Departing from the Maoist emphasis on local self-sufficiency, the reformers have reintegrated China’s vast resources into the global division of labor and have thereby integrated China into neoliberal globalization. But this integration is based on the premise of being controllable and controlled by the Chinese state and the CCP. The Chinese reform paradigm that emerges in the first decade of reform is marketization under the primacy of the state and not of private property. The market and private property are meant to serve the state’s developmentalist agenda. This form of marketization has reintegrated China into neoliberal globalization without, however, pursuing a wholesale adaptation of neoliberal economic policies.(H. Wang 2006),(H Wang 2011) 

Friedman in China,

n the context of what some considered an overheating economy, increasing inflation, and China’s ongoing move toward a market economy, the main lessons of the conference concerned monetary and fiscal tools used in capitalist countries to smoothen economic cycles. So, if the Eastern European economists at the Moganshan Conference had laid the groundwork for using modern economic tools by showing their application to socialist economies, and the two World Bank reports introduced the application of modern mainstream economics to Chinese data, the Bashanlun Conference provided access to some of the leading economists at the time who were shaping global discussions on economic policy-making, including proponents of a neoliberal big bang in price reform such as Kornai (Weber 2019, 2020

n these regards, China’s reformers are in accordance with Mises. Yet they insist on the possibility of rational socialism and reject the neoliberals’ primacy of private property. This becomes apparent through a close reading of the Chinese Communist Party’s official reevaluation of the history of the People’s Republic and the emergence of the doctrine of the initial stage of socialism.

The crucial difference between Mises and the Chinese primary stage of socialism is, however, that for the Chinese reformers, the leadership by the Communist Party and the strategic importance of public ownership remain vital to economic progress. The Chinese reforms rely on market interventions, and state guidance is key to China’s strategy for economic development. In contrast, for Mises and for neoliberals more broadly, the spontaneous interaction of individuals in possession of private property is the only rational organization of the economy. The role of the state is to safeguard the market, not to intervene in it. Critically, Chinese state ideology is also opposed to Mises’s rejection of the “basic principle” of the “inevitability of socialism.” For the Chinese reformers, the scientific development of the productive forces will eventually lead to mature socialism in some distant future. For neoliberals like Mises, rational socialism remains impossible.

Similar to Oskar Lange and other socialist opponents of Mises and his neoliberal allies in the SCD, the new stance on scientific socialism in China now shares the basic view of economics as a science: a depolitized, technical tool that can serve diverse political ends.

In these regards, China’s reformers are in accordance with Mises. Yet they insist on the possibility of rational socialism and reject the neoliberals’ primacy of private property. This becomes apparent through a close reading of the Chinese Communist Party’s official reevaluation of the history of the People’s Republic and the emergence of the doctrine of the initial stage of socialism.

n this essay, I explore the ideological shift in China in the late 1970s from Maoism to economic developmentalism to trace the origins of this contradictory relation between China and global neoliberalism. Drawing on my reading of Ludwig von Mises’s rejection of the possibility of a rational socialist order in conjunction with key Chinese party documents, I argue that the primacy of economic development and growth of the reform era integrated China into neoliberal globalization and gave rise to strategies of neoliberal governmentality. Yet my study of the arrival of Western economists and the World Bank in China brings out critical differences between China’s market reforms and the neoliberal economic policy paradigm. The Chinese state has maintained control over the direction of the economy in ways that contradict the neoliberal vision of state-market relations. Thus, China has been integrated into global neoliberalism while not pursuing a neoliberal economic policy. Let me spell out how my historical argument in this paper helps us to make sense of the contradictory state of the literature on China’s being neoliberal or not. China is found to be (non-)neoliberal on several grounds that can be traced back to the shift from Maoism to economic developmentalism in the late 1970s. As I show, this shift resulted in the primacy of economic efficiency and growth and the rejection of late Maoism’s emphasis on permanent revolution. The reformers replaced the Maoist slogan of revolutionizing social relations with the idea of making up lessons from capitalism in order to achieve historical progress through market reforms. Consequently, a technocratic policy agenda became dominant, and China became amenable to what Foucauldians call neoliberal governmentality (see, e.g., Sigley 2007; Zhang and Ong 2008(L. Zhang and Ong 2008)). From a related perspective, China’s developmentalism, economism, and transitionism represent a “linguistic hegemony” of neoliberalism (Hui Wang 2003). A broad range of studies on a wide range of empirical phenomena find China to be neoliberal in this sense.1

Friedman in China

Departing from the Maoist emphasis on local self-sufficiency, the reformers have reintegrated China’s vast resources into the global division of labor and have thereby integrated China into neoliberal globalization. But this integration is based on the premise of being controllable and controlled by the Chinese state and the CCP. The Chinese reform paradigm that emerges in the first decade of reform is marketization under the primacy of the state and not of private property. The market and private property are meant to serve the state’s developmentalist agenda. This form of marketization has reintegrated China into neoliberal globalization without, however, pursuing a wholesale adaptation of neoliberal economic policies

he Bashanlun Conference provided access to some of the leading economists at the time who were shaping global discussions on economic policy-making, including proponents of a neoliberal big bang in price reform such as Kornai (Weber 2019, 2020).

In December 1979, Włodzimierz Brus, a Polish economist who was then professor at Oxford University, visited China (Lim et al. 2008; Liu 2010, 280). Before Brus was removed from his posts in 1968, he had been professor of economics at Warsaw University, head of the department of economic research of the Planning Commission and vice-chairman of the State Economic Council, and “a close colleague of the late Professor Oskar Lange” (Dobb 1973 viii). He positioned his work on markets in a socialist economy explicitly in the tradition of the SCD and was diametrically opposed to the neoliberal stance of Mises and others (Brus 1972, 12--61). Two years later, in 1981, Ota Šik, then professor in St. Gallen, former Czech vice-premier and economy minister, who laid the economic grounds for the Prague Spring of 1968 and became famous for theorizing a “third way” between Soviet socialism and capitalism, was also invited to China (Wu et al. 1982, 45; Kosta 1990). Both Šik’s and Brus’s lectures were met with great enthusiasm by Chinese politicians and economists (Weber 2020) Inspired by the discussions, Wu Jinglian and Liu Guoguang approached Edwin Lim and requested that the World Bank organize a conference to invite more Eastern European reformers to China (Lim et al. 2008). The World Bank met this request by hosting the Moganshan Conference. This was the first conference organized by the World Bank in China. It had to be held under the radar of the public in China and abroad. Both its topic—price reform—and its participants were politically too sensitive. Some of the delegation members were dissidents from other socialist countries who had not set foot on socialist soil since they fled to the West. Brus led the delegation of economists, including Julius Struminsky (Poland), Jiri Kosta (Czechoslovakia), and Peter Kende (Hungary) as well as the American expert on socialist economies David Granick. Chinese participants included Xue Muqiao, Liao Jili, and Liu Zhuofu, who all reported to the State Council (Lim et al. 2008; Wood 1982; W

The crucial difference between Mises and the Chinese primary stage of socialism is, however, that for the Chinese reformers, the leadership by the Communist Party and the strategic importance of public ownership remain vital to economic progress. The Chinese reforms rely on market interventions, and state guidance is key to China’s strategy for economic development. In contrast, for Mises and for neoliberals more broadly, the spontaneous interaction of individuals in possession of private property is the only rational organization of the economy. The role of the state is to safeguard the market, not to intervene in it. Critically, Chinese state ideology is also opposed to Mises’s rejection of the “basic principle” of the “inevitability of socialism.” For the Chinese reformers, the scientific development of the productive forces will eventually lead to mature socialism in some distant future. For neoliberals like Mises, rational socialism remains impossible.

Similar to Oskar Lange and other socialist opponents of Mises and his neoliberal allies in the SCD, the new stance on scientific socialism in China now shares the basic view of economics as a science: a depolitized, technical tool that can serve diverse political ends.

In these regards, China’s reformers are in accordance with Mises. Yet they insist on the possibility of rational socialism and reject the neoliberals’ primacy of private property

I argue that the primacy of economic development and growth of the reform era integrated China into neoliberal globalization and gave rise to strategies of neoliberal governmentality. Yet my study of the arrival of Western economists and the World Bank in China brings out critical differences between China’s market reforms and the neoliberal economic policy paradigm. The Chinese state has maintained control over the direction of the economy in ways that contradict the neoliberal vision of state-market relations. Thus, China has been integrated into global neoliberalism while not pursuing a neoliberal economic policy.