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Dependency and modernization theories of growth are two opposing theories with opposing viewpoints for understanding changes in countries and economies. The proposals clash with one another, but they are both important to the creation of nations. To have a better understanding of China's growth, this paper employs both the modernization theory and the dependency theory.
The phase of change of the fiscal, social, and political structures is referred to as modernization. It is a global change that continues to shape institutions and processes all over the world. Modernization theory explains the shift of the society from a traditional to a modern society.
The theory explains a modern society as that with well-established service and manufacturing sectors and relies majorly on inanimate energy. Similarly, a modern society exhibits advancement in science and technology that can be directly transformed to productive forces and increase in automation and industrialization. Regarding political issues, a modern society shows high levels of functional specialization and differentiation which promotes decision-making. Participation in political activities is of great interest to the people and the regulations established have their foundation in law. Individuals in a modern society exhibit high democratic consciousness. Modern societies, exhibit stratifications in the social structure with populations concentrated in cities. (Bao and Chen, 2015).
The People's Republic of China was established in 1949 and has seen generations of leaders who have been continually carrying out explorations regarding modernization. The first leaders emerged soon after the founding of the People's Republic of China and were represented by Mao Zedong. The group took upon themselves to transform China from an agricultural economy towards industrialization. They took agriculture as the foundation and established relationships between agriculture and heavy industry against light industries. (Fangjun, 2009).
Between 1951 and 1961, the Great Leap Forward, a social and economic campaign formed by the Communist Party of China with the aim of rapid transformation to socialist society by well-established collectivization and industrialization. The movement emphasized on self-reliance and mainly rejected foreign involvement especially from the west and the ideas for capitalism. The period of Cultural Revolution followed in 1966. It aimed to preserve the communist ideologies in the country by doing away with by remaining capitalist elements in the Chinese society. The move, however, was a political disaster and adversely affected the country's economy. Similarly, several people died during this stage due to violent deaths in the aim of destroying the capitalist systems. Modernization during Mao Zedong's era was not a total failure as described by the Great Leap Forward and the Cultural Revolution. The leader transformed China from an agrarian economy towards industrialization. He, therefore, laid the foundations for Deng Xiaoping economic reforms.
Deng directed his focus on four areas in the development of China; national defense, agriculture, industry, and science and technology. Although he followed the examples laid down by the west, their management was done in a Chinese way. First, Deng started by de-collectivizing, allowed the formation of Special Economic zones, Township Village Enterprises, provided profit incentives for businesses, encouraged foreign investment, and privatization of companies. He went against the theories of Mao on self-reliance and depended on foreign exchange to provide funds for modernization. Through modernization, China's economy has shifted to capitalism and privatization, and the People's Republic of China has remained as an authoritative regime.
To note in China's development is the introduction of the one-child policy. The policy contributed towards modernization through fertility transition aimed at generating ambitious people with the availability of the necessary resources to compete in the global arena. China is still developing even in the 21st century. As at 2010, it was recognized as the world's second-largest economy with the biggest labor force. Its economy had a growth of 10.3 %. The modernization of China was done through industrialization, urbanization, and development of economic policies that were of benefit to the country's economy. (Ahlstrom and Ding, 2014).
A debate has been ongoing in China regarding the contribution of Confucian values to the modernization of the country. Confucianism was the cornerstone of Chinese culture. The ideological system was created by Confucius, and its basis was the traditional culture of Zhou, Shang, and Xia dynasties. The system influenced the Chinese history and its social structure. The primary values associated with Confucianism were hard work, austerity, peaceful development and harmony.
Confucian ethics were developed form the teachings of Confucius and the subsequent development of his works. Confucianism values emphasized on shared family values as opposed to individualism, work ethics, interdependence, harmony, discipline, and stability in the society for peaceful coexistence. The Chinese population developed these values upon the foundations of loyalty, hierarchy, education and the rule of law. The costs associated with family responsibility and filial piety acted as a remedy to the limitations which were related to the social welfare system and hence restoring the altruistic values. (Sleziak, 2014).
Chinese Confucian values contributed to the prosperity and development of China. The promotion and upholding of family values encouraged working together and savings providing sufficient capital for development, hence the economic development of the country. Modern values in China build upon the values developed by Confucius. Its mode of thinking, its emphasis on morality rather than profit, the development of interpersonal relationships and acts of kindness to others still apply to the Chinese community today. Confucianism is therefore still indispensable today to the way of life of China. (Miletic, 2013).
Rostow, an American economist, developed s theory of the stages in economic development. It was established in 1960, clearly indicating the steps that countries go through on their road to modernization. The main steps of the theory included the movement from a traditional society, then the stage for preconditions for take-off, the take-off stage, the drive to maturity and finally the stage for mass consumption. The first stage of the theory, the traditional stage is characterized by an agriculture-based economy low trading levels and intensive labor. At this juncture, the population of a country has no scientific perspective regarding technology and the world. At the second stage, society starts developing its manufacturing systems with a focus on the international, rather than the regional arenas. At the take-off stage, a country's development is characterized by short periods of intensive growth, industrialization develops, and there is a shift of population and institutions closer to the newly established industries.
The fourth stage in the development of countries and societies is the drive towards maturity stage. (Li and Hung, 2013). The stage occurs over an extended period as the standards of living rise for the country's population, the advancement in technology is witnessed, and there is a growth in a country's economy. Additionally, a country's economy is diversified. The last stage of the Rostow's development model is the age for increased mass consumption. At this stage, a country's economy flourishes within a capitalistic system .Similarly the stage is characterized by consumerism and mass production.
In the 1990s, there was a fast growth in the economy of China. At this point, it would be reasonable to place the country's development in the fourth stage of development, the drive to maturity. At the time, China saw an expansion of the economy and its opening up to the outside world. Before 1978, China rarely interacted with the outside world as regards its economy. Economic reforms initiated in the development of the country resulted in increased GDP and foreign direct investments. From 1978, the economy of China has grown nine times. In 2002, it became the largest recipient of FDI and fifth biggest global trader among many other achievements in the country's economy. From the stated developments associated with the economic development of China, it fits into the fourth stage of Rostow's stages of economic growth theory.
Dependency theory was developed in the 1960s in response to research carried out by Raul Prebisch which concluded that the increase in the wealth of richer nations was at the expense of the poorer nations. It is based on the Marxist view of the world as a global village with a spread of capitalism, exploitation of resources and cheap labor in return for western technologies. The dominant view of the theory is a dominant world capitalist system that depends on the division of labor between the poor and the rich countries. Over time the rich countries will use their dominance against the marginalized developing countries. (Farny, 2014).
The cooperation between China and the developing countries was established soon after the cold war. There was growth in these stable relationships since China's political and economic interests had increased towards these areas and efforts were put to build comprehensive partnerships. Additionally, for the developing countries that did not have proper relationships with Europe or the United States had positive expectations about their new relationship with China. (Wong and Chan, 2003).
For the last three decades, China has opened up to the outside world and become a player in the global economy. The Country's GDP has grown at the rate of over 9% in 30 years. Brazil established their diplomatic relationship with the people’s republic of China in 1974.It was not until 1993 that China recognized its trade relationships with Brazil. In 2010, China was the largest trading partner of Brazil and accounted for 15% of the total exports of Brazil and supplied 14 5 of China's imports.
The bilateral trading relationships between Brazil and China have both direct and indirect effects on both countries. Brazil exports primary products and resources that have undergone little value addition. These exports account for 70% of the total Brazilian exports to China than the other countries in 2002.These exports have been increasing over time. In 2009, the Brazilian exports to China of the resource-based manufactures and primary commodities rose to 90% of the total exports. The fact that Brazil only exports primary products may be explained by the fact that it has an abundance of natural resources. However, the country exports some of its manufactured goods to other countries other than China. Brazilian imports from China consist mainly of non-resource based productions. (O'Connor, 2012).
Concerns have been raised concerning the exports of China to Brazil as these exports have displaced the domestically produced goods in Brazil. (Skira, 2007). Further, challenges to the relationship between Brazil and China regards investment. The relationship between the two economies is skewed as China imports natural resources from Brazil and Brazil, on the other than, imports high-value products. While China has established its markets in Brazil, on the one hand, Brazil is still struggling to penetrate the Chinese markets.
Diplomatic relationships between Peru and the People's Republic of China were established in 1971.The government of Peru encouraged economic policies governing their exports and China tapped into this opportunity due to the natural resource endowment of the Peruvian nation. Established relationships exist between these two countries due to the ability to participate in a common trade market. In the 1990S, when Peru was ion the road towards the privatization of mining countries, Chinese companies invested in the market, leading to the making of trade agreements between the two nations. After the signing of the Free Trade Agreement in 2009, China became the leading trading partner of Peru replacing the United States. Several Chinese companies are registered to operate in the Peruvian nation in the economic sectors of oil and mining industry, banking and technology industries. (Gonzalez-Vicente, 2012). The other fields of the trade bringing Peru and China together are the education, health sectors, agriculture, defense, and technology. This has seen the relationships strengthened by the Peruvian nation purchasing military vehicles from China.
New bilateral trade agreements exist between China and Peru as regards an optimization of the business infrastructure between the two countries. Additionally, the agreements strengthen the two countries' cooperation in agriculture, social development, and further deepening of the current trade structure.
The trading relationship between China and Africa is of importance to both trading partners. Africa is becoming an important source of raw materials for China's industries. The materials imported from Africa include iron ore, copper and crude oil essential for China's infrastructural development. China, on the other hand, provides Africa with affordable consumer goods, purchases its natural resources and help in the development of infrastructure in the continent. (Udeala, 2010).
China has played a significant role in boosting the mining and oil sectors of African industries in exchange for trade deals between the economies. Similarly, Africa's manufacturing, agriculture, infrastructure, and telecommunications industries have developed due to the trade agreements established with China. (Dent, 2010).
From the trading relationships between China and the developing countries as discussed above, China mainly imports primary resources from these resources endowed economies. It then processes these raw materials in its well-established manufacturing industries to produce consumer goods which are then exported back to these developing nations. The trade seems to benefit China more than its trading partners, the developing countries. As such, their relationships can be considered as a form of modern imperialism. (Szunomár, 2014).
Dependency theory further explains the relationship between China and European powers before the establishment of the People's Republic of China. The motive behind British imperialism of China was economic gains. The British forces wanted to benefit from Chinese silk, porcelain, and teas in the British market. The barter trade that developed between China and the Western powers saw the use of Indian opium to facilitate trade. The trade benefited the western powers but was detrimental to the ancient China due to addiction to opium and the resulting social instability.
Continuous use of opium by the Chinese population led to addiction hence more was needed to sustain the addiction. As a result, Chinese resources were given in exchange for the Indian opium. Following the occurrence of opium wars, China was made open to the imperial system which leads to its collapse. (Feige and Miron, 2008).
Both modernization and dependency theory could be used to explain the development of China. Modernization theory explains the necessary changes that were required for the transitioning from a traditional society to a modern one. These changes touched on the political, economic, and social spheres of lives. Dependency theory, on the other hand, describes the relationship between countries and the fact that rich economies take advantage of the poorer ones as they develop. This was the case before the formation of the People's Republic of China when the western powers took advantage of Chinese resources. Similarly, modern China takes advantage of developing economies like Brazil, Peru, and Africa for raw materials for its industries.
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