Editor's Note: As a lawyer, policy adviser, filmmaker and social enterprise pioneer, Laurence Brahm is not only a keen observer but an active participant in China's reform and opening up. "Laurence Brahm's Diary on China in Change" is a special series dissecting the colossal changes Laurence has witnessed in his 37-year stay in China. In the second episode, Brahm shares his views with CGTN on China's socialist system.
CGTN: There were heated discussions over socialism vs. capitalism at the initial stage of reform and opening up. What has brought an end to such debates?
Brahm: Pragmatism, I think the debate on whether China is socialist or capitalist, or the debate anywhere in the world for that matter, was buried by Deng Xiaoping in the 1980s, you had that time as China opened up [and] moved away from the planned economic system, the introduction of what Deng Xiaoping called "black cat, white cat" theory.
It doesn't matter if the cat is white or black, as long as it catches mice, that's a good cat, which is it doesn't matter what you call this system, as long as it works, as long as it's pragmatic.
CGTN: China's economy has gradually transformed from a planned to a market system while maintaining high-level political and social stability. What's the key to China's success?
Brahm: The key is again pragmatism. The success of this transition has been to move away from planning toward the market but recognizing that the market economy is not perfect.
And that's where the state comes in to guide it, to push it, to create incentives, to cool it down when it gets too hot, or to warm it up when it gets too cold.
And so it's this very, (very) pragmatic approach which has made the China Solution, which is at its core pragmatic, works for China and for many other countries.
CGTN: From re-engineering the state-owned enterprises to replacing the iron rice-bowl system, the market is playing an increasingly important role in China's economy. While striving for efficiency, how to ensure fairness in China?
Brahm: Fairness is always a challenge. It's a challenge even in my country, the U.S., where you have movements like Occupy Wall Street.
Back in the 1980s, Deng Xiaoping said, look, the whole base of the economy is so low, everybody has a very low income so let a few people get rich first and the rest will catch up. Well, that's happened. It has also created enormous gaps and distortions in the economy and in the social structure. So, now the priority of the government, and this is where the planning aspect kicks into the market, is to say, look, we do have an unequal distribution of wealth so now it's time to come in and to build up greater wealth at the lower levels.
And so, you have this economic and in turn social mobility, which creates broader, more long-term and sustainable stability for all.
CGTN: The more advanced an economy is, the more welfare it will bring to the public. To what extent should public welfare be available in China?
Brahm: Public welfare is a social offering by the government. In the case of China, there has been an enormous focus on education and reinvesting into infrastructure. Wherever you have an infrastructure which has become outdated, the government [will] reinvest to create more, better, smarter, and efficient systems. Now, there's a need for upgrading smart transport to help people to be able to move faster, more efficiently. Once upon a time, we were all riding bicycles in the street because there were no cars.
Today, they are bringing the bicycles back. You have all of these online platforms that allow people to have instant rental bicycles for even short distances. And this is now changing the nature of mobility and the nature of social attitudes in China.
CGTN: Some Westerners still attach great importance to ideology by hyping "China collapse" theory. What's your response to them?
Brahm: China's achievements over the past 40 years cannot be underestimated. You have to look at it from the big picture. However, some Western theorists are still talking about "China collapse". I wrote a book at the time called China's Century: The Awakening of the Next Economic Powerhouse. I said the 19th century was Britain's, the 20th was America's and the 21st century is China's. Now, we're almost a quarter of the way through that century and China has not collapsed. It's only grown as an economy. It has addressed not only many of its own economic issues, but it's also addressing now its internal debt issues, issues that the U.S. is not addressing.
And most importantly after all of this high growth and economic empowerment, which is created through heavy industrialization, the government is now addressing the environment. It is not only addressing the environment on a national level, but it is becoming the leader on green bonds in the world, the leader of green finance and the leader in renewable energies of all forms and exporting those renewable energy systems through the Belt and Road Initiative to other developing countries.
That's happening while America's leadership under Donald Trump is pushing the U.S. back into coal, back into fossil fuels, back into pollutants. So I think from this perspective you can understand that China is not just a rising economic power, but it is a rising green power.
CGTN: You said in your TED speech that it is time for pragmatism to lead us to the future. While China has attached greater importance to productivity, Western models of economics, in your words, are theory dependent. What the West can learn from China in this regard?
Brahm: There are too many ivory tower theorists who are making the policy for not only economy in America, but also our foreign policy. If you look at [China's] leadership, all of these leaders have served at different levels of government.
They've either worked in ministries dealing with very pragmatic industrial technology or agricultural issues. They've gone down to the village level, they've worked at the city level, they've worked at the province level, dealing with the issues of administration of both urban centers and villages, they've worked in enterprises.
Some of them have been shifted over to the financial sector to work in banks before they eventually get to the top of the government.
So when they're sitting there at the top of the government, you can't tell them a story. They know how the system works and they know the pragmatic technical aspects of how to balance books, how to deal with development, how to deal with people, how to deal with people's lives and their aspirations.
Reporter: Liu Jianxi
Creative planning: Li Yunlong
Videographers: Wang Yucheng, Zheng Xiaotian
Video editors: Liu Lian, Ge Kai, Xu Qianyun
Producer: Wei Wei
Supervisor: Zhang Shilei
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