The impact of policy on the free market

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The impact of policy on the free market

Introduction

The Chinese state worked to unleash the market and keep it unfettered, not because it believes in the primacy of the free market. Instead, it was the goals of survival, resources, politics, and ideology that prompted China to embrace the power of the market.

To save the country from sinking

² The introduction of the free market was like a saving grace for China, as it was experiencing economic stagnation for years under the Mao administration.

² The economic system designed by the Mao administration was disastrous. With no intervention with the power of the market, China would be like a sinking ship

² Change for the sake of change had to be the primary goal for the Deng administration. This was more on the survival level than on the strategic level, since it is no exaggeration that Deng’s economic plans literally saved China from falling behind the rest of the world.

To amass necessary resources and sustain power

² The motivation behind is to establish a state-manipulated market economy, to accumulate wealth and technology in the process of economic development

² Deng realized that wealth and technology are crucial in building and sustaining powerful state apparatus. With failed planned economy for the past decades, market economy was likely the most efficient way to obtain these two crucial resources

To regain political control both internally and internationally

² The country was facing tremendous power struggles both internally and externally. Internally, the death of Mao created disturbances in the already chaotic China.

² With the declining international and regional influence and status, China wanted to place itself back onto the radar in the international political stage

² Economic development effectively diverted people’s attention, turning them from political enthusiastic to money driven. This has determined the social characteristics of China even today

To explore a path and promote an ideology that is unique from capitalism

² Primacy of a strictly defined free market has never been established in China, as the country found its own path to privatization by avoiding the “shock therapy”

² Socialism ‘with Chinese characteristics’ is a compromise between state control and free market. It also showed the state’s reluctance to conform to the western ways and ideologies.

² The “Chinese characteristics” resembles a propaganda. Its success nowadays is giving China increasing soft power to “conquer” the world with its own ideology, different from what is offered by the west.

Conclusion

In the age of neoliberalism, economy is the new power. Deng was wise enough to realize that. A free market was never the goal of the Chinese state. It was only the most efficient means and tools for it to obtain economic, technological, political, and ideological power.

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