China’s 21st century ascendency : neoliberal hegemony, development and the World Bank

China’s 21

st

Century Ascendency

Neoliberal hegemony, development and the World Bank

Jasper P. Simons

6043364

jaspersimons@gmail.com

University of Amsterdam

Political Science

17-06-2013

Bachelor Thesis

The rise of the BRICS: from North-South to South-South Relations?

Sarah Hardus

- Table of Contents - Introduction: 3 Theoretical Framework: 4 Section 1: 9 Section 2: 11 Section 3: 16 Conclusion: 20 Bibliography: 21

- Introduction -

To subdue the enemy without fighting is the supreme excellence

Sun Tzu, The Art of War

In this bachelor thesis, I engage in the debate on changing power relations and the political and economic impact of 21st century China. I particularly attempt to enlarge our understanding of how the dynamic interplay of material, ideational and institutional forces have maintained the legitimacy of the neoliberal hegemonic order and how the order is changing by the ascendency of China. I will draw on critical theory inspired by the neo-Gramscian concept of hegemony and its historical materialist approach, because it presents the most accurate and comprehensive approach to deal with the question of both domestic and international changing power relations. This thesis is thus both an effort to understand power and a contribution to International Relations (IR) theory by showing the utility of critical theory.

We often see the picture of incrementally declining American-led Western power in material terms and of the soft contestation of the (legitimacy of) international economic governance institutions (Cox, 2012; Nye, 2010; Lake, 2006). The BRICS are generally depicted as an unmistakable alternative force to Western power, but also as an incoherent group with sometimes strongly conflicting interests and world views (Glosny, 2010). Although American supremacy remains largely unchallenged, we can see a return to the Westphalian-system, a renewed spirit of multilateralism and a regional concentration of power (Barma et. al, 2009; Hampson & Heinbecker, 2011). The important question in this respect is what the influence of China, the most likely new great power, as an alternative pole is or will be and whether the Chinese pole will challenge, adjust or maintain the hegemony of neoliberalism.

To answer this question I will, firstly, focus on the World Bank (WB or Bank) and how it maintains the legitimacy of the neoliberal paradigm, particularly its Washington Consensus (WC) based development strategy. Development is central, because China’s ascendency is often lauded in terms of its distinct and rather successful development strategy. In order to understand the impact of China’s rise, I will, secondly, elaborate on the

relationship between the Chinese Communist Party (CCP) and China’s civil society. From this state/society complex perspective I will identify the possibilities and constraints for the CCP to transpose its domestic political economic dominance to the regional and global level. Thirdly, I will clarify how China behaved vis-à-vis the Bank and whether it offers a different development model. Based on this, I can show whether China is countering the neoliberal hegemony with WB reform and alternative development ideas.

The structure is based on three sub-questions answered in three consecutive parts. Research question: What is the influence of China’s 21st century political and economic ascendency on the neoliberal hegemony and the World Bank in particular?

1. How does the World Bank represent and maintain the neoliberal hegemony?

2. How has the Chinese state-civil society complex changed during its market-transition and is the Chinese state promoted or constrained to act other than maintaining the neoliberal hegemony?

3. Does China challenge the World Banks neoliberal hegemonic position with Bank reform and/or a different development model?

- Theoretical Framework -

The essentials and benefits of critical theory

The concern with the changing power relations between China and the Western neoliberal hegemony and the WB as one of its representative international institution implies the need for a theoretical perspective that does not accept the status quo but critically assesses the dynamics constituting its preservation. Moreover, because the neoliberal hegemony and the Chinese state/society complex are central, we need a comprehensive framework that can identify the totality of the power relations that compose them, rather than its analytically separated elements.

In his foundational article Social Forces, Forms of State and World Orders, R. Cox starts with the assumption that theory is always for someone and for some purpose and subsequently makes a distinction between problem-solving and critical theory (Cox, 1981: 206). According to Cox, problem-solving theory is improper because it is not concerned with the origins and possible changes of a historically contingent socio-political order but seems to implicitly legitimize it. Critical theory, in contrast, acknowledges this historical contingency of the prevailing order and thus analyzes the continuing process of historical change (Cox, 1981: 209-210).

Critical theory’s perspective is based on three theoretical aspects of historical materialism. Firstly, historical materialism focuses on the production process, because the distribution of material power is the preliminary determinant of social relations (e.g. class conflict) within a historical structure (Cox, 1981: 216-217). Secondly, it perceives interstate power relations in a horizontal and vertical manner, because the notion of interstate relative power struggle central in neo-realist thought is supplemented with the idea of dominance of centre states over peripheral states as outlined in world systems theory. Thirdly, historical materialism does not perceive the state as an unitary actor with fixed preferences. Rather, it draws attention to the dialectic relationship between the state and civil society. The latter is the centre-weight for the consolidation and as well as the destabilization of the state (Cox, 1981: 215-216).

Hegemonic stability theory and legitimacy

To comprehensively identify China’s impact on the neoliberal hegemony, I draw on the neo-Gramscian concept of hegemony. Neo-Gramscian hegemony is alternative to hegemonic stability theory (HST), as found in neo-realism and neo-liberal institutionalism. HST assumes that in the anarchic interstate system one predominant state superior in material coercive power is needed to create stability. Within neo-realism, variations exist about

whether other great powers, thus potential hegemons, will inevitably try to overthrow the predominant power or that they will abide to its system as long as it serves their self-interest. However, when a state does challenge the hegemon’s (declining) systemic power and seeks a power transition or revision of the status quo, it will be by military and economic force (Gilpin 1983). Neo-liberal institutionalists expand HST with the logic that the hegemon will partly sacrifice its self-interest as to provide global public goods, thus creating cooperative relations and a positive-sum game (Keohane, 1984). Particularly, regime theorists take on the notion that the international system is not merely anarchic and driven by the pursuit of relative military and economic power, but claim that the international system relies on certain

principles, norms and rules on which the primarily rational expectations of states and other actors coincide. In addition, it is claimed that institutions have an autonomous will to enlarge their power and that they may live on when the hegemon declines (Krasner, 1982).

However, hegemony in the neo-Gramscian sense is the most accurate. Hegemony is defined as “a coherent conjunction or fit between a configuration of material power, the

prevalent collective image of world order (including certain norms) and a set of institutions which administer the order with a certain semblance of universality (Cox, 1981: 222-223).

Hegemony is constituted by social forces establishing their dominance within a state in material, ideational and institutional terms and is then transposed to the interstate system. The dominance of material power serves as an enforcement potential, which will minimally be utilized because institutions, perceived as legitimate, structure conflictive behaviour towards the collective interest and peaceful solutions. Hegemony is thus defined as the broad-based acceptance of legitimate ideas and norms of a world order which is underpinned by material resources and inclusive institutions. The power of one state is therefore necessary but not, as neo-realists hold, sufficient for the establishment of hegemony (Bieler & Morton, 2003; Cox, 1981: 219, 223).

The centrality of legitimacy is better suited to this thesis’ specific empirical orientation, because it is concerned with the neoliberal hegemony based on American unipolarity. With unipolarity, in contrast to a bipolar constellation wherein power balancing is necessary to maintain bipolarity, power balancing is inherently confrontational. Moreover, because unipolarity means an asymmetry of power, the first serious attempt to change the unipolar world has to be indirect or non-confrontational. Therefore, the first locus where hegemony is contested or adapted is the predominant ideology and its legitimacy (Schweller & Pu, 2011: 41-50). Presumed that unipolarity is changing towards multipolarity and that China is potentially the first contender, this thesis focuses on how China might be conforming to, reforming or countering neoliberal legitimacy.

Analytical framework and empirical orientation

The neoliberal historical structure is deconstructed with a comprehensive framework of two triads (figure 1 and 2 below). Historical structures consist of three interrelated

elements, namely material capabilities, ideas and institutions, that reciprocally influence each other and accordingly form a structural and coherent limited totality (Cox, 1981: 220).

Limited, because a historical structure manifests itself in three interrelated spheres of activity that together form the whole of reality. Those spheres are identified as the organization of production – particularly the social forces within the production process, or social relations of production –, the form of state or the state/society complex and world orders (Ibid.). Due to its complexity, the historical structure must be treated as close to an ideal-type that represents a consistent representation of reality. Thus, a historical structure does not determine individual behaviour but constitute[s] the context of habits, pressures, expectations and constraints

within action takes place (Cox, 1981: 217).

Figure 2 (Cox, 1981: 222)

This thesis is interested in the neoliberal hegemonic world order and the impact of China’s ascendency. However, it focuses on the WB because it is, together with the International Monetary Fund and the World Trade Organization, an institutional

representative of the neoliberal world order. The WB will not be researched as a case study in order to generalize findings to the total neoliberal world order, because I am particularly interested in China’s impact as a developing power on the neoliberal development paradigm. This paradigm prescribes certain policies, namely related to the general prescriptions of the Washington Consensus (WC). The IMF is typically identified as the other WC institution, but it is primarily concerned with financial stability and not development. The WTO is not a direct representative of the WC, because it is a regulator and enforcer of multilateral trade agreements. Moreover, I will not discuss the changing international material relations due to arguments of scope. I simply assume that since large national markets emerge and economic activity becomes regionally concentrated, the economic distribution is gradually moving from unipolarity to multipolarity (Lim, 2011; Yifu Lin, 2011). Moreover, I assume that financial capitalist and transnational production networks are strongly represented as relations of production (Schiller, 2003). Finally, I focus on the Chinese state/society complex, because China has the largest material capabilities and a distinct culture, perhaps even a civilization, to counter the hegemony. To understand whether the CCP-dominated state is constrained or enabled by its society to expand its power, the dialectic interplay of the material capabilities, ideas and institutions within the state/society complex will be profoundly studied.

Core concepts

Several core concepts are below more precisely described in order to increase the conceptual clarity of this theoretical approach.

The three elements: Material capabilities are the productive and destructive potentials. Simply put, it is the power following from military capabilities, natural resources, technology and wealth. Ideas are, on the one hand, intersubjective meanings about social reality (e.g. the state and its relations with others) which are over time conditioned by experience. On the other, ideas are collective images of the social order concerning issues as legitimacy of power, public good and morality. Institutions are means to maintain the power relations of a social order and, at least at first, promote collective images of the ideology of the hegemonic historical structure. However, institutions and other actors have a reciprocal relationship of influence because institutions tend to pursue their own interests autonomously (Cox, 1981: 218-219)

State/society complex: The state/society complex refers to the interdependent

relationship between the state and civil society as two analytically distinct concepts. The state is the government and its executive forces and civil society is the aggregation of private and semi-public social actors like non-governmental organizations (NGOs) and labour unions. Although civil society and its collective images are influenced by state institutions and

constrained by its enforcement apparatus, civil society is the foundation of the state (Bieler & Morton, 2003; Cox, 1981: 205, 216; Cox, 1999: 5-8).

Counter-hegemony: Counter-hegemony is the possibility of a coalition of developing states and their civil societies having a coherent alternative world order image supported by material power capable of challenging the Western core. However, softer counterhegemonic tendencies are also detectable, particularly challenging ideas (Cox, 1981: 238-239)

Neoliberalism: An ideological concept that became predominant in the 1980s and encompasses theories united by the centrality of individual freedom and a particular notion of the legitimate relationship between state and market. The state’s role is stereotypically

restricted to the establishment of an impartial institutional and legal context that guarantees a free market and strong property rights. As such, neoliberalism is, on the one hand, based on a political philosophical spectrum ranging from Hayek’s classical liberalism to Nozick’s libertarianism and, on the other, on an economic rationale of neo-classical theories that promote laissez-faire macroeconomics and economic and financial globalization (Thorsen, 2011). Although a thorough elaboration is beyond scope, I point out that the ideational basis of the neoliberal hegemony is particularly interpreted as a coherent set of political and economic policy prescriptions. Therefore, the thesis focuses on the intersubjective meanings and collective images resembling the ten points of the Washington Consensus (WC) as originally described by Williamson (Williamson, 1989; Cox, 2007: 522).

Legitimacy: Legitimacy is the acceptance of rightful authority, of the government, its ideology and aims and the (coercive) policies/means to reach those aims. Because acceptance relies on values and ideas, legitimacy is open for debate. Democratic legitimacy, which holds that elections determine political authority, is different from utilitarian/consequentialist legitimacy, which holds that the achievement of predetermined practical results means rightful authority. This thesis, however, focuses on whether power or ideas are perceived as

legitimate and whether alternatives are offered, thus not necessarily what theory constitutes a

perception.

Operationalization and data-collection

The main focus is on China and its relationship with the WB in the 21st century. The historical materialist timeframe is the period of hegemonic neoliberalism and the WC (ca. 1980-now) and the start of modernization by Deng Xiaoping (1979-now). Although the WB represents the broader phenomenon of neoliberal hegemony, I recognize my thesis’ limits. The focus on China’s influence on the WB and the neoliberal development model is indicative of China’s relation to the neoliberal hegemony, but cannot be transposed to a general claim about neoliberalism’s endurance. Thus, this case is primarily descriptive. However, I also intend to show the utility of critical theory and therefore this paper is an attempt to enrich our theoretical thoughts.

Understanding specific relationships and their changing power relations, also requires a qualitative content analysis of professional data from multiple sources. This thesis therefore draws on a large number of academic literature and independent data of Freedom House, Human Rights Watch and the World Value Survey. I acknowledge the limit that the Chinese state and the CCP are closed and that translated Chinese discourse easily allows for

misinterpretation. WB reports are included because, although it is a subject under scrutiny, it provides the best economic data. Finally, I use articles of the Bretton Woods Project. This professional but ideologically motivated whistle-blowing organization might contradict, or confirm, the academic literature and WB reports on important issues.

The first sub-question is divided in two paragraphs. The first will research how the West dominates the WB by looking at its relative quota shares and voting power (material), its informal and cultural ties with the WB’s staff (ideas) and the Bank’s internal bureaucratic mechanisms that preserve the Bank’s ideology (institutional). The second will research how the WB maintains neoliberalism’s legitimacy by looking at financial resources, the reliance of recipient countries on Bank loans (material capabilities), the relative importance of the WB’s research and data for countries, development studies and the public, the responsiveness to criticism of experts, NGOs and countries, the staff’s internal culture (ideas) and whether the WB converts criticism to reform (institutions).

The second sub-question is separated in five paragraphs. The first assesses the CCP’s authoritarian power over society and its legitimacy by looking at the CCP’s control over the political and judicial system and the numbers of strikes and protests (material

capabilities/institutions), the average levels of confidence, self-expression and subjective well-being, the effect of exposure to propaganda and the average level of negative perception of corruption (ideas). The second researches the historical Chinese identity and concepts legitimizing Chinese modernization (ideas). The third estimates the changing relations of production by looking at the numbers on poverty, inequality and employment, the

informalization of labour and the size of private business (material capabilities), subjective belief on modernization’s merits (ideas) and the liberalization of collectivities, state

enterprises and social security (institutions). The fourth and fifth investigate how free and influential civil society is by concentrating on the articulation of demands and criticism, the use of the internet for political purposes (ideas) institutional control of the CCP over legal and illegal social organizations, labour unions, blogs and webhosts (material

capabilities/institutions). The sixth will research what the official and real form of Chinese nationalism is, whether elite and public discourse reflect radical nationalism and whether the CCP is responsive (ideas).

The third sub-question contains five paragraphs. The first introduces the general Chinese foreign policy attitude and concepts (ideas). The second elaborates on China’s changing relationship with the WB by identifying China’s reliance on WB expertise and development loans (material), China’s position within reform discourse (ideas) and the erection of Chinese development banks (institutions). The third focuses on the 2010 WB reforms, because those are the most recent and significant. It clarifies the changes in quota shares (material), senders and essence of the calls for reform, China’s position within reform discourse and the WB’s responsiveness to different policies (ideas). The fourth and fifth look at China’s development strategy more closely by identifying whether it conforms to, adapts or challenges the WC by identifying the degree of implementation of WC policies and

performance of China’s strategy (material) and the existence of a coherent alternative model with norms and prescriptive policies different from the WC (ideas).

- Section 1 Neoliberal hegemony and the World Bank -

1.1. WB and neoliberal hegemony

The hegemonic power of Western developed countries, particularly the U.S., over the WB and its ideas and policies is evident. Overt indicators of the considerable American weight over the Bank are the WB’s dependency on American funds, America’s relative quota size and de facto veto power, its informal right to appoint the President, its legally binding instructions for the U.S. executive director and the proximity of the WB’s headquarters. As U.S. direct and indirect influence is fundamental and WB decision-making is based on consensus, the formal voting within the Board of Governors is generally a formality (Barnett & Finnemore, 2004: 49, 68; Mallaby, 2007: 76-77; Wade, 1996: 35; Weaver, 2007: 499-500).

Covertly, we first see the preservation of this dominance following from the tendency of WB staff to have a Western-oriented view and a neoliberal economics affirming

background. This Washington-centred approval culture and “paradigm maintenance” follow from the dominance of PhD economists from Anglo-Saxon universities. Moreover, the staff’s mathematical rationality and technocratic view have the propensity to discard unquantifiable arguments of other social sciences (Babb, 2012: 286-287; Weaver, 2007: 506-507). Secondly, because status quo preserving research is often promoted, the internal culture has a conformist bias. Furthermore, dissenting voices are obstructed and discouraged by hiring staff that

reinforce the Bank’s development ideas. This bias has grown over the years, despite the pledge to diversify the staff, and obstructs reform already agreed to by the shareholders. For example, agreements to centralize poverty reduction and Bank accountability took almost a decade to become manifest in the Bank’s practice (Broad, 2006: 390-407; Weaver & Leiteritz, 2005: 369, 373-375, 379, 382-384). Thirdly, the Bank’s research body maintains the paradigm because, by being the most professional and best funded global development research centre, it is the leader in development studies. As such, the Bank can create public consensus on its views and contain criticism. For example, the Japanese strive for the Bank’s recognition of the Japanese successes of direct government credit allocation has been blocked with the East

Asian Miracle Report. This rapport recognized the Japanese success but presented it as an

incident that could not challenge the Bank’s ideology (Wade, 1996: 30-36; Weaver, 2007: 500).

1.2 WB legitimacy and neoliberal adaptation

Undeveloped (Part II) countries rely on the Bank for capital due to constrained capital market access and have to show compliance with WB programs because non-compliance will indicate low credit-worthiness. Moreover, Part II countries have weak voting power, which barely increased over the years, and face an asymmetrical relationship of development knowledge. The latter is particularly important, because the WB’s legitimacy strongly depends on it. The Bank’s tightly conditioned neoliberal programs are posed as the objectively determined set of policy prescriptions. As the WB infringes upon national sovereignty, domestic policy makers facing this asymmetry blindly have to trust the WB (Barnett & Finnemore, 2004: 71; Weaver, 2007: 500-501).

However, the WB is not simply an isolated neoliberal bastion. Client countries with large loans have considerable leverage over the Bank by threatening with a default. Moreover, the WB has incidentally been forced to alter the content and rigidness of its loan conditions. Particularly in the 1990s, the WB showed considerable responsiveness to counter-hegemonic calls for alternative policies. The legitimacy of structural adjustment and its neoliberal conditionality have been challenged on grounds of justice and effectiveness. Client countries have often been destabilized, showed negative or meagre growth and the most vulnerable segments of their population suffered immensely (e.g. the increased inequality and extreme poverty in Latin-America) (Chorev & Babb, 2009: 461-464). The Bank had to be responsive, because its funds were barely increased and its programs scarcely demanded due to their meagre effectiveness (Weaver, 2007: 501-502). Since then, criticism on the tough neoliberal conditionality’s legitimacy, the composition of the Board of Governors and voting shares has become rather apparent (Bretton Woods Project, 2010; Stiglitz, 1999). Interestingly, the WB showed responsiveness to the voices of civil society actors and NGOs. These actors have by, inter alia, extensive lobbying at the U.S. Congress influenced the WB’s reform agenda and development ideas. Consequently, the WB has addressed issues of transparency and adapted its development prescriptions by including environmental, social and corruption safeguards into the programs and emphasizing poverty reduction (Weaver, 2007: 495, 502-503). As a result, some argue that the Washington Consensus today is rather an Augmented Washington Consensus or, as Gordon Brown did at the 2009 G-20 Summit, proclaim that its dead

(Kaufmann, 2009; Rodrik, 2006: 1-10)

Whereas this first position has some validity, the latter is rather hasty. True, the WB changed its views and rhetoric in favour of this new set of policy prescriptions and publicly addressed the weakness of structural adjustment programs and conditionality. This change is, however, not radical but marginal. Firstly, the WB retains the use of conditionality but, as a result of U.S. pressure, altered it to ex-ante conditionality, thus providing funding only after progress has been apparent (Babb, 2012: 287). Secondly, structural adjustment programs are not discontinued but have been given a new name, namely “Development Policy Loans”. A third of the Bank’s lending still consists of these loans, which is much higher than the share of policy-based loans before 1980. In fact, this share has grown to 50% as the WB’s lending tripled in the aftermath of the 2007 financial crisis (Babb, 2012: 288; Wade, 2011: 359). Thirdly, although current WB rhetoric reflects a shift towards country-ownership and environmental and poor people protection, the development conditions remain neoliberal because the core of the programs are still based on marketization, liberalization and privatization. In fact, with regard to the provision of social services such as health and education, the role of the state is still considered necessary to be limited and private sector involvement is uninterruptedly promoted (Mehrotra & Delamonica, 2005: 141-165). Moreover, access to WB loans are increasingly more dependent on the implementation of neoliberal policies prior to program admittance (Babb, 2012: 289). Fourthly, its is arguable that as the WB proved to be open to criticism and gave civil society and NGOs a voice, it has increased its legitimacy, shaped social organizations’ preferences to its favour and therefore contained a radical change from the WC (Ünay, 2010: 45-51; Weaver, 2007: 504). Hence, although the neoliberal hegemony has been challenged, the gradual adaptation of the WB proved to be enough to maintain the WC status quo.

- Section 2 China’s state/society complex -

2.1 Authoritarian but legitimate power

Until today, China remains a classic authoritarian state. The CCP and the Politburo Standing Committee in particular are in full control of policy-making and large economic enterprises. Political opposition has been suppressed through imprisonment and torture. Freedom of speech, assembly, protest and religion are constitutionally granted but in practice heavily constrained. The rule of law is weak because the judicial system is controlled by the CCP through the appointment of judges and even the formulation of verdicts. Although in the past decade liberalizing reform was applied to civil aspects such as information and the rule of law, many reforms have recently been belated or reversed. As regards the 2011 global civil protests to authoritarian regimes – e.g. the Arabic Spring –, the CCP responded by assigning more resources to internal security, arresting human rights activists and restricting the Internet (Freedom House, 2001; Freedom House, 2006; Freedom House, 2012).

Strikingly, survey research indicates that the CCP regime enjoys a high level of legitimacy. Chinese citizens do not display confidence in the CCP because they are afraid of expressing critical opinions. Rather, self-expression levels are rising and the articulating of dissatisfactions and individual opinion is gaining strength as a public value. Moreover, the Chinese are also not profoundly influenced by propaganda. In fact, the exposure to

propaganda negatively influences the trust in CCP rule (Inglehardt and Welzel, 2009: 15; Wang, 2004: 2-8; Abdollahan et. al., 2012). Furthermore, the Chinese do not protest as much as citizens of countries with a similar economic situation but with more freedom do. In the late 1990s, demonstrations and strikes were widespread throughout China, but remained ad hoc and uncoordinated. In the 2000s, protests are limited to an amount of 250-500 per day. This low level does not simply correspond to the lack of freedom, but to the generally high level of subjective well-being (Inglehart et. al., 2008: 268, 282; Abdollahan et. al., 2012).

The deepest fracture in CCP legitimacy is the decades long and widespread corruption. Public awareness of corruption grows due to the increased openness of information.

Corruption has accordingly been publicly identified as a critical matter by the CCP. In 2007 the CCP created the National Bureau of Corruption Prevention and in 2010 Hu Jintao branded corruption as the core challenge to CCP survival. However, even though almost two thirds of Chinese citizens acknowledge corruption as a grave problem, not central but local government institutions are held responsible (Dong & Torgler, 2010; Harmel & Yeh, 2011: 1-5). Finally, it seems that neither political but economic reasons are of the citizens’ main concern. Public demands for Western-style democracy are low, often even deemed as inappropriate (Lee, 2007: 456, 472). The main reasons for the high trust and legitimacy are, on the one hand, the Chinese historical identity and, on the other, China’s remarkable economic development.

2.2 Chinese historical identity and rejuvenation of the nation

The Chinese state is historically based on two ideational complexes, which are now embedded in the Chinese identity. Firstly, the Central or Middle Kingdom Complex contains the idea of the Sino-centric world order of ancient imperial China, wherein the supposedly culturally superior Han dynasties formed the centre of Southeast Asia. The regional Han hegemony was primarily based on a tributary system (tianxia), the harmonization of language and dispersion of Confucianism. Secondly, the Strong China Complex refers to the goal of

restoring China’s ancient political and economic strength after the “century of humiliation” (bainian guochi), caused by Western and Japanese imperialist invasions between the Opium Wars and the Second Sino-Japanese War (Zhang, 2004: 281-286).

Together, these complexes have been identified as the ideational basis of the CCP’s policy of “rejuvenation of the Chinese nation” (zhenxing zhonghua). Since Deng Xiaoping’s post-1979 modernization policy of “reform and opening up” (gaige kaifang), the Chinese state/society complex has been in ongoing transition from a socialist, class-based economy to a market-driven one. The rejuvenation of China has found content in the idea of “socialism with Chinese characteristics” (zhongguotese shehuizhuyi), which in fact entails the process of transition from Maoist socialism to state-led capitalism (Zhang, 2004: 286-296). Although market-driven, the CCP holds that its economy is socialist because, as China remains in a developmental stage for many years, the primary task of the CCP is to eradicate poverty and modernize production. From Deng to Hu Jintao, this task is conceived as socialism (Hu Jintao, 2007). The appeal to “Chinese characteristics” as a legitimization reflects foremost the emphasis on Chinese distinct cultural tradition, although it can be quite differently interpreted and used for political purposes. China, or more specifically Han China, generally reflects Confucian customs and values but Confucianism itself is debatable. Although Confucianism is generally peaceful and cosmopolitan, more assertive or forceful versions are detectable (Callahan, 2007: 11).

The rejuvenation of China has been accompanied by a revival of pride and optimism throughout China. During the 1990s, the Chinese intellectual elite has had a firm hand in promoting a new dominant form of nationalism based on the condemnation of American and Japanese imperialism. Chinese expansion of power is meant to be defensive, in order to restore justice in the international realm (Hughes, 2013: 602-605). However, this conception is of a rather pacified form since it reflects the nationalism as propagated by Deng Xiaoping’s principles to ‘hide capabilities’ and ‘bide our time and focus on building ourselves’ (Holmes, 2009). It rests on the notion to reap the benefits of Western economic development, but without losing Chinese cultural traits. Hu Jintao has maintained this particular form with the claim that China is in a stage of ‘peaceful development’ which will lead to a ‘harmonious world’ (Hu Jintao, 2005).

The CCP’s ability to pursue this strategy is dependent on the stability of the CCP itself. The internal cohesion is safeguarded because the CCP managed to incorporate the largest segments of the Chinese elite in its apparatus. The continuity of pragmatic and moderate government officials results from reformed recruitment conditions from Maoist beliefs to professionalism and knowledge. Hence, the CCP created a competent and likeminded elite. However, the recruitment led to a more pluralistic composition of party members in terms of cultural background and interests. Factional politics have grown, in fact constitute a bipartisan structure that hinders the CCP’s appearance of unity. Additionally, with state retrenchment and reform of local government structures, the CCP will find it more difficult to control its members (Chang, 2009).

2.3 Changing relations of production

The combination of authoritarianism and pragmatic development facilitated history’s largest economic restructuring and poverty reduction. The agricultural collectivist economy has in the 1980s been completely transformed with the nation-wide adoption of the Household Responsibility System (HRS), in which not the state but local private actors are responsible for production. Local production is now organized in collective Township and Village Enterprises (TVEs) under the surveillance of local governments. These reforms proved to be

successful because they assisted absorption of rural labour, the reduction of poverty and the increase of output. The liberalization has from then on been imposed on other productive sectors such as industry and manufacturing (World Bank, 2009: iii-iv).

Accordingly, Chinese state-owned enterprises (SOEs) have been privatised,

downsizing the employment rate within SOEs from 145 million in 1994 to 72 million in 2006. General unemployment has risen subsequently and labour participation fell with 10% between 1999 and 2003 (Ibid: viii). Within Maoist state-socialism, Chinese labour enjoyed a privileged position of lifetime employment with a relatively secure income and working environment. The state also provided housing, medical care, education and a substantial political voice. However, since the 1980s labour has lost its privileged position. Wages and social services became dependent on the economic performance of the particular enterprise employing them. This marketization meant divergent wages and social service benefits and hence divided labour as a coherent class (Blecher, 2002: 3-5, 12-13).

This trend of divergence is aggravated by the industrialization of production and large-scale urbanization. The integration of China into the global economy, particularly since its 2001 accession to the WTO, accelerated international trade and foreign investment. Hence, the booming urban economy attracted large labour flows from the rural periphery to the coastal economic centre. This added to the elimination of extreme poverty and an impressive increase in human development –albeit that Chinese poverty figures maintain high by

international standards. However, the rural areas have lower standards of living and almost 150 million Chinese form a floating underclass that works in locations where they barely have access to social protection. Furthermore, inequality rises incredibly, from 30.9% in 1981 to 45.3% in 2003 (World Bank, 2009: vii, ix-x). As a result of the marketization and

privatization of public social services, the service delivery has been monetized. Consequently, the access to social services narrowed in the poorer, often rural, regions (Ibid.: viii).

Moreover, the privatization of SOEs led to a diversified urban labour market wherein private enterprises have gained in their share of economic activity. This implied the informalization of urban labour. Almost 50% of today’s total urban employment is unregistered.

Consequently, labour is far less protected in terms of social security and working conditions (Ibid.: ix).

However, capitalism is generally perceived as legitimate. Despite the recent decrease in subjective well-being caused by rising levels of inequality, monetization of social services and corruption, most Chinese believe capitalism brings prosperity. Even those subordinated in the market economy accept the new hegemonic relations of production. Remarkably, the disadvantaged workers do not hold the state responsible for the changing relations of production but the enterprises that employed them – even when they were state owned. Of those who did, most are older generations of formerly privileged workers. Paradoxically, workers only subscribe capitalism’s virtues but not its vices to the state. As a result, the CCP has persuaded most Chinese of the separation of politics and economics, making the state not responsible for the social problems following from modernization (Blecher, 2002: 14-19, 26-29). Moreover, inequality and monetization of social services do not simply imply less people being able to enjoy social welfare, but also ideological and socio-psychological effects. In contemporary China, wealth seems to symbolize status and is increasingly glorified (Inglehart, 2004: 19; Inglehart et. al., 2008: 15-17).

2.4 A rising civil society

The market-based transformation has been accompanied by the expansion of social organizations. With the state retrenching from the provision of social services, the CCP has

subsidised social organizations to take up its former tasks. These organizations constitute the primary link between the state and civil society by representing social interests in the policy-making process. Their autonomy varies but is generally limited because of the top-down CCP control. However, it would be a mistake to hold that these social organizations are extensions of state power because the state’s capacity to control them in fact narrows. Despite the institutional structure based on state control and cooptation, practice shows that social organizations’ negotiations with the state result in decreased state interference and

maximization of social organizations’ self-interest. Moreover, the lack of resources to enforce rules provides opportunities of unrestrained action. Arguably, the impact of social

organizations on policy may be higher through institutional embeddedness than with full autonomy (Saich, 1999: 2-5; Spires, 2011: 5-8).

Parallel to the state-driven erection of social organizations, grass roots organizations emerged as well. Grass roots organizations are generally registered and under supervision of a governmental agency, making it hard to become autonomous (Liang, 2003). However, in the 2000s, more grass roots organizations are formed illegally to fill the gap of absent social protection. Because censorship of information is not extended to the local level, grass roots organizations have room for manoeuvre. Often, CCP officials are unaware of local

developments due to restricted access to information. Although the state perceives these organizations as a potentially threatening force of political mobilization, they are tolerated as long as they do not formulate direct criticism along democratic lines and as the CCP can claim credit for the successes and avoid blame for failure (Spires, 2011: 10-14, 19).

Although more space for the expansion of civil society is apparent, the high levels of fear of repression and mutual distrust within civil society should not be underestimated. The CCP’s authoritarianism causes self-restraining mechanisms for social organizations (Spires, 2011: 26-28). Moreover and not unimportantly, labour particularly remains an appendix of state control and a means to contain resistance. The All-China Federation of Trade Union (ACFTU) is the largest and only legal labour organization governed in a corporatist fashion by CCP appointed officials. The ACFTU canalizes bottom-up opposition through the representation of regional and industrial groups at the CCP level and transmits ideas and policies top-down (Spires, 2011: 9; Abdollahan et.al., 2012: 5).

2.5 Institutional reform and Internet

Although the “rejuvenation of the nation” is mainly limited to the economy, growing civil assertiveness has led to some institutional reform. Public demands for non-violence, a solution to the local government legitimacy problem, bureaucratic efficiency, the

establishment of an impartial judicial system and access to information have been met with, inter alia, the National Human Rights Action Plans, a universal tax reform which centralized tax collection bureaucracies and governmental revenues, measures to strengthen the rule of law and the limited opening up of information resources such as Internet (Human Rights Watch, 2013: 303-315; Abdollahan et.al, 2012). The CCP has responded with pragmatism, thus meeting demands but only limitedly and gradually. Therefore, civil assertiveness cannot be perceived as a serious threat to the CCP’s hegemony. Political institutional reform can thus properly be classified as “contained institutional change” (Gilley, 2007: 263-266).

Nevertheless, in the past decade China witnessed a minor information revolution in the digital sphere. Indeed, the CCP still extensively restricts certain discourses through bans on specific words and pressures, mostly successfully, blog-hosting private actors to participate in censorship. However, as the CCP has acknowledged the economic opportunities of the

blogs and weblogs are increasingly used as fora of political debate (MacKinnon, 2008: 32). Additionally, the CCP installed online mechanisms for citizen commentary and policy suggestions, in order to show its accountability, and more often allows anti-government discourses. However, this selective opening-up enables the CCP to control the articulation of citizen dissatisfaction and the mobilization of real life protest and to restrict critical discourse to certain issues. Through this selective control of discourses, the CCP provides enough freedom to satisfy citizens needs while the Internet remains biased towards CCP support. Strikingly, most Chinese Internet consumers do not question the accurateness and truth of Chinese information sources more than foreign sources. Besides, most Internet consumers are not politically active and use the Internet for leisure. It is mainly the youth that uses the Internet for political discussions and to mobilize others. In this regard, notice the fact that nationalist and anti-American discourses are often allowed free passage (Ibid.: 33-41).

2.6 Confrontational nationalism

Although China’s official foreign policy, its public and intellectual elite generally express a peaceful and pragmatic Confucian world view, nationalism is in upsurge and seems to be more antagonistic and, incidentally, based on ethnic superiority. China’s increased self-confidence due to its remarkable economic performance has since 2007 been followed by events indicative of confrontational nationalism. The global financial crisis, which left China almost unaffected, fostered the belief that the global economy is a matter of survival of the fittest and the dispute with Japan over the Senkaku/Diaoyu Islands caused mass public

protests. In regard of both, Chinese intellectuals argued that the reform and opening up policy is stalling the national rejuvenation, because its liberal character does not allow for a hard, or, if necessary, military pursuit of national economic interests in the international realm

(Hughes, 2011: 602, 607-609). Moreover, the intellectual elite has proven to address stronger criticism on Hu Jintao’s technocratic, consensus-seeking and liberal approach to domestic development and foreign policy as inspired by cosmopolitan Confucian ideas. Rather, several authors have advocated for a morally conservative and politically militant interpretation of Confucius on which the national spirit should be based. The younger generations are particularly receptive to this discourse and also have been able to articulate broad-based demands with several Internet campaigns (Hughes, 2011: 610-613; Zhang, 2004).

Interestingly, the CCP seems to be responsive to the growing public interest in foreign policy and demands for a nationalist economic policy. Hu Jintao has at the 17th CCP Congress included a more mercantilist approach to trade, international investment and resources abroad as a policy tool (Hu Jintao, 2007). Even the People Liberation Army seems to reflect a trend towards a form of nationalist militarism, because high military officials have agreed with the cultivation of militarism (Hughes, 2011: 613-618).

- Section 3 China’s conformism, criticism and alternatives -

3.1 China’s foreign policy

After the Tiananmen-incident, China realigned itself with the international community and its neighbouring countries. China’s foreign policy changed from disinclination with the world to “peaceful rise” (zhongguo heping juegi). This policy contains the idea that China should become a responsible great power through the expansion of economic and diplomatic relations. However, China concentrates on its domestic development. China insists on a strict interpretation of state sovereignty and will not, above all, resort to military means to promote its interests (Clarke, 2008; Foot, 2006: 84-90). China’s 21st century foreign policy thus foremost rests on deepening its integration within the global and regional economy and reshaping its image as an assertive but benign actor (Shambaugh, 2005). As such, China has been a promoter of multilateralism and, as the self-proclaimed representative of the

developing world, inclusion of otherwise neglected voices (Beeson, 2013: 242; Xiaoyu, 2012).

3.2 China and the WB: from cooperation to criticism

China’s relationship with the WB has, since its representation in 1980 transferred from Taipei to Beijing, been one of close cooperation. As a new member, China needed time to familiarize itself with the institutional rules and procedures, developmental ideas and its internal politics. Moreover, China has borrowed more than any other country and its WB programs not merely covered human development and poverty reduction but also fiscal and monetary issues. China has particularly benefitted from the WB’s provision of technical assistance and its vast development experience. After 1991, the WB assisted China on institutional development, an area which it formerly neglected (Bottelier, 2006; Wutnow et. al., 2012).

However, today China is no longer dependent on the WB’s expertise and financial resources because China has much practical experience and easy access to international private capital. Moreover, in 1994 China erected the Chinese Development Bank which total outstanding loans are now, combined with those of the China Export Import Bank, larger in size than WB loans (Hogg, 2011; Chen, 2013). Chinese foreign development investments are, like its development aid, often linked to commercial activities and primarily based on

infrastructural projects. China steps in where Western countries are unwilling to invest or recipient countries unwilling to accept the strong conditionality of good governance and human rights attached to WB loans (De Haan, 2010: 11).

China’s close relationship with the WB has gradually changed according to its reduced reliance on funding and knowledge. Since the 2000s, China has posited itself more critically, albeit less provocative than Brazil and Russia, towards the WB’s meagre representation of developing countries and its focus on economic growth instead of targeted development (Glosny, 2010: 122-123). As part of the BRICS, China recently countered the WB hegemonic position as the world’s development bank with the declaration to form the New Development Bank. This Bank is an explicit alternative to the World Bank, formally erected because of globally lacking long-term resources to develop infrastructure (Fifth BRICS Summit, 2013). This shift from a moderate recipient to an independent actor confidently promoting the interests of developing countries is clearly apparent in the 2010 reforms.

3.3 The 2010 reforms

The 2002 Monterrey Consensus urged to adapt the WB’s representation to the reality of multipolar economic power and to alter the Bank’s development paradigm, particularly to explicitly focus in developing and transition countries (DTCs) on poverty reduction instead of growth through WC reforms. The 2007 global crisis underscored the changing power relations and neoliberalism’s vices because it exposed the weakness of Western economies, while non-Western countries as China remained unaffected, and the negative effects of strongly

deregulated financial capitalism. China proved less vulnerable, because economic

multipolarization and a specifically regulated, in fact state controlled, economy (e.g. controls on capital outflow and direct credit allocation) shields one from global financial chaos and deteriorating levels of demand. Accordingly, recognition of China’s growing material

capabilities and its economic strategy followed and China’s normative power in opposition to the neoliberal hegemony strengthened (Xiaoyu, 2012: 342-343). Moreover, the 2009 G-20 Summit uncovers the cracks in the Western hegemonic bloc because, as Western countries criticised unregulated financial capitalism and recommended state interventionist policies to solve the debt crisis and boost demand (e.g. the Federal Reserve’s quantitative easing program), neoliberal economics suffered from internal delegitimation (Farrel & Quiggin, 2012).

Accordingly, the WB’s major shareholders recognized that the WB had to reform its institutional representation, in order to reflect the shifting economic power, and to incorporate alternatives to the WC. The 2010 WB reform package is symptomatic of hegemonic change because it reflects a relatively small but unprecedented change in institutional representation and development policies. A large coalition consisting of both Part I creditors and Part II borrowers urged for a larger share of quota and votes of the latter group. The quota shares shifted in favour of the Part II countries with Japan, the U.S. and Western European states losing relative share. The corresponding votes are due to be allocated in 2015. Although questions about the categorization of Part I and II countries can justifiably be raised – since several Part II’s (e.g. South Korea and Saudi Arabia) are more creditworthy and richer per capita than some Part I’s (e.g. Greece and Portugal) – the shift is evident (Horton, 2010; World Bank, 2010). Despite the U.S. leading the coalition of G-20 shareholders and stressing to reform institutional representation, developing countries showed more assertiveness than before in articulating their demands. As a stronger collectivity, Part II countries urged for a voting increase to 50%. Notwithstanding the WB’s genuine recognition of representational problems, the Part II general voting share mildly increased from 44% to 47%. Of them, middle-income countries as Brazil and China gained the most – China increased its share considerably from 2.78% to 4.42% – while low-income countries practically gained nothing (World Bank, 2010). China showed its good-heartedness because it granted half of its promised increase to other borrowing countries (Wade, 2011: 360-362; World Bank, 2010). While the Western countries opposed a general capital increase, China advocated for it so as to sustain the WB’s objective of poverty reduction in developing countries. Moreover, China called for more favourable loan conditions and better development assistance to Part II countries. China also took the lead in encouraging regional monetary and financial cooperation to supplement the BW institutions (Senholz, 2009: 6-7). By being assertive, China has been able to serve the representational interest of DTCs and stabilized its role as the developing countries’ leader. But more importantly to the WB’s ideological power is the Chinese development strategy and its remarkable performance.

3.4 Conformist but distinct development

China’s “socialism with Chinese characteristics”, resting on the aim to acquire the benefits of a market-oriented economy complementing and suitable to China’s political and cultural tradition, is conformist to neoliberalism but also fairly distinct. By drawing on the history of domestic and international development experiences, China acknowledged the failures of both states and markets and stressed the complementary relation of the two.

On the one hand, China’s former Maoist economy could not raise living conditions because, firstly, the state-planned agricultural and industrial sectors were unproductive and inefficient and, secondly, Maoism’s radical egalitarianism paralyzed private initiative and obstructed foreign investment to spur innovation. However, on the other hand, the CCP discarded the neoliberal market-transition strategy applied in Eastern Europe, Latin America and Russia. China in fact watered-down the WC strategy by also implementing elements of its mercantilist and state-interventionist Asian neighbours. But without a clear development strategy which reconciles the market and the state being available, the CCP realized that an equitable market economy could only be achieved with an approach of technocratic learning-by-doing and gradual reform. Through developmental experiments on the local level modified to context-specific conditions, empirical knowledge had to be gained and subsequently

transposed into large-scale reforms. As such, the CCP attempted to formulate an incremental development track superior to the WC strategy (Angresano, 2005: 480-482, 490; Babb, 2012: 283).

The state gradually moved towards a regulatory role of facilitating market forces and economic growth. With the liberalization of nation-wide price-stabilizing quotas and

subsidies, the promotion of private initiative and introduction of extensively deregulated special economic zones and competitiveness reforms along WC lines, the private sector expanded to the level that it outbalanced the state’s market share. Together with the reduction of external tariffs and trade barriers, as conditioned by China’s WTO accession, trade

accelerated. Although these reforms were far lower in pace and less extensive in reach than advocated by WB officials, the CCP committed itself to a strategy in compliance with the WC (Angresano, 2005: 481, 493-494).

However, the state was essential in the transition because market expansion was only perceived as feasible as long as the state balanced the marketization and the associated social costs with gradual reform and a context-specific approach. A radical one-size fits all approach of liberalization (e.g. Russia’s shock therapy) was abandoned in favour of the technocratic approach. The Chinese strategy emphasized the necessity of the state to control the allocation of natural and financial resources, facilitate high savings and investment rates and minimize Chinese vulnerability to capital flight. Although market expansion and free competition was encouraged, the state kept on subsidizing SOEs to guarantee public social goods. China therefore supported institutional unity and assured public governance and social services. The Chinese approach thus departed significantly from the WB development model, not merely in policy terms but also with regard to China’s much more successful socio-economic

performance in terms of stable growth, innovation and poverty reduction as compared to Russia or Eastern Europe (Ibid.: 479, 491, 493).

3.5 A China Method, but no China Model

China’s conformist but distinct development strategy has attracted global admiration and notable support from influential development scholars and economists outside and within

the WB. The coalescence of politics and economics and the pragmatic learning-by-doing approach and experimenting locally have opened-up a new method of development. This new method protected the Chinese from the mistakes made in developing countries following the WC. In particular, China’s gradual and mercantilist entry into the global economy is lauded because the Chinese spared themselves from the currency crises and capital flight Latin American and Asian economies experienced in the 1980s and 90s (Angresano, 2005: 491-492; Rodrik, 2006). The admiration of the Chinese method only increased as China’s growth remained unaffected by the 2007-8 global crisis. Moreover, the gradual approach is praised because it assisted the stable unfettering of China’s growth potential. In addition, although being authoritarian, Chinese politics maintain stability and thus have a favourable effect on investment. Doubts are therefore raised on the commonly held view that democracy is

essential to economic development. Therefore, WB economists have, despite the decades long insistence on liberalization, marketization and privatization, recognized the necessity of the state complementing the market and shaping the legal and institutional preconditions wherein markets can flourish (Angresano, 2005: 494-497; De Haan, 2010: 14-15; Rodrik, 2006).

However, despite the distinctiveness of the Chinese method, it remains inaccurate to speak of an alternative Chinese model because the Chinese policies incorporated many of the WC principles. The approach of pragmatism, gradual change, local experiments and state control over the economy does not meet the requirements of a real alternative because it does not represent a clear and coherent set of policy measures and normative principles. These principles are merely means that do not imply a certain desirable outcome or objective and therefore lack a clear ideological focus. Arguably, the strategy is mainly attractive to undeveloped and authoritarian countries (Beeson, 2013: 238-240; De Haan, 2010: 9-13). Moreover, the Chinese development discourse is nationalistic and thus does not contain an appeal to universalist principles. Due to the similarities with the WC, the CCP’s discourse of “socialism with Chinese characteristics” is primarily rhetorical and serves the purposes of maintaining legitimacy as a communist party and accommodating the WC-style reforms to its national culture and political objectives. Furthermore, China has not developed an official policy outline of this method. China’s developmental studies are still largely in an infant state and since China does not allow free research, it has had a mild influence on the international academic development debate (De Haan, 2010: 11-16). Finally, the technocratic control over the capitalist economy and protection of domestic labour and social goods reflect a mode of governance apparent in other, particularly Asian, countries. Hence, claims of an alternative and coherent prescriptive Chinese development model, or even Beijing Consensus, are simply inaccurate (Beeson, 2013: 240-246; De Haan; 2010: 17-19; Kennedy, 2010: 467-477).

- Conclusion -

Neoliberal hegemony is not as orthodox and Western dominated as it once was, but its legitimacy proved strong enough to maintain the neoliberal development perspective. The WB’s development prescriptions and methods changed from the rigid WC solely aiming at growth and private sector expansion to a comprehensive and flexible set of policies. Poverty reduction is made a core objective alongside growth and inequality and social instability are recognized as important factors to development. The shock-therapy became perceived as less valuable and conditionality is now ex-ante and less stark. Civil society actors have been given a voice and developing countries gained quota share and voting power since the reality of multipolarization is acknowledged. Hence, the WB adapted its development prescriptions, its methods and its institutional representation. China’s 21st century role in these changes is significant. With its increased economic and political weight, it became independent of the WB and confident of its own development approach. In accordance with “peaceful rise”, China became the assertive but benign leader of the developing world. China used this clout to move the Bank’s 2010 reforms’ agenda-setting towards the developing countries’ interests. As such, China showed the world that it is willing to articulate criticism and demands, albeit generally conformist and thus to water-down neoliberal hegemony. Open counter-hegemony is detectable (e.g. New Development Bank), but still of infant form. Moreover, China’s development strategy persuaded WB staff and scholars of the benefits of gradual liberalization and privatization, state involvement in the economy to allocate credit and facilitate markets and local context-based experiments.

However, the West retains its overt and covert influence over the WB, and the Bank itself maintained its position as the global development bank and the legitimacy of its

programs. China’s development is remarkable in poverty reduction terms, making its methods attractive, but China does not have a clear alternative model with distinct norms and

objectives. Hence China has not cracked the neoliberal paradigm’s legitimacy. Rather, the Chinese state/society complex indicates the unambiguous need for the CCP to lay low internationally and concentrate on domestic stability and progress. Although the general state/society complex is authoritarian, civil society enjoys more freedom and political power. The CCP and the rejuvenation of China enjoy high legitimacy, but immense corruption, inequality and more restricted access to social services point out that the CCP should watch its step. The balance between opening-up (e.g. Internet) and steering public opinion to its

interests (e.g. allowing anti-American discourse) is precarious. However, the tendencies of more apparent confrontational nationalism can lead to demands for national unity and international assertiveness in the counter-hegemonic sense.

Hence, the next decade will be of utmost importance to the neoliberal hegemony. Following research should focus on China’s domestic challenges of corruption, inequality and social security, but perhaps above all on changes in Chinese nationalism, and whether the CCP has to show responsiveness to it in order to retain legitimate power. In addition, research should focus on China’s assertiveness in the ASEAN plus Three framework – absent in this thesis – because the CCP has to transpose its domestic hegemony to the regional level in order to become globally counter-hegemonic. Particularly the counterhegemonic potential of

China’s Development Bank and the BRICS’ New Development Bank are vital topics. But most importantly, scholars should be aware of the relevance of legitimacy and continue critically assessing the historical conditions structuring their research objects. Therefore, I salute Cox for his theoretical contributions and hope that the academic world will follow suit.

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