Workers make fillets of Swai fish at a factory of Bien Dong seafood company in the southern Mekong delta city of Can Tho, Vietnam, July 7, 2017. REUTERS/Kham
Workers make fillets of Swai fish at a factory of Bien Dong seafood company in the southern Mekong delta city of Can Tho. Photo: Reuters

The West and its multinational institutions have never properly understood the myriad, competing social base that constitutes the Chinese empire. The primary explanation for this perception is the West’s continued reliance on heuristic mediums that constitute mass media throughout the Cold War. Headline news of how the “US Lost China” never permitted the requisite complexity of imperial or republican China to permeate the very mediums used to transmit groundbreaking international developments. China itself developed a love of political sloganeering, often numbering lists to both solicit and identify domestic political enemies. The criminalization of political differences has a long history in China.

It isn’t surprising that the World Bank made use of a numbered list to encapsulate its own reform agenda for the Middle Kingdom. Titled Innovative China: New Drivers of Growth, the World Bank sought to ply its neoliberal agenda at reforming China’s statist mercantile political economy. By introducing the three Ds, World Bank technocrats believe they can confer on the Chinese empire a transition from the middle-income trap toward developed world status as an economy built on innovation. They list three constitutive components China must have; the removal of economic distortions, the diffused impact of technology and fostering a modern economy.

The World Bank never considered how best to convey new ideas or criticism to a government unwilling to break new paradigms. Just as Keynesian economics ignores micro-foundations, monolithic neoliberal governing institutions like the World Bank cannot appeal to humanist ideals. Because both envision and enforce conceptions of the human person as constituted without an intrinsic nature, they seek to command, not understand, the moral foundations of liberty as requisites to scientific innovation.

By having to seek the imprimatur of the Development Research Council, the World Bank was working in open consultation with the State Council on reforming China’s state-led capitalism. The document itself should temper any hopes that western ethical ideals of liberalization have taken hold among China’s dominant political class. They haven’t. And this latest document should fortify China’s competitors abroad as they seek to discern the trajectory of China’s rebalancing.  The World Bank explicitly states that “state-owned enterprises are at the core of the co-existence between the state and the market.

Previous attempts at persuading China to embrace liberalization saw the World Bank calling the State-Owned Assets Supervision and Administrative Commission (SASAC) agency overseeing state firms to be limited in scope pertaining to regulation alone rather than asset management. What the World Bank got right was the growing evidence of structural flaws internal to China’s statist model.  The near-permanent misallocation of capital and its consequences for future rebalancing efforts, the purely domestic structure of its banking system, the lack of functioning-integrated capital-bond markets, an opaque bankruptcy system effectively supporting zombie firms. But these are well documents flaws that are known by China’s best public policy professionals.

It isn’t that China remains at an impasse. China possesses all the resources it needs to succeed in its rebalancing efforts. What the World Bank refused to admit, hard-working Chinese people already know. The rebalancing of China toward becoming a first-world political economy begins in the very region that has always been China’s bread-basket, the Mekong Delta basin.

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