C. Patterson Giersch introduces his new book Corporate Conquests
It’s 2020, and Xi Jinping's promise to eradicate rural poverty comes due this year. By most accounts, China has achieved extraordinary success in poverty reduction over the last few decades, but it seems unlikely Xi, no matter what he claims, will fulfill his promise, even despite a frantic sprint to the finish.
One reason that Xi will fail is the difficulty in eradicating poverty among western ethnic minority communities. Despite efforts to implement economic development specially tailored to each region, the Communist Party acknowledges that many “ethnic minority regions are still lagging behind on the path to moderate prosperity.”[1] As of 2016, up to 48 percent of those who lived in poverty were in these regions, where, according to Arthur Holcombe, “top-down…policies to reduce poverty have been least effective.”[2] Throughout China, poverty alleviation has been hampered by inequality and an inability to promote inclusive growth,[3] but these problems are particularly acute in minority communities.
Why has inequality and poverty proven difficult to address in China’s vast and ethnically diverse West? The simplest answers point to geography, not ethnicity: Chinese citizens in rural, inland provinces tend to be poor no matter what their ethnicity.[4]
However, a more accurate answer lies in the intertwined histories, stretching over the past century, of Chinese economic development, nation-building, and ethnicity. If one understands these intertwined histories, then it becomes clear why the Chinese state’s extraordinary efforts since 2000 to ‘Develop the West’ have largely failed to be equitable or to inspire widespread loyalty to Beijing. Instead of equity and inclusiveness, researchers find increasing ‘marginalization’ among ethnic minorities, leading some influential Chinese academics to conclude that long-standing policies to promote political autonomy and social equality for minorities have failed.[5] At the highest levels of government, moreover, that conclusion is shared and has led to Xi Jinping’s brutish policies of subjugation through the internment of Uyghurs and others.[6]
In Corporate Conquests », I explain how ethnicity has factored into economic development and nation-building since the late nineteenth century. The book’s story begins in China’s dusty southwestern towns, where entrepreneurs experimented with recordkeeping and profit-sharing to build early-twentieth-century corporations that could trade across vast distances while maintaining relatively disciplined corporate governance. These corporations brought great concentrations of wealth to the entrepreneurial elite’s villages in Yunnan Province, where inhabitants developed increasingly mobile and cosmopolitan lifestyles based on access to the growing urban areas of China, Burma, and South Asia.
My research reveals that successful trading firms were founded by people from a variety of ethnic backgrounds, thus disproving pernicious stereotypes about minority cultures as unsuitable for modern commerce or hard work.[7] Success, I find, was dictated by the ability to adopt new management technologies. It was not dictated by assimilation to the majority Han’s Confucian cultural practices, which some scholars have lionized as the key to traditional business success.
But success was not widespread, and Corporate Conquests reveals how corporations undermined local indigenous power over resources in Eastern Tibet (Kham), where the trading corporations came to dominate commerce. As the corporations reached deeper into the villages and grasslands, places largely inhabited by local Tibetans called Khampas, they controlled the profits from important commercial sidelines, such as medicine gathering. Many Khampa families were limited in the economic leverage they could gain through increased market participation. Meanwhile, the trade corporations and their managers invested their profits back in their hometowns, thus creating oases of wealth across a landscape of relative poverty.
Today, these patterns of uneven development continue to undermine Beijing’s plan for a unified, thriving nation. In some places, there have been local successes with the development of the tourist industry or the revitalization of particular city neighborhoods, but these successes are limited in number, spatially fragmented from surrounding communities, and accessible primarily to outside corporations and a few local elites.[8] Moreover, it has become typical that outside businesses, mostly controlled by the state and Han Chinese migrants, thrive while most minorities are excluded, sometimes because of outright prejudice, from the benefits of new industries and jobs.[9] This has resulted in “disempowered development,” a term coined by Andrew Fischer to describe a situation in which decisions about resource allocation and economic change are removed from local communities and placed in the hands of outside corporations and officials.
Disempowerment runs counter to ideas about best developmental practices, including the concepts of local control and participatory development that have been evolving since the 1980s.[10] The Chinese government theoretically embraces policies that approximate participatory development, and, recently, the government has dispatched hundreds of thousands of Communist Party officials to work with local officials in order to create programs that fit local needs.
However, Party men are often unwilling to risk the creation of innovative, inclusive economic development plans. Ben Hillman has found that formal and informal pressures on local officials prevent them from cooperating with local communities. Meanwhile, because the evaluation of officials is based largely on performance as measured by regional economic growth, they pursue development strategies that avoid inclusiveness and emphasize rapid growth, which often marginalizes minorities.[11]
Marginalization by the state is part of an old pattern, dating to the late nineteenth century, and the second part of Corporate Conquests provides the first comprehensive study of why Chinese states, including the current People’s Republic, have been unable to conceive of economic development as a partnership with minority communities. The book demonstrates how economic development was influenced by changing ideas about ethnicity and sovereignty. From the late nineteenth century, China was transformed from an empire, in which the imperial government accommodated its diverse western communities, into a nation state where cultural and ethnic difference became an object of suspicion and a target for control. Top-down efforts to implement economic development in borderland areas with large minority populations became a strategy of control, and the book reveals how the Sichuan and Yunnan Provincial governments sought to use development efforts to solidify government authority in strategic border areas by removing from power indigenous elites who were increasingly represented as detrimental to national security and modern progress.
In Yunnan, we find the most important early efforts to theorize and then implement state-controlled development, a process led by Miao Yuntai who, as a Yunnanese government technocrat with an American university degree, sought to translate the efficiencies of the large, professionally-managed American corporation into innovative corporations owned by the Yunnan government. Because Miao imagined Southwest China as impoverished, diverse, and therefore vulnerable, he set Yunnan on a course of government-led development designed to bring prosperity and stability. Miao beat the central government to the punch in creating state-owned enterprises and, in emphasizing corporate governance and the production of competitive products, he anticipated some of the keys to economic reform in the post-Mao era.
In opposition to state-dominated development stood men such as Fang Kesheng, an ethnic Tai from westernmost Yunnan. Educated in Rangoon and interested in the politics of autonomy and independence in Burma, which bordered his homeland, Fang worked with fellow Tai aristocrats to pursue autonomy in western Yunnan. His vision was to work with the Yunnan provincial government to transform the Tai-governed region from one in which local farmers produced crops for subsistence and for sale to Han merchants, to one of diversified cash cropping and local light industry controlled by the Tai. To implement such a vision, however, required confronting outside trading corporations as well as decades of state discourse that portrayed borderlands people as backward and in need of state-controlled intervention to raise them from their allegedly sorry states.
Like the minority entrepreneurs who developed private trading companies, Fang Kesheng’s vision reminds us that disempowered development was not inevitable for China. So, how did we get from Fang Kesheng’s radical plans in 1948 to now? Corporate Conquests concludes with the initial decade of this transition: Just a year after Fang Kesheng presented his plans to central government officials, Communist armies entered Yunnan and took control. Despite stated commitments to ethnic equality, Mao’s regime would largely discard concepts of inclusive development and embrace earlier patterns of inequality and disempowerment by undermining minority elites, limiting minority farmers from pursuing more lucrative commercial options, and building on Miao Yuntai’s state-led development concepts in ways that served and employed Han migrants while leaving behind others because they were deemed less trustworthy or less capable.[12]
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Notes
[1] Ju Li, “Poverty Alleviation, A 70-Year Miracle in China,” Qiushi Journal 11.4, Issue 41 (October-December 2019). Accessed May 22, 2020. http://english.qstheory.cn/2020-01/13/c_1125454135.htm.
[2] Arthur N. Holcombe, “Can China Reduce Entrenched Poverty in Remote Ethnic Minority Regions? Lessons from Successful Poverty Alleviation in Tibetan Areas of China during 1998–2016,” Harvard Kennedy Center, Ash Center (June 2017), p. 1. Accessed May 22, 2020. https://ash.harvard.edu/files/ash/files/271837ash_tibetv4.pdf
[3] Yuen Yuen Ang, “Missing the Big Picture on Poverty Reduction,” Project Syndicate Nov. 13, 2019.
[4] Bjorn Gustafsson, “Ethnic Disparities in Economic Well-Being in China,” in Handbook on Ethnic Minorities in China, ed. Xiaowei Zang (Cheltenham, U.K.: Edward Elgar, 2016), 344, 347.
[5] Ma Rong, “Reconstructing ‘nation’ (minzu) discourses in China,” International Journal of Anthropology and Ethnology 1.8 8 (2017): 1-15.
[6] James Leibold, “Planting the Seed: Ethnic Policy in Xi Jinping’s New Era of Cultural Nationalism,” ChinaBrief, vol. 19, no. 22 (December 31, 2019): 9-14.
[7] Emily T. Yeh, Taming Tibet: Landscape Transformation and the Gift of Chinese Development (Cornell University Press, 2013), 7, 115, 129.
[8] Rune Steenberg & Alessandro Rippa, “Development for all? State schemes, security, and marginalization in Kashgar, Xinjiang,” Critical Asian Studies 51.2 (2019): 274-295; Kelly Dombrowski, “Exploring the Potential of Mass Tourism in the Facilitation of Community Development: A Case Study of Jiuzhaigou Biosphere Reserve, Western China” (MPhil Thesis, Massey University, New Zealand, 2005).
[9] Yue Hou, Chuyu Liu, and Charles Crabtree, “Anti-Muslim Bias in the Chinese Labor Market,” forthcoming in Journal of Comparative Economics (Dec. 20, 2019). I consulted the pre-publication paper.
[10] For example, The World Bank, The World Bank and Participation (English) (Washington, DC: World Bank, 1994). See the terrific review of changing concepts of development in Dombrowski, “Exploring the Potential of Mass Tourism,” chapter 2, especially pp. 24-25.
[11] Ben Hillman, “Unrest in Tibet and the Limits of Regional Auotnomy,” Ethnic Conflict and Protest in Tibet and Xinjiang, ed. Benn Hillman and Gray Tuttle, 18-39 (Columbia University Press, 2016), 24-27.
[12] For an outstanding study that similarly demonstrates how industrial development in Xinjiang was primarily organized to benefit state and Han migrants, see Judd C. Kinzley, Natural Resources and the New Frontier: Constructing Modern China’s Borderlands (Chicago: University of Chicago Press, 2018).
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