China Offers Alternative Development Model in 'Beijing Consensus'

The Beijing Consensus, a new development model based on China’s own economic success, is one of the latest ways that China is asserting itself as a major player in international politics. This shift comes as developing countries around the world look for ways to spur growth in a challenging economic climate.

During the 1990s and early 2000s, Latin America became the biggest test bed for the Washington based recommendations. Policies that initially appeared a big success ultimately came under fire. Critics of the Washington Consensus contend that it was at the core of Latin America’s economic problems, which included multiple currency crises, recession, and economic collapse in some countries.

The most notorious case was that of Argentina: after strictly adhering to recommendations by the IMF, the economy surged in the early 1990s, began to slow mid-decade, and finally collapsed in 2001. The collapse led to massive street riots in Argentina, with many government and financial experts pinning the blame on the IMF and the United States (the IMF’s largest shareholder). In the last decade, many Latin American countries have continued to struggle under financial pressure, leading to growing disillusionment with U.S. economic policies.

The result has manifested itself as a political “left turn” in Latin America. Jorge Castaneda, the former Mexico Foreign Minister and a Professor of Politics and Latin American Studies at New York University, says, “a wave of leaders, parties, and movements generically labeled ‘leftist’ have swept into power in one Latin American country after another,” starting with Hugo Chavez in Venezuela and followed by a host of other leaders in Bolivia, Nicaragua, Brazil, and Argentina. Throughout the world, there has been a definite shift away from the economic agendas of policymakers in Washington.

The Alternative: China’s Model

While the IMF was in significant difficulty attempting to produce results, the economies of Eastern Asia were literally exploding in comparison. World Bank economists Shahid Yusuf and Kaoru Nabeshima have noted, “Consistently high growth rates are an anomaly limited to a handful of economies in East Asia.” Referring specifically to China, they say, “No other country has averaged a growth rate more than 9 percent over a 25-year period.” By any standard, it is an impressive feat.

In this context of sustained growth emerged what is now called the Beijing Consensus, a development model first formalized not by a Chinese economist, but by American economist and journalist Joshua Cooper Ramo, in a paper published by the British Foreign Policy Center.

The Beijing Consensus is nothing like Washington’s Consensus. Instead of clearly delineating strict economic policies, it is founded on three broad ideas:  the importance of innovation, a rejection of per capita GDP, and a fundamental belief in self-determination.

Indeed, these ideas turn our neoliberal approach on its head. The Beijing Consensus draws heavily on the ideas that China has pursued since 1979, when former leader Deng Xiaoping came into power. Deng became famous for being a pragmatist; one of his best-remembered sayings is, "I don't care if it's a white cat or a black cat… It's a good cat so long as it catches mice." And today, Deng’s pragmatism is reflected in the Beijing Consensus.

Unlike the Washington model, the China model recognizes that each country faces a unique set of challenges and therefore requires unique solutions. This can be seen through the Chinese program to slow population growth, its infamous ‘One Child’ policy. Despite becoming a punching bag for human rights groups, within China the policy is widely accepted as both necessary and effective. According to a 2008 survey by the Pew Research Center, 76% of Chinese support the policy.

In many ways the One Child policy represents the embodiment of the Beijing Consensus. In 1979 when the “family planning policy,” as it is referred to in Beijing, was implemented, China faced growing social and economic problems because of its huge population. Now thirty years later, it is estimated that anywhere from 250-400 million babies were never conceived because of the policy, an amount which likely would have overwhelmed social services such as health care and education and dampened economic growth.

The continent of Africa, largely disregarded by the U.S. as a place with little potential and too many problems, has increasingly turned East—to China—to pursue development goals. And it is easy to see why: a helping hand from China doesn’t include the lecture and myriad other ‘strings’ associated with support from the Western institutions.

“China’s investments are attractive to Africans,” said Princeton Lyman, of the U.S. based Council on Foreign Relations, “because they come with no conditionality related to governance, fiscal probity or other of the concerns that now drive western donors.”

Although some question the true utility of the Beijing Consensus as a “model” vis-à-vis the Washington Consensus, China specialists, such as Chan Lai-Ha and Pak Lee, generally agree “that the state should play a predominant role in reform and development,” adding that the Beijing Consensus “enhances the voice of developing nations in global affairs.”

Whether Washington likes it or not, the emerging influence of the Beijing Consensus around the world is not an illusion. And if the past three decades serve as any indication, it’s an idea that could grow fast.