Reframing Reform: Positioning the Chinese Economy in the World
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REFRAMING REFORM: POSITIONING THE CHINESE ECONOMY IN THE WORLD BANK by Christopher Meulbroek A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE AND POSTDOCTORAL STUDIES (Geography) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) June 2020 © Christopher Meulbroek, 2020 The following individuals certify that they have read, and recommend to the Faculty of Graduate and Postdoctoral Studies for acceptance, a thesis entitled: Reframing reform: positioning the Chinese economy in the World Bank submitted by Christopher Meulbroek in partial fulfillment of the requirements for the degree of Master of Arts in Geography Examining Committee: James Glassman, Professor, Department of Geography, UBC Co-supervisor Jamie Peck, Canada Research Chair in Urban & Regional Political Economy and Professor, Department of Geography, UBC Co-supervisor ii Abstract The rise of China as an economic power is one of the defining economic trends of last forty years. There has been considerable academic and policy controversy over the extent to which China’s political economy can be classified as capitalist, resulting, in many instances, in a problematic apriori distinction and separation between state and market. This thesis explores how development economists have managed this distinction through an extended case study of the World Bank. Through a critical discourse analysis of the Bank’s corpus of reports on China, along with a historical analysis of archival material, speeches, and academic journals, this thesis traces the Bank’s policy diagnoses, prognostications, and prescriptions since the late 1970s. Chapter 1 introduces the thesis by situating the role of the World Bank in the international development sector in general, and in China, in particular. Chapter 2 examines the first decade of the World Bank-China relationship. I argue that the Bank deployed the discursive technology of ‘transition’ to reduce the complexities of managing economic policy formulation within a state- socialist framework. Through an examination of industrial, labor, and financial policy discourses, I claim this ‘transition imaginary’ was predicated upon an ascendant hegemony of a neoliberal policy nexus within the Bank, coupled with the use of market-based policy instruments in Chinese economic statecraft. In the 1990s, however, the posited teleology from ‘central planning’ to ‘market economy’ grew unsustainable in the face of post-Soviet collapse and the continuation of state-backed credit provisioning to state-owned enterprises, weakening the dominance of the transition imaginary. Chapter 3 examines the introduction of the ‘gradualist model’ of economic reform in the World Bank in the uncertain geopolitical-economic context of the late 1980s. I argue the contested acceptance of ‘gradualism’ as a distinctive reform model challenged the Bank’s extant ‘shock therapy’ model, but was subsequently articulated into a unified post-Washington Consensus paradigm. Chapter 4 concludes by highlighting the significance of shifting discursive and institutional boundaries between market and plan in the global political economy. iii Lay Summary The Washington Consensus refers to a set of free-market economic policies promoted by the development sector, multilateral organizations and the United States government, that were once thought to promote financially-sound and efficiency-maximizing economic growth. China is often positioned as an economic model that has defied this consensus, with its growth proving the alleged superiority of state-led developmentalism. This thesis examines how Washington Consensus-affiliated economists have interpreted China’s economic development through one institutional lens, the World Bank. Through an extended analysis of the World Bank’s discourses on China, I find that the Bank has continually struggled to formulate policies adequate to China’s economic development, which I claim is based on a misrecognition of the relation between markets and planning. I suggest that the inability to define China’s economy signifies geopolitical and ideological contention over the form and function of the capitalist state. iv Preface This thesis is the original, unpublished, independent work of the author, Christopher Meulbroek. v Table of Contents Abstract .......................................................................................................................................... iii Lay Summary ................................................................................................................................ iv Preface ............................................................................................................................................. v Table of Contents .......................................................................................................................... vi List of Tables ............................................................................................................................... viii List of Figures ............................................................................................................................... ix List of Abbreviations ...................................................................................................................... x Acknowledgements ........................................................................................................................ xi Chapter 1: China in the development imagination ...................................................................... 1 1.1 The World Bank and the geopolitics of development knowledge ............................ 3 1.1.1 Putting the World Bank in its place: From Bretton Woods to Knowledge Bank ....... 6 1.1.2 ‘We were bringing in a lot of experts’: China’s encounters with the World Bank .. 13 1.2 Between consensuses: discourses, imaginaries, articulations ................................. 17 1.3 Outline of the thesis .................................................................................................... 22 Chapter 2: Constructing a transition economy ........................................................................... 24 2.1 Introduction ................................................................................................................. 24 2.2 Spatializing paradigms and imaginaries at the World Bank .................................. 28 2.3 Robert McNamara in Beijing: Redesigning state socialism .................................... 39 2.4 Transitioning China .................................................................................................... 46 2.4.1 Reforming enterprises ............................................................................................... 49 2.4.2 Reforming finance .................................................................................................... 54 2.4.3 Reforming labor ........................................................................................................ 56 2.5 Faultlines of transition: from market-formation to state capitalism ..................... 59 vi 2.6 Conclusion ................................................................................................................... 63 Chapter 3: Managing gradualist reform ..................................................................................... 66 3.1 Introduction ................................................................................................................. 66 3.2 Retroducing ‘models’ of development ...................................................................... 69 3.3 Competing imaginations of reform after Tiananmen .............................................. 77 3.3.1 Reading the Tiananmen conjuncture ........................................................................ 78 3.3.2 Gradualism versus liberalism: factional struggles in the World Bank ..................... 84 3.4 Neutralizing gradualism, consolidating the model .................................................. 91 3.4.1 Reform imaginaries and the art of paradigm maintenance ....................................... 92 3.4.2 Representing gradualism in the post-socialist era ..................................................... 95 3.5 Conclusion: Adequating the Chinese economy ...................................................... 103 Conclusion: Market/plan ........................................................................................................... 105 Bibliography ............................................................................................................................... 109 vii List of Tables Table 2.1: Reports consulted…………………………….…………………………………. ……38 Table 2.2: Making competition intransitive .................................................................................. 51 Table 2.3: Discursive transitions in the World Bank-China relationship ..................................... 59 viii List of Figures Figure 1.1 World Bank's lending to China, 1981-2000………………………………………….16 Figure 3.1 The phasing of reform………………………………………………………………..86 ix List of Abbreviations ADB Asian Development Bank AIIB Asian Infrastructure Investment Bank COE Collectively-owned enterprise CPE Cultural political economy CSP Country strategy paper DPG Development Policy Group FDI Foreign direct investment GATT General Agreement on Tariffs and Trade GDP Gross domestic product IDA International Development Assistance IMF International