Critical Issues Confronting China series

China’s Long March: From Politics to Economics and from Economics to Politics

Yasheng Huang, Epoch Foundation Professor of Global Economics and Management at MIT Sloan School of Management

with

Yuhua Wang, Professor of Government, Harvard University

November 29, 2023

In a recent Critical Issues Confronting China talk, Yasheng Huang, Professor of Global Economics and Management at MIT Sloan School of Management, and discussant Yuhua Wang, Professor of Government at Harvard University, explored the roots of China’s present-day return to heightened political controls.

Professor Huang, author of The Rise and Fall of the EAST, How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to its Decline, argued that the crackdown on the democracy movement of 1989 sowed the seeds that eventually led to today’s rise in autocracy and the ultimate reversal of economic reforms. “Tiananmen was the turning point,” he said, while arguing that, in the early 1980s, divisions among state agencies and Politburo members formed a check-and-balance mechanism of sorts. Following the crackdown, the drive toward capitalist-style reforms paired with a ban on political reform led to unprecedented growth—but also rampant corruption and crony capitalism. Inevitably, Huang argued, Communist Party leaders, fearing the collapse of the Party itself, turned to recentralization and a reinstatement of strong political control. The end result: Reframing economist Adam Posen’s argument that China has "Economic Long Covid,” Huang asserted that China has "Political Long Covid," under which confidence wanes in three critical components of the economy: business, government, and households.