Book Review — Unlikely Partners by Julian Gewirtz

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In July 2019, I finished Julian Gewirtz’s “Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China”

China is an astonishing country that has defied many economists’ guideline on how a progressive economy works. Just a few years after rendering China incapable of development, Milton Friedman would throw out the challenge, “The economist who is able to provide an analysis of China’s economic development and reform is qualified for a Nobel prize.”

With the Chinese propagandist machinery intent on keeping out the great influences that has made it a truly super economy, the book laid bare the twists and turns that made China a global economy it is today.

The book spans the period between the time of Mao Zedong’s death in 1976 to the mid-90s, and the many partners who helped it achieve its astronomical growth.

From the period of Mao’s death, his eventual successor Deng Xioping made it clear that his lifelong ambition was to turn China from a pauper nation to a nation of prosperity. With many of his colleagues still intent on following Mao’s fully Marxist system — a system that birthed initiatives like the Great Leap Forward (where an estimated 40 million people died in just three years) and the Cultural Revolution (where 3 million Chinese died) — Deng decided that he would seek out ideas from anyone and anywhere if these would help fulfil his ambitions.

Deng would use terms like “crossing the river by feeling for the stones…” and “seeking truth from facts” to declare a momentous break with the inefficient traditional socialist economy and his intention to find a form of socialism that did not “boil down to shared poverty”.

Deng and his protégé Zhao Zedong would send delegations upon delegations to visit both capitalist (US, UK, Japan, Germany, Brazil, etc.) and socialist countries (Hungary, Romania, etc). For example, in 1978 twenty-one delegations with participants at the vice premier or vice chairman level traveled to fifty-one countries. Deng and Zhao gave them only one assignment — learn what works and bring it to China for development. One of the most remarkable moments in the book for me was when Deng, leader of about a billion people at the time, met with the World Bank in 1980 and uttered the words, “We are very poor. We are very poor. We have lost touch with the world. We need the World Bank to catch up.”

And help the World Bank did. During the period of 1981–1989, the World Bank approved sixty-nine projects totaling over US$7.25 billion, and provided over US$3 billion in loans. During this period, the World Bank became China’s largest single source of foreign capital, and China became the Bank’s largest borrower. Efforts by the World Bank would eventually help in the facilitation of the popular Bashan Conference, a framework still in use by the Chinese top officials.

(As an aside, when someone like John Williamson and his ilk portray the World Bank and IMF as a bastion of neoliberalism with damaging results, China provides a counter to how these institutions’ recommendations can be both flexible and context-specific.)

Asides the World Bank, organizations like the Ford Foundation, in particular, would be instrumental in providing millions of dollars to fund expert exchanges and academic study.

Upon opening up of the economy to capitalistic tendencies in 1978, experts from other countries would notice a total lack in depth in intellectual exchanges with Chinese economists and intellectuals, however it was crystal clear that these people wanted to learn. In the years to come, Chinese economists would be revered economic experts in their own right, to the extent that Justin Yifu Lin would become the first non-Western World Bank chief economist (2008 to 2012).

The Premier Zhao Zedong, the force behind China’s economic blueprint would eventually be placed under house arrest till his death and his achievements purged from public records because he was seen to be sympathetic towards political reforms as well as his involvement in events leading to the bloodbath known as Tiananmen Square. A reminder that even though China would extricate itself from Marxism and Socialism and officially call its system “Socialist Market System”, it was not ready to let go of its political system at the time or in the future.

With Zhao gone in 1989 and conservatives at the helm of affairs, the Chinese economy would record its lowest growth since opening-up at 3.4% in 1990. Thankfully, Deng was able to hold his ground and accelerate the promotion of another pro-market reformer, Zhu Rongji, to coordinate the economy and among his other achievements, a growth of 13.4% in 1993.

It’s truly remarkable. From a country where 9 out of 10 people were in extreme poverty in 1976 to one where a lot of its citizens have experienced a 50-fold increase in their standard of living, China continues to astound. As at last count, 850 million have been lifted out of poverty since 1978. It’s a miracle. It’s unprecedented in human history. 40 years of economic miracle have created a greater increase in human well-being for more individuals than occurred in the previous 4000+ years of China’s history.

And it’s because China sought out the best ideas and partnership even if from unlikely quarters, and adapted them to its local economy.

At a point, Deng declared bluntly to anti-market conservatives, “Whoever is against reform must leave office…”, because according to him, “It doesn’t matter whether a cat is black or white, so long as it catches the mouse.”

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