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China's governance model (Understanding China's model of…

- - - - Its adoption of sound incentive structures and good economic institutions that promote competition among firms and reward hard-working individuals.
      - The Chinese model
        
        The affirmative view
        
        Problematic+severe flaws
        
        The middle view
        
        Still evolving
        
        Components of the China model
        
        Economic aspects
        
        Initial conditions
        
        Large potential internal market
        
        Relatively healthy and well-trained work force
        
        Economic components
        
        Mixture of various types of ownership with private ownership dominating the competitive sectors and government ownership non-competitive sectors
        
        Policies aim at promoting competition more than private ownership, though the entry to the market has been eased for no-state ownership after 1987.
        
        Public ownership can be used to generate investment and to ensure provision of public goods
        
        Investment-led growth is essential in order to create capacity that can be used gradually later
        
        The government can offset costs for business operation and create business opportunities by investing in infrastructure.
        
        China's comparative advantage is utilized by labor-intensive manufactured exports and through strong linkage with the world economy
        
        Incremental reform is pursued through initial local trials before being spread nationwide.
        
        Reform started with a basic sector or aspect such as agriculture before moving to a complex one.
        
        Incremental reform is pursued through initial local trials before being spread nationwide
        
        Critical pro-market institutions
        
        Incremental reform of SMEs, originated indigenously, instead of being forcefully transplanted from abroad
        
        competition/infrastructure investment/Incremental growth/Indigenous reform
        
        Political conditions
        
        Initial conditions
        
        Diverse social-economic conditions across provinces
        
        Political components
        
        The rule of the CCP has been reformed and efforts are made to strengthen the Party's governance capacity
        
        The leadership system has been institutionalized and intra-Party democracy is introduced.
        
        Cadre accountability has been improved in order to prevent official mishaps in governance, such as improper handling of epidemics and unrest.
        
        National leaders use cadre appointment to jump-start reform in critical provinces and to ensure national unity
        
        Decentralization permits localities and local officials to vie for bold but sound reform efforts and the best economic outcomes
        
        Ability to generate local economic growth has become a core element in the promotion of local cadres
        
        Constitutional reforms help to offer some protection of private property and ownership and the rule of law.
        
        The CCP remains the sole ruling party, which values political stability and has so far rejected liberal domocracy.
      - For scholars or thinkers critical of capitalism in the Western world, the China model has yet to break out of the development paradigm the West has created, though the model offers glimpses of hope to modify the paradigm.
      - high economic growth in China is enabled by heavy investment. In China, massive investment is made in infrastrucutre even ahead of the demand in order to create capacity that can be used gradually.