How does China’s system really work? https://geopoliticaleconomy.com/2025/08/25/china-model-zhang-weiwei-interview/
. In the Western model, political parties are partial interest parties, or partisan interest parties. In China it is one holistic political party. And behind this is a vigorous process of what I call “selection plus election”. Selection from China’s own tradition. You have to pass all kinds of exams and tests today; your work experience, your performance. And elections for the best.
economically, China is a socialist market economy.. in China, many of the leading industries are run by state-owned enterprises, including, the financial sector, telecommunications, certain industries, mining, energy, the land. , the state owns so many resources, from minerals to land, everything. Yet, the right to use the land is flexible. It’s very often shaped by market forces. A good example of why China can be so successful in internet applications, even for those apps used in the United States, such as TikTok, Temu, or Shein.. in China, there are very rich people, there are billionaires, but they have no political power.
How do China’s government, political system, and socialist market economy work? How does it see democracy? Prominent Chinese academic Zhang Weiwei explains in this sit-down interview with Ben Norton.
China’s Secret to Lifting 800 Million People Out of Poverty Aug 25, 2025 https://www.youtube.com/watch?v=HqBg2utP9S8
Zhang Weiwei, professor at Fudan University, : : a unique blend of socialism and market economy that has lifted nearly 800 million people out of poverty and created the world’s largest economy in terms of purchasing power.
China’s long-term planning, innovation in technology, its approach to democracy, the U.S.-China trade war, and the growing role of the Chinese yuan in global finance.
Yotube transcript: (Extract) What if the world's second largest
economy operates on a model the West
girl doesn't fully understand? Today we
explore the China model with Professor
Zong Wii, a system that lifted 800
million people out of poverty, built the
world's largest economy, and u may be
shaping a multipolar future. We're
taking a deep dive into the insights of
Professor Zong Wiwi. He's a renowned
Chinese scholar from Fuan University in
Shanghai, and he has millions of
followers across Chinese social media.
We recently had the pleasure of hearing
his perspectives at an academic
conference and our mission today is to
truly unpack his decades long
articulation of the China model and
understand what its trajectory means for
the global future and maybe you know for
you.
Absolutely. And what's truly fascinating
here is how China has synthesized what
might seem like well contradictory
approaches into a system that has
delivered outcomes many thought
impossible. Understanding the core
components of this model is critical not
just for policy wonks or economists um
but really for anyone trying to make
sense of the rapidly shifting global
landscape. It's a puzzle, right? And
Professor Zang offers a unique way to
put the pieces together.
Okay, let's unpack this then. We've all
seen the headlines about China's
economic ascent. Yeah. Yeah. But
Professor Zang asks us to look beyond
the raw numbers and consider what unique
underlying logic allowed this specific
model to achieve such well unprecedented
results. He's been discussing the China
model for almost 20 years and the
statistics he sites are truly
staggering. I mean we're talking nearly
800 million people lifted out of extreme
poverty. That accounts for 3/4 of the
global reduction according to the World
Bank. And the country has transformed
from one of the poorest nations to
having the largest economy on Earth when
measured by GDP at purchasing power
parody. That's just an astonishing
transformation in a remarkably short
period.
That's right. And Professor Zang argues
this isn't just a story of rapid growth.
It's a story of a distinct framework he
calls a socialist market economy or
socialism with Chinese characteristics.
He really clarifies that this isn't
simply a mixed economy as you know we
might understand it in the West.
Instead, he sees it as a strategic
synthesis where the state retains
crucial guidance and ownership over core
resources and large-scale infrastructure
ensuring national direction while
simultaneously unleashing intense market
forces and private enterprise and other
sectors to drive innovation and
efficiency. It's quite a balance. He
breaks this unique approach down into
three key interconnected dimensions,
political, economic, and social. And to
connect this to the bigger picture, it
highlights how a different
organizational logic, one that often
combines seemingly contradictory
elements, can yield dramatic and
sustained results, sort of defying
conventional wisdom.
That's a powerful distinction. So if we
look at the political dimension first,
how does Professor Zang describe the
governance structure in China,
especially when he talks about a
holistic political party? What does that
term really mean and how does it
contrast with say the partial interest
parties we often see in Western models?
Yeah, he makes a really sharp contrast
here. For him, a holistic political
party is one that fundamentally aims to
represent the overall long-term
interests of the entire nation and its
people. It's not supposed to be
beholdened to specific factions or
corporations or even regional interests.
He frames this through China's identity
as a civilization state, an amalgamation
of hundreds of states unified way back
in 221 BC. So, this isn't just a country
in the modern sense. It's a civilization
that has historically valued unity and
long-term stability above pretty much
everything else.
Okay. So, if China is this civilization
state, what does Professor Zang argue
are the most critical operational
differences that emerge from governing
such a state versus say a traditional
western nation state, you know, in terms
of long-term planning or public
consensus building today?
That's an excellent question and it's
absolutely central to his argument. This
historical depth, he says, profoundly
shapes the system of governance. He
calls it a meritocracy, but it's based
on a vigorous process of selection plus
election. The selection component draws
heavily from China's ancient civil
servant examination tradition. We're
talking rigorous tests, extensive work
experience, and proven performance over
many, many years. It's really about
demonstrating competence and loyalty to
the overall vision. The election
component, he explains, is adapted from
western concepts, but it's typically
confined to local levels, often within
the party itself. It serves to identify
promising leaders and ensure some level
of local accountability.
So, it's not the broad multi-party
national elections we're familiar with
here. It sounds like the emphasis is
heavily, really heavily on proven
capability.
Precisely. And this combination, he
argues, produces highly competent
leaders. He often points to examples
like uh most of the top seven standing
committee members of the CPC. These
individuals have typically served three
full terms as the number one leader of a
province. Think about that. They've
effectively governed populations of over
100 million people each before reaching
their current national positions.
That's just incredible.
This extensive real world governance
experience is for him a defining
characteristic. It ensures leaders
understand and can effectively manage
complex societal challenges. It's less
about winning popularity contests, you
know, it's much more about demonstrating
administrative prowess over time.
That's an incredible depth of leadership
experience, as you say. Given that, how
does Professor Zang argue this emphasis
on experience and meritocracy shapes the
social contract in China, especially in
how the state interacts with its
citizens? He talks about mutually
positive reactions rather than sort of
pitting society against the state,
right? He makes a compelling point about
this. Rather than the adversarial
relationship that can sometimes
characterize state society interactions
and other models, Professor Zang
describes a system designed to foster
these mutually positive reactions. He
emphasizes that the state and party are
remarkably reactive. They respond much
faster, he argues, to events like
natural disasters, earthquakes, floods,
or even uh public grievances expressed
online or through other channels. He's
observed firsthand how quickly resources
and solutions are deployed in these
situations, which he sees as crucial for
maintaining public trust and stability.
Does Professor Zang share any particular
examples of how this rapid reactive
response has manifested maybe in a
crisis that really stuck with you?
Well, he often cites the swift,
coordinated, national response to the CO
19 pandemic as a prime example. He
contrasts it with the more fragmented
and sometimes slower responses seen
elsewhere. He argues the Chinese systems
capacity for rapid mobilization and
resource allocation enabled by that
holistic party and centralized
decision-making allowed for extremely
effective containment measures and
vaccine roll out particularly early on.
This ability to swiftly address
immediate challenges for him is a
cornerstone of this positive reaction
dynamic.
Okay, this raises an important question
though. How does this contrast with say
the US capitalist model? Perth Zang
highlights a fundamental difference in
the balance of power.
He really draws a sharp contrast there.
He argues that in China there's an
overall balance between political power,
social power, and the power of capital.
And he believes this ultimately favors
the majority of the Chinese population.
Now, while China certainly has
billionaires, Professor Zang asserts
they typically have no direct political
power. They can't, for example, directly
fund political campaigns or lobby for
legislation in the way we see it happen
in the West. In contrast, he argues the
US system is often balanced heavily in
favor of the power of capital with
billionaires and large corporations
wielding significant political influence
through lobbying, campaign funding. He
sees this as creating a different kind
of societal equilibrium, one that often
prioritizes capital over broader social
good. Now, this is a point where critics
might raise concerns about transparency
or accountability in the Chinese system.
Right. Right. But Zang would counter
that the focus should be on the
substantive outcomes for the vast
majority of people.
Here's where it gets really interesting
on the economic front. We hear about
China's socialist market economy. How
does Professor Zang explain this unique
blend, this mix of state ownership and
market forces? It sounds like it goes
beyond just a simple mixed economy.
It absolutely does. He stresses that
while the state owns vast resources,
minerals, land, you name it, the right
to use that land is incredibly flexible.
It's deeply shaped by market forces,
it's not simply rigid state control.
Instead, the state acts as a strategic
guide and investor. It builds the
foundational infrastructure, sets
long-term national goals, but then
allows the private sector to operate
with intense dynamism within that
framework.
Like building the highways for others to
drive on.
Exactly. Think of it as the state
building the high-spe speed rail lines
and superighways and then private
companies compete fiercely to offer the
best services on them.
Okay, give us an example of how that
plays out in practice.
Well, a prime example Professor Zang
often cites is China's astonishing
success in internet applications. The
fundamental digital infrastructure, the
4G and now ubiquitous 5G networks
largely created and insured by the state
sector extending to virtually every
village. He even joked to his French
friends that internet connections in
Tibet or Shinjiang are often better.
Better than central Paris. Yeah, I
remember reading that anecdote. It's
quite something.
Exactly. But on this top-notch
state-built infrastructure, the private
sector thrives. Companies like Ali
Group, Tik Tok, Teimu, Shane, they
flourish through incredibly intense
internal competition. This state
provided foundation allows private
innovation to just explode at a scale
and speed that's very difficult to match
elsewhere. So these Chinese inventions,
these global giants we see now, they
actually came from fierce domestic
competition, almost like a massive
innovation incubator.
Precisely. He explains that this isn't
just competition. It's what they call a
nunin. It's often translated as
involution, but professor Zang describes
it as this incredibly intense almost
hypercompetitive domestic environment.
Businesses, individuals, they constantly
push to innovate, reduce costs,
outperform each other. He argues this
extreme internal pressure is a
deliberate, even brutal driver of global
competitiveness.
Brutal, but effective, apparently.
Look at their auto industry. You have
literally over a 100 different
automobile plants producing electric
vehicles. Everything from luxury to
budget models. This fierce domestic
rivalry rapidly drives down costs,
accelerates innovation like crazy, and
makes them incredibly competitive
internationally. That dynamic, the state
infrastructure plus this intense market
competition, it really does sound like a
unique engine. How has this system built
up over decades impacted their
manufacturing and supply chain?
Oh, it has created an unparalleled
ecosystem. He points to places like the
Yangze River Delta. Their companies,
even global giants like Apple or Tesla,
can find virtually all the necessary
spare parts and components supplied by
the whole ecosystem within maybe a 100
km radius.
Incredible density. It's this logistical
efficiency and depth of interconnected
supply chains. It's simply unparalleled
globally and cannot be replicated
quickly. He argues this showcases the
long-term strategic planning involved
and the massive scale of industrial
integration China has achieved. It's a
key reason why many global companies
find it so difficult to derisk or you
know relocate their supply chains out of
China. The alternative simply isn't
there yet. Not at that scale or
efficiency. Okay, now let's turn to a
concept that often sparks intense
debate, democracy. Professor Zang
directly challenges the western paradigm
of democracy versus autocracy. He argues
the western understanding often boils
down to periodic elections, often funded
by big corporations. But China, he says,
has a different conception. Whole
process, people's democracy. What's his
core argument for this alternative view?
It sounds quite different.
Yeah, he advocates for a paradigm shift.
moving the focus from democracy versus
autocracy to good governance versus bad
governance. That's the key distinction
for him. For him, what matters most is
substantive democracy, what he calls the
purpose or the daw of democracy rather
than just procedural democracy or
democracy purely in form. He argues that
if a government consistently delivers a
better quality of life, effectively
addresses societal challenges, and
genuinely incorporates public feedback
into its policym, well, that constitutes
a more meaningful form of democracy than
simply holding elections that might be
swayed by money or frankly divisive
rhetoric.
So, how does this substantive democracy
translate into practice? Especially
given that many critics would point to a
lack of multi-party elections or certain
civil liberties in China.
That's the million-dollar question,
isn't it? He gives a compelling example
with how major laws are made. He shared
an anecdote about visiting a legal local
contact center where a draft law in this
case against family violence was being
discussed. Hundreds of ordinary
households participated offering direct
feedback face to face.
Really at the household level.
Yes. And this input directly influenced
the final law ensuring it reflected real
world issues like violence against the
elderly, not just the more commonly
discussed husband wife violence. He
argues this isn't a one-off. It's part
of a broader continuous engagement and
feedback loop that runs from the
grassroots all the way up. So, while it
lacks multi-party competition as we know
it, he'd say the process of governance
is deeply consultative and aims to be
responsive to the people's actual needs.
That's a fascinating look at the
legislative process from his
perspective. And Professor Zang argues
this whole process democracy also
extends to economic planning. Right. He
often points to China's long-term
vision.
Absolutely. If we connect these to the
bigger picture, look at China's current
world leadership in the electric vehicle
industry. That wasn't an accident,
right?
No, definitely not.
It's the direct result of four
consecutive 5-year plans. That's 20
years of solid executed work, consistent
policy, and coordinated investment. A
huge undertaking. Professor Zang often
contrasts this with the difficulties the
West faces with its own Green Deal or
climate change initiatives. He argues
the Chinese model is simply more
effective at long-term coordinated
transitions because it enables sustained
consistent effort towards a clear
national goal. It's less hindered by
short-term electoral cycles or, you
know, partisan gridlock. He would
contend that while western systems
debate and often reverse course, China
can lay out and execute a multi-deade
strategic vision.
It's certainly a different approach to
governance and planning, focusing on
that long horizon. Thinking about these
different systems, it brings us back to
Professor Zang's famous 2011 debate with
Francis Fukuyama. Fukuyama, who famously
argued for the end of history, predicted
an Arab spring in China. Professor Zang
was uh famously skeptical, predicting an
Arab winter instead, which, you know,
ultimately proved true. It certainly
made you stop and think about the limits
of universal predictions back then.
Indeed, that debate was truly pivotal.
And Professor Zong highlights how
Fukuyama's forecasts not just on the
Arab Spring, but also on issues like the
Ukrainian crisis, the global impact of
COVID, or even US elections, have often
proven incorrect. This, Zong argues,
suggests fundamental limitations in
Fukuyama's original end of history
thesis, which posited that universal
endpoint of liberal democracy. Zong
underscores the need to understand
China's unique civilization state
complexity rather than trying to apply
universal western centric prescriptions.
It just reminds us that historical,
cultural, and political contexts
significantly shape societal outcomes,
often defying simplistic narratives. He
argues Hukyama failed to grasp the
resilience and the distinct logic of
China's model. And this ideological
clash, this different understanding of
systems leads directly to the USChina
trade war started by Trump, continued by
Biden. Professor Zong has consistently
warned that the US is overestimating its
leverage. He uses that great line, Trump
says we have all the cards and China
says we made the cards. Can you
elaborate on what he means by that? It's
pretty punchy.
It's a powerful and succinct summary of
his view, isn't it? He argues the US
economy is far more dependent on Chinese
manufacturing and supply chains than
China is on US markets. He points out
that China isn't just a producer. It's
often the sole producer or supplies
maybe 80 90% of components for countless
manufactured goods. Everything from a
tiny specialized screw to critical heavy
machinery components.
So the dependency runs deeper than just
finished goods.
Much deeper. He frames it as a strategic
miscalculation by the US because the
sheer scale and integration of China's
industrial ecosystem particularly in
areas like the Yangsa or Perover Deltas.
It just cannot be replicated by the US
or any other country in a matter of
years. Companies like Apple or Tesla
rely on this robust network finding all
necessary parts within that 100 km
radius we mentioned. This makes the
trade war a strategic miscalculation
where in his view the US stands to lose
more because of the sheer impossibility
of quickly rebuilding such a
sophisticated and efficient supply chain
somewhere else.
That's a truly critical point about the
underlying economic reality, the
physical making of things. And finally,
on the global stage, Professor Zang is
also keenly focused on the financial
system. China is actively pursuing
ddollarization,
reducing its holdings of US government
debt, working with BRICS nations to
create alternatives to US financial
dominance. What's his take on the future
global financial system?
He sees this as an inevitable and
accelerating shift towards multipolarity
in finance as well. Professor Zang
points to the growing use of CIPS,
China's crossber interbank payment
system. He presents it as a
sophisticated high-tech alternative to
the older Swift system. the dominant one
now.
Exactly. And he noted as of March this
year, Chinese companies conducted 54% of
their crossber business in yuan compared
to 41% in US dollars. That's a
significant flip, right?
Yeah, that's a major shift.
He describes CIPS as a brand new
highway. It's blockchain based, offers
nearly instant transactions with almost
no fees. A stark contrast to the slower,
more costly, and let's face it, often
politically weaponized Swift system.
This is fundamentally about building
independent financial infrastructure,
reducing reliance on the US controlled
system.
And his argument about financial
leverage versus productive capacity,
especially in times of crisis.
Yes, that's crucial to his argument
about ddollarization. He contends that
in times of crisis or what he calls real
world confrontation, countries with
actual goods, industrial capacity, and
productive capabilities like China,
perhaps Russia, are ultimately in a much
stronger position than those relying
primarily on financial leverage or the
power of their currency alone. The
ability to produce what the world needs,
he argues, is the ultimate source of
strength, especially when financial
systems can be used as tools of
geopolitical pressure. Makes sense,
doesn't it?
It does. So what does this all mean for
the emerging global order looking
forward? Professor Zang sees
multipolarity as not just inevitable but
already underway. How does he
characterize China's role within it?
Well, he sees China as a reformer rather
than a revolutionary in this process. He
often contrasts this with how he might
describe Russia's approach. A reformer
in his view works within existing
international structures where possible,
but aims to gradually shift them rather
than seeking to overturn them
completely. He argues China is actively
shaping this multipolar future by
offering alternative development models,
alternative financial systems, and
different governance philosophies, but
without necessarily imposing them on
others. He explicitly contrasts this
forward-looking vision with what he
describes as Donald Trump's
backward-looking 19th century
merantalism, which he sees as trying to
return to an outdated economic model
focused on protectionism and bilateral
trade deficits rather than adapting to
the complex interdependencies of the
21st century. So, China's model, as Vang
describes it, is this blend of state
planning, intense market competition,
and social balance. A system really
built to look forward, not backward.
Whether it's reshaping global trade,
innovating technology, or challenging
dollar dominance, understanding this
model seems key to seeing the future of
the global order. The world is becoming
multipolar, and China, according to this
perspective, is definitely leading the
way in shaping parts of it.
Absolutely. And as you reflect on these
insights, maybe consider this. How might
the continued evolution of China's
unique model influence not just global
economics and power dynamics,
but also the very way we think about
effective governance and societal
progress in a rapidly changing world. It
certainly challenges many of our
established assumptions, doesn't it?
Makes you think.