The first economic and policy recommendations were conceived in the year 1989 by the reputed economist, John Williamson and were referred as the ‘Washington Consensus.’ These recommendations would be accepted globally as a convenient model upon which growing economies and developing countries could base their all their political and economical potentialities.
Focused in achieving its mission to the world, the Washington Consensus had strongly embraced all aspects of free-market at its infancy stage.
Some of these ideals included privatization, open trade policies, and deregulation and were among the major policies that would be used to provide a promising prescription for development and advancement in the developing nations. That was the very humble and the seemingly promising beginning of the Washington Consensus.
However, the implementation of the Consensus was not smooth all through and it bore mixed results with the worst part of it being incessant instability in the global financial markets. In most cases, the Washington Consensus was observed to be characterized by a number of currency crises, recession, and stagnation, thus resulting to the collapse of economic systems of several countries in the world1.
The 2007 financial crisis, whose serious implications to the global economies are yet to subside, remains the most recent blow associated with the Washington Consensus. The Beijing Consensus is currently viewed by many as the alternative development model to the fallen Washington Consensus.
With the advanced economic developments as well as the undoubting market stability currently witnessed in China, there is no doubt that Beijing has really presented a certain threat to the Washington Consensus.
With the current development models witnessed in Beijing, China, it is certainly obvious that China is fast gaining splendid appeal within the developing world as the most influential nation when it comes to development of third world nations. As it would be observed, China has shown great economical stability and proficiency than any other country in the world.
Even at this moment when the global economy is yet to regain its full composure, following numerous financial crises which had befallen the world in the last two or so decades, China had faced none of these problems and it is still very strong ahead with its economy.
This clearly explains the reason as to why the Chinese are free from what many developed countries are grappling with presently, in attempts to regain their economical composure following the 2007 financial crisis.
Considering the context presented by the Chinese domestic business as well as its foreign trade, there is every reason to believe that the Beijing Consensus has turned out to become an attractive economic development model for many rising countries in the world in preference to the Washington Consensus2. Beijing Consensus values the necessity for a unique approach in relevant to the unique challenges of each nation.
This Consensual was first conceived in the year 2004 through the observations of Joshua Cooper Ramo in his article, ‘The Beijing Consensus.’ Cooper’s argument would be based upon three big ideals which dominated the Chinese development. Through these ideas, the author provided a set of suggestions on how the developing world could utilize the strategies in China’s success into their own success plans.
China is observed to have been doubling its incomes and outputs with every ten-year period that passes, since opening and reform in the year 1979. The World Bank currently observes that, China has succeeded in uplifting more than 300 million people globally out of imminent condemnation of poverty in a period of just three decades.
It has been in the concern of the Chinese authorities recently, to make China a more sustainable developmental model for other developing nations through a trade-based strategy that enables the country to take its success strategies and mission across the borders to other developing nations who are angling to stay free from the bondages of power politics and hegemonism.
In all dimensions, China has eventually shown up splendidly to provide glittering hope for third world countries, after the sudden failure of the Washington Consensus in its holistic missions. Currently, many developed and developing countries have expressed strong willingness and attitude in following the strong paradigm of development offered by the China.
According to Ramo, a new beginning characterized by new attitudes to developments, politics and the balance of power among nations is rising under the Beijing Consensus. Presently, China has grown up to elude its number one competitor and rival in technology and economical matters, the US, in many ways.
The dominant ideals that define the Chinese developments and adversity and which are constituted in the framework of the Beijing Consensus, have been the force behind the success of the next major icon in the global economy after USA and Japan.
Through these ideals or theorems, the Chinese have massively gained full control of their economical and political strength, thus succeeding in attracting and maintaining strong foreign trade ties with the entire world. China’s booming trading affairs with external subjects defines the stability enjoyed by the Chinese in the global trade.
China’s outstanding position at the international economy as well as its wide interactions with the outside world is among the many achievements which the country prides of today. As observed by Ramo, this progressive development of China as the next global economy leader can be aligned to three overarching ideals or theorems which include commitment to innovation, Pursuit of dynamic goals and self determination.
Commitment to innovation Innovation serves a significant role in the development and advancement of countries. Through a strong conception of effective forms of innovations, the Chinese have diversified the density of their society. As a matter of fact, China comes second to none in almost all fields of production, ranging from farming strategies to the vast electronic industry, among other others.
For governments to address the incessant challenges frequently posed by the changing social and economic environment, it would be necessary for them to actively embrace the idea of innovation3. Innovation brings out constant changes as well as recognitions that are likely to steer developments in all sectors of the economy.
This ideal repositions the necessity of innovation as a way of creating change which is likely to adverse faster than the potential problems that are likely to arise as a result of the changes. Taking the example of China, it has always established effective policies whose main focus is to address and solve those problems directly affecting the citizens.
To be able to achieve this objective, the innovators and policy makers in China have always tried to identify the needs of the people first before establishing the most desirable intervention on those needs. This is evident in the common practice of the Chinese government to regularly carry out public opinion surveys so as to actively evaluate the impact of its policies on the citizens.
This innovative policymaking staregies where both the government and the citizens take part is a policy that has been successful in China, thus enabling it to attain a strong economic growth and stability among other significant approaches. This innovative approach is emphasized by the Beijing Consensus as a key developmental approach which could serve as a developmental model to other developing nations.
Innovations are observed to have had widespread benefits as far as the Chinese developments are concerned. The trend has helped to bring people together through connection webs and it cuts to change, thus facilitating ways of communication.
The improved channels of innovation utilized by the Chinese have largely helped to intensify the density, thus facilitating rapid developments in China as it is manifested through Beijing city among other urban zones within the country. One of the best forms of innovation in China can be observed in the agricultural sector, which was noted to have grown faster than any other industry in the country, during the 1980s.
Chinese farmers had long been considered to be among the most tradition-bound workers globally. However, with time, they would absorb and incorporate new technologies in agriculture such as improved drainage systems and better engineered seeds. Pursuit of dynamic goals This theorem states that a whole set of effective modern tools would be necessary in addressing chaos which is hard to control from the top.
This ideal of the Beijing Consensus partially advocates for utter rejection of policies that are known to exaggerate a lot of concern in per capita GDP4 as the determining force behind development priorities4.
Over the time, China has strongly maintained its attention on aspects such as individual equity and quality of life as the most appropriate measures that would come first in facilitating substantive achievements for any growing economy.
The Beijing Consensus observes that, an increasing GDP will not be able to solve the many problems affecting people single-handedly, but should be sustained with other effective strategies and interventions such as the one ones proposed here to be able to steer positive achievements. One of the new approaches applied by China applies in encouraging development would emphasize on the management of chaos.
Self determination This theorem as applied by China in its development plans, observes the need for the third world countries to incorporate the spirit of independence through financial self-determination. According to Ramo, leverage is the best policy to advance forwards and make a positive change towards developments.
This actually has been the route taken by various hegemonic powers having immense authority and control over the global economy.
Leverage is observed to be a convenient way that can be used by the less-developed countries to keep strong economical independence and this way, the countries will be creating a platform for their own financial sovereignty or independence apart from having to depend on others for financial support and sustenance.
What comes out clearly from this theorem is that, it is possible for the rising nations to design and implement their own developmental plans without having to rely on the unfavorable terms provided by the fallen Washington Consensus.
This perception, as it is constituted in the Beijing Consensus presents a big challenge to countries within Africa and some parts of the Middle East, who for a very long time have been subjects to incursion and exploitation by the Western powers simply for showing the attitude of overdependence to those developed countries.
Indeed, this nuisance form of habit was among the priorities that would propel China to extend its foreign relations to the regions through a fleet of developmental infrastructure and investments, with the aim of lifting them economically so that they can be independent of their own someday.
With these observations, it is precisely clear that the Beijing Consensus continues to play an increasingly significant task in the shaping of future economical developments allover the world. In its efforts to remain a leader in global affairs, China has continued to play a predominant role in the development and reform of other economies in the world5.
It is widely recognizable that, China is a real model in economy and its undertakings in various developmental approaches have formed a platform upon which third world countries could place and shape their policies. More importantly, disdain with the fallen Western model has increased the appeal of the Beijing Consensus in the awakening world.
All these observations are indicative of the increasing significance of the Chinese territory as a force to reckon in the global economy and also as a recognized world power. These are enough reasons why the Beijing Consensus as it was proposed by Joshua Cooper Ramo should be accepted as the possible alternative for the Washington Consensus, which is still the currently accepted model.
Through the alternative development philosophy which has proved to generate strong impacts to the ever-changing international environment, China has truly turned up as an attractive political economy paradigm for many developed and developing nations in preference to Washington consensus.
Bibliography
Halper, Stefan. The Beijing consensus: how China’s authoritarian model will dominate the twenty-first century. Phoenix: Basic Books (AZ), 2010.
Handelman, Howard. The challenge of Third World development, 5th edition. Upper Saddle River: Prentice Hall, 2008.
Huang, Yasheng. “Rethinking the Beijing Consensus.” Asia policy 11, no. 6 (2011): 1- 26.
Ramo, Joshua. The Beijing Consensus. United Kingdom: The Foreign Policy Centre, 2004.
Williamson, Johnson. “The strange history of the Washington consensus.” Journal of Post Keynesian Economics 27, no. 2 (2004): 195-206.
Footnotes
1 Johnson, Williamson. “The strange history of the Washington consensus.” Journal of Post Keynesian Economics 27, no. 2 (2004): 199.
2 Howard, Handelman. The challenge of Third World development, 5th edition (Upper Saddle River: Prentice Hall, 2008), 72.
3 Joshua, Ramo. The Beijing Consensus (United Kingdom: The Foreign Policy Centre, 2004), 12.
4 Stefan, Halper. The Beijing consensus: how China’s authoritarian model will dominate the twenty-first century (Phoenix: Basic Books (AZ), 2010), 23.
5 Yasheng, Huang. “Rethinking the Beijing Consensus.” Asia policy 11, no. 6 (2011): 7.