China’s and Brazil’s economic development over the last 60 years has been remarkable and earned them the status of ‘rising powers’. Especially China’s transformation stands out as it increased its share of global GDP more than six fold from 1970 – 2009, to around 6%. Brazil’s share actually decreased slightly but still remains stable since 1995 at around 2.5% ( Farooki and Mohan, 2013, p. 106, fig. 5.1 ). Notably, both countries increased their service sectors’ share of domestic GDP – China by 21%, Brazil by 23% - from 1980 to 2009, hinting at increasing sophistication (ibid, p. 108, table 5.1). This essay shows that these increases are results of structural changes in the global economic system and intentional action in both countries, which were initiated by international, national and non-governmental actors. Comparisons and contrasts are made to show how China and Brazil moved towards broader goals, such as governance, macroeconomics, and industrialization; as well as narrower ones, like decisions on aid and rural/urban development. Frameworks provided by development theories inform this attempt. The concluding section will summarize the main points and close with the argument that, although both countries’ trajectories diverged nationally, major international crises linked their ascendance.
In order to make sense of China’s and Brazil’s rise, Development theories provide a great deal of support. Structuralist theory, for example, is often associated with Marxist theory. It acknowledges that capital accumulation creates inequalities, which a responsible state should have the moral obligation and legal resources to mitigate through wealth re-distribution, after the societal structures have been thoroughly examined. Interventionism, on the other hand, claims that structuralism alone does not actually create enough wealth, and thus should be complemented with neoliberal approaches, which on the other hand, favours liberalized free market regimes, e.g. lax labour and environmental regulations and therefore rather less intended actions (Hanlin and Brown, 2013, p. 34). A people-centred approach criticizes all other views for their main concern with economic development. Instead, democratic participation and empowerment should come first (ibid, p. 43). When the ‘Peoples’ Republic of China’ (PRC) was founded in 1949, after rural-settled communists defeated the urban-settled nationalists, it enacted policies resembling structuralist views. The Mao administration started to put agriculture at the centre of macroeconomic restructuring, resulting in the ‘Great Leap Forward’. This initiative aimed to industrialize the country through re-distribution of land to the peasantry, so they could form the backbone of the PRC’s independent sustenance. Urban policy, on the other hand, actually showed neoliberal traits as petty capitalists could keep their enterprises, provided they were not monopolistic. Yet, it was the state that determined production quantities, as it slowly took over firms. In order to motivate workers, laws were enacted that divided the population in rural and urban, and gave generous benefits employees in state-owned companies . This type of planned economy, however, was a failure because famine ravaged the country during the period of the late 60’s till late 70’s. It was dubbed the ‘Cultural Revolution’ and aimed to erase capitalist thinking (Mohan, 2013, p. 67/68). Complicating the situation was the ideological rift between liberal capitalism and communism in the international system. The US’s stiff resistance to communism and dominance in the liberal capitalist world was also reflected in the stance international NGO’s like the IMF took against China. Loans that could kick start the economy, were thus virtually unobtainable.
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- development theory theories China Brazil invest policy crisis crises capitalism communism Cold War liberal free market neoliberal neo-liberal Marxist accumulation prosperity Cultural Revolution Mao IMF petrodollar loans debt agriculture international