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Some aspects of China’s development model

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by Shiran Illanperuma

China’s rapid development over the last few decades has been the source of much debate among economists. Some claim China as the model par excellence of market liberalisation and the superiority of private sector driven growth. Others equally argue that China’s model is one of planning and state intervention.

On 28 March, I was invited by Nexus Research to deliver a presentation on China’s development model alongside former Ambassador to China Dr. Palitha Kohona. Unfortunately, the contents of this presentation have been misreported in an article in the Island published on 4 April (Dr Kohona: developing countries should covet China model). The article claimed that my presentation touched on “low-cost labour, foreign direct investments, and global trade agreements”. In fact, such simplistic tropes were precisely what I had intended to counter.

China’s development model challenges many of the axioms of neoclassical economics. If low-cost labour were the decisive factor for take-off, then investment should be pouring into much-cheaper labour markets in sub-Saharan Africa. On the contrary, rising wages in China have not led to the outflow of capital one would expect under such a model. This is because the advantage China offers is a healthy and skilled workforce (relative to price) and an infrastructural system that keeps non-wage operating costs (such as transport and energy) low. This, combined with a domestic value chain, is China’s main strength and why economic growth has been combined with rising wages and standards of living.

While foreign direct investment (FDI) has been a huge part of China’s success story, it is possible to overstate their importance. First, FDIs only really took off from the 1990s onwards, yet to begin there would be to ignore the decades of work done to develop the country’s agricultural self-sufficiency, basic industrial system, and institutional structure. Second, what has mattered for China is the quality of FDI, which is determined by government policy. By the standards of the OECD Foreign Direct Investment Regulatory Restrictiveness Index, China remains fairly selective on what FDI is allowed and encouraged. FDI is promoted not as an end in itself but as a means to acquire technology that should be transferred to national champions.

Role of Local Government

A significant portion of my presentation for Nexus Research was on the role of local governments economic policy – something that is often neglected (though there is a growing literature on the subject). China has a fairly decentralised system of governance, a product of its vast size and geography, as well as the institutional changes and experiments in direct democracy during the period of the Cultural Revolution.

Chinese economist Xiaohuan Lan, in his book How China Works (2024), has said that “In China, it is impossible to understand the economy without understanding the government.” While the central government in China formulates indicative plans and the overall goals and trajectory for development, implementation of these plans is delegated to local governments. Local governments have a broad remit to interpret these plans, experiment with implementation, and compete with each other for investment. This leads to a much more dynamic and decentralised development process that encourages grassroots participation.

A comparison between China and India on the share of public employment at different levels of government is very revealing. For China, over 60% of public employment is at the level of local government, with federal and state governments comprising less than 40% of employment. In contrast, less than 20% of Indian public employment is in local government. India, therefore, despite its much-touted linguistic federal system, is far more centralised than China. The weakness of Indian local governments remains a significant barrier for its development.

The Role of SOEs

State-owned enterprises (SOEs) are the elephant in the room when it comes to China’s development model. Chinese political scientist Prof. Zheng Yongnian said in 2011 that “the state sector is in fact important for China’s macroeconomic stability.” This is a radically different approach from neoclassical economics, which views macroeconomic policy purely through the lens of fiscal and monetary policy.

Broadly speaking, SOEs in China perform four ‘macroeconomic’ functions. First, they conduct the low-cost production of upstream inputs such as metals, chemicals, and rare earth minerals. Second, they manage essential commodity reserves and intervene in commodity markets to stabilise prices. Third, they engage in countercyclical spending on public works during economic downturns. Fourth, they are deployed to respond during emergencies and external shocks such as the 2008 Sichuan earthquake and the COVID-19 pandemic. The through line in these functions is to keep costs low and smoothen out business and commodity cycles. This is why China has not yet faced a recession comparable to many capitalist economies.

As a consequence of this model, SOEs remain a significantly large part of the Chinese economy in quantitative terms. According to data compiled by the Peterson Institute for International Economics, SOEs accounted for around 75% of the aggregate revenue of Chinese firms in the Fortune 500. While it is true these firms are often not as profitable as the private sector, this is by design, as they pass on low prices to domestic manufacturers.

China has entities such as the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) which facilitate the centralised governance and oversight of SOEs. This model is crucially different from the Temasek model often discussed in Sri Lanka. Under Temasek, SOEs are almost entirely market-oriented and depoliticised. This is not the case in China, where SOEs continue to play crucial social and political functions.

The Role of Competition

What confuses most observers of China is the fact that it very obviously has a fiercely competitive and dynamic private sector. How then to reconcile the preceding elaboration of the role of local government and SOEs with a competitive private sector? Local governments and SOEs provide the basic institutional framework and economic building blocks for the private sector to play its role in capital accumulation and innovation.

The competitive cycle in China could be broadly divided into four phases. In the first phase, incentives created by the central and local governments lead to a flood of investment in desired sectors and sub-sectors, resulting in the establishment of new firms and production capacity. In phase two, these incentives are eased, leading to fierce competition and survival of only the fittest firms. In phase three, once the market has reached a stage resembling monopoly, one of three tactics may be used: 1. Firms are forced to compete internationally and export; 2. monopoly firms are broken up by the state; or 3. monopoly firms are nationalised or brought under stronger state supervision. The system is designed to resist the market’s natural tendency towards monopolisation.

Political Leadership

The Chinese state has an exceptional ability to maintain what political sociologist Peter B. Evans calls ‘embedded autonomy’. It is close enough to the private sector to understand economic conditions and formulate policy but politically independent enough from capital to resist capture by private interests. This is a key difference between China’s development model and the developmentalism of East Asian states such as Japan and South Korea, where large private firms (zaibatsu in the former, chaebols in the latter) dominate political life.

China’s development model cannot be understood in isolation of its leadership system. The Communist Party of China, which has around 100 million members (almost five times the population of Sri Lanka!), has been key to the process of China’s development. The party remains committed to developing Marxist-Leninist philosophy and applying it to the country’s concrete conditions. It retains deep roots in all levels of Chinese society, engaging in consultation during the policymaking process.

To what extent China’s model can be replicated by other countries is an open question. While the CPC has often invited academics and political parties to study its system, this does not equate to the party attempting to export said system. There is no real ‘Beijing consensus’ that is equivalent to the ‘Washington consensus’. On the contrary, President Xi Jinping, in 2023, cautioned that modernisation “cannot be realised by a cookie-cutter approach”.

“For any country to achieve modernisation, it needs not only to follow the general laws governing the process but, more importantly, consider its own national conditions and unique features.”

(Shiran Illanperuma is a researcher at Tricontinental: Institute for Social Research and a co-editor of Wenhua Zongheng: A Journal of Contemporary Chinese Thought. He is also a co-convenor of the Asia Progress Forum which can be contacted at asiaprogressforum@gmail.com)



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Opinion

Morning Star of Nursing Education in Sri Lanka

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Chandra

Chandra de Silva, 20th Death Anniversary

After a convulsive struggle for national liberation from British colonialism which tore the subcontinent apart, India gained its independence in 1947. Way ahead of Ceylon, on the cusp of this momentous event, it established a degree-awarding College of Nursing at the University of Delhi in 1946, a committee having visited and considered the best practices in nursing education in Canada, the USA, England and Scotland. It then carefully designed a course to meet the needs of India’s social and health requirements, and admitted its first batch of 13 students in July 1946, for a four-year BSc (Honors) degree in Nursing.

Soon after, they offered this advantage through a competitive interview to students from Ceylon.

In 1950, the year India adopted its first Republican Constitution, Chandra Samarasinghe was one of the three persons admitted to this course, and would go on to be the one who eventually introduced university education for Sri Lankan nurses in 1992, after a lifetime of campaigning.

When Chandra de Silva (nee Samarasinghe), much loved and respected by her students and colleagues alike, passed away 20 years ago on 28th January 2006, a former student wrote a moving tribute to her titled “The Morning Star of the World of Nursing Has Faded…” on the front page of the February 2006 issue of the magazine New Vision, a publication of the Graduate Nurses’ Foundation of Sri Lanka.

Describing Chandra as “the Nightingale of Sri Lanka”, a “most noble lady (Athi uththama kanthawa) filled with compassion”, “born for the good fortune of the nation” and “incomparable teacher-mother (guru mathawa) of hundreds of thousands of students”, the writer, Malini Ranasinghe, who was the President of the Graduate Nurses Foundation, confesses it is beyond her to set down in full Chandra’s life-long service of over 50 years to the profession. The magazine New Vision itself was one of Chandra’s many initiatives as was the encouragement for the Nursing Profession to obtain membership of the Sri Lanka Association of Professionals. Malini Ranasinghe promises in this heartfelt farewell, that Chandra’s legacy would be passed down the ages to each new batch of nursing students, to remain in their hearts through the course on the History of Nursing.

Chandra was Sri Lanka’s first Chief Nursing Education Officer (CNEO, now titled Director Nursing) at the Ministry of Health. She took up the pioneering role in 1967, having returned from Boston University, USA, after completing a Master’s degree in Education and Administration.

In her first year in the role, Chandra presented a comprehensive memorandum drawing the attention of the government of the day to the country’s need for a Bachelor’s degree in Nursing. She was the first to do so. It took decades before this dream came true, with Chandra having made several more proposals many years apart, before she was invited by a Canadian University in collaboration with the Open University of Sri Lanka (OUSL) to help set up the degree course in Nursing in 1992. Having spent most of her professional life in a battle to uplift the nursing profession in Sri Lanka to international standards, she was setting exam papers at the OUSL the day before she was admitted to hospital for kidney surgery, and passed away at the recovery unit. By then, she had seen not only several batches of undergraduate nurses don their robes, but also graduate nurses earn Master’s degrees with a PhD programme well on its way to being implemented.

When Delhi Built Bridges

It all started when three young ladies boarded a train with their Thomas Cooks travel documents, to Delhi in July 1950, having competed and won places at Delhi University to follow a BSc Honours degree, majoring in Nursing. Chandra Samarasinghe from Mahamaya College Kandy, dressed in a Kandyan Saree, Trixie Marthenesz from Ladies College and later Ananda College Colombo, and Shireen Packeer, also from Ananda College Colombo, in dresses, were the lucky ones selected, and became firm friends known as the “The Trio from Ceylon” at their university in India. They had “luxury accommodation” at their residential university campus at number 12, Jaswant Singh Road, New Delhi, and travelled everywhere on their bikes.

They had a blast during their four years there, not only completing their degrees but also able to experience the newly independent nation in transition, already forging a future for itself. Chandra continued to wear the Kandyan saree throughout her stay there, and when she had to introduce herself to the rest of the students, said “I am Chandra Samarasinghe from Kandy, in Lanka”, leaving a puzzled Trixie wondering why she didn’t say Ceylon.  When they left the university after four years, the Principal, Dr. Margeretta Craig, O.B.E. told them “You three Ceylonese girls have been live wires!” They got on well with the staff including the Vice Principal Dr. Edith Buchanan, a Canadian from the Canadian Faculty of Nursing, who had an interesting experience with Chandra at their first encounter. When asked to explain the meaning of the term “prone position”, Chandra, always the first to offer an answer, piped up to say somewhat indelicately, “That’s the one with the backside up!” to giggles from the class. She was soon persuaded that “face-down” was a much more decorous way of saying it.

They sang and danced in the presence of Lady Edwina Mountbatten who graced the university’s annual concerts and had their names appear approvingly in the Indian newspaper report of the event. They were invited to Rashtrapati Bhavan in 1951 where they met India’s iconic first Prime Minister Jawaharlal Nehru and Dr. Rajendra Prasad, the first President. They made friends with J. Wijetunga, author of ‘Grass for my Feet’ fame who lived only a short distance away from their hostel, who gave them free access to his pantry and taught them the cultural history of India and also of Sri Lanka. They travelled to places of interest including a long-desired visit to Shanthi Nikethan, having developed a love for Rabindranath Tagore’s work, and took photos in front of the Taj Mahal.

When they first arrived in Delhi, they were thrilled to meet another Sri Lankan student in the senior year who had known them from Ceylon, Viola Perera. Viola introduced them to her friends, one of whom on obtaining her PhD became the Principal of the College of Nursing, University of Delhi.

It was clear that their time at Delhi University left a deep impression on the girls. They were being trained to take over from the departing British, and to maintain the required standards as well as to develop them further.  The sense of patriotic duty they saw in India made an impression on them. They also had plenty of fun, and Chandra was able to keep Ceylon’s end up when the beautiful Bengali voices of Indian students sang at their gatherings, having herself been voice-trained by Saranagupta Amarasinghe, and according to Trixie Marthenesz’s reminiscences in her book, ‘Those Delhi Days”, also by Ananda Samarakoon (p143).

A Worthy Battle Waged

Back in Ceylon, Chandra tried many times to introduce the educational opportunities she herself had obtained, to others in her profession. And yet, unlike India at Independence, Ceylon and later even Sri Lanka, was not ready to accept such progress easily. With the Health Ministry decision makers being male and mostly doctors, they ignorantly regarded the role of the nurse as a minor one, needing just “a pair of hands”. It may have involved some insecurity which masqueraded as good sense, at the cost to the country for many decades. As CNEO, Chandra battled through it all, rewriting the curriculum to bring it up to international standards, doing what she could to send Nurses overseas for training. And she kept presenting proposals for a BSc programme, which fell on deaf ears. Decades later, she was rewarded for her unwavering commitment to the cause when she was asked to start the BSc Nursing programme at the Open University of Sri Lanka (OUSL), which is now a great asset to the country, with other universities also offering it.

In 2004, two years before she passed away, the first publication of New Vision by the Graduate Nurses Foundation of Sri Lanka was presented to her. In the 2005 issue, they reproduced on the front page her keynote address at their AGM on the 31st of October 2004, at which she was Chief Guest.

Her speech recounts the painfully hard journey that the profession (and she herself) had to endure to raise it to its current status. Chandra recalls with sadness that the three-year Nursing Diploma did not entitle Sri Lankan nurses to pursue higher education, qualifying them only to follow a few courses at the Post Basic School of Nursing:

“I had to fight a very hard battle to keep the 3 year programme intact because there was a very serious effort to downgrade the three year programme to two years, a step that would have prevented our nurses from obtaining any acceptance and recognition in a foreign country. There was intense official and political pressure for a long time to effect this change but with the assistance of a few other Nursing Leaders this retrograde step was suppressed, perhaps forever. Such dangers can arise in the future too. The price we nurses have to pay, is eternal vigilance to challenge and suppress any effort to downgrade the standard of Nursing Education in Sri Lanka.”

She happily announced that at that stage, there were 200 BSc graduates and 25 who had obtained their Master’s degree, with two heading for their PhD. She defined the lack of access to higher education for nurses as a “human right denied”. She also declared that for the first time, there was agreement across all nursing services to propose a nursing degree at conventional universities, disclosing that this was the “first time such consensus has manifested in the Nursing Services”. She called upon nurses to retain this unity “at whatever cost” and just as in other professions such an engineering, law, medicine, “it was time to rectify this anomaly” and “work together to achieve this new dimension in Nursing Education.”

A Mother to More Than Her Own

As I write this memorial to honour my mother Chandra for her life of service and unwavering dedication to provide for others the education she herself received at two of the best universities in the world (Delhi and Boston), her determination and grace under pressure, I know why I have focused on her professional life rather than her personal one. It is because I grew up sensing that she was truly a mother to a larger family, of nursing students and professionals she was responsible for. She never turned away any of them coming over to her home for special help with their dissertation topics or applications for scholarships. She encouraged the senior nursing staff to follow the degree course and helped them complete it when they were discouraged. Some who recognized me at the counters in private hospitals came up to declare their gratitude to her for this specific gesture of help, because their employment prospects had expanded greatly with that.

Though infinitely patient, graceful and ladylike, my mother was a fighter. I saw how she never gave up on her ambitions for her profession, although she was hardly ambitious for herself. I saw her pain, and her determination to fight on in a hostile environment of male dominated bureaucracy.

I am eternally grateful to Aunty Trixie (Trixie Marthenesz, her fellow student at Delhi Uni) for writing a delightful little booklet called “Those Delhi Days” (Tharanjee Prints, Maharagama, 2009), recounting their time from 1950 to 1954 at the University of Delhi, with wonderful photographs of their 4-year journey as undergraduates, including at the annual concert in creative costumes and also on their holidays around India. An especially charming photo on the first page is the one on Convocation Day 1954, which shows Chandra, Trixie and Shareen together with a few of their batch mates wearing their robes with the distinctive Delhi Uni Cap. The book recalls in such delicious detail their time during such an exciting period in India, just two years after Independence from the British. I found some of the facts for this article from that book. Aunty Trixie, whom my mother drew in, together with Aunty Viola (Viola Perera, the senior student at Delhi University) talking them both out of retirement to begin the work of setting up a new department of Nursing at the Open University, writes in her book, of the young student Chandra who screamed at witnessing the death of their first patient in a hospital in India, bringing “half the ward to the scene”, but who then turned into “a leader among professional nurses in Sri Lanka” which appellation Trixie says “befitted her”.

I see that others have now taken the profession to new heights. Her students are now the warriors at the forefront of the battle for even further professional and pedagogical development. She would be proud. I like to believe that she was as much a guiding light as a Morning Star, softly glowing in the memories of those who knew her, inspiring them to never give up, and to do things with grace. That’s why I share these memories of my exceptional, beloved mother with all those nurses who have known her personally, her colleagues, lecturers and students in white who lined the path throwing jasmine blossoms at the vehicle taking her on her final journey through Kanatte, Colombo’s the main cemetery, and those who have and will come to know her, and the contribution she made to their profession, through the History of Nursing in Sri Lanka.

By Sanja de Silva Jayatilleka

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to pathi

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Pathiraja

Dharmasena Pathiraja’s eight death anniversary falls today

it is in loss and loneliness, one
finds words of solace, without which,
none may live or even die,
fling forging nouns,
into the far-flung corners
of birth and death, departing
from the beaten tracks of heavy tread.

dreams come and go,
in colour, as a contamination of the real,
the waking hours, a coming and going,
of departure and death
of bodies lined up shot,
in eelam, in lanka, or any other place.
the political is strained, half breathing,
lines the tongue with lashing words.
stories we tell our children
of war in words of peace,
and of peace in words there’s nothing to tell.

in silence, the quiet beat of the heart, strums louder and louder,
calling up the sound of waiting, for that time, when it is
all a matter of leaving, and now a matter for grieving,
living out the vanishing moments as limn, time pass, and
as our life foreshadowing death, not yet dreamt of,
but dreaded still.

in gaza, the children are gone forever
and it’s been a long journey, these forever years.

sumathy – january 2026

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Opinion

Those who play at bowls must look out for rubbers

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President Anura Kumara Dissanayake should  listen at least to the views of the Mothers’ Front on proposed educational reforms.

I was listening to the apolitical views expressed by the mothers’ front criticising the proposed educational reforms of the government and I found that their views were addressing some of the core questionable issues relevant to the schoolchildren, and their parents, too.

They were critical of the way the educational reforms were formulated. The absence of any consultation with the stakeholders or any accredited professional organisation about the terms and the scope of education was one of the key criticisms of the Mothers’ Front and it is critically important to comprehend the validity of their opposition to the proposed reforms. Further, the proposals do include ideas and designs borrowed from some of the foreign countries which they are now re-evaluating in view of the various shortcomings which they themselves have encountered. On the subject, History, it is indeed unfortunate that it has been included as an optional, whereas in many developed countries it is a compulsory subject; further, in the module the subject is practically limited to pre-historic periods whereas Sri Lanka can proudly claim a longer recorded history which is important to be studied for the students to understand what happened in the past and comprehend the present.

Another important criticism of the Mothers’ Front was the attempted promotion of sexuality in place of sex education. Further there is a visible effort to promote trans-gender concepts as an example  when considering the module on family unit which is drawn with two males  and a child and two females  and a child which are nor representative of Sri Lankan family unit.

Ranjith Soysa

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