By Antoaneta Bezlova
BEIJING, China, January 31, 2008 – The pending appointment of a Chinese academic as chief economist in one of the world’s prime financial institutions, the World Bank, comes at a time of symbolic shifts in economic power from west to east and foreshadows a more assertive China on the international stage.
News that Lin Yifu, or Justin Lin, well respected in Chinese government circles, is to succeed Francois Bourguignon at the top job of chief economist for the Bank has now circulated for several weeks, giving rise here to debate about China’s future role in leading global institutions.
In recent years China has been lobbying for more voting power in the International Monetary Fund (IMF) and its increasing assertiveness in the World Trade Organisation (WTO) has been rewarded with the appointment of a Chinese judge to the trade body’s top court.
Observers have hailed Lin’s promotion as testimony to the attraction of China’s political-economic model to developing countries. They also speak about the dawn of a new era at the Bank where the supreme reign of ”Washington consensus” would be replaced with a new set of economic policies where the government plays the role of the invisible hand previously reserved for the markets.
”The appointment comes at a time when a growing number of countries from Africa and Latin America are gradually abandoning the simplistic formulas of comprehensive market liberalisation and massive privatisation, preached by the ‘Washington consensus’, and turning to China’s model of development for inspiration,” said an opinion in the 21st Century Business Herald this week.
”After all, China is not only the World Bank’s leading loan recipient but also its paragon student in poverty reduction,” it added.
The prospect of U.S. recession, coupled with wage stagnation and rising income inequalities in some of the world’s richest countries, have focused world attention on the ascent of emerging economies like China and India.
As questions about the benefits of ever-faster globalisation and free trade multiply, the example of China where the government defines the margins of market operation appears as an attractive alternative to the conventional free-market capitalism.
”China is in a unique position to ‘re-write’ the macro-economic policies of the past,” Lin Yifu told the China Business News in an interview. ”Because of China’s success in transforming the economy and sustaining its growth for a long time, everybody wants to know the formula behind.’
Lin Yifu, 55, established his career researching the fundamentals of economic development in China, focusing in particular on agricultural economy and redistribution of wealth. He studied economics at Beijing University, China’s most prestigious university, and went on to earn a doctorate in economics from the University of Chicago in the U.S.
Lin’s official biography highlights his founding of the China Centre for Economic Research at Beijing University and his stints at a top research think tank of the State Council, advising the government on rural polices and issues of development.
Official accounts of Lin’s background tend to omit his defection to China from archenemy Taiwan where he was born and served in the army in the late 1970s. More pronounced is his tenure as a research scholar at the University of Yale where he did post-doctoral studies.
Lin is credited with putting forward a new theory about the causes of the Great Leap Forward (1958-61) famine, that killed 30 million people in China, in the wake of Mao Zedong’s radical experiment with rapid industrialisation.
While other Chinese academics have argued that the famine was caused by three consecutive years of bad years, which reduced crops and created food shortages, Lin has suggested the main reason lied with the ”urban bias” of Beijing’s misguided central-planning policy at the time that diverted food to the cities at the expense of the countryside.
Lin however, stops short of discussing what Indian economist Amartya Sen has termed as the ”political complexity” of famine, such as the lack of independent news media and a democratic system.
Amidst the general tone of pride felt by Chinese academics at Lin’s appointment to the Bank there have also been notes of caution, suggesting that China is still in the middle of huge transformation and it is perhaps a little too early to be emulated as a development model.
The part of China’s experience that makes the World Bank most proud is Beijing’s success in dramatically reducing poverty over the last 30 years of guided market reforms. But experts here point out that human progress is determined not just by the statistics of economic growth.
”There is a multitude of problems in China’s development that still need to be resolved before we can talk about exporting China’s model — from the society’s growing income inequality to the deteriorating environmental situation,” says Deng Yuwen, researcher on China’s reform and opening up policies.
Lin’s tenure at the Bank is expected to strengthen China’s ties with the global body. The country is already one of the bank’s leading loan recipients but in recent months has been touted also as a development partner in Africa.
Upgradation of the relationship came during Robert Zoellick’s first visit to China as the Bank’s president late last year, when Beijing agreed for the first time to become donor to the bank’s fund for poor countries.
In his previous job as U.S. deputy secretary of state, Zoellick introduced the concept of China as a ”responsible stakeholder” of the international community, demanding that Beijing acts in line with its growing global clout.(IPS)