 Economic S abili y and Peace: The T ibu e Sys em enhanced economic
connec ions and in e dependence, p omo ing egional peace and s abili y
o a ce ain ex en . When economic in e es s a e closely ela ed, he isk o
con lic may educe.
4 Economic In luence: Th ough he T ibu e Sys em, China expanded i s eco-
nomic and cul u al in luence. Neighbo ing coun ies migh adop Chinese
echnologies, p oduc s, and cul u e, deepening economic ies wi h China.
5 Tool o Diploma ic S a egies: Dynas ies in Chinese his o y u ilized he
T ibu e Sys em as pa o hei economic diploma ic s a egies o ensu e
egional peace, s abili y, and in luence.
In o al, he T ibu e Sys em was a c ucial pa o ancien China’s economic
s a ec a , p omo ing peace, coope a ion, and mu ually bene icial ela ion-
ships wi h neighbo ing coun ies h ough economic means.
The Ming Dynas y (1368 AD–1644 AD) was one o he pe iods when
he Chinese ibu a y sys em was mos de eloped and ac i e. Du ing he
Ming Dynas y, he ibu a y sys em, as a means o in e na ional ela ions
and o eign policy, eached a ela i ely ma u e and sys ema ic le el. Du ing
he Ming Dynas y, due o i s s ong economic and mili a y powe , as well
as he de elopmen o ma i ime ade and diplomacy, many coun ies and
egions es ablished ibu e ela ionships wi h he Ming Dynas y. Some o
he ibu a y coun ies o egions du ing his pe iod include: (1) Eas Asia:
Ko ea and Japan ( hough he ibu e ela ionship wi h Ming was uns able
and some imes in e up ed); (2) Sou heas Asia: Vie nam, Siam (p esen -
day Thailand), Malay s a es (including pa s o p esen -day Malaysia and
Indonesia), B unei and Pa s o he Philippines; (3) Sou h Asia: Ceylon
(p esen -day S i Lanka); (4) Cen al and Wes Asia: Occasionally, en oys,
me chan s, o delega ions om Cen al and Wes Asia would isi Ming,
hough his was sligh ly di e en om he ixed ibu e ela ionships wi h
Eas and Sou heas Asia; and (5) A ica: Due o Admi al Zheng He’s se en
oyages o he Wes e n Seas, connec ions we e es ablished wi h some coun-
ies and ci y-s a es along he eas e n coas o A ica, such as Mogadishu,
Musca , and Malindi.
I should be no ed ha he ibu e ela ionships did no imply ha hese
coun ies we e assal s a es o e i o ies o Ming. Ins ead, he T ibu e Sys em
was mo e o a diploma ic and economic in e ac ion me hod, h ough which
ade, cul u al exchanges, and poli ical communica ions we e conduc ed.
Al hough a imes con lic s and dispu es exis ed, he T ibu e Sys em mainly
se ed as a way o pe iphe al coun ies o egimes o o e ibu es o cen al
majo coun ies (like China) o show loyal y and espec , expec ing ecip oca-
ions, p o ec ion, o ecogni ion in e u n. While in some cases, mili a y aid o
p o ec ion migh be p o ided o ibu a y s a es by he cen al majo coun y,
China’s Classic Economic S a ec a 19
he T ibu e Sys em didn’ au oma ically imply such mili a y obliga ions o
commi men s.
Tha being said, China did send oops o p o ec he ibu a y s a es and
ied o main ain he T ibu a y Sys em. He e a e some ob ious examples:
1 Wa s wi h Vie nam:
• Han-Nanyue Wa : F om 111 BC o 108 BC, Empe o Wu o Han
launched a conques wa agains he Kingdom o Nanyue o uni y he
sou he n on ie . Al hough he e was a ibu e ela ionship be ween
Nanyue and he Han Dynas y be o e his, mili a y ac ion was aken by
he Han when Nanyue h ea ened Han’s in e es s.
• Ming-Annam Wa : Du ing he Ming Dynas y, Ming o ces mili a ily
in e ened in Annam (now no he n Vie nam) mul iple imes. Espe-
cially du ing he eigns o Yongle and Xuande, he Ming Dynas y sen
oops o Annam mul iple imes o suppo hei own candida es o
ibu a y s a es.
2 Wa s wi h Mongolia: The ela ionship be ween he Ming Dynas y and
Mongolia was some imes good and some imes bad, and bo h sides had
pe iods o accep ing each o he ’s ibu a y ela ions. When he h ea om
Mongolia o Ming inc eased, he Ming Dynas y ca ied ou mili a y ac-
ions mul iple imes, such as he expedi ions sen by Empe o Taizu o
paci y Mongolia.
3 Wa s wi h Japan: The Yuan Dynas y launched wo amous Mongol in a-
sions when ying o conque Japan (1274 and 1281). Al hough he e was
a ibu a y ela ionship be ween Japan and he Yuan Dynas y be o e his,
mili a y ac ion was aken by he Yuan Dynas y when Japan ejec ed he
Yuan’s demands.
4 Mili a y In e en ion in Ryukyu: The Ming Dynas y had sen oops in he
ea ly days o suppo he Ryukyu Kingdom, which had a ibu a y ela ion-
ship wi h i , o help s abilize i s egime.
To main ain he T ibu a y Sys em was cos ly and o en led o o e ex en-
sion. As a ma e o ac , he high cos o main aining he T ibu a y Sys em
was a key ac o o he collapse o he Ming Dynas y and he Qing Dynas y,
he las wo dynas ies in Chinese his o y. A he end o he 16 h cen u y,
Japan’s Toyo omi Hideyoshi planned o in ade Ko ea as pa o his con inen al
expansion s a egy, ul ima ely in ending o a ack he Ming Dynas y. In 1592,
Japan in aded Ko ea, quickly occupying mos egions. The Ko ean Dynas y
eques ed assis ance om he Ming Dynas y in his di e si ua ion. The Ming
Dynas y saw Japan’s ac ions as a h ea o i s own secu i y and el esponsible
o assis ing a long- e m ibu a y s a e, deciding o send oops o aid Ko ea.
This wa las ed six yea s, un il 1598, when Toyo omi Hideyoshi died, and
Japan decided o wi hd aw i s oops.6
20 China’s Mode n Economic S a ec a
The Imjin Wa (1592–1598) posed a signi ican bu den on he easu y o
he Ming Dynas y. To suppo his wa , he Ming Dynas y mobilized a la ge
amoun o inancial esou ces, ma e ials, and manpowe . Acco ding o his o i-
cal eco ds, he Ming Dynas y in es ed la ge amoun s o ood, gold and sil e ,
weapons, and o he ma e ials in his wa . This wa no only consumed he eco-
nomic esou ces o he Ming Dynas y bu also esul ed in a la ge numbe o
soldie s being killed o inju ed. Addi ionally, o main ain on line ope a ions,
he Ming Dynas y also needed o equen ly le y axes and consc ip soldie s,
leading o domes ic dissa is ac ion and di icul ies. The p essu e o his wa on
he Ming Dynas y’s easu y was so g ea ha some imes eme gency inancial
measu es, such as issuing pape money, we e necessa y o aise unds.
The economic p essu e b ough by his wa also a ec ed he poli ical s a-
bili y o he Ming Dynas y. Al hough he Ming Dynas y success ully assis ed
Ko ea and won he wa , long- e m mili a y expendi u es emp ied he easu y,
and oge he wi h o he domes ic and o eign p essu es, i laid he g oundwo k
o he ul ima e decline o he Ming Dynas y. Fo y-six yea s la e since he end
o Imjin Wa , he Ming Dynas y inally collapsed in 1644 amid he peasan ebel-
lion led by Li Zicheng. Li Zicheng was inally de ea ed by he Qing o ces, who
es ablished China’s las impe ial dynas y, Qing Dynas y (1644 AD–1912 AD).
His o y epea s i sel . The Qing Dynas y sen oops o Ko ea once again
o main ain i s T ibu e Sys em, wi h Japan eme ging as he i al. China and
Japan ough in he Ba le o Jiawu (1894–1895), also known as he Fi s Sino-
Japanese Wa , o he Ba le o he Yalu Ri e . This ba le u he weakened he
Qing Dynas y and b ough emendous humilia ions o he Chinese na ion.
One o he di ec consequences o his wa was he signing o he T ea y o
Shimonoseki, acco ding o which China was o ced o cede Taiwan and i s
a ilia ed islands o Japan.
In he la e 19 h cen u y, al hough he Kingdom o Ko ea was nominally
a ibu a y s a e o he Qing Dynas y, due o in e nal poli ical and economic
u moil, a se ies o e o mis and an i- e o m ac ions eme ged wi hin he
coun y. These ac ions o en sough he suppo o ex e nal majo powe s,
especially he Qing Dynas y and Japan, o consolida e o expand hei powe .
O e ime, Japan’s in luence on he Ko ean Peninsula g adually inc eased,
con lic ing wi h he in luence o he Qing Dynas y.
In 1894, he Donghak Peasan Re olu ion occu ed in Ko ea. The Ko ean
go e nmen eques ed he Qing Dynas y o send oops o help supp ess he
up ising, and he Qing Dynas y complied and dispa ched oops. Howe e ,
Japan also ook he oppo uni y o send oops o Ko ea, claiming i was o
p o ec Japanese ci izens and hei in e es s in Ko ea, leading o a di ec con-
on a ion be ween Chinese and Japanese o ces on he Ko ean Peninsula.
The ense si ua ion be ween he wo sides in Ko ea quickly escala ed in o
a ull-scale wa . In he subsequen mili a y con lic s, he Ba le o he Yalu
Ri e was he mos c ucial na al ba le, in which he Japanese na y achie ed
a decisi e ic o y.
China’s Classic Economic S a ec a 21
The wo his o ical pe iods, he Ming Dynas y (1368–1644 AD) and he
Qing Dynas y (1644–1912 AD), spanning mo e han 500 yea s, collec i ely
demons a e he signi ican impo ance o he T ibu e Sys em in China’s
his o y. Main aining he T ibu e Sys em was c ucial o upholding he
legi imacy o he impe ial dynas ies in China. Howe e , he cos o doing so
o en esul ed in he o e ex ension and subsequen collapse o hese impe ial
dynas ies. The e o e, economic s a ec a in ancien China was much mo e
han a me e ac ic o c a ; i was in eg al o he su i al o he dynas y and
he in e na ional o de ha unde pinned hese dynas ies.
1.4 His o ical Ini ia i es o China’s Economic S a ec a
Economic s a ec a e e s o a coun y using economic means o achie e
diploma ic o s a egic objec i es, o he o he way a ound. In Chinese his o y,
he e we e many ini ia i es o economic s a ec a . Below a e some examples:
1 Silk Road: S a ing om he Han Dynas y (202 BC–9 AD, 25–220 AD),
he Silk Road was a ade and cul u al exchange ou e connec ing China
wi h Wes e n Asia, Sou h Asia, and e en Eu ope. I was no jus a com-
me cial ou e bu also a channel o poli ical and cul u al exchange. Du -
ing he eign o Empe o Wu o Han, Zhang Qian was sen o he Wes e n
Regions, success ully opening his ou e, allowing goods like silk and ea
om China o low in o he Wes , while also enabling cul u al exchanges
wi h o eign egions.
2 Ma i ime Silk Road: Sou h o he Silk Road, he Ma i ime Silk Road
became ano he essen ial ade and cul u al exchange ou e connec ing
China, Sou heas Asia, Sou h Asia, and Eas A ica. Du ing he Tang and
Song Dynas ies, ma i ime ade lou ished, and po ci ies like Quanzhou
and Guangzhou had close ies wi h o eign coun ies. In he ea ly 15 h cen-
u y, Admi al Zheng He made se en oyages o egions such as Sou heas
Asia, Sou h Asia, he Middle Eas , and e en Eas A ica. Al hough hese
oyages we e mainly o display he powe o he Ming Dynas y, hey also
boos ed ade and cul u al exchanges wi h hese egions.
3 Tea-Ho se T ade wi h Cen al and Wes e n Asia du ing he Ming and Qing
Dynas ies: Du ing he Ming and Qing Dynas ies, Chinese ea was ans-
po ed o Tibe and hen en e ed Cen al and Wes e n Asia ia he Himala-
yas. Meanwhile, ho ses and o he goods om o eign egions also en e ed
China. This ea-ho se ade had economic signi icance as well as poli ical
and s a egic meanings.
4 Ma i ime P ohibi ion Policies: The ma i ime p ohibi ion policies in he
middle and la e Ming Dynas y and ea ly Qing Dynas y es ic ed China’s
ma i ime ade wi h he ou side wo ld o p o ec he domes ic economy
and main ain na ional secu i y. Be o e he Opium Wa s in 1840s, he Qing
Dynas y implemen ed a es ic ed o eign ade policy. This included
22 China’s Mode n Economic S a ec a
es ablishing “o icial me chan houses” o o icial ade and a single ad-
ing po sys em in Guangzhou. The ma i ime p ohibi ion policies, ep e-
sen ing a o m o nega i e economic s a ec a , we e he opposi e o he
Silk Road policies, which exempli ied posi i e economic s a ec a .
A signi ican example o China’s posi i e economic s a ec a ini ia i e was
Admi al Zheng He’s oyages. Zheng He’s se en oyages ook place be ween
1405 and 1433 AD and we e majo diploma ic ac i i ies du ing he eigns o
Empe o Yongle and Empe o Xuande o he Ming Dynas y. The main pu pose
o Zheng He’s oyages was o display he au ho i y and weal h o he Ming
Dynas y and o es ablish diploma ic ela ions and expand he in luence o he
Ming Dynas y. This was a “g ea powe diplomacy” s a egy, sp eading he
cul u e and in luence o he Ming Dynas y h ough peace ul means.
Du ing Zheng He’s oyages, al hough he Ming go e nmen allowed and
suppo ed hese oyages, he e we e s ill s ic es ic ions on p i a e ma i ime
ade. This led o a con adic o y si ua ion: he go e nmen -app o ed and sup-
po ed Zheng He’s oyages con as ed wi h he es ic i e policies on p i a e
ade. A e Zheng He’s dea h, he Ming Dynas y g adually abandoned his
la ge-scale ma i ime diploma ic s a egy. Meanwhile, he sea ban policy was
u he s eng hened a e Empe o Xuande.
1.5 Majo Challenges o China’s Classic
Economic S a ec a
China’s economic s a ec a has an inbuil p oblem: o e s e ching. Main ain-
ing a mo al-based in e na ional o de h ough he T ibu e Sys em was cos ly.
In he Ming Dynas y, especially a e Zheng He’s oyages, opposi ion oices
appea ed ad oca ing o sa ing iscal expendi u es, concen a ing esou ces
on inland de ense, and holding skep ical o e en opposing a i udes owa d
ma i ime ac i i ies. This led o he es ic ion o ma i ime ac i i ies and he
neglec o des uc ion o ela ed ma e ials.
I is impo an o emembe ha he T ibu e Sys em was nei he a o m o
ee ade as ad oca ed by libe alism, no was i an expo -o ien ed ade as
championed by Me can ilism. The T ibu e Sys em was buil upon s a e-led,
non- ecip ocal ade and he g an ing o gi s.
Zheng He’s oyages caused a inancial c isis: his oyages we e p ima -
ily ibu e missions, poli ically mo i a ed, and o e looked p ac ical economic
bene i s, o en e e ed o as “gene ous ou bound, meage e u n”. His o ical
eco ds show ha he g and ewa ds by Zheng He and Empe o Zhu Di o
hese o eign ibu a ies igge ed panic in he empi e. Jus he expense on sil-
e alone was six million aels pe yea , no including ewa ds o he 20,000
o icials and soldie s. Due o he la ge amoun o coppe coins ca ied ab oad
o pu chases, he e was a signi ican ou low o cu ency, causing a domes-
ic “money sho age”, se e ely deple ing he na ional ese es and causing a
massi e de alua ion o he cu ency.
China’s Classic Economic S a ec a 23
Mo eo e , Zheng He’s economic s a ec a was s a e monopoly: on he
su ace, Zheng He’s lee , each ime i se sail, was magni icen and awe-
inspi ing, “cloudy sails blocking he sun”, bu essen ially, i was a “lonely sail
in he dis ance”. Behind i , he e we e no, no we e hey allowed, ships om
p i a e ma i ime me chan s. Empe o Zhu Di did no allow coas al mili a y
and ci ilians o “p i a ely in e ac wi h o eign coun ies”, epea edly o de -
ing “s ic p ohibi ion agains ci ilians sailing o e seas p i a ely”. As o he
o e seas ade o coas al esiden s, he o de ed i o be “s ic ly p ohibi ed and
comple ely s opped”. The s ic ma i ime p ohibi ion jeopa dized he li eli-
hoods o coas al esiden s and also led o he closu e o he seas when he
s a e-o ganized oyages o Zheng He s opped. In o he wo ds, once he oyal
needs we e me , once hey hea d he news o peace and anquili y, he ocean
was comple ely closed o om he na ional le el o he ci ilian le el, esul -
ing in he absence o he ocean in China’s mode n his o y a a c i ical pe iod
in wo ld his o y.
When discussing economic s a ec a , people end o o ge he ollowing
h ee key con adic ions:
• The con adic ion be ween he ela i e sca ci y o na ional weal h and he
unlimi ed na u e o a s a e’s pu sui o powe .
• The con adic ion be ween he sca ci y o s a e powe and he unlimi ed
pu sui o weal h by he s a e.
• Finally, he e exis s a dialec ical ela ionship be ween a s a e’s weal h
s a egy and powe s a egy, cha ac e ized by con adic ions and comple-
men a i ies, mu ually shaping and cons uc ing each o he (Zhang, 2023,
pp. 17–18).
Empe o Yang Guang o he Sui Dynas y was a ypical example o weal h-
powe dialec ic. He was he second and las empe o o China’s Sui Dynas y,
uling om 604 o 618 AD. He is a highly con o e sial igu e in his o y,
ma ked by bo h his imp essi e achie emen s and he socioeconomic p ob-
lems hey engende ed.
His majo accomplishmen s included: (1) Comple ing he cons uc ion
o he Sui Dynas y’s capi al, Daxing Ci y (p esen -day Beijing); (2) S eng h-
ening cen alized powe h ough a se ies o adminis a i e e o ms; and
(3) Cons uc ing he G and Canal, connec ing China’s no h and sou h, acili-
a ing economic and cul u al exchange.
Howe e , his ule was also plagued wi h signi ican issues:
1 His in es men in cos ly cons uc ion p ojec s, such as Daxing Ci y and he
G and Canal, exace ba ed he s a e’s inancial bu dens and he axa ion
p essu e on he people.
2 He ini ia ed h ee cos ly mili a y campaigns agains Gogu yeo (loca ed in
p esen -day Ko ean Peninsula and No heas China), all ending in ailu e
and d aining na ional esou ces.
24 China’s Mode n Economic S a ec a
3 In he la e yea s o his ule, poli ical co up ion, embezzlemen , and y anny
led o widesp ead public dissa is ac ion, ul ima ely spa king ebellion.
In 618 AD, Empe o Yang was assassina ed, leading o he collapse o he Sui
Dynas y and ushe ing in a new e a in Chinese his o y— he Tang Dynas y. Tang
Dynas y li e a y schola Pi Rixiu w o e “Two Odes o he Reminiscence o he Bian
Ri e ” o p aise he achie emen s o Empe o Yang Guang. The i s one: “Thou-
sands o d agon boa s wi h g een silk sails, all eaching Yangzhou, ne e o e u n.
I mus be hea en’s ins uc ion o open he Bian wa e way, making a la land o
o e a housand miles wi hou any moun ains”. The second one: “E e yone says
he all o he Sui was because o his i e , ye oday o a housand miles, i s ill e-
lies on i s lowing wa es. I i we en’ o he d agon boa a ai s a he wa e palace,
in discussing achie emen s, i would be much mo e han hose o Yu”.7
In he second hal o he 19 h cen u y, China’s T ibu e Sys em began o
collapse due o he in e nal weaknesses o he Qing Dynas y, Wes e n impe i-
alism and unequal ea ies, Japanese agg ession in Eas Asia, and he in luence
o na ionalism and he concep o he mode n na ion-s a e. Wi h he demise o
he T ibu e Sys em came he end o China’s classic economic s a ec a . How-
e e , Con ucianism, pa icula ly he eachings o Con ucius and Mencius, e-
mains he mos in luen ial philosophy in China. The T ibu e Sys em emains
a p ominen his o ical example om which Chinese policymake s con inue o
d aw lessons and inspi a ion.
The T ibu e Sys em o China, hough his o ically concluded, s ill holds
ce ain ele ance o China’s economic s a ec a oday. I was based on cul-
u al and poli ical exchanges, emphasizing he es ablishmen o ela ionships
and ne wo ks. This way o hinking s ill echoes in China’s cu en o eign
policy, such as in p omo ing he Bel and Road Ini ia i e, whe e he ocus is
on coope a ion and mu ual bene i , no jus economic in e es s.
The T ibu e Sys em was cen e ed on managing asymme ical economic e-
la ions. This expe ience wi h unequal economic ela ionships emains ele an
o China’s cu en economic and diploma ic dealings, pa icula ly wi h de el-
oping coun ies. As an inhe en ly hie a chical sys em, he T ibu e Sys em is
no longe sui able o oday’s in e na ional ela ions, making i impossible o
China o eins a e a new T ibu e Sys em. I is c ucial o China o c i ically
assess he old T ibu e Sys em and conside he ype o in e na ional o de i s
new economic s a ec a could help es ablish.
In he subsequen chap e s ha discuss China’s new economic s a ec a ,
we can s ill iden i y some dis inc aces o he T ibu e Sys em, deeply oo ed
in he eachings o Con ucius and Mencius.
No es
1 “The G ea Lea ning” o iginally was one o he chap e s in he “Book o Ri es” and
is one o he Con ucian classics. Rega ding he au ho ship o “The G ea Lea n-
ing,” he e a e a ious adi ional iewpoin s. The mos widesp ead belie is ha i
China’s Classic Economic S a ec a 25
was eco ded and compiled by Con ucius’s disciples and hei la e ollowe s, bu
he speci ic au ho o edi o is unce ain. In la e anno a ions and in e p e a ions,
especially wi hin he Neo-Con ucianism o he Song and Ming dynas ies, Zhu Xi e-
anno a ed “The G ea Lea ning” and g ouped i wi h “The Doc ine o he Mean,”
“The Analec s,” and “Mencius,” collec i ely known as he “Fou Books.” These
books became he p ima y ex books o schola s s udying Con ucianism du ing he
Ming and Qing dynas ies.
2 The discussion in his pa ag aph is based on a con e sa ion wi h OpenAI’s Cha GPT,
whe e Cha GPT p o ided in o ma ion and analysis based on i s aining da a. The
con e sa ion ook place on No embe 19, 2023.
3 ⟪孟子⟫,⟪尽心章句上⟫“The ‘Exhaus i e Discussions’ sec ion in he ‘Mencius’ ex .”
Mencius, also known by his bi h name Meng Ke o Mengzi, was a amous Chi-
nese philosophe who li ed du ing he Wa ing S a es pe iod om a ound 372 o
289 BCE. He is bes known as he mos amous ollowe o Con ucius and a signi i-
can con ibu o o Con ucian philosophy. Mencius expanded and de eloped Con u-
cius’s ideas, emphasizing he inhe en goodness o human na u e ( enxing) and he
impo ance o nu u ing one’s mo al quali ies and i ues o ealize one’s ull e hical
po en ial. Mencius a eled om s a e o s a e, engaging wi h ule s and o e ing ad-
ice on go e nance and leade ship based on Con ucian p inciples. He belie ed ha
a ule should be bene olen and i uous o go e n e ec i ely and ha he people’s
well-being should be a p io i y. Mencius a gued ha i a ule ailed o p o ide o
he people and ac i uously, he people had he mo al igh o o e h ow him.
His eachings and dialogues we e la e compiled in o a ex known as he
“ Mencius” o “Mengzi,” which, along wi h he “Analec s” o Con ucius, became a
cen al ex in Con ucian educa ion. Along wi h Con ucius and Xunzi, Mencius is
conside ed one o he h ee mos impo an Con ucian philosophe s, and his in e -
p e a ions o Con ucianism ha e been highly in luen ial in he de elopmen o Eas
Asian in ellec ual hough and mo al philosophy.
Sou ce: Con en de i ed om a con e sa ion wi h OpenAI’s Cha GPT, accessed
on No embe 19, 2023.
4 “The noble pe son is awa e o mo ali y, he lesse pe son is awa e o p o i .” This
s a emen is om he “Analec s o Con ucius - Yong Ye” chap e . This implies ha
noble indi iduals should be guided by mo ali y, while lesse indi iduals a e guided
by p o i .
5 Chinese Tex P ojec , “梁惠王上-Liang Hui Wang I”, a ailable a : h ps://c ex .o g/
mengzi/liang-hui-wang-i
6 The empe o o he Ming Dynas y du ing he Imjin Wa (1592–1598) was Empe o
Wanli. His name was Zhu Yijun, and he was he 13 h empe o o he Ming Dy-
nas y, uling om 1572 o 1620, making him he longes - eigning empe o in he
his o y o he Ming Dynas y. Unde his ule, he Ming Dynas y expe ienced ea ly
p ospe i y, bu subsequen ly also encoun e ed a ious in e nal and ex e nal di icul-
ies, including he Imjin Wa wi h Japan.
7 Yu e e s o Yu he G ea , a legenda y ule in ancien China amed o his in oduc-
ion o lood con ol.
Re e ence Lis
Angus, M. (2007) De elopmen Cen e S udies Chinese Economic Pe o mance in
he Long Run, 960–2030 AD, Second Edi ion, Re ised and Upda ed. Pa is: OECD
Publishing.
Zhang, X. T. (2023) New Economic S a ec a : China, he Uni ed S a es and he
Eu opean Union. Ox o d: Taylo & F ancis.
DOI: 10.4324/9781003270379-3
This chap e has been made a ailable unde a CC-BY-NC-ND 4.0 license.
China’s Con empo a y
Economic S a ec a
A Ma xis -De elopmen alis
Syn hesis
Since he ounding o he People’s Republic o China (PRC) in 1949, he
Communis Pa y o China (CPC) has main ained i s hold on powe , guiding
he na ion’s economic s a ec a wi h Ma xis ideology. Howe e , a close
examina ion e eals ha he si ua ion is no as clea -cu as i migh ini ially
appea .Wha we indabou heguiding hough so China’seconomics a ec a
pos -1949 is a Ma xis -De elopmen alis syn hesis.
Economics a ec a ,byde ini ion,in ol es hep oduc iono weal handi s
con e sion in o powe . Ma xism, on he o he hand, aims o achie e social jus-
ice h ough he edis ibu ion o weal h. Thus, when a Ma xis pa y go e ns
a s a e and engages in s a ec a , i aces an inhe en dilemma be ween weal h
c ea ion and weal h dis ibu ion. In o he wo ds, a Ma xis s a e mus esol e
his dilemma; ailu e o do so could lead o he down all o he uling Ma xis
pa y. Ul ima ely, weal h dis ibu ion is unsus ainable wi hou weal h c ea ion.
Fo he i s decadeo MaoZedong’s uling,heunde s ood e ywell ha
China was in a si ua ion o “ex emely poo and blank” (“一穷二白”). So,
he and his com ades ocused on indus ializa ion, ag icul u e, and imp o -
ing people’s li elihoods. Bu he was oo has y in achie ing Communism in
China. His ash ac ions, including he “Th ee-An i and Fi e-An i Campaigns”
(“三反五反”), “G ea Leap Fo wa d”, (“大跃进”) “Mass S eel P oduc ion”
(“大炼钢铁”), and he goal o “Su pass he UK and Ca ch Up wi h he US”
(“赶英超美”), led o ca as ophe. Un il Deng Xiaoping’s ime, Mao’s w ong-
doing has been co ec ed. Deng, as a Ma xis , has adop ed a p agma ic ap-
p oach, which is a de elopmen alis app oach.
This Ma xis -De elopmen alis syn hesis is cen al o unde s anding he
long- e m ule o China’s CPC. This syn hesis alle ia es he ensions inhe -
en inMa xism,speci ically hedilemmabe weenweal hc ea ionandweal h
edis ibu ion,o ,insimple e ms,be weeneconomice iciencyandsocial
jus ice. Fo any Ma xis pa y o go e n long- e m, he key lies in s iking a
balancebe weene iciencyandjus ice.Thedemiseo heUSSRwasla gely
due o i s ailu e o main ain his balance. Mao’s mis akes we e also ela ed
o his issue.
2
China’s Con empo a y Economic S a ec a 27
China’s de elopmen alism is a combina ion o economic libe alism and
me can ilism wi h a s ong s a e. Since he People’s Republic was ounded in
1949, Chinese leade s ha e emb aced di e en guiding hough s o economic
s a ec a , anging om Ma xism and me can ilism o economic libe alism
(Table 2.1).
In hischap e ,wewilldiscussMaoZedong’sMa xis economics a ec a ,
Deng Xiaoping’s de elopmen alis economic s a ec a , and he con inua ion
o Deng’sapp oachbyJiangZeminandHuJin ao.
Table 2.1 China’sEconomicS a ec a omMaoZedong oXiJinping
Poli ical
ideology
Economic
ideology
Main asks Economic
s a ec a
(Weal h-powe
s a egy)
Mao
Zedong
Communis Ma xis mixed
wi h China’s
adi ional way
o hinking as a
cen al kingdom
An i-impe ialism,
independence,
sel -
su iciency,
building a
s ong s a e
Suppo ing
Communis
e olu ion,
de eloping
coun ies,
suppo ing a
new
in e na ional
economic
o de
Deng
Xiaoping
Communis De elopmen alism
(leaning owa d
libe alism)
Economic
de elopmen ,
building a
s ong s a e
GATT accession
Jiang
Zemin
Communis De elopmen alism
(leaning owa d
libe alism)
Economic
de elopmen ,
building a
s ong s a e,
he g ea
eju ena ion o
China, “Th ee
Rep esen s”
GATT/WTO
accession
Hu Jin ao Communis De elopmen alism
(Libe alism +
ligh
Me can ilism +
Socialism)
Economic
de elopmen ,
building a
s ong s a e,
g ea na ional
eju ena ion
The Ou look o
Scien i ic
De elopmen
Eme ging
s a egic
indus ies,
sel -
inno a ion
(Con inued)
34 China’s Mode n Economic S a ec a
Chai man Mao, and we always unswe ingly ollow wha e e di ec i e o
Chai man Mao.” The public in oduc ion o he “Two Wha e e s” spa ked
a majo discussion h oughou he Pa y ega ding he c i e ion o u h.
On May 11, he “Guangming Daily” published a special commen a o ’s
a icle i led “P ac ice is he Sole C i e ion o Tes ing T u h.” The pub-
lica ion o his a icle immedia ely spa ked hea ed discussions and had a
emendous impac . This deba e o e he c i e ion o u h was no jus an
o dina yphilosophicala gumen ,bu a undamen al ec i ica iono chaos
in e ms o hough and heo y. Deng Xiaoping encou aged and led his de-
ba e abou he “c i e ion o u h” and libe a ed he en i e pa y and people
o he na ion om he men al shackles o dogma ism and pe sonali y cul .
This deba e also helped ees ablish he pa y’s ideological line o seeking
u h om ac s, s a ing om eali y in e e y hing, and in eg a ing heo y
wi h p ac ice, hus p epa ing he ideological g oundwo k o u he ec-
i ica iono chaos(News o he Communis Pa y o China, 2023). This
deba e pa ed he way o e o m and opening-up.
Thi dly,on o eign ela ions.Du ingMaoZedong’s ime,despi e ensions
wi h he So ie Union a ce ain pe iods, he e was s ill a endency o uni e
wi h socialis coun ies. Du ing Deng Xiaoping’s ime, China paid mo e a -
en ion o economic and diploma ic ela ions wi h all coun ies, including
Wes e n coun ies, and o eign s a egies we e no longe pu ely based on
ideology. In o he wo ds, Mao’s economic s a ec a , oo ed in Ma xis ideol-
ogy, was p ac iced along he geopoli ical di ide o Eas s. Wes . In con as ,
Deng Xiaoping’s economic s a ec a , p io i izing China’s needs o eco-
nomic de elopmen , ex ended globally, anscending ideological bounda ies.
Fou hly,on hea i ude owa dseconomic e o m.MaoZedongwas igi-
lan agains capi alis endencies and he dange o “ aking he capi alis
oad”. Deng Xiaoping belie ed ha some “capi alis ” phenomena mus
be ole a ed in he e o m, and p oposed he iew o “le ing some people
ge ich i s ”.Di e en omMaoZedong,DengXiaopingbelie ed ha
engaging in heo e ical deba es would lead o missed oppo uni ies and
los chances o de elopmen . F ui less a gumen s a e o no help; u h
can only be es ed in p ac ice. We should boldly expe imen and y hings
ou , e aining om d awing conclusions p ema u ely; ac ion should speak
o i sel . “I doesn’ ma e i a ca is black o whi e; as long as i ca ches
mice, i ’s a good ca .” (China News, 2008) Du ing he Cul u al Re olu-
ion, he me apho o “yellow ca s and black ca s” was c i icized as “only
ca ing abou p oduc i i y” and aced condemna ion. A ound 1976, Mao
Zedongspeci icallyc i icizedDengXiaoping.Maosaid,“Thispe son”—
e e ing o Deng Xiaoping—“does no ocus on class s uggle; he has
ne e emphasized his key issue. I ’s s ill abou he ‘whi e ca , black ca ,’
ega dless o whe he i ’s impe ialism o Ma xism.”
(China News, 2008)
China’s Con empo a y Economic S a ec a 35
In summa y, Mao Zedong’s Communis belie s we e mo e ocused on
ideology and poli ics, while Deng Xiaoping paid mo e a en ion o p agma-
ism and economic de elopmen . I we desc ibe Mao’s economic s a ec a as
s aunchly Ma xis , hen Deng’s economic s a ec a should be cha ac e ized
as p agma ically de elopmen alis .
When p ac icing economic s a ec a , Deng Xiaoping e y much empha-
sized enhancemen and de elopmen o China’s na ional economic s eng h.
He e a e some o Deng Xiaoping’s co e unde s andings and policy iews on
China’s na ional economic s eng h:
Fi s ly, sup emacy o economic cons uc ion. Deng Xiaoping emphasized
he impo ance o China’s na ional economic cons uc ion. He belie ed ha
China’s economic s eng h is he ounda ion o achie ing na ional p ospe i y
and mode niza ion. He p oposed he iew ha “de elopmen is he absolu e
p inciple”, emphasizing ha economic g ow h is China’s mos u gen ask.
Secondly, Re o m and Opening Up Policy. Deng Xiaoping led China’s
e o m and opening up policy, one o he co e objec i es o his policy is
o imp o e China’s economic s eng h h ough ma ke -o ien ed e o ms
and opening up o he ou side wo ld. He in oduced a se ies o e o m
measu es, including he u al land con ac sys em, s a e-owned en e p ise
e o ms, and o eign in es men , o p omo e apid economic g ow h and
mode niza ion.
Thi dly, “Socialism wi h Chinese Cha ac e is ics”. Deng Xiaoping p o-
posed he concep o “socialism wi h Chinese cha ac e is ics”, emphasiz-
ing ha China can de elop i s unique economic pa h wi hin he amewo k
o socialism. He belie ed ha China could main ain poli ical s abili y and
he socialis sys em while abso bing in e na ional expe ience and ma ke
mechanisms o enhance he coun y’s economic s eng h.
Fou hly, emphasis on in as uc u e cons uc ion. Deng Xiaoping belie ed
ha in as uc u e cons uc ion is a key componen o na ional economic
s eng h. He suppo ed in es men in anspo a ion, ene gy, communica-
ions, and o he in as uc u e sec o s o suppo China’s mode niza ion
cons uc ion and economic g ow h.
Fi hly, in e na ional coope a ion and opening-up. Deng Xiaoping ad o-
ca ed ac i ely pa icipa ing in in e na ional economic coope a ion, abso b-
ing ex e nal esou ces and echnology o p omo e China’s mode niza ion.
He encou aged o eign in es men and echnology in oduc ion, while also
ad oca ing he “Fi e P inciples o Peace ul Coexis ence” o main ain in-
e na ional peace and s abili y.
In gene al, Deng Xiaoping’s co e iews on China’s na ional economic
s eng h include he sup emacy o economic cons uc ion, e o m and opening
36 China’s Mode n Economic S a ec a
up, socialism wi h Chinese cha ac e is ics, in as uc u e cons uc ion, and
in e na ional coope a ion. Unde his leade ship, China achie ed signi ican
economic de elopmen , ealizing he goals o na ional p ospe i y and mod-
e niza ion. These unde s andings and policy iews became he co ne s one o
China’s e o m, opening up, and economic de elopmen .
Howe e , we need o unde s and Deng Xiaoping’s economic s a ec a
was a om a capi alis one. The e was a clea poli ical bounda y, which is
China’s Communis egime. Tha is why Deng emphasized he “Fou Ca di-
nal P inciples”, also known as he “Fou Upholds”: (1) Upholding he social-
is pa h; (2) Upholding he dic a o ship o he p ole a ia ; (3) Upholding he
leade ship o he Communis Pa y; and (4) Upholding Ma xism-Leninism
andMaoZedongThough .DengXiaoping’seconomiclibe alism,ope a ing
unde heumb ellao Communism,signi ican lyshapedChina’seconomic
s a ec a in he ensuing decades.
Thesep inciplesholdasigni ican posi ioninChina’spoli icalli eand
a e conside ed he ounda ion o he heo y and p ac ice o socialism wi h
Chinesecha ac e is ics.Despi eadjus men sand lexibili yinac ualpolicies
and economic e o ms, hese Fou Ca dinal P inciples a e s ill ega ded as
unshakable guidelines.
A e a decade o eco e y g ow h, China’s economy began o expe i-
encecyclical luc ua ions.Wi h he apidde elopmen o ligh indus ies, he
numbe o p i a e en e p ises su ged, ma e ial supplies became inc easingly
igh , and na ionwide p ices s a ed o soa uncon ollably. Illegal eselling o
ma e ials became ampan , and he e o m o he con ac ing sys em in s a e-
owneden e p isesne e ullyma e ialized, esul inginsubs an ial inancial
lossesandhea ie iscalbu dens.Tob eak ee om hisp edicamen , he
cen al go e nmen was o ced o inc ease cu ency issuance, u he accel-
e a ingin la ion.Amids hesec ises,decision-make saccep edopinionslike
hose o Wu Jinglian, deciding o ake he isk o quickly adjus ing p ices o
be egula ed by he ma ke . The ailu e o his p ice adjus men in 1988 was
one o he mos dishea ening e en s in he economic e o m his o y o New
Chinaandsigni ican ly al e ed China’spa h o mode niza ion.This ailu e
caused many e o m ini ia i es ha we e al eady on he agenda a ha ime o
bepos poned,wi hsomee enbeinginde ini elydelayed.Inace ainsense,
he ailu e o “b eak h ough” mean ha China missed an oppo uni y o join
he global wa e o democ a iza ion (Wu, 2013).
2.3 A Con inua ion o Deng Xiaoping’s Way: Economic
S a ec a o Jiang Zemin (1989–2002)
Mao and Deng ep esen wo di e en ways o China’s mode n economic
s a ec a . Mao is la gely Ma xis , while Deng is much mo e p agma ic and
de elopmen alis . Bo h ways eed in o hei successo leade ships: Jiang
Zemin,HuJin ao,andXiJinping.
China’s Con empo a y Economic S a ec a 37
Following Deng Xiaoping’s e i emen , Gene al Sec e a y and P esiden
JiangZeminheld he eignso heChinesego e nmen .Jiangadhe ed o he
line o e o m and opening o he ou side wo ld designed by Deng. In he e a
o Jiang Zemin, China sco ed g ea achie emen s in economic diplomacy,
opening up o e seas ma ke s, s abilizing esou ce supply, and imp o ing he
coun y’s economic coope a ion wi h o eign coun ies.
Jiang Zemin’s e a wi nessed many signi ican his o ical inciden s, such
as “ he June 4 h Inciden ”, he 1997 Sou heas Asian Financial C isis, 1999
NATO bombing o he Chinese Embassy in Yugosla ia, he collision o a US
ai c a and a Chinese ai c a o e he Sou h China Sea in 2000, and he 9/11
a acks. Bu P esiden Jiang Zemin s ongly belie ed ha despi e all hese
challenges, he i s 20yea so he21s cen u ywasape iodo s a egicop-
po uni ies o China. I happened ha he was igh .
Theo e a chingphilosophyo JiangZemin’ss a ec a canbeencapsu-
la edinhis“Th eeRep esen s” hough .JiangZemin’s“Th eeRep esen s”
hough wasp oposedin heyea 2000.Speci ically,he i s pu o wa d he
“Th ee Rep esen s” hough on Feb ua y 25, 2000, when he explici ly s a ed
du ing his inspec ion wo k in Guangdong P o ince ha he CPC mus always
ep esen he de elopmen equi emen s o China’s ad anced p oduc i e
o ces, always ep esen he o wa d di ec ion o China’s ad anced cul u e,
and always ep esen he undamen al in e es s o he b oades masses o he
Chinese people (Li, 2022). This hough la e became one o he guiding ide-
ologies o he CPC.
JiangZeminsaid:“The hough o he‘Th eeRep esen s’didno eme ge
ou o hin ai . I is he esul o ou con inuous explo a ion and de elopmen
in heo y and p ac ice o e he pas hi een yea s”… Especially a he end o
he 1980s and he beginning o he 1990s, when se ious poli ical u moil oc-
cu ed domes ically, d ama ic changes in Eas e n Eu ope, he disin eg a ion
o he So ie Union, and se ious se backs in wo ld socialism, China’s socialis
cause acedunp eceden eddi icul iesandp essu es.Ou Pa yandcoun y
we e a a c ucial his o ical junc u e ha would de e mine hei u u e and
des iny (Hu, 2016).
Guided by his belie in he “s a egic oppo uni y pe iod” and he “Th ee
Rep esen s” hough , Jiang con inued o implemen economic s a ec a in he
manne es ablished by Deng Xiaoping. Jiang Zemin’s economic s a ec a
p ima ily e ol ed a ound he con inua ion and expansion o he economic
e o ms ha had been ini ia ed by his p edecesso s, Deng Xiaoping and Hu
Yaobang. Jiang’s economic s a egies we e cha ac e ized by se e al key
elemen s:
Fi s ly, Ma ke -O ien ed Re o ms. Jiang p omo ed ma ke -o ien ed e-
o ms, including he es uc u ing o s a e-owned en e p ises (SOEs) o
imp o ee iciencyandcompe i i eness.Healsoencou aged hede elop-
men o he p i a e sec o and o eign di ec in es men .
38 China’s Mode n Economic S a ec a
Secondly, “Th ee Rep esen s”. Jiang’s “Th ee Rep esen s” heo y empha-
sized ha he Communis Pa y should ep esen he de elopmen end o
China’s ad anced p oduc i e o ces, he o ien a ion o China’s ad anced
cul u e, and he undamen al in e es s o he o e whelming majo i y o
he Chinese people. This also had economic implica ions, emphasizing he
ole o en ep eneu s and echnological ad ancemen s in China’s de elop-
men .Du ingJiangZemin’se a,capi alis scouldalsojoin hePa y.This
e e s o hesigni ican policyshi madeby heCommunis Pa yo China
(CPC) unde Jiang Zemin’s leade ship o allow p i a e en ep eneu s
(capi alis s) obecomePa ymembe s.Thischangeinpolicy e lec ed he
Pa y’s adap a ion o he e ol ing economic s uc u e o China, especially
agains he backd op o he ad ancing e o m and opening-up policies.
In adi ional communis heo y, capi alis s we e conside ed a class an-
agonis ic o socialism. Howe e , unde Jiang’s leade ship, he CPC g adu-
ally ecognized ha wi h he de elopmen o he ma ke economy, p i a e
en ep eneu s had become an impo an o ce in China’s economic g ow h.
The e o e, o be e acili a e na ional economic de elopmen , he Pa y
began o admi p i a e en ep eneu s as i s membe s.
Thi dly, “Going Ou ” S a egy. Jiang p omo ed he “Going Ou ” s a egy,
encou aging Chinese en e p ises o in es o e seas, seek in e na ional co-
ope a ion, and explo e global ma ke s.
Fou hly, engagemen wi h global economy. Jiang encou aged China’s
pa icipa ion in global economic ins i u ions and amewo ks, pa ing he
way o China’s accession o he Wo ld T ade O ganiza ion (WTO) in
2001. His leade ship was c ucial in nego ia ing and acili a ing China’s
in eg a ion in o he global economic sys em.
Fi hly, de elopmen o Wes e n China. Jiang ini ia ed s a egies like he
“Go Wes ” policy, aimed a educing egional dispa i ies by p omo ing
economic de elopmen in wes e n and cen al p o inces.
Six hly,p omo iono aSocialis Ma ke Economy.Jiangwo kedonde in-
ing and p omo ing he concep o a “socialis ma ke economy,” blending
elemen s o socialism wi h ma ke economy p inciples. Jiang saw his as
one o his bigges achie emen s in s a ec a .
Jiang Zemin’s economic s a ec a was abou s a egically employing
economic esou ces and policies o acili a e China’s comp ehensi e de el-
opmen ,globaleconomicin eg a ion,andenhancingChina’sin luenceand
compe i i eness on he wo ld s age. His leade ship was ins umen al in shap-
ing China’s economic ajec o y in he global landscape and laying he oun-
da ions o i s subsequen apid economic ise.
China’s Con empo a y Economic S a ec a 39
Howe e , Jiang Zemin’s economic s a ec a aced se e al majo chal-
lengesdu inghis enu easChina’sleade .Someo hemos signi ican chal-
lenges included:
Fi s ly, S a e-Owned En e p ises (SOEs) Re o m. Re o ming SOEs o im-
p o ee iciencyandcompe i i enesswhilemanagingunemploymen and
social ins abili y ha migh a ise due o layo s and es uc u ing was a
majo challenge.
Secondly, Regional Dispa i ies. Add essing egional dispa i ies in eco-
nomic de elopmen , especially be ween he mo e de eloped coas al e-
gions and he less de eloped wes e n and cen al egions, was a pe sis en
issue.
Thi dly, inancialsec o ulne abili ies.TheChinesebankingand inancial
sec o s aced issues like non-pe o ming loans and equi ed subs an ial e-
o ms o imp o e hei esilience and mode niza ion.
Fou hly, legal and egula o y amewo ks. Building obus legal and egu-
la o y amewo ks o suppo a ma ke -o ien ed economy, p o ec p op-
e y igh s, and acili a e o eign in es men and business ope a ions was
essen ial.
Fi hly, managing economic g ow h wi h social s abili y. Ensu ing ha eco-
nomic e o ms and g ow h did no lead o excessi e social inequali y o ins a-
bili y was c ucial. Managing he social impac s o apid economic changes,
such as unemploymen and labo mobili y, equi ed ca e ul conside a ion.
Six hly, global economic in eg a ion. Na iga ing China’s accession o
he Wo ld T ade O ganiza ion (WTO) and managing he implica ions o
deepe global economic in eg a ion, such as inc eased compe i ion and ex-
posu e oglobalma ke luc ua ions,we esigni ican challenges.
Se en hly, en i onmen al sus ainabili y. Managing he en i onmen al im-
pac s o apid indus ializa ion and economic g ow h, and p omo ing sus-
ainable de elopmen p ac ices was a g owing conce n.
Eigh hly, inno a ion and echnology. P omo ing echnological inno a ion
and upg ading indus ies o mo e up he global alue chain and educe
dependency on low- alue-added manu ac u ing was a s a egic challenge.
Nin hly, co up ion and go e nance. Comba ing co up ion and imp o ing
go e nanceandbu eauc a ice iciencieswi hin hepa yandgo e nmen
appa a us we e also con inuous challenges.
Each o hese challenges equi ed s a egic policy esponses and go e n-
ance adap a ions. Jiang’s economic s a ec a was cha ac e ized by na iga ing
40 China’s Mode n Economic S a ec a
h ough hese complexi ies o main ain a ajec o y o apid economic de-
elopmen and e o m while ensu ing social s abili y and esilience agains
global economic unce ain ies.
A e he 1990s, a sub le shi in China’s economic policy objec i es oc-
cu ed: he goal o he p e ious decade was economic eco e y and sol ing
hep oblemo insu icien p oduc ioncapaci y, husindulging hep i a esec-
o .E e y hingbene icial oimp o ingp oduc i i ywasencou aged,e eni
i c ossed legal bounda ies, i was ole a ed. A e his pe iod, he objec i e
changed, shi ing owa d s eng hening he leade ship abili y o he uling
g oup,enhancingcon ol,andob ainingg ea e bene i sinde elopmen .Con-
sequen ly, he cen al go e nmen eclaimed powe s om local au ho i ies,
and hego e nmen compe edwi h hep i a esec o o bene i s,ma kinga
e u n o au ho i a ianism (Wu, 2013). S a ing in 1994, he implemen a ion o
a ax-sha ingsys emhadasigni ican impac onChina’seconomiclandscape
he ea e .In1994, hecen algo e nmen ’s iscal e enuesu gedby200%
compa ed o he p e ious yea . The mos impo an ou come o his was ha
hecen algo e nmen egained heini ia i eineconomicpowe andbene i
dis ibu ion (Wu, 2013).
G adually, Jiang’s economic s a ec a is assuming an inc easingly salien
de elopmen alis cha ac e is ic, wi h he cen al go e nmen playing a bigge
ole. The e is a clea shi owa d s a e in e en ion.
2.4 A Con inua ion o Deng Xiaoping’s Way: Economic
S a ec a o Hu Jin ao (2002–2012)
Inhe i ed omDengXiaopingandJiangZemin,HuJin aocon inuedChina’s
de elopmen alis economic s a ec a . Hu’s economic s a ec a is heo ized
as he“Scien i icDe elopmen ”philosophy.
The ou b eak o Se e e Acu e Respi a o y Synd ome (SARS)3 in 2003 was
closely ela ed o hep oposalo he“Scien i icDe elopmen ”Concep .The
Scien i icDe elopmen Concep ,p oposedin2003,was he i s majo chal-
lenge acedbyHuJin aoa e akingo iceandhadasigni ican impac on he
o ma iono his hough sonscien i icde elopmen .
The ou b eak and sp ead o SARS exposed new con adic ions and p ob-
lems in China a e a phase o apid economic de elopmen , such as uncoo -
dina ed de elopmen , lagging public heal h de elopmen , and an inadequa e
eme gency esponse mechanism. This p omp ed he CPC Cen al Commi ee
o deeply ponde o e he de elopmen issues o China unde he new si u-
a ion. The majo heo e ical and p ac ical ques ion o “wha kind o de el-
opmen o achie e and how o de elop” was his o ically placed be o e he
Chinese Communis s.
A he end o Augus and he beginning o Sep embe 2003, du ing
hisinspec ioninJiangxi,HuJin aop oposed heconcep o heScien i ic
China’s Con empo a y Economic S a ec a 41
De elopmen Concep , emphasizing he need o i mly es ablish a scien-
i ic iew o coo dina ed, comp ehensi e, and sus ainable de elopmen .
In Oc obe , he Thi d Plena y Session o he 16 h CPC Cen al Commi ee
i s o mallypu o wa d heScien i icDe elopmen Concep in hePa y’s
o icialdocumen ,s essing“adhe ence opeople-o ien edp inciples,es ab-
lishing a comp ehensi e, coo dina ed, and sus ainable iew o de elopmen ,
and p omo ing he comp ehensi e de elopmen o he economy, socie y, and
people”.
On Ma ch 10, 2004, Hu Jin ao made a comp ehensi e explana ion o he
scien i icconno a ion, basic equi emen s,andguiding signi icance o he
Scien i ic De elopmen Concep a he Cen al Popula ion Resou ces and
En i onmen Wo k Symposium. He poin ed ou ha adhe ing o people-
o ien ed p inciples means aiming o he comp ehensi e de elopmen o
people, seeking and p omo ing de elopmen based on he undamen al in-
e es s o he people, con inuously mee ing he g owing ma e ial and cul u al
needs o he people, e ec i ely sa egua ding he economic, poli ical, and
cul u al igh s and in e es s o he people, and allowing he ui s o de elop-
men obene i all hepeople.Comp ehensi e de elopmen means cen e -
ing on economic cons uc ion, comp ehensi ely ad ancing he cons uc ion
o he economy, poli ics, and cul u e, and achie ing economic de elopmen
and o e all social p og ess. Coo dina ed de elopmen means coo dina ing
u ban and u al de elopmen , egional de elopmen , economic and social
de elopmen , ha monious de elopmen be ween man and na u e, coo dina -
ing domes ic de elopmen and opening up o he ou side wo ld, p omo ing
he coo dina ion be ween p oduc i e o ces and p oduc ion ela ions, and he
economic base and he supe s uc u e, and coo dina ing all aspec s o eco-
nomic, poli ical, and cul u al cons uc ion. Sus ainable de elopmen means
p omo ing ha mony be ween man and na u e, achie ing coo dina ion be-
ween economic de elopmen , and popula ion, esou ces, and en i onmen ,
adhe ing o heci ilizedde elopmen pa ho p oduc i ede elopmen ,a lu-
en li e, and good ecology, and ensu ing sus ainable de elopmen om gen-
e a ion o gene a ion (Edi o ial Team o A B ie His o y o he Communis
Pa y o China, 2021).
I wecompa eJiangZeminandHuJin ao,wecanobse esomedi e -
ences in hei unde s anding and p ac ice o s a ec a . Below a e some o he
majo di e ences:
Fi s ly, di e en ocus on de elopmen . Du ing Jiang’s enu e, Chinese
policies emphasized economic cons uc ion and na ional economic mod-
e niza ion, pu suing enhanced na ional economic s eng h, wi h a ocus
on economic g ow h. In con as , Hu Jin ao placed mo e emphasis on so-
cial ai ness and imp o ing people’s li elihoods, p oposing he concep o
“building and sha ing oge he ,” ocusing on social issues, ensu ing ha all
people could sha e he g ow h esul s o na ional weal h.
42 China’s Mode n Economic S a ec a
Secondly,emphasisonsus ainablede elopmen .Al houghJiangZemin
also paid a en ion o en i onmen al issues, he ela i ely less empha-
sized en i onmen al p o ec ion and ecological ci iliza ion, ocusing
mo e on economic cons uc ion. In con as , Hu emphasized he impo -
ance o en i onmen al p o ec ion and sus ainable de elopmen , p o-
posing he concep o building an ecological ci iliza ion and adop ing a
se ies o policies o p omo e en i onmen al p o ec ion and sus ainable
de elopmen .
Thi dly, handling poli ical sys ems and social issues: Du ing Jiang’s en-
u e, he e was ela i ely mo e emphasis on poli ical s abili y and social
con ol, adop ing ela i ely s ingen measu es on some social issues o
main ain na ional s abili y. Hu, ins ead, ad oca ed social ha mony, paid
mo e a en ion o handling social issues, adop ed a se ies o policies o
educe po e y, imp o e educa ion and medical le els, emphasizing social
ai ness and imp o ing people’s li elihoods.
Insumma y, hee aso DengXiaopingandJiangZemin ocusedmo eon
economic g ow h and he accumula ion o economic s eng h, while he e as
o Hu Jin ao and Xi Jinping ocused mo e on he ans o ma ion o economic
s eng h. Hu Jin ao emphasized he ans o ma ion o economic s eng h o-
wa d domes ic aspec s such as social ha mony and en i onmen al p o ec ion,
while Xi Jinping ocused on bo h domes ic and in e na ional ans o ma ions,
such as he ex e nal “Bel and Road Ini ia i e” and he domes ic “Th ee-Yea
Po e y Alle ia ion” and “Common P ospe i y”.
In many aspec s, Hu Jin ao’s app oach lies somewhe e be ween ha o
Deng Xiaoping and Xi Jinping. Once Xi Jinping assumed powe , he began o
implemen a Ma xis -De elopmen alis syn hesis in his app oach o economic
s a ec a .
No es
1 Key cha ac e is ics and goals o de elopmen alism include:
1 Economic G ow h and De elopmen : The p ima y objec i e is o achie e apid
andsus ainableeconomicg ow h.Thiso enin ol essigni ican in es men in
in as uc u e, indus y, and echnology o mode nize he economy.
2 S a e-Led Ini ia i es: Go e nmen s play a p oac i e ole in guiding he econ-
omy. This can include s a egic planning, di ec ing in es men in key sec o s,
and some imes di ec ly managing ce ain indus ies o esou ces.
3 Indus ializa ion: A majo ocus is o en on de eloping a s ong indus ial base.
This can in ol e mo ing away om an economy based p ima ily on ag icul u e
o awma e ialexpo s oone ha ismo edi e si iedandindus ialized.
4 P o ec ionism and T ade Policy: De elopmen alism may in ol e p o ec ing
nascen indus ies h ough a i s and o he ade ba ie s un il hey a e com-
pe i i ein e na ionally.Howe e , hisaspec can a ydependingon hespeci ic
s a egies o a coun y.
China’s Con empo a y Economic S a ec a 43
5 Imp o ing Li ing S anda ds: Alongside economic g ow h, he e’s o en an
emphasis on imp o ing he gene al li ing s anda ds o he popula ion, including
educing po e y and inc easing access o educa ion and heal hca e.
In con as o mo e laissez- ai e o ma ke -d i en economic models, de el-
opmen alism elies on ac i e go e nmen in e en ion and s a egic planning
o s ee na ional economic de elopmen . This app oach has been pa icula ly
p e alen in many Eas Asian economies, like Sou h Ko ea and Taiwan, espe-
cially in he pos -Wo ld Wa II e a.
The abo e discussion is based on a con e sa ion wi h OpenAI’s Cha GPT,
whe e Cha GPT p o ided in o ma ion and analysis based on i s aining da a.
The con e sa ion ook place on No embe 24, 2023.
2 The “Two Newspape s and One Magazine” e e s o wo newspape s and one maga-
zineinMainlandChina ha we e hemos au ho i a i eandin luen ialdu ingand
o a pe iod a e he Cul u al Re olu ion. These h ee media ou le s ypically e e
o he People’s Daily (⟪人民日报⟫), he PLA Daily (⟪解放军报⟫), and he Red
Flag magazine (la e enamed “Seeking T u h” o ⟪求是⟫).
3 The ou b eak o SARS occu ed owa d he end o 2002 and in o 2003. This epi-
demicwas i s iden i iedinNo embe 2002inGuangdongP o ince,China.I hen
apidly sp ead globally, pa icula ly peaking in he sp ing o 2003. By July 2003, he
Wo ld Heal h O ganiza ion (WHO) decla ed ha he SARS epidemic was la gely
con ained.
Re e ence Lis
Angus, M. (2007) De elopmen Cen e S udies Chinese Economic Pe o mance in
he Long Run, 960–2030 AD, Second Edi ion, Re ised and Upda ed. Pa is: OECD
Publishing.
Bo elie , P. (2018) Economic Policy Making in China (1949–2016): The Role o Econ-
omis s. London: Rou ledge.
China News. (2008) The Backs o y o Deng Xiaoping’s ‘Black Ca , Whi e Ca Theo y’:
O iginally a Sichuan Colloquialism [China News] 17 Decembe . A ailable a : h p://
www.chinanews.com.cn/cul/news/2008/12-17/1490780.sh ml
Edi o ial Team o a B ie His o y o he Communis Pa y o China. (2021). A B ie
His o y o he Communis Pa y o China. Beijing: People’s Publishing House.
A ailable a : h ps://a icle.xuexi.cn/a icles/pd /index.h ml?a _id=165724132929
65867289&s udy_s yle_id= eeds_wm_lis &pid=25525014109442846&p ype=75&
sou ce=sha e&sha e_ o=wx_single
Edi o ial Team o he Economic His o y o China. (2019) Economic His o y o China.
Beijing: Highe Educa ion P ess.
Hu, J. T. (2016) “Speech a a P esen a ion on he S udy o Selec ed Wo ks o Jiang
Zemin”,Selec ed Wo ks o Hu Jin ao. Beijing: People’s Publishing House.
Li, Q. G. (2022) How Did he Impo an Though o Th ee Rep esen s Come in o Being?
[S udy Times] 2 Decembe .
Mao,Z.D. (1977) Selec ed Wo ks o Mao Zedong (Volume 5). Beijing: People’s Pub-
lishing House.
Mao,Z.D. (2002) “Don’ S ike Ou on All Sides”, Selec ed Wo ks o Mao Zedong.
Beijing: CPC Cen al Pa y School Publishing House.
Na ional Bu eau o S a is ics. (1979) Summa y o Na ional Economic S a is ics o he
30 Yea s a e he Founding o he People’s Republic o China (1949–1978).
50 China’s Mode n Economic S a ec a
China’s inabili y o de ine o i sel a leading posi ion in he global econ-
omy is u he illus a ed, om he Chinese pe spec i e, by i s ailu e hus a
o achie e so-called Ma ke Economy S a us (MES). China belie ed ha he
MES should be g an ed wi hou objec ion 15 yea s a e China’s accession o
he WTO, which occu ed in 2001. The Uni ed S a es and he EU, a leas un il
now, seem o belie e o he wise (Ga y and Ca hleen, 2015).
In July 2008, he Wo ld T ade O ganiza ion’s Doha Round o nego ia ions,
in ol ing a small g oup o minis e s, ended once again wi hou any esul s.
The global ade sec o was imme sed in ex eme disappoin men . Du ing he
mee ing whe e Pascal Lamy announced he b eakdown o he nego ia ions,
he EU’s Commissione o ag icul u e was choked up se e al imes while
speaking (Chai, 2015). The ailu e o he 2008 WTO Minis e ial mee ing also
se ed as a wake-up call o Chen Deming, he Chinese Minis e o Com-
me ce. He del ed deepe in o hese e lec ions in his book “Economic C isis
and Rule Recons uc ion” (Chen, 2014). As a key policy igu e unde Hu Jin-
ao’s leade ship, Chen belie ed in he necessi y o e o ming he exis ing ules
o he global economic sys em.
Secondly on inance.
Finance is he second o igin o he Chinese pe spec i e on economic s a e-
c a . Fo example, in 2009 du ing he peak o he inancial c isis, he Chinese
cen al bank go e no Zhou Xiaochuan w o e an a icle i led “Re o m he
In e na ional Mone a y Sys em”, p oposing o a “supe -so e eign in e na-
ional ese e cu ency”, which e lec ed China’s aspi a ions and dissa is ac-
ion wi h he US dolla hegemony (Zhou, 2009).
Fo Zhou Xiaochuan, an in e na ional ese e cu ency should i s be an-
cho ed o a s able benchma k and issued acco ding o a clea se o ules, he e-
o e o ensu e o de ly supply; second, i s supply should be lexible enough
o allow imely adjus men acco ding o he changing demand; hi d, such
adjus men s should be disconnec ed om economic condi ions and so e eign
in e es s o any single coun y. The ou b eak o he Global Financial C isis
and i s spillo e o he en i e wo ld e lec he inhe en ulne abili ies and
sys emic isks in he exis ing in e na ional mone a y sys em. Zhou belie es
ha he desi able goal o e o ming he in e na ional mone a y sys em is o
c ea e an in e na ional ese e cu ency ha is disconnec ed om indi idual
na ions and is able o emain s able in he long un, hus emo ing he inhe en
de iciencies caused by using c edi -based na ional cu encies (Zhou, 2009).
Zhou p oposed eplacing he US dolla wi h a supe -so e eign in e na-
ional ese e cu ency as he wo ld’s ese e cu ency. He sugges ed ha
Keynes’s “Banco ”, in oduced du ing he B e on Woods Con e ence, was
a mo e a sigh ed concep . This o esigh , acco ding o Zhou, is e idenced
by he collapse o he B e on Woods sys em, which elied on he app oach
p oposed by Ha y Whi e (Zhou, 2009).
Amids he inancial c isis, Zhou Xiaochuan’s a icle sen shockwa es
a ound he wo ld and was widely ega ded as China’s i s open challenge
Hu Jin ao’s Time 51
o he in e na ional s a us o he US dolla (D ezne , 2009). I also ma ked
a signi ican debu o China on he in e na ional inancial diplomacy s age,
ep esen ing he i s ime China sys ema ically exp essed i s dissa is ac ion
wi h he exis ing in e na ional inancial o de . In ac , jus days be o e Zhou
Xiaochuan’s a icle was published, Russia had al eady pu o wa d a simila
p oposi ion. Howe e , he e was no in e na ional esponse o Russia’s sugges-
ion un il Zhou Xiaochuan made his p oposal, a which poin he in e na ional
communi y eac ed as i a po o oil had exploded. Zhou Xiaochuan’s a icle
ecei ed posi i e esponses om eme ging coun ies such as Russia, B azil,
India, A gen ina, and Indonesia, demons a ing he appeal o China’s inancial
diplomacy (Li, 2015).
Fu he mo e, o acknowledge he signi icance o China’s inancial powe ,
F ance, he o a ing p esiden o he G20 summi in 2011, speci ically hos ed
a semina on “Re o ming he In e na ional Mone a y Sys em” in Nanjing,
China. This semina ga he ed inance minis e s, cen al bank go e no s om
he G20 and ela ed coun ies, ep esen a i es o in e na ional o ganiza ions,
and key schola s in he ields o in e na ional economics and cu ency.
Howe e , China’s inancial diplomacy in e o ming he in e na ional mon-
e a y sys em has achie ed e y limi ed success. Mos Wes e n coun ies ha e
exp essed opposi ion o China’s sugges ion o swi ch ese e cu encies. The
Uni ed S a es eac ed swi ly and s ongly, wi h P esiden Obama esponding
p omp ly o Zhou Xiaochuan’s sugges ion by s a ing ha he e is no need o
c ea e a new global cu ency. Al hough he Eu opean Union suppo s a g ea e
ole o eme ging coun ies, i is less en husias ic abou changing he ese e
cu ency. Joaquín Almunia, he EU Commissione o Economic and Mon-
e a y A ai s, said in an in e iew ha he did no see a signi ican s uc u al
change in he dolla ’s ole as a majo ese e cu ency oday. A e a mee ing
a he Eu opean Commission, Almunia ema ked, “E e yone belie es ha he
cu en global ese e cu ency, he dolla , is s ill he e and will emain so o
a long ime”. Aus alian P ime Minis e Ke in Rudd also exp essed a simila
sen imen du ing his isi o he Uni ed S a es, s a ing in Washing on ha he
dolla ’s s a us as a ese e cu ency is indispu able (Jiemian News, 2009). As
a esul , he US dolla emains he wo ld’s dominan ese e cu ency.
Thi d, on ene gy, China is deeply and inc easingly conce ned abou po-
en ial dis up ions o i s sea lanes o economic supply, especially he na ow
passage o he Malacca S ai , which om Beijing’s pe spec i e could be eas-
ily blockaded o he de imen o China’s economic de elopmen and secu i y.
Acco dingly, China is seeking o lock up sou ces o supply and c ea e al e -
na e ou es o deli e y ha equi e i s inno a i e use o channels o in es -
men no beholden o he Wes (Zhang and Kei h, 2017).
F om 2002 o 2012, he mos no able achie emen in Sino-Russian ene gy
diplomacy was he comple ion o he China-Russia c ude oil pipeline. This
pipeline is pa o he “Eas Sibe ia-Paci ic Ocean Pipeline” sys em, aimed a
expo ing Russian c ude oil o he Asia-Paci ic ma ke .
52 China’s Mode n Economic S a ec a
Nego ia ions o he China-Russia c ude oil pipeline began in 1997 bu
p og essed slowly due o a ious easons. In 2009, China and Russia signed
an ag eemen in which China p o ided a $25 billion loan o Russia. In ex-
change, s a ing om 2011, China would impo 15 million ons o oil an-
nually om Russia o e a 20-yea pe iod. As pa o his ag eemen , i was
decided o lay a pipeline om Sko o odino in Russia o Daqing in China.
This pipeline was comple ed on Sep embe 27, 2010. Since Janua y 1, 2011,
i has been anspo ing 300,000 ba els o oil pe day. This is known as he
“loan- o -oil” p ojec .
Be ween 2002 and 2012, he mos p ominen achie emen in China’s en-
e gy diplomacy wi h Cen al Asia was he cons uc ion o he China-Cen al
Asia na u al gas pipeline. The ini ial in en ion behind building he China-
Cen al Asia na u al gas pipeline was o ex end he exis ing China-Kazakhs an
oil pipeline. The ac ual cons uc ion o he na u al gas pipeline has p o ided
China wi h a s eady supply o na u al gas and has spu ed economic de elop-
men in Cen al Asian coun ies. I s signi icance o China and he Cen al
Asian coun ies is simila o ha o he China-Russia c ude oil pipeline p ojec
(Wu, 2015).
Fou h, on echnology, China has become e en mo e deeply us a ed
wi h he pe sis en a ms emba go and expo con ols o dual-use p oduc s im-
posed by he Wes e n wo ld. Some o hese measu es da e om no maliza ion
and ha e e ol ed; ha e olu ion was a ec ed by he “Tiananmen Inciden ” on
June 4, 1989 (Zhang and Kei h, 2017).
In esponse, China s a ed o implemen he Inno a ion-D i en De elop-
men S a egy (IDDS) in 2006. The IDDS is buil a ound he idea ha a e y
speci ic wa e o echnological change is beginning. The con igu a ion o his
wa e o echnological change hus gi es inc easingly a de ini e o m o pol-
icy. I also means ha , in he IDDS, he oppo uni y o mo e di ec ly o he
echnological on ie and su pass o he economies is no longe a wished- o
ea u e o a ew andom sec o s bu a he a undamen al ea u e o he cu en
global momen . Inc easingly, Chinese indus ial policy is based on he idea
ha China has a once-in-a-li e ime oppo uni y o ge in on he g ound loo
o a echnological e olu ion and aul in o he leading anks o economic and
echnological powe s (Naugh on, 2021).
In summa y, Hu Jin ao’s economic s a ec a yielded mixed esul s. While
he e we e successes, mos achie emen s we e only pa ially ealized, whe he
in he ealm o WTO leade ship o in e o s o e o m he in e na ional mon-
e a y sys em.
Hu Jin ao’s enu e wi nessed China’s apid economic ascen . Howe e ,
his pe iod was also ma ked by a signi ican dilemma: despi e g owing eco-
nomic s eng hs, China aced an inc easingly challenging in e na ional en-
i onmen , cha ac e ized by heigh ened pushback and skep icism abou i s
global ole. This p edicamen signi ican ly shaped he economic s a ec a o
bo h Hu Jin ao and his successo . In esponse, Hu ini ia ed economic s a ec a
Hu Jin ao’s Time 53
ini ia i es ocused on e o ming global economic go e nance, le e aging
China’s bu geoning economic capabili ies. Howe e , hese e o s we e a
om comple e, leading o us a ion among Chinese policy eli es and se ing
he s age o Xi Jinping’s new app oach o economic s a ec a .
Re e ence Lis
Chai, X. L. (2015) “ he WTO”, in Zhang, X. T. and Wang, H. Y., co-eds, Chinese Eco-
nomic Diplomacy: The PRC’s G owing In e na ional In luence in he 21s Cen u y.
London: ACA Publishing L d.
Chen, D. M. (2014) The Economic C isis and he Res uc u ing o Rules. Beijing: The
Comme cial P ess.
China Go e nmen Websi e. (2009) P emie Wen Jiabao A ended he Wo ld Economic
Fo um Annual Mee ing and Deli e ed a Special Speech. 29 Janua y. A ailable a :
h ps://www.go .cn/ldhd/2009-01/29/con en _1216758.h m
D ezne , D. W. (2009) “Bad Deb s: Assessing China’s Financial In luence in G ea
Powe Poli ics”, In e na ional Secu i y. 34(2), p. 39.
Ga y, C. H., and Ca hleen, C. (2015) Looming US-China T ade Ba les?: Ma ke
Economy S a us [Pa II] 9 Ma ch, Pe e son Ins i u e. A ailable a : h ps://piie.
com/blogs/ ade-in es men -policy-wa ch/looming-us-china- ade-ba les-ma ke -
economy-s a us-pa -ii.
Hu, J. T. (2016a) “Accu a ely G asp he New Cha ac e is ics o Wo ld Economic De-
elopmen : Speech a he Cen al Economic Wo k Con e ence”, Selec ed Wo ks o
Hu Jin ao (Volume 3). Beijing: People’s Publishing House.
Hu, J. T. (2016b) “Accu a ely G asp he P o ound Conno a ion and Basic Requi emen s
o he Scien i ic Ou look on De elopmen – Speech a he Cen al Symposium on
Popula ion, Resou ces and En i onmen Wo k”, Selec ed Wo ks o Hu Jin ao (Vol-
ume 2). Beijing: People’s Publishing House.
Hu, J. T. (2016c) “Be P epa ed o Di icul Si ua ions”, Selec ed Wo ks o Hu Jin ao
(Volume 3). Beijing: People’s Publishing House.
Hu, J. T. (2016d) “Coo dina ing he Two O e all Si ua ions a Home and Ab oad:
Speech a he 11 h Mee ing o Diploma ic En oys Ab oad”, Selec ed Wo ks o Hu
Jin ao (Volume 3). Beijing: People’s Publishing House.
Jiemian News. (2009) Zhou Xiaochuan’s ‘Supe -so e eign’ Cu ency is Opposed by
he Wes [in Chinese] 30 Ma ch. A ailable a : h ps:// inance.sina.cn/sa/2009-03-30/
de ail-ikknscsi7080896.d.h ml? om=wap
Li, W. (2015) “Fiscal and Financial Diplomacy”, in Zhang, X. T. and Wang, H. Y., co-
eds, Chinese Economic Diplomacy: The PRC’s G owing In e na ional In luence in
he 21s Cen u y. London: ACA Publishing L d.
Naugh on, B. (2021) The Rise o China’s Indus ial Policy, 1978 o 2020. Mexico Ci y:
Uni e sidad Nacional Au ónoma de México.
Paulson, H. M. J. (2016) Dealing wi h China: An Inside Unmasks he New Economic
Supe powe (in Chinese). T ansla ed by Wang, Y. G., Zhu, Y., Zhu, Q. W., and Wang,
H. Hongkong: The Chinese Uni e si y P ess.
Phoenix In o, (2016) Is he WTO S ill Use ul? The Fi s Chinese Ambassado Explains
How China Managed o be Pa o he Co e Decision-Making [in Chinese] 11 De-
cembe . A ailable a : h p://www.ccg.o g.cn/a chi es/30254
54 China’s Mode n Economic S a ec a
Wu, J. (2015) “Ene gy Diplomacy”, in Zhang, X. T. and Wang, H. Y., co-eds, Chinese
Economic Diplomacy: The PRC’s G owing In e na ional In luence in he 21s Cen-
u y. London: ACA Publishing L d.
Zhang, X. T., and Kei h, J. (2017) “F om Weal h o Powe : China’s New Economic
S a ec a ”. The Washing on Qua e ly [Sp ing], p. 189.
Zhou, X. C. (2009) Re lec ions on he Re o m o In e na ional Mone a y Sys em [in
Chinese], People’s Bank o China, 23 Ma ch. A ailable a : h p://www.pbc.go .cn/
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DOI: 10.4324/9781003270379-5
This chap e has been made a ailable unde a CC-BY-NC-ND 4.0 license.
Xi Jinping’s New Economic
S a ec a (2012–2017)
Ma xis -De elopmen alis Syn hesis
Based on Con ucius-Mencius
Philosophy
4
P esiden Xi Jinping has championed China’s new economic s a ec a , exem-
pli ied by nume ous ambi ious p ojec s such as he Bel and Road Ini ia i e
(BRI), he Asian In as uc u e In es men Bank (AIIB), Bila e al In es men
T ea ies (BITs) wi h he EU and he USA, and he Regional Comp ehensi e
Economic Pa ne ship (RCEP). Xi is he i s Chinese leade since Mao
Zedong o ac i ely seek o ans o m China’s accumula ed na ional weal h in o
a p ominen posi ion on he wo ld s age.
He had s ong mo i a ions o do ha . A e assuming o ice, Xi Jinping
aced signi ican esponsibili ies, wi h he accumula ed issues om p e ious
gene a ions o leade s weighing on him alone. He is dedica ed o add essing
a se ies o go e nance p oblems in China ha ha e pe sis ed since he e a o
Deng Xiaoping.
Xi’s wo ld iew is oo ed in a ea less, Ma xis pe spec i e. Alongside
his Poli bu o colleagues, including he new P emie Li Keqiang and Vice
P emie Wang Yang, he sough ans o ma i e changes. Unde Xi’s leade -
ship, Li Keqiang’s landma k ini ia i e was he es ablishmen o he F ee T ade
Zones (FTZs) and he supply-side s uc u al e o m. Vice P emie Wang Yang
no ably con ibu ed o his di ec ion by playing a key ole in nego ia ing he
Bila e al In es men T ea y wi h he Uni ed S a es. Du ing Xi’s i s e m
(2012–2017), he e appea ed o be a consensus wi hin he Communis Pa y o
China (CPC) owa d u he e o m and opening-up. In o he wo ds, wi hin he
CPC’s Ma xis poli ical ideological amewo k, economic libe alism emained
a ib an o ce.
Fo Xi Jinping, he had a highe poli ical pu sui – o achie e China’s
G ea Reju ena ion. On No embe 29, 2012, sho ly a e he closing o he
18 h Na ional Cong ess o he CPC, Xi Jinping, along wi h membe s o he
Poli bu o S anding Commi ee including Li Keqiang, Zhang Dejiang, Yu
Zhengsheng, Liu Yunshan, Wang Qishan, and Zhang Gaoli, isi ed he “Road
o Re i al” exhibi ion a he Na ional Museum. Th ough his exhibi ion, hey
e iewed he a duous jou ney o he Chinese na ion since mode n imes and
emphasized he his o ical mission o ealizing he g ea eju ena ion o he
Chinese na ion and he Chinese D eam.
56 China’s Mode n Economic S a ec a
When Xi Jinping in oduced a new ype o economic s a ec a wi h
he BRI, he d ew upon wo sou ces ha he c i iqued: he ancien Chinese
Con ucius-Mencius philosophy coupled wi h he T ibu e Sys em, and he mo e
con empo a y Ame ican Ma shall Plan. The o me has been a pa o Chinese
cul u e o o e wo millennia, while he la e ep esen s a ela i ely ecen
de elopmen . Bo h sou ces we e inspi a ional ye p oblema ic. Fo Xi and his
colleagues, c i ically e alua ing bo h he T ibu e Sys em and he Ma shall Plan
was essen ial in shaping China’s newly eme ging economic s a ec a (CGTN,
2019).
To pu sue China’s G ea Reju ena ion, Xi s a ed o implemen he
“Majo - Coun y Diplomacy” wi h Chinese cha ac e is ics (“中国特色大国
外交”). In 2014, Xi Jinping i s p oposed a he Cen al Fo eign A ai s Wo k
Con e ence ha China mus ha e i s own cha ac e is ic majo -coun y diplo-
macy, which should embody dis inc i e Chinese ea u es, Chinese s yle, and
Chinese g andeu in i s o eign a ai s wo k. In 2017, Xi explici ly s a ed in
he epo o he 19 h Na ional Cong ess o he Communis Pa y he need o
“comp ehensi ely ad ance China’s cha ac e is ic majo -coun y diplomacy”,
and inco po a ed i in o he guiding ideology and s a egic deploymen o
adhe ing o and de eloping socialism wi h Chinese cha ac e is ics in he new
e a (Wang, 2022).
Wi hin he amewo k o China’s Majo -Coun y Diplomacy, 2013,
ma ked a new beginning o China’s economic s a ec a . Fo o e 30 yea s
since 1978, China’s diplomacy has p ima ily se ed economic de elopmen .
Howe e , wi h he apidly e ol ing global con ex and China’s mo e p oac-
i e ole in in e na ional a ai s, he na ion has inc easingly u ilized economic
s a ec a o ans o m i s na ional weal h in o global in luence.
Since Xi’s new leade ship ook o ice, China has implemen ed a se ies o
majo economic diplomacy ini ia i es, such as he “BRI”, “Two Co ido s and
Two Banks”,1 “High-speed Rail Diplomacy”,2 and “Nuclea Ene gy Diplo-
macy”.3 Each o hese ini ia i es in ol es majo inancial commi men s and
co e s mul iple coun ies and egions (see Table 4.1 o de ails). Economic
diplomacy is becoming an inc easingly impo an ool o China o achie e i s
g ea powe ambi ions.
In 2010, China’s GDP su passed ha o Japan, making i he wo ld’s
second- la ges economy. China has become a majo economic powe wi h
global in luence. The de elopmen o China is no only ha o a la ge-scale
coun y bu also ha o a de eloping coun y. Fo Chinese policy eli es, how
o be e ans o m he comp ehensi e s eng h o a majo coun y in o i s
diploma ic capabili ies has become a signi ican issue ha conce ns bo h he
na ion’s des iny and he a e o humani y (Wang, 2017).
China’s peace ul de elopmen aces a se ies o dilemmas. Fi s is he
secu i y dilemma: China needs peace ul de elopmen , bu na ional secu i y
is challenged by issues o so e eign y and e i o ial dispu es, including he
Sou h China Sea dispu e, he Eas China Sea dispu e, and he India-China
Xi Jinping’s New Economic S a ec a (2012–2017) 57
Table 4.1 Lis o egions, sec o s, and inancial commi men s co e ed by China’s new economic diplomacy ini ia i es
Bel and
Road
Two co ido s and
wo banks
High-speed ail
diplomacy
Nuclea ene gy
diplomacy
Coun ies
and
Regions
Co e ed
The Silk Road Economic
Bel mainly in ol es
Cen al Asia, Wes Asia,
and Cen al and Eas e n
Eu ope, including
coun ies such as Russia,
Kazakhs an, Russia, I an,
and Saudi A abia.
The 21s -cen u y Ma i ime
Silk Road mainly in ol es
Sou heas Asia, Sou h
Asia, Wes Asia, and No h
A ica, wi h in ol emen
om Indonesia, Thailand,
Bangladesh, India,
Pakis an, Oman, Kenya,
and Egyp .
The Bangladesh-China-India-Myanma
(BCIM) Economic Co ido mainly
in ol es Sou h Asia, including India,
Myanma , and Bangladesh.
The China-Pakis an Economic Co ido
(CPEC) mainly in ol es Pakis an.
The Asian In as uc u e In es men Bank
(AIIB) is p ima ily o Asia, ocusing on
de eloping coun ies in he con inen .
The New De elopmen Bank (NDB)
suppo s in as uc u e cons uc ion in
membe and ela ed coun ies and he
expansion o o e seas in e es s; i has se
up a Con ingency Rese e A angemen
(CRA) o p o ide assis ance unding o
membe s in he e en o inancial
eme gencies, such as capi al ligh o deb
c ises.
China’s “high-speed ail
diplomacy” co e s Eas
Asia, Sou h Asia,
Sou heas Asia, Cen al
Asia, Wes Asia, Cen al
and Eas e n Eu ope, he
Ame icas, and A ica,
including Russia, he
Uni ed S a es, he Uni ed
Kingdom, B azil,
Venezuela, Vie nam,
Myanma , India, Pakis an,
I an, Thailand, Tu key,
Saudi A abia, Kenya, and
ce ain Cen al and
Eas e n Eu opean
coun ies.
China’s “nuclea ene gy
diplomacy” co e s
Eu ope and No h
Ame ica, including he
Uni ed S a es, F ance,
he Uni ed Kingdom,
and Romania.
Sec o s Ene gy, inance, in es men ,
ade, communica ions,
anspo a ion, ag icul u e
C i ical p ojec s, in as uc u e, ene gy and
esou ces, ag icul u e and wa e esou ces,
and in o ma ion and communica ion
T anspo a ion Ene gy
Sou ce: Made by he au ho .
58 China’s Mode n Economic S a ec a
bo de dispu e. Second is he de elopmen dilemma: China’s domes ic econ-
omy needs upg ading and eju ena ion due o insu icien economic d i ing
o ces, ye China also aces he ask o sa egua ding i s expanding o e seas
in e es s. While China’s domes ic economic g ow h is slowing down and i s
economic de elopmen model is in a ansi ional and challenging phase, i
u gen ly needs o ely on i s economic s eng h o p o ide ma e ial suppo o
expanding in e na ional in luence. These issues cons i u e he win dilemmas
o secu i y and de elopmen o China, leading o con adic ions be ween he
deepening global in e dependence and China’s need o s eng hen s a egic
au onomy, and be ween China’s na a i e o “majo coun y esponsibili ies”
and i s s a us and powe as a de eloping coun y. Resol ing hese wo majo
dilemmas is necessa y (Wang, 2017).
4.1 Xi Jinping’s New Economic S a ec a (2012–2017):
Ma xis -De elopmen alis Syn hesis Based on
Con ucius-Mencius Philosophy
Xi Jinping’s economic s a ec a is la gely a syn hesis o he de elopmen al-
is and Ma xis app oaches, combined wi h China’s classic Con ucian phi-
losophy. To a la ge ex en , Xi Jinping’s economic s a ec a combines he
app oaches o Mao Zedong and Deng Xiaoping.
4.1.1 Xi Jinping’s De elopmen alis App oach
o Economic S a ec a
Unlike Ame ica, China’s economic s a ec a has adi ionally been de elop-
men alis . E en du ing Xi Jinping’s enu e, he ocus o China’s economic
s a ec a emains hea ily on economic de elopmen . In o he wo ds, in
China’s app oach o economic s a ec a , powe is u ilized o gene a e weal h,
and weal h is le e aged o inc ease powe . This c ea es a con inuous dialec ic
in e ac ion be ween weal h and powe .
Agains his backg ound, Xi Jinping p oposed he BRI. He poin ed ou ha
he cons uc ion o he “Bel and Road” is a majo s a egic mo e o China
o expand i s opening-up o he ou side wo ld and is he op-le el design o
i s economic diplomacy. I se es as he mas e plan o China’s ex e nal
opening- up and coope a ion o a conside able pe iod in he u u e, and i is
also China’s p oac i e app oach in p omo ing he e o m o he global go e n-
ance sys em (Zhong, 2017).
O iginally en isioned as summi deli e ables du ing his isi s o Kazakh-
s an and Indonesia, Xi Jinping apidly ans o med he BRI in o he mos
signi ican economic s a ec a ini ia i e o his enu e. The BRI was e i-
den ly P esiden Xi’s a o ed p ojec . I had no exis ed on any hink ank’s
desk, no was i men ioned. E en in a signi ican policy speech deli e ed by
Xi Jinping’s New Economic S a ec a (2012–2017) 59
hen-Fo eign Minis e Wang Yi in June 2013, his concep was absen (Wang,
2013a). I is said ha P esiden Xi g ea ly enjoyed his ip o Kazakhs an and
was imp essed by he en husiasm in Kazakhs an o his idea o he Silk Road
Economic Bel .
The BRI has a dual pu pose. On one hand, i aims o os e domes ic eco-
nomic g ow h. On he o he hand, i is designed o con e China’s economic
s eng hs in o global in luence. These wo pu poses ein o ce each o he . The
Chinese policy eli es a e ully awa e ha China’s weigh in he wo ld econ-
omy and global go e nance has isen apidly, bu he issue o being a la ge ye
no s ong economy emains p ominen . The ans o ma ion o China’s eco-
nomic s eng h in o in e na ional ins i u ional powe s ill equi es s enuous
e o . China’s opening-up has en e ed a mo e balanced s age o bo h b inging
in and going ou , bu he sys ems and o ces suppo ing high-le el opening-up
and la ge-scale ou wa d expansion s ill appea weak (Publici y Depa men o
he Communis Pa y o China, 2016, p. 135).
To es ablish an open de elopmen concep , i is necessa y o con o m o he
end o China’s economy deeply in eg a ing in o he wo ld economy. This in-
ol es pu suing a mu ually bene icial and win-win open s a egy, main aining
a balance be ween domes ic and o eign demands, balancing impo s and ex-
po s, gi ing equal impo ance o bo h a ac ing in es men and going global,
and concu en ly ocusing on a ac ing capi al, echnology, and in elligence.
I ’s abou de eloping a highe -le el open economy, ac i ely pa icipa ing in
global economic go e nance and he p o ision o public goods, enhancing
China’s ins i u ional say in global economic go e nance, and building a b oad
communi y o sha ed in e es s (Publici y Depa men o he Communis Pa y
o China, 2016, pp. 135–136).
So, he i s cha ac e is ic o Xi Jinping’s economic s a ec a is de elop-
men alism. In many ways, Xi’s economic s a ec a , pa icula ly du ing his
i s e m (2012–2017), ep esen s a con inua ion o he de elopmen alism
ha began in China wi h Deng Xiaoping.
Xi Jinping’s de elopmen alis economic s a ec a is linked o he s a e
o he domes ic economy. China’s economic g ow h – based on ixed asse
in es men , he main engine o weal h c ea ion – has decele a ed since 2014
and en e ed in o a “new no mal”, o use a popula e m. This new phase ep-
esen s a downshi ing om a high-speed g ow h pa e n o 1992–2012 o-
wa d a sus ainable, mid- o high-speed g ow h a e wi h highe e iciency and
lowe cos s. The e is conside able deba e abou he deg ee o which China can
succeed in his economic es uc u ing. The economic slowdown has spu ed
China’s ambi ious agenda o economic s a ec a and posed main challenges,
which signi ican ly cons ain he ansla ion o China’s weal h in o powe and
global in luence (Zhang and Kei h, 2017). This is why P esiden Xi and his
colleagues igo ously p omo ed economic s a ec a p ojec s like he BRI o
enhance he con e sion o weal h in o powe . In many ways, he economic
slowdown and o e capaci y spu ed Chinese leade s o de elop inno a i e
66 China’s Mode n Economic S a ec a
Du ing his mee ing wi h Obama a he Annenbe g Re ea in Sunnylands,
Cali o nia, in 2013, Xi Jinping and Obama ag eed o es ablish a new ype
o majo -coun y ela ionship. Xi Jinping belie ed ha he essen ial ques ion
acing US-China ela ions is whe he and how o o e come he so-called
“Thucydides T ap”, he ine i able con on a ion be ween a ising powe and
an es ablished one. The new ype o majo -coun y ela ionship i well wi h
Xi Jinping’s majo -coun y diploma ic ision and helped o main ain he o e -
all s abili y o he US-China ela ionship du ing Xi’s i s e m.
As a ma e o ac , as ea ly as in Feb ua y 2012, he hen Vice P esiden Xi
Jinping, du ing his isi o he Uni ed S a es, had al eady p oposed ha China
and he Uni ed S a es should emba k on a new pa h o majo -coun y ela-
ions. In Ma ch 2012, du ing he ou h ound o he China-US S a egic and
Economic Dialogue, he Chinese side ocused on explaining i s policy con-
cep s and comp ehensi e p oposi ions o cons uc ing a new model o majo -
coun y ela ions be ween China and he Uni ed S a es (Dai, 2016, p. 172).
Dai Bingguo, he o me S a e Councilo in cha ge o o eign ela ions unde
Hu Jin ao’s leade ship, s a ed in his memoi e ha , in ac , “new model o
majo -coun y ela ions” is no a new e m; since he i s ound o he China-
US S a egic Dialogue (in 2009), bo h sides ha e been p og essi ely explo -
ing in-dep h how o a oid con lic and con on a ion, and join ly wo k owa d
de eloping a new model o majo -coun y ela ions cha ac e ized by mu ual
espec and win-win coope a ion (Dai, 2016, pp. 172–173).
The consensus be ween Obama and Xi on de eloping a new model o
majo -coun y ela ionship was signi ican o Xi’s i s e m, as i la gely s a-
bilized China’s ex e nal ela ionships. This consensus also ep esen s a con-
inua ion o he s a egic managemen o g ea powe ela ions ha began in
2006 wi h he es ablishmen o he S a egic Economic Dialogue be ween he
Uni ed S a es and China.
Howe e , he Obama-Xi consensus signi ies di e en hings o Obama and
Xi. Fo Obama, i implies ha China’s ise will be amed wi hin an ins i u-
ional amewo k led by he Uni ed S a es. Fo Xi, i means ha China will
con inue o ascend wi h a ully- ledged new diploma ic agenda, one ha is
des ined o change he wo ld and es o e China o i s igh ul his o ical cen al
posi ion.
On May 21, 2014, in Shanghai, Xi Jinping’s majo -coun y diplomacy
ook he wo ld by su p ise. A he Con e ence on In e ac ion and Con idence
Building Measu es in Asia (CICA), China in oduced a diploma ic concep
known as he “Asian Secu i y Concep ”. This was quickly c i icized and lik-
ened o a “Chinese e sion o he Mon oe Doc ine” (The Pape , 2014). Wha
Xi Jinping speci ically s a ed was, “Ul ima ely, he a ai s o Asia mus be
managed by he people o Asia; he p oblems o Asia mus be esol ed by he
people o Asia; he secu i y o Asia mus be upheld by he people o Asia. The
people o Asia ha e he capabili y and wisdom o achie e peace and s abili y
in Asia h ough s eng hened coope a ion (Xinhuane , 2014)”.
Xi Jinping’s New Economic S a ec a (2012–2017) 67
The co e o his new Asian Secu i y Concep is o p omo e he idea ha
“Asian coun ies should lead Asian a ai s”, aiming o emphasize China’s
leade ship ole in he Asia-Paci ic egion. This mo e is seen by he in e -
na ional communi y as China’s a emp o eshape he egional secu i y a -
chi ec u e and i s comp ehensi e compe i ion wi h he Uni ed S a es in he
Asia-Paci ic. Pa icula ly du ing he p epa a ion o he CICA, he changes in
China’s diploma ic discou se a ac ed a en ion om Wes e n coun ies and
neighbo ing coun ies o China.
Tha is why we a gue ha Xi Jinping’s new diploma ic app oach ep e-
sen s no me ely a eadjus men bu a diploma ic e olu ion. His diplomacy
is oo ed in Ma xism and is d i en by he his o ical ambi ion o es o ing
China o i s igh ul cen al posi ion in his o y. Acco ding o Xi Jinping, he
bigges challenge China aces is s ill he supp ession by a coali ion o Wes e n
coun ies led by he US hegemon. The dominance o Wes e n ins i u ions a
a global le el has become a ba ie o he de elopmen o eme ging de elop-
ing na ions. This is a long- e m p oblem ha canno be quickly esol ed. To
o e come hese challenges o ising and de elopmen , China needs o make
conce ed e o s a he global le el and wi hin he in e na ional sys em, aim-
ing o achie e new o ms o de elopmen (Wang, 2022).
4.3 Xi Jinping’s Go e nance Re olu ion
While Jiang Zemin and Hu Jin ao a e ega ded as con inua ions o Deng
Xiaoping’s policies, Xi Jinping ep esen s a depa u e in many aspec s.
Indeed, Xi’s app oach can be seen as a e i al o Mao Zedong’s p inciples.
Howe e , Xi’s esemblance o Mao was no e y e iden du ing his i s e m.
I was only du ing his second and hi d e ms ha hese simila i ies g adually
became mo e p onounced.
Tha being said, aces o Xi’s simila i ies o Mao can s ill be obse ed by
compa ing his leade ship s yle and policies wi h hose o Hu Jin ao:
1 Emphasis on Poli ical Philosophy and Ideology: Xi Jinping emphasizes
he impo ance o Socialism wi h Chinese cha ac e is ics and he Chinese
D eam, as well as he goal o he g ea eju ena ion o he Chinese na-
ion. Du ing Hu Jin ao’s enu e, he e was mo e emphasis on building a
“ ha monious socie y”.
2 An i-Co up ion Campaign: A e coming o powe , Xi Jinping ini ia ed an
unp eceden ed an i-co up ion campaign o pu i y he Pa y and go e n-
men , wi h he goal o enhancing go e nmen e iciency and c edibili y.
In con as , Hu Jin ao did no launch an an i-co up ion campaign on he
same scale as Xi’s.
3 Cen aliza ion o Powe : Xi Jinping s eng hened cen aliza ion, enhanc-
ing he powe and in luence o cen al leade ship. In con as , du ing
68 China’s Mode n Economic S a ec a
Hu Jin ao’s e a, he dis ibu ion o powe be ween he cen al and local
go e nmen s was mo e balanced.
4 Economic Re o ms: Xi Jinping has championed supply-side s uc u al
e o ms, placing an emphasis on inno a ion-d i en and high-quali y de-
elopmen . In con as , Hu Jin ao’s enu e was cha ac e ized by a ocus
on s able g ow h and expanding domes ic demand. Du ing Xi’s i s e m,
he e was a no able emb ace o e o m and opening-up policies, which
had unde ones o economic libe alism. This s ance becomes pa icula ly
no able conside ing Xi’s pi o away om economic libe alism owa d he
end o his second e m and in o his hi d.
5 Mili a y Re o ms: Xi Jinping unde ook p o ound mili a y e o ms, in-
cluding es uc u ing mili a y egions and p omo ing he in eg a ion o
mili a y and ci ilian de elopmen .
6 Es ablishmen o he Na ional Supe iso y Law and he Na ional Supe i-
sion Commission: Du ing Xi Jinping’s enu e, China passed he Na ional
Supe iso y Law and es ablished he Na ional Supe ision Commis-
sion, u he s eng hening an i-co up ion and go e nmen o e sigh
mechanisms.
7 Ideological Con ol: Du ing Xi Jinping’s enu e, he e was inc eased con-
ol o e ideology, emphasizing he impo ance o he Pa y’s leade ship
and social s abili y. On No embe 17, 2012, sho ly a e being elec ed as
he Gene al Sec e a y o he CPC, Xi Jinping, while p esiding o e he i s
g oup s udy session o he 18 h Cen al Poli bu o, made explici demands
o upholding he Pa y’s leade ship. He emphasized ha “in all aspec s o
pa y, go e nmen , mili a y, ci ilian, and academia, and ac oss all egions –
eas , wes , sou h, no h, and cen e , he Pa y is he leade o e e y hing
(People, 2022)”.
These changes e lec Xi Jinping’s di e en iews and s a egies on China’s
u u e de elopmen and global s a us and also highligh he di e ences in
ocus and me hods in go e nance and s a ec a compa ed o Hu Jin ao.
No es
1 “The Silk Road Economic Bel ”, “The 21s Cen u y Ma i ime Silk Road”, “China-
India-Myanma -Bangladesh Economic Co ido ”, “China-Pakis an Economic Co -
ido ”, “Asian In as uc u e In es men Bank”, and “BRICS De elopmen Bank”.
2 The concep o “High-Speed Rail Diplomacy” was i s p oposed by Hong Kong’s
“Sou h China Mo ning Pos ” in an a icle i led “China Plans o Build a T ans-
Eu asian Railway Ne wo k” published on Ma ch 8, 2010. The a icle posi ed ha
nego ia ions we e unde way ega ding China’s plans o expand i s high-speed ail
ne wo k o 17 coun ies. These ailways would connec and open up he whole o
Cen al Asia, Eas Asia, and Sou heas Asia, aiding China in mo e e icien ly ans-
po ing i al aw ma e ials. Ta ge ing neighbo ing coun ies such as hose in Sou h-
eas Asia and Cen al Asia as ma ke s o i s high-speed ailways has become an
impo an aspec o China’s o eign policy. Th ough “High-Speed Rail Diplomacy”,
Xi Jinping’s New Economic S a ec a (2012–2017) 69
China is ac i ely cons uc ing a high-speed ail ne wo k o igina ing wi hin i s bo -
de s o acili a e he impo o ene gy esou ces like coal and i on o e and expand i s
in luence in neighbo ing coun ies.
3 China’s “Nuclea Powe Diplomacy” began in he 1980s, when i in oduced ech-
nology and capi al om F ance, a nuclea powe powe house, o s a building
he Daya Bay Nuclea Powe Plan in Guangdong. S a ing om Daya Bay, Sino-
F ench nuclea coope a ion has gone h ough h ee s ages: ini ially “F ench-led wi h
Chinese assis ance”, hen ansi ioning o “Chinese-led wi h F ench suppo ”, and
inally o “join design and cons uc ion”. China’s nuclea echnology capabili ies
ha e con inuously g own s onge . In ecen yea s, i has s a ed o pa icipa e in in-
e na ional compe i ion. A signi ican b eak h ough was made in 2013 in i s “going
global” s a egy when China Na ional Nuclea Co po a ion and China Gene al Nu-
clea Powe G oup, in collabo a ion wi h wo F ench companies, eached an ag ee-
men wi h he B i ish go e nmen o build wo hi d-gene a ion p essu ized wa e
eac o nuclea uni s a Hinkley Poin in he sou hwes o England. This ma ked he
i s ime Chinese nuclea echnology en e ed a de eloped coun y. A e Xi Jinping
and he new leade ship ook o ice, Chinese na ional leade s ha e inc easingly used
nuclea powe as a diploma ic ca d du ing hei isi s ab oad, p omo ing coope a-
ion in he ield o nuclea powe be ween bo h sides.
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This chap e has been made a ailable unde a CC-BY-NC-ND 4.0 license.
Xi Jinping’s Economic
S a ec a in he E a o
D ama ic Changes Unseen
in a Cen u y (2018–2023)
The yea 2018 was a wa e shed momen , ma king he beginning o Xi
Jinping’s challenging second e m. In many ways, 2018 ep esen ed a climax
a e se e al yea s o uphea al bo h domes ically and on he global s age.
Domes ically, 2014 ma ked a ansi ional yea as China’s economy began o
slowdown, leading Xi Jinping o in oduce he concep o he “Economic New
No mal”. In 2016, he s ains in China’s economy became e en mo e appa -
en . The pandemic, which s a ed in Wuhan in Decembe 2019, u he de as-
a ed China’s economy. On he global on , we wi nessed signi ican e en s
including he Russia-Uk aine c isis, B exi , and he elec ion o Donald T ump
as he US P esiden , a populis leade who caused a majo , unexpec ed shock
in global diplomacy. T ump’s ansac ional app oach o diplomacy and his
bullying s yle ook many wo ld leade s by su p ise.
Xi Jinping was likely he i s global leade o pe cei e he signi ican
changes o ou imes, and he has a s ong sense o u gency. As ea ly as 2017,
he ecognized ha we we e expe iencing p o ound shi s no seen in a cen-
u y (“百年未有之大变局”) (Xi, 2018). P esiden Xi Jinping p oposed his
concep a he 2017 annual con e ence o Chinese ambassado s and consuls
ab oad: “Socialism wi h Chinese cha ac e is ics has en e ed a new e a. To do
a good job in diploma ic wo k in he new e a, we mus i s deeply unde s and
he spi i o he 19 h Na ional Cong ess o he Communis Pa y o China and
co ec ly g asp he cu en ends o he imes and he in e na ional si ua ion.
Looking a he wo ld, we a e acing a g ea change no seen in a cen u y
(Xinhuane , 2017)”.
Six mon hs la e , Xi u he elabo a ed on his concep by dis inguishing
be ween he domes ic and global si ua ions: “Cu en ly, ou coun y is in he
bes de elopmen pe iod since mode n imes, and he wo ld is unde going a
g ea change no seen in a cen u y. The wo a e in e wined and in e ac wi h
each o he (Xinhuane , 2018)”.
When he i s p oposed his concep , many we e skep ical, ques ioning
whe he we we e indeed on he b ink o d ama ic changes akin o hose las
wi nessed du ing he Fi s Wo ld Wa . G adually, as nume ous “g ay hino”
and “black swan” e en s un olded one a e ano he , people became con inced.
5
72 China’s Mode n Economic S a ec a
Recognizing he shi ing ides doesn’ necessa ily mean ha China was
ully p epa ed o managed all c ises e ec i ely. While i ’s challenging o
make gene aliza ions, i ’s ai o say ha China’s ela ionship wi h Wes e n
coun ies de e io a ed, whe eas i s ela ions wi h de eloping na ions gene ally
imp o ed. This dynamic also signals a new o m o Cold Wa , wi h China and
he Uni ed S a es leading wo no en i ely de ined camps.
Du ing Xi Jinping’s second e m (2017–2022), China’s economic s a ec a
aced conside able challenges as he coun y’s economy slowed signi ican ly
and i s ela ionship wi h he Wes de e io a ed. Despi e hese di icul ies,
China demons a ed no able esilience du ing and a e he pandemic.
5.1 China’s Diploma ic Con on a ion wi h he Wes
Since Xi Jinping assumed o ice, China’s diploma ic eli es ha e inc easingly
emb aced he belie o “The Eas Rises and he Wes Declines” (东升西降)
(People, 2021). The concep o “Eas Rising, Wes Declining” was a icu-
la ed by Xi Jinping on a ious occasions since 2021. Du ing he pandemic,
Xi Jinping (2022) also a icula ed he concep o “Good Go e nance in China
and Chaos in he Wes ” (中治西乱). These s a emen s e lec he wo sening
US-China ela ionship and Xi Jinping’s e o s o bols e na ional con idence
in China. This concep bea s a s iking esemblance o Mao Zedong’s asse -
ion in No embe 1957 abou he “Eas Wind p e ailing o e he Wes Wind”.
We mus bea in mind ha he e is a dis inc i e shi in Xi Jinping’s a -
i ude owa d he Uni ed S a es. When he me Obama in 2013, he US-China
ela ionship was s ill in good shape, and i was highly unlikely ha Xi would
publicly a icula e concep s like “Eas Rising, Wes Declining” o “Good
Go e nance in China and Wes e n Chaos”. Fo many yea s be o e Xi, China’s
diploma ic na a i e la gely accep ed Ame ica’s leade ship, wi h he Uni ed
S a es in u n welcoming China’s peace ul ise. The e o e, o unde s and Xi’s
a i ude shi , i is necessa y o iden i y he ac o s and imeline o he de e io-
a ion in he US-China ela ionship.
The yea 2018 was a u ning poin o US-China ela ions. Be o e T ump’s
ise o powe and i s agg essi e unila e al s ance on ade, he Chinese e-
ac ed o Ame icans inc eased p esence in hei neighbo hood by he adop-
ion o a s a egy cha ac e ized by summi and economic diplomacy, an e o
o s abilize China-US economic and ade ela ions. In hope o pu suing on
he same diploma ic pa h, on Ap il 6–7, 2017, wi hin 100 days o P esiden
T ump’s accession o he Whi e House, Chinese P esiden Xi Jinping me wi h
he la e a Ma -a-Lago in Flo ida, claiming ha “ he e a e a housand easons
o make he China-US ela ionship wo k, and no eason o b eak i ”(People’s
Daily, 2017). China and he Uni ed S a es ha e also ag eed on a Comp ehen-
si e Economic Dialogue, he i s o which was held in Washing on on July
19, 2017. On he su ace, e e y hing seemed o un smoo hly du ing he i s
isi o China by P esiden T ump on 8 h–10 h No embe o he same yea .
Xi Jinping’s Economic S a ec a in he E a o D ama ic Changes 73
China ag eed o a majo pu chase o Ame ican goods, amoun ing o US$253.5
billion, including a Chinese pledge o buy 300 ai c a om Boeing, wi h a
lis alue o $38 billion. The Chinese also ag eed o impo up o $12 billion
in mobile phone chips and made a commi men o in es $83 billion in he
US pe ochemical indus y o de elop shale gases. The ag eemen did no
assuage T ump’s agg essi e s ance, as he judged ha he Chinese p oposal
would do li le o ed ess his coun y’s comme cial imbalance owa d Beijing.
As nego ia ions we e ongoing, Ame icans main ained he p essu e. In ac , as
ea ly as Augus 18, 2017, one mon h a e he conclusion o he Comp ehen-
si e Economic Dialogue and h ee mon hs be o e T ump’s isi o China, he
Ame ican p esiden signed he P esiden ial Memo andum on he Ac ions by
he Uni ed S a es Rela ed o he Sec ion 301 In es iga ion o p obe whe he
Chinese laws and egula ions implemen manda o y echnology ans e and
whe he i ha ms US in ellec ual p ope y and inno a ion. This shows ha
P esiden T ump was main aining a double-edged ading s a egy, as he
planned o launch a “ ade o ensi e” agains China, e en be o e his isi o
China. I soon became clea ha T ump would pu sue a s a egy o agg essi e
unila e alism o e nego ia ions wi h his Chinese coun e pa .
On Decembe 18, 2017, jus one mon h a e his isi o China, T ump’s
adminis a ion un eiled i s i s Na ional Secu i y S a egy Repo , which
iden i ied China as a “compe i o ”, “ i al”, and “ad e sa y”. This o mula ion
was a mo e s ingen han any epo s pu o h by p e ious adminis a ions.
Ha sh wo ds led o quick ac ions. On Ma ch 22, 2018, he T ump adminis a-
ion announced on he basis o i s 301 in es iga ion ha puni i e a i s will
be slapped on some US$50 billion wo h o impo s om China due o in el-
lec ual p ope y in ingemen . China immedia ely coun e a acked, ma king
he ou b eak o he China-US ade wa . F om ha poin on, he ade wa
has escala ed wi h nea ly all Chinese expo s o he Uni ed S a es co e ed by
puni i e a i s, and he Uni ed S a es has e en conside ed he “decoupling”
o Chinese and Ame ican economies as a po en ial policy op ion (New Yo k
Times, 2019).
The launch o he ade wa agains China by P esiden T ump igge ed
a a - eaching ideological compe i ion be ween China and he Uni ed S a es,
he wo leading coun ies in he wo ld, e ec i ely plunging he wo ld in o a
new Cold Wa . As Susan Shi k sugges ed, Xi Jinping also cas ed he ela ion-
ship wi h he Wes as a cold-wa - ype ideological con es be ween socialism
and capi alism. Socialism wi h Chinese cha ac e is ics would iumph o e
capi alism and ha e inc easingly g ea e in luence in he wo ld. O icials in
bo h he T ump and Biden adminis a ions amed he ela ionship as a con-
es be ween he wo sys ems, Chinese communis au oc acy e sus Wes e n
ma ke democ acy (Shi k, 2023, p. 184).
Agains his backd op, China’s diploma ic app oach has inc easingly
shi ed owa d “Wol Wa io Diplomacy” (战狼外交). The e m “Wol Wa -
io Diplomacy” e lec s a mo e asse i e end in China’s o eign policy in
74 China’s Mode n Economic S a ec a
ecen yea s. This e m o igina es om he 2015 mo ie “Wol Wa io ”, di-
ec ed by Wu Jing, which showcased s ong na ionalis sen imen s. The ilm,
gaining widesp ead a en ion, old he legenda y s o y o an unde dog he o
ising o sa e his coun y’s and na ion’s a e. The e m began o gain a en-
ion on Decembe 8, 2020, when Ge many’s De Spiegel published a epo
c i icizing China’s o eign policy. The epo desc ibed Chinese diploma s’
beha io as “mo e agg essi e” and poin ed ou ha China had adop ed “Wol
Wa io Diplomacy”. The co e cha ac e is ic o “Wol Wa io Diplomacy”
is i s oughness and di ec ness. This diploma ic s yle is seen as a label o
China’s asse i e o eign policy since Xi Jinping became Gene al Sec e a y
o he Communis Pa y o China. Wes e n coun ies belie e ha du ing his
pe iod, Chinese diploma s and leade s ha e shown a p o oca i e a i ude,
issuing a se ies o agg essi e s a emen s. The unde lying policy o his dip-
loma ic s a egy da es back o he 18 h Na ional Cong ess o he Communis
Pa y o China in 2012, when Xi Jinping ascended o powe and p omo ed he
policy o “ad ancing majo -coun y diplomacy wi h Chinese cha ac e is ics,
wi h he mission o achie ing he g ea eju ena ion o he Chinese na ion”. A
key concep o his policy is “da ing o show he swo d”, meaning o adop a
ough s ance a c i ical momen s. In he in e na ional communi y, “Wol Wa -
io Diplomacy” has become one o China’s diploma ic b ands. Fo example,
China’s mos senio o eign policy o icial, Yang Jiechi, has old he Uni ed
S a es ha i isn’ quali ied o “speak om a posi ion o s eng h” when c i i-
cizing China (BBC, 2021). I is also seen as an embodimen o “Wol Wa io
Diplomacy”.
5.2 China’s S ained Economy
China’s economy slowed down om a double-digi pace in he decade up o
2011 o a ange o 6–7% since hen. No ably, he economy began o slowdown
signi ican ly in 2018. China’s GDP g ow h a e dec eased om 7.9% in 2012
o 6.7% in 2018 (Wo ld Bank, 2023). In 2015, Xi Jinping (2017, p. 239) pe -
suaded he Chinese people ha his was he “New No mal”. He s a ed ha
since he cu en p oblem is mainly s uc u al a he han cyclical, a V-shaped
ebound h ough sho - e m s imula ion was impossible, and China’s economy
may expe ience an L-shaped g ow h phase. Xi wa ned o he need o be p e-
pa ed o a p o ac ed ba le, o be willing o endu e signi ican challenges, o
app op ia ely inc ease ole ance o gea shi ing and slowing down, o i s
es ablish a ounda ion, and hen aim o eco e y. Xi’s policy solu ion in 2015
was supply-side s uc u al e o m, a policy also associa ed wi h P emie Li
Keqiang.
The concep o supply-side economics eme ged in he 1970s as a esponse
o s ag la ion (simul aneous in la ion and s agnan economic g ow h), chal-
lenging he hen-dominan Keynesian emphasis on demand managemen .
Supply-side e o ms gained p ominence in he Uni ed S a es du ing he
Xi Jinping’s Economic S a ec a in he E a o D ama ic Changes 75
Reagan adminis a ion in he 1980s, which a gued ha educing axes and
egula o y bu dens would lead o inc eased p oduc ion, job c ea ion, and eco-
nomic g ow h.
In he con ex o China, supply-side s uc u al e o m became a signi i-
can policy ocus unde he leade ship o Xi Jinping. The Chinese go e nmen
o icially endo sed he concep a he Cen al Economic Wo k Con e ence in
Decembe 2015 (People, 2015). The e o ms we e in oduced o add ess a i-
ous s uc u al imbalances in he Chinese economy, such as o e capaci y in
ce ain indus ies (like s eel and coal), eal es a e bubbles, and he need o a
ansi ion om an in es men -d i en o a mo e consump ion- and inno a ion-
d i en g ow h model. The p ima y objec i es o China’s supply-side s uc-
u al e o ms include: dele e aging ( educing he high le els o deb wi hin
he economy, pa icula ly co po a e deb ), educing o e capaci y, des ocking
( educing high le els o unsold eal es a e in en o y), imp o ing co po a e e -
iciency, and isk mi iga ion (add essing inancial isks and ensu ing s abili y
in he inancial sec o ).
China’s economy slowed u he du ing Xi Jinping’s second e m (2017–
2022), wi h he annual g ow h a e dec easing om 6.7% in 2018 o 2.2% in
2020. This conside able economic slowdown since 2018 is a ibu ed mo e o
policy managemen and exogenous shocks han o a na u al economic slow-
down ajec o y, a si ua ion Xi Jinping has o iginally e e ed o as he “New
No mal”. Key con ibu ing ac o s include he US-China ade wa in 2018
ha con inued un il Janua y 2020, and he COVID-19, which u he de as-
a ed China’s economy. People began ques ioning why he economy slid so
d as ically and why social s esses we e inc easing.
The Wes s a ed o eel China’s economic slowdown du ing and a e he
COVID-19 and hea ily c i icized Xi Jinping o de ia ing om ma ke p in-
ciples. Nicholas La dy (2019, p. 4), a senio esea che o Pe e son Ins i u e,
a gues, one o he mos impo an con ibu o s o China’s slowing economic
g ow h is he slowing pace o domes ic economic e o m and he esu gence
o he ole o he s a e in esou ce alloca ion. These ends s i led he compe i-
i e o ces ha had p e iously powe ed he Chinese economy, placing mo e
in es men in poo ly pe o ming and indeed de e io a ing s a e-owned en e -
p ises. Nicholas La dy’s analysis shows ha a main d i ing ac o was he
u n away om he ma ke o ien a ion ha guided economic e o m o mo e
han h ee decades s a ing in 1978. Bu a isible change in s a egy, in a o
o s a e-led g ow h, accele a ed unde he leade ship o Xi Jinping s a ing in
2012 (Posen, 2019, p. x).
I emains deba able whe he Xi Jinping has abandoned ma ke p inciples.
I he has, i is puzzling why he unde wen a U- u n in his a i ude owa d he
ma ke . Back in No embe 2013, a he Thi d Plena y Session o he 18 h
Cen al Commi ee o he Communis Pa y o China, P esiden Xi Jinping
pa icula ly emphasized he ma ke ’s decisi e ole in esou ce alloca ion. This
s ance le he wo ld wi h he imp ession ha Xi would con inue o ad ance
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DOI: 10.4324/9781003270379-7
This chap e has been made a ailable unde a CC-BY-NC-ND 4.0 license.
Economic s a ec a is he s a egy employed by a coun y o expand i s
economy and le e age i s economic s eng hs o become a s ong na ion and
main ain ha s a us in in e na ional poli ics (Zhang, 2024, p. 1). A he hea
o economic s a ec a lies he weal h-powe con e sion. In p ac icing his
s a egy, coun ies, pa icula ly g ea powe s, o en concen a e on con e ing
weal h in o powe . Howe e , hey some imes o e look he in e se p ocess:
con e ing powe back in o weal h. This o e sigh is a symp om o wha Paul
Kennedy (1987) desc ibed as “o e s e ching” in his book “The Rise and Fall
o he G ea Powe s”.
When a coun y conduc s economic s a ec a , he e a e h ee implici p em-
ises: (1) economic esou ces a e ela i ely su icien o e en unlimi ed; (2) eco-
nomic powe is ungible and ans o mable; and (3) he ela ionship be ween
weal h and powe is ha monious, o a leas noncon lic ing and noncon adic-
o y. Howe e , hese h ee p emises a e no always p esen , and hus, h ee
limi ing condi ions eme ge o he implemen a ion o a coun y’s economic
s a ec a : (1) economic esou ces a e no su icien bu a he a e sca ce; (2)
economic powe may no always be ans o mable; and (3) weal h and powe
a e in a ela ionship o uni y o opposi es. The neglec o unde es ima ion o
hese h ee implici p emises is o en key o he ailu e o economic s a ec a .
Economic s a ec a should examine hese h ee implici p emises ha p e i-
ous s udies ha e o e looked, ha is, how o achie e economic g ow h, ex ac
economic esou ces, and achie e he wo-way con e sion o weal h and powe
(Zhang, 2024, pp. 17–18). He e, we posi ha a weal h-powe dialec ic exis s
in he economic s a ec a o any coun y, and China is no excep ion.
Xi Jinping’s new economic s a ec a ajec o y i idly exempli ies he
weal h-powe dialec ic. Building on he subs an ial na ional weal h accumu-
la ed since he 1978 e o m and opening-up, Xi began o explo e how o con-
e his na ional weal h in o powe , g adually s ee ing owa d wha is e med
“g ea powe economic s a ec a ”. Th ough lagship ini ia i es like he Bel
and Road Ini ia i e (BRI) and d awing inspi a ion om Con ucius-Mencius
philosophy, Xi sough o es o e China’s his o ical p es ige. The newly o mu-
la ed “ igh eousness-bene i concep ” is a p ominen example o his. While
Conclusion
The Weal h-Powe Dialec ic: Fundamen al
o China’s Economic S a ec a
Conclusion 85
Xi has made signi ican s ides in ad ancing China’s new economic s a ec a ,
ma king a high poin in he coun y’s economic diplomacy, his app oach has
no su icien ly add essed he weal h-gene a ion aspec . Ins ead, he e has
been an excessi e ocus on he powe -play dimension, he eby dis up ing he
delica e balance be ween weal h and powe .
Upon concluding his book and e lec ing on i s con en s, we ha e iden i-
ied ou majo indings o sha e.
6.1 Th ee App oaches o China’s Economic S a ec a
China’s economic s a ec a has e ol ed h ough h ee dis inc app oaches:
(1) The app oach o Empe o Zhu Di, who ini ia ed Admi al Zheng He’s oy-
ages ac oss he Indo-Paci ic, symbolizing a pe iod o explo a ion and ma i-
ime p owess. (2) Mao Zedong’s app oach, oo ed in Ma xis ideology and
in e wined wi h China’s classical his o y, ep esen ing a blend o ideological
e o and his o ical con ex . (3) Deng Xiaoping’s app oach, cha ac e ized by
a de elopmen alis philosophy, ocusing on economic g ow h and mode niza-
ion as he p ima y d i e s o s a ec a .
6.1.1 Empe o Zhu Di’s App oach o Economic S a ec a
Empe o Zhu Di o China, like se e al o he capable and ambi ious Chinese
empe o s, adep ly u ilized a adi ional Chinese economic s a ec a app oach.
His p ima y goal was o con e weal h in o powe , he eby ein o cing he
T ibu a y Sys em. This s a egy was in eg al o ensu ing ha China main-
ained i s s a us as he “Cen al Kingdom”. By doing so, Zhu Di sough o
sus ain China’s cul u al and economic in luence o e he na ions wi hin he
T ibu a y Sys em, a key aspec o he coun y’s o eign policy du ing his eign.
Empe o Zhu Di’s app oach o economic s a ec a was oo ed in a-
di ional Chinese philosophy, pa icula ly he eachings o Con ucius and
Mencius. This s a egy emphasized China’s economic supe io i y bu did no
aim o di ec economic gain. Ins ead, i ocused on upholding he “Tianxia
sys em”, a China-cen ic wo ld o de . Unlike colonialism, which sough e i-
o ial conques , China’s app oach aimed o p ese e a cul u al hie a chy wi h
China a he apex o he T ibu a y Sys em. A signi ican challenge in main ain-
ing his sys em was o e ex ension, exempli ied by he cessa ion o Admi al
Zheng He’s oyages and he des uc ion o his a el logs a e Zhu Di’s dea h,
la gely due o in e nal dissen . The ag icul u al na u e o China’s economy,
ulne able o wea he and land limi a ions, made sus aining he T ibu a y Sys-
em inancially bu densome. Fo ambi ious empe o s like Zhu Di (1402–1424
AD), Han Wu (141 BC–87 BC), and Sui Yang (605–618 AD), a key challenge
was mobilizing economic esou ces o mili a y and majo s a ec a p ojec s,
whe e ailu e could lead o he dynas y’s down all.
86 China’s Mode n Economic S a ec a
6.1.2 Mao Zedong’s App oach o Economic S a ec a
Mao Zedong, a p ominen Ma xis , adap ed he ideology o i China’s unique
condi ions and his o ical con ex . He de eloped a dis inc pa h o Ma xism
wi h Chinese cha ac e is ics, a oiding dogma ic adhe ence o he heo y.
Howe e , his app oach o economic s a ec a , which combined Ma xism wi h
adi ional Chinese me hods, placed signi ican s ain on China’s economy.
Ma xism’s s eng hs lay in mobilizing esou ces o wa ime e o s and e-
gime su i al, bu i s planned economic aspec s we e less e ec i e in os e ing
long- e m economic g ow h. Mao’s has y e o s o implemen Communism
esul ed in economic and poli ical u moil, exempli ied by he “G ea Leap
Fo wa d” campaign.
Simul aneously, Mao’s pe spec i e was deeply in luenced by China’s his-
o ical con ex , iewing China as a majo na ion wi h esponsibili ies owa d
smalle coun ies. His p o ound unde s anding o Chinese his o y, pa icula ly
he s a egic impo ance o Ko ea ac oss di e en dynas ies, in luenced his
decision o suppo Ko ea, e en a he expense o engaging in con lic wi h
UN-allied o ces led by he Uni ed S a es. This decision e lec ed a blend
o ideological commi men and his o ical awa eness in Mao’s economic
and diploma ic s a egies. In many ways, Mao Zedong ep esen ed China’s
Ma xis economic s a ec a wi h he in luence o adi ional Chinese his o y.
Mao Zedong’s app oach o economic s a ec a was a unique blend o
Ma xis p inciples, adap ed o align wi h China’s speci ic needs and ci cum-
s ances, and in luenced by he na ion’s ich adi ional his o y. This syn hesis
allowed him o c a policies ha e lec ed bo h he e olu iona y ideals o
Ma xism and he endu ing lessons om China’s his o ical expe iences.
6.1.3 Deng Xiaoping’s App oach o Economic S a ec a
While Deng Xiaoping was a Ma xis , his app oach o economic s a ec a
di e ged signi ican ly om adi ional Ma xis doc ines, ocusing ins ead on
de elopmen al p agma ism. He main ained espec o Mao Zedong, his p e-
decesso , ecognizing Mao’s achie emen s while also add essing his e o s.
Deng’s pe spec i e on wo ld a ai s anscended ideological lines, p io i izing
p agma ic diplomacy and economic de elopmen .
Deng’s legacy is mos no ably ma ked by his ini ia ion o he e o m and
opening-up policies and his in luen ial “Sou he n Tou ”, which played a c u-
cial ole in in eg a ing China in o he global ma ke economy. His economic
s a egies emphasized mode niza ion, in eg a ion wi h in e na ional inancial
ins i u ions, and p ac ical solu ions o e ideological igidi y.
Deng’s ocus was on weal h gene a ion a he han i s con e sion in o
powe . He is known o ad oca ing he p inciple o “keeping a low p o ile”
and “biding ime”, con ibu ing o a pe iod o sus ained economic g ow h and
ela i e in e na ional peace o China.
Conclusion 87
Unde Deng’s guidance, China’s economic policy shi ed owa d a ma -
ke economy and global engagemen . His chosen successo s, Jiang Zemin
and Hu Jin ao, con inued o adhe e o and expand upon hese de elop-
men al s a egies. Deng Xiaoping’s app oach o economic s a ec a , em-
phasizing e o m, opening-up, and p agma ic engagemen wi h he global
economy, is widely ega ded as one o he mos success ul in China’s pos -
1949 his o y.
6.2 China’s Pos -1978 Economic S a ec a Model:
Ma xis -De elopmen alis Comp omise
The ema kable economic ascen o China since 1978 can be a ibu ed o a
unique blend o Ma xis ideology and de elopmen alis economics, a comp o-
mise o ged wi hin he Communis Pa y o China (CPC). This comp omise
main ained Ma xism as he dominan ideological amewo k while simul a-
neously emb acing economic libe alism as he d i ing o ce behind China’s
s a ec a .
Jiang Zemin, Deng Xiaoping’s handpicked successo , encapsula ed his
app oach wi h he concep o he Socialis Ma ke Economy. This model sym-
bolizes he Ma xis -De elopmen alis comp omise, ep esen ing mo e o a
middle g ound be ween he CPC’s le -wing p e e ence o planned econom-
ics and he igh -wing inclina ion owa d ma ke mechanisms and capi alis
elemen s. The balance s uck be ween Ma xis ideology and de elopmen al-
is economics has been ins umen al in guiding China’s de elopmen since
he ini ia ion o he e o m and opening-up policies in 1978. Despi e acing
challenges, his equilib ium has e ec i ely s ee ed China’s apid economic
g ow h and ans o ma ion.
Deng Xiaoping’s philosophy, known as he “ h ee a o ables”, emphasized
policies ha we e a o able o enhancing p oduc i i y, na ional powe , and he
li ing s anda ds o he people. This app oach was used as a me ic o assess
whe he China’s de elopmen s aligned wi h socialis o capi alis p inciples.
Jiang Zemin’s “ h ee ep esen s” philosophy highligh ed he CPC’s ep esen-
a ion o he mos ad anced p oduc i i y, cul u e, and people’s in e es s. Hu
Jin ao in oduced he “Scien i ic De elopmen Philosophy”, while Xi Jinping
ad oca es he “New De elopmen Philosophy”, which emphasizes inno a-
ion, coo dina ion, g een de elopmen , openness, and sha ing, p oposed in
Oc obe 2015 du ing he Fi h Plena y Session o he 18 h Communis Pa y
o China Cen al Commi ee (Qiushi, 2021). These philosophies collec i ely
embody he endu ing Ma xis -De elopmen alis Comp omise, c ucial o he
CPC’s long- e m go e nance s a egy.
Xi Jinping con inues o uphold his comp omise, hough he aces he com-
plex ask o balancing adi ional Ma xis p inciples wi h he eali ies o eco-
nomic libe alism. This balancing ac is cen al o unde s anding he cu en
dynamics o China’s economic s a ec a and i s u u e ajec o y.
88 China’s Mode n Economic S a ec a
6.3 Xi Jinping’s G and Syn hesis: Ma xis -
De elopmen alis S a ec a Enligh ened
by Con ucius-Mencius
Xi Jinping’s app oach o economic s a ec a ep esen s a comp ehensi e syn he-
sis, amalgama ing elemen s om he s a egies o his o ical igu es like Empe o
Zhu Di, Mao Zedong, and Deng Xiaoping. This app oach can be cha ac e ized
as “Ma xis -De elopmen alis S a ec a Enligh ened by Con ucius-Mencius”.
Xi Jinping (2022) shows a deep app ecia ion o Con ucius-Mencius philos-
ophy, echoing Con ucius’s ideal o a gen leman who cul i a es himsel , man-
ages his household, go e ns he s a e, and ul ima ely b ings peace o he wo ld.
His ocus on “go e ning he s a e” is e iden in his mos signi ican w i ings.
Mo eo e , Xi Jinping demons a es a p o ound unde s anding o he phi-
losophy o his o y, con empla ing he endu ing ques ion o o e coming he
dynas ic cycle o ise and decline – a ques ion also ponde ed by Mao Zedong.
Mao’s solu ion was “public supe ision”, ad oca ing ha go e nmen ac-
coun abili y o he people p e en s go e nance lapses. A he 6 h Plena y
Session o he 19 h CPC Cen al Commi ee, Xi Jinping o e ed his own an-
swe : “sel - e olu ion”, emphasizing he need o con on in e nal challenges,
main ain he pa y’s p og essi eness and pu i y, and con inually enhance i s
c ea i i y, cohesion, and comba e ec i eness (Liu, 2022).
While a commi ed Ma xis , Xi Jinping espec s he “Ma xis -De elop-
men alis Comp omise” es ablished since Deng Xiaoping’s e a. Recognizing
he impo ance o economic g ow h, Xi Jinping was also awa e ea ly in his
enu e ha he e a o double-digi economic g ow h was o e , and a “New
No mal” o slowe g ow h would be China’s eali y in he coming decade.
The e ec i eness o Xi Jinping’s app oach in add essing he “New No mal”
o China’s economic s a ec a emains an open ques ion, pa icula ly as his
second e m p og esses and beyond.
Ambi ious, de e mined, ideologically d i en, and ye p agma ically ex-
pe ienced, Xi Jinping has endea o ed o c ea e a g and syn hesis, blending
Ma xis -De elopmen alis S a ec a wi h insigh s om Con ucius-Mencius
and Chinese his o y. This syn hesis is e lec ed in ini ia i es like he BRI, he
“New Righ eousness-Bene i Philosophy”, and he concep o a “Communi y
o Sha ed Fu u e o Mankind”. Xi Jinping ca ies a s ong sense o his o i-
cal esponsibili y and u gency o accomplish signi ican objec i es wi hin his
enu e, leading o an ambi ious agenda. Howe e , his has e has also led o
o e ex ension and s ess, impac ing bo h China and he global communi y.
6.4 O e s e ch: The Bigges Challenge o Xi Jinping’s
Majo -Coun y Economic S a ec a
Xi Jinping’s app oach o majo -coun y economic s a ec a is a na u al p o-
g ession o an ambi ious and capable leade , and he has achie ed no able
Conclusion 89
success, pa icula ly in enhancing China’s in e na ional epu a ion in de el-
oping coun ies. This success has ins illed a sense o p ide among many Chi-
nese ci izens ega ding China’s ele a ed global s anding. Ini ia i es like he
BRI and he Asian In as uc u e In es men Bank (AIIB) a e inno a i e and
aimed a igh eous causes.
Howe e , he challenges Xi aces lie p ima ily in he weal h-powe dialec-
ic in insic o economic s a ec a – a dilemma no unique o China bu com-
mon among g ea powe s. The co ne s one o success ul economic s a ec a
o any g ea powe is i s economic g ow h. Xi inhe i ed a subs an ial na ional
weal h accumula ed since 1978, allowing him o wield economic powe in
ways his p edecesso s could no . Ye , he also aced he challenge o a slowing
economy ea ly in his ule, c ea ing ension be ween his ambi ious s a ec a
agenda and he eali y o China’s economic slowdown.
As a s aunch Ma xis , Xi has made signi ican s ides, such as e adica -
ing absolu e po e y in China wi hin h ee yea s (2018–2020) (Xinhuane ,
2021). Howe e , his s ic adhe ence o Ma xis ideology has clashed wi h
capi alis elemen s in China’s economy. His e o s o egula e sec o s like
he In e ne , housing, inance, and e en educa ion ha e led o a decline in
p i a e sec o con idence. Main aining he balance be ween Ma xism and
economic libe alism has become inc easingly challenging in his second
e m and beyond. The p i a e sec o plays a c ucial ole in China’s eco-
nomic g ow h, con ibu ing signi ican ly o ax e enue and job c ea ion. A
ma ke economy necessi a es ad anced ins i u ions o e ec i e economic
managemen . O e - eliance on Ma xis -s yle planned economy app oaches
and excessi e s a e in e en ions can po en ially hinde China’s economic
g ow h.
Addi ionally, Xi’s ela ions wi h he Uni ed S a es and he Wes in gen-
e al ha e de e io a ed, complica ing his diploma ic and s a ec a e o s. The
mo e ad e sa ial he Wes ’s s ance owa d China, he mo e Xi has emphasized
ideological pu i y and na ional secu i y.
This ideological shi unde Xi Jinping has p omp ed a ocus on ga ne ing
suppo om he poo and lowe wo king class, a s a egy ha isks aliena -
ing he weal hie and mo e cosmopoli an uppe -middle class. This e ol ing
dynamic poses a challenge o he Ma xis -De elopmen alis comp omise ha
has been a co ne s one o Chinese leade ship o e he pas ou decades. To
sus ain a de elopmen alis economic policy, i is essen ial o p ese e key ele-
men s o he ma ke economy. Addi ionally, allowing a deg ee o economic
libe alism is c ucial o main aining public con idence in bo h he economy
and he b oade socie y.
The undamen al challenge o Xi in go e ning China emains economic.
The e ec i eness o policies such as he Supply-side S uc u al Re o m, ini i-
a ed wi h P emie Li Keqiang, has been limi ed. The ques ion o wha new
economic policies o ways o hinking a e necessa y emains open. Pe haps a
econside a ion o Deng Xiaoping’s economic libe al p agma ism is needed.
90 China’s Mode n Economic S a ec a
Howe e , he con ex has signi ican ly changed since Deng’s e a, and unde
Xi’s leade ship, China is na iga ing uncha ed wa e s.
China’s economic and social expe imen con inues, wi h i s g ea powe
economic s a ec a unde Xi’s enu e being a c i ical and impac ul expe i-
men in go e nance and s a ec a , bo h o China and he global communi y.
I is s ill oo ea ly o p edic he ailu es o China’s economic s a ec a . Pe -
haps i would be wise o conside he global implica ions should China’s
g ea powe s a ec a ail. China is simply oo big o ail, and he wo ld can-
no a o d i s ailu e.
Re e ence Lis
Kennedy, P. (1987) The Rise and Fall o he G ea Powe s: Economic Change and
Mili a y Con lic om 1500–2000. New Yo k, NY: Random House.
Liu, X. Z. (2022) Two Answe s: S epping Ou side he His o ical Cyclical Ra e [Peo-
ple] 27 Janua y. A ailable a : h p://dangjian.people.com.cn/n1/2022/0127/c117092-
32340904.h ml.
Qiushi (2021) Xi Jinping: G asp he New S age o De elopmen , Implemen he New
De elopmen Concep and Build a New De elopmen Pa e n [The S a e Council
o The People’s Republic o China] 30 Ap il. A ailable a : h ps://www.go .cn/
xinwen/2021-04/30/con en _5604164.h m.
Xi, J. P. (2022) The Go e nance o China. IV. Beijing, China: Fo eign Languages P ess.
Xinhuane (2021) Xi Jinping: Speech a he Na ional Po e y E adica ion Summa y
and Commenda ion Ce emony [Xinhuane ] 25 Feb ua y. A ailable a : h p://www.
xinhuane .com/poli ics/leade s/2021-02/25/c_1127140240.h m
Zhang, X. T. (2024) New Economic S a ec a : China, he Uni ed S a es and he Eu o-
pean Union. London and New Yo k, NY: Rou ledge.
A ica 4
ag icul u al collec i iza ion 32
Almunia, Joaquín 51
an i-co up ion campaign 67
An i-Economic Coe cion Ins umen
(ACI) 79
An i-Subsidy Regula ion 79
Asian In as uc u e In es men Bank
(AIIB) 1, 55, 89
Bangladesh-China-India-Myanma
(BCIM) Economic Co ido 5
Ba le o Yalu Ri e 20
Bel and Road Ini ia i e (BRI) 1, 55, 58,
76, 84
Biden, Joe 80
Bila e al In es men T ea ies (BITs) 1,
55, 76
B e on Woods Con e ence 50
B i ain 3
Buzan, Ba y 3
Cen al Economic Wo k Con e ence 75
Cha GPT 25, 43
Chen Deming 48
Chen Yun 30, 31
Chiang Kai-shek 31
China: Aus alia ela ion 78; Canada
ela ion 78; China-Kazakhs an oil
pipeline 52; China-Russia c ude oil
pipeline 51–52; China-US ade wa
73; and Co id 9; de elopmen alism
27; economic policy objec i es 40;
economic eali ies 32; economic
slowdown 9; economy 45–46;
o eign policy 11; GDP 11; global
in luence 2; Japan ela ion 78;
majo coun y economic diplomacy
2–4; mode niza ion cons uc ion
and economic g ow h 35; na ional
economic s eng h 35; policy and
academic communi y 1; poli ical li e
36; ax-sha ing sys em 40
China Na ional Nuclea Co po a ion 69
China-Pakis an Economic Co ido
(CPEC) 5
Chinese Academy o Go e nance 59
Chinese Communis Pa y 31
Chinese ea 21
Chips Ac 2022 79
ci iliza ional iden i y and he i age 7
ci il socie y 7
comme cial cul u e 6
communism 29, 61
Communis Pa y o China (CPC) 6, 26,
46, 61, 87
comp ehensi e de elopmen 41
Con ucian e hics 11
Con ucius 8
Con ucius-Mencius Philosophy 11, 14–15
coo dina ed de elopmen 41
COVID-19 75, 77
cul u al exchange 18, 62
cul u al powe 9
Cul u al Re olu ion 34
demand managemen 74
Deng Xiaoping 8, 9, 27, 37, 40–42, 58,
59, 87
de elopmen alism 42–43
diploma ic s a egies 18
Doc ine o he Mean 15
Doha Round 49
Doha Round o nego ia ions 49, 50
Donghak Peasan Re olu ion 20
Due Diligence Di ec i e 79
Index
