Title: The Beijing Consensus: A Path to Growth, or a Path to Degradation?

Author, School, School System: Graham Long Catonsville High School Baltimore County, MD Grade Level: High School Duration of the History Lab: Two 45 minute class periods Curriculum Alignment: This lesson aligns with the following national standards in History/Social Studies: National Center for History in the Schools Standards: World History Era 9: The 20th Century Since 1945: Promises and Paradoxes Standard 2A: Analyze causes of the worlds accelerating population growth rate and connections between population growth and economic and social development in many countries. Standard 2B: Compare systems of economic management in communist and capitalist countries and analyze the global economic impact of multinational corporations. Standard 2D: Analyze causes and consequences of continuing urban protest and reformist economic policies in post-Mao China in the context of state authoritarianism. Standard 3A: Assess the degree to which both human rights and democratic ideals and practices have been advanced in the world during the 20th century. Standard 3A: Analyze connections between globalizing trends in economy, technology, and culture in the late 20th century and dynamic assertions of traditional cultural identity and distinctiveness. Collegeboard Advanced Placement World History: Period 6: Period 6: Accelerating Global Change and Realignments, c. 1900 to the Present 6.1.II. As the global population expanded at an unprecedented rate, humans fundamentally changed their relationship with the environment. 6.3.I. States responded in a variety of ways to the economic challenges of the twentieth century. A. In the Communist states of the Soviet Union and China, governments controlled their national economies. D. At the end of the twentieth century, many governments encouraged free market economic policies and promoted economic liberalization.

Objectives: In Lesson 1, students will define the following economic principles in order to understand the economic intentions of the Beijing Consensus: State-owned corporations Small business Inflation policy Foreign exchange policy

In Lesson 2, students will examine the following social and political issues in China and how they might influence the Beijing Consensus: Peaceful rise/foreign policy Pollution Infrastructure Human rights

Teacher Background Essay: This curriculum project was developed during a four week trip to China taken during July 2011 as part of a Fulbright-Hays Delegation. The purpose of the trip was to expose secondary school teachers to the economics, politics, and culture of one of the fastest growing economies in the world. The focus of the curriculum will be on the Beijing Consensus 1, the unofficial title for the Chinese government's plan for economic growth. This model of economic growth stands in stark contrast to the previous growth model used in the 1980s and 1990s, called the Washington Consensus.2 The Beijing Consensus comes around at an important time in the history of the world; as a result of the financial crisis of 2008, rightly or wrongly blamed on the profligacy of Western capitalism that lies at the heart of the Washington Consensus, many developing countries (and perhaps some developed ones) around the world are looking for a new model. As China has seen spectacular economic growth in the past dozen years, and escaped the financial contagion relatively unscathed, there is the potential for a dramatic paradigm shift in economic thinking. In this curriculum project, students will build a definition of the Beijing Consensus. On day one, students will look at general economic data of China, learning how the Chinese government manages the delicate balance of stateowned corporations and small free-enterprise. Students will also look at economic data to determine the effectiveness of these policies. In day two, students will look at the social and political costs of the Beijing Consensus. They will see how the quest for rapid infrastructure growth might have compromised safety, as the railroad crash of July 2011 suggests. They will examine the issue of pollution, an whether economic prosperity can co-exist with a clean environment. And students will also look at the issues of human rights and foreign policy. This lesson is designed for all students, from those on grade level to Advanced Placement. Enough documents and sources are provided so that teachers have flexibility to mix and match them depending on the reading ability of their students; A.P. teachers might choose to have their students look at all documents, while those teaching students of lesser reading levels might prefer to give their students the documents that are pictures or graphs. Ideally, this lesson should be taught during a unit on modern culture/history. Students should be familiar with past Chinese history from the post-Mao period, and some familiarity with the Washington Consensus will help students compare and contrast the two approaches. While none of the economic concepts presented are difficult, working knowledge of economic terms such as GDP, per capita, and an understanding of market functions will make the lesson flow much smoother. Materials: Worksheets 1 through 5. Resource sheets include full bibliographic citations.

1 For a highly detailed analysis of the Beijing Consensus, see http://fpc.org.uk/fsblob/244.pdf 2 For more details on the Washington Consensus, see http://www.cid.harvard.edu/cidtrade/issues/washington.html or http://www.imf.org/external/pubs/ft/fandd/2003/09/pdf/clift.pdf

Procedures: 1. As an optional opening activity, have the students read China Passes Japan as Second-Largest Economy from the August 15th, 2010 edition of the New York Times (http://www.nytimes.com/2010/08/16/business/global/16yuan.html?pagewanted=all). A worksheet is provided for students to answer focus questions. Alternatively, provide the students with a more recent article to analyze. The questions should emphasize China's relatively recent and rapid economic expansion, and it helps if the article provided contrasts China's economy with other countries, such as the E.U., U.S.A., or Japan. This assignment can be given one or two days ahead as a priming activity. 2. Explain to students that many foreign policy scholars have called China's formula for spectacular economic growth the Beijing Consensus. Tell the students that they will be spend the next two days developing a definition of the Beijing Consensus, as well as analyzing any drawbacks to it. 3. Students should be given Worksheet 1; it is here that they will be taking notes as they go through the readings. 4. Day 1 should be spent analyzing the Economic Strategies behind the Beijing Consensus. All students should be given the data sources on economics which can be found on Worksheet 3. Key Questions are provided to help narrow the students' focus. Note that information can be delivered in any variety of ways depending on reading level, prior knowledge, class size, etc. The data sources could be divided among groups, so that each group of students only looks at one data source. They can then share their information with the class. Alternatively, all students could look at all data sources. 5. As students read through the data sources on Worksheet 3, the teacher should be making sure that all students are moving toward an understanding of the Beijing Consensus: mainly, that the government balances small private ownership of business with heavy subsidy of large industry and government directed capital projects. This concludes Day 1 of the lesson. 6. At the start of Day 2, give students Worksheet 2. Have students pick what they believe to be the two most important economic strategies behind the Beijing Consensus and have them put them in the bricks. This will serve as a review of the previous day. 7. Explain to students that today they will be looking at the political and social costs of the Beijing Consensus. Give students the data sources from Worksheet 4. Again, the data sources are flexible enough that it can be done in groups or individually. Students should put their answers to Key Questions on Worksheet 1. 8. When complete, have students fill in two of the cracks on Worksheet 2. Then, have them write a complete definition of the Beijing Consensus which incorporates both the economic strategies and the political/social costs of those strategies. 9. Worksheet 5 is provided as an assessment. In an essay, students are asked to analyze the effectiveness of the Beijing Consensus and to speculate on its applicability to other countries. Licensing/Copyright Information All photographs included in worksheets/documents as a part of this curriculum project were either acquired from web via Creative Commons or taken by the author during the Fulbright-Hays Seminar Abroad in July 2011. In both cases, attribution is provided. News articles are provided, with citation, and are used under the education provisions of Fair Use.

Why Does China Matter?

As a high school student, sitting in your classroom right now, China may not seem to be a particularly relevant topic to you. A nearly twelve hour flight from San Francisco, how can a country so far away, and so foreign, possibly concern you? After all, you have the SATs coming up, or football practice, or prom! China matters far more to you than you realize, and as a citizen in a global economy it will be necessary that you understand everything you can about this country. For the reality is that while the period from 1945 to 1991 was defined futureatlas.com. "Chinese and American flags | Flickr - Photo Sharing!." Welcome to Flickr by the relationship and conflict between the United States and the Soviet Union, many pundits and scholars believe that Photo Sharing. the current period in history, the one in which you will spend http://www.flickr.com/photos/87913776@N0 most of your life, will be defined by the relationship (and 0/3033614888/ (accessed October 8, 2011). conflict?) between the United States and China. To that end, over the next two days you will be analyzing the spectacular growth of China, and trying to determine two things. First, you will determine just how has China achieved their economic growth. And more importantly, the you will be predicting the impact of this growth on the world. Please read the article provided, and answer the questions that follow. They will prepare you for the upcoming activities. 1. The criteria for determining the size of an economy is called Gross Domestic Product (abbreviated GDP). In 2010, what was the second quarter GDP of Japan and China?

2. According to the article, why does China have room to grow?

3. Compare the standard of living of the Chinese to citizens of Japan or the United States. Just because the Chinese economy is now the second largest, are its citizens the second most wealthy?

4. How are foreign companies around the world responding to this news? How will this help China grow even more in the future?

5. How does China's authoritarian government provide it, in the words of one analyst, with an advantage?

Worksheet 1: Examining the Beijing Consensus

As you have learned, China has seen a period of spectacular economic growth in the past fifteen years. Your task will be to examine China's economic strategies to fuel the growth, as well as look at the social and political issues that might hamper this growth. Using the analogy of the Great Wall of China, you will put each one of your economic strategies on a brick; together, those bricks will build what we will call the Beijing Consensus. The political/social challenges will each be a crack in the Great Wall of China; these cracks might help bring down the Beijing Consensus. In the spaces provided below, jot down all of the information from the readings.

Economic Issues
Data Source 1 Data Source 1

Political/Social Challenges

Data Source 2

Data Source 2

Data Source 3

Data Source 3

Data Source 4

Data Source 4

Worksheet 2: Building the Beijing Consensus, Brick by Brick

For the past two days, you have been researching the different economic and political strategies used by the Chinese government to develop their country and rise to global power; we are calling this group of strategies the Beijing Consensus. Your task is to look at the complete list of strategies you wrote on Worksheet 1. In the bricks below, pick the two economic strategies that you think are most important in the Beijing Consensus (i.e. the six that you think help China develop the fastest). Put them in the bricks of the Great Wall at the bottom of this page: you have built the Great Wall! Then, pick the two political or social issues that you think will be the biggest challenge to the Beijing Consensus; put them in the cracks of the wall. Finally craft a one sentence definition of the Beijing Consensus and write it below. Definition: The Beijing Consensus is ______________________________________________________________________ ___________________________________________________________________________________________________.

Worksheet 3: Economic Data on China

Data Source 1

Chart created by the author using data from: O'Rear, David. "Hong Kong, China and Whatever is about to happen in the US and Europe." Lecture, Fulbright-Hays Seminar Abroad from Hong Kong General Chamber of Commerce, Hong Kong, August 1, 2011.

Key Questions (put answers on Worksheet 2)

What is China doing to their foreign currency holdings? If China holds foreign currency, what does that mean it can easily do to another country? (Hint: If China wants to buy something overseas, it needs foreign currency...so the fact that China is accumulating foreign currency should tell you what about their future plans?)

Data Source 2

Key Questions (put answers on Worksheet 2)

What is the difference between the inflation rate in China and the United States historically?

Which inflation rate is more volatile?

Why might the Chinese government be more tolerant of a higher inflation rate? (Hint: do they have to answer to the people?)

Humpage, Owen, and Michael Shenk. "Chinese Inflation and the Renminbi." Federal Reserve Bank of Cleveland. http://www.clevelandfed.org/research/trends/2008/0208/01intmar.cfm (accessed October 14, 2011).

Key Questions (put answers on Worksheet 2)

What does the existence of small shops like the ones pictured suggest about the willingness of the Chinese government to allow private business?

Can China really be considered communist if this kind of private enterprise exists?

How do these small businesses strengthen the Chinese middle class? Photograph taken by the author in Shanghai, China on July 5th, 2011

Data Source 3

Data Source 4
Why China's State-owned Companies Are Making a Comeback 3 China's long economic rise began in the 1980s when the communist government began dismantling inefficient state-owned companies and expanding the private sector, allowing greater scope for unfettered capitalism. But in recent years, the pendulum has begun to swing the other way. Many of China's stateowned enterprises (SOEs) have grown into giants, eclipsing the relatively young, private companies that have contributed heavily to the country's progress. That trend is being reinforced as China implements economic stimulus measures that in practice boost state-owned giants while private companies are left largely to fend for themselves. Companies that are majority owned by the government include some familiar names, among them China Mobile, the world's largest mobile phone company by subscribers, Baoshan Steel and China National Petroleum Corp. The role they play in China's hybridized economy appears to be expanding due to the global slump. As Beijing fights recession with a $586 billion stimulus package and as banks boost lending at the behest of the government, the private sector looks to be getting squeezed out. Loans to private firms in January totaled $61.7 billion, down $102.5 million from the previous month, even as total lending has swelled, according to the All China Federation of Industry and Commerce. It isn't just financing that is flowing to SOEs. So are revenues from Beijing's infrastructure-heavy stimulus package. State-owned companies maintain a strong presence in construction, the sector that will gain the most from the surge in government spending.

Key Questions (put answers on Worksheet 2)

What is the Chinese economic policy toward the state-owned enterprises (SOE)? What are some examples of SOEs? When you look at the cited SOEs, how important are they to an economy? Therefore, why do you think they are controlled by the government? How does government support of SOEs help the economy? (Hint: think back to their importance.)

Ramzy, Austin. "Why China's State-owned Companies Are Making a Comeback - TIME." Breaking News, Analysis, Politics, Blogs, News Photos, Video, Tech Reviews - TIME.com. http://www.time.com/time/world/article/0,8599,1894565,00.html (accessed October 14, 2011).

Worksheet 4: Political/Social Issues of China

Data Source 1
"China Threat" or a "Peaceful Rise of China"?4 "China's rise" can be seen as a quintessentially political processthrough which the ruling Communist Party has sought to shore up its legitimacy after the Cultural Revolution irreversibly changed the nation and caused three crises of ideological belief, faith in the CPC, and confidence in the future. As the Party realized that the performance-based legitimacy was the only hope for prolonging its rule, economic development became the highest politics. Consequentially, the success of economic development would have to cause political implicationsthe external ones are carefully monitored and evaluated by China's neighbors and the only superpower of the worldthe United States. Will China become a threat to the United States, Japan, and surrounding countries? The reason for American concern mainly arises from its hegemonic status in the world politics and the ideological incompatibility of China with the Western value system. China's stunning economic growth has convinced the West that it is just a matter of time until China becomes a world superpower. But its ideological orientation makes China a revolutionary power that is threatening both to the United States' status and global structure. In addition to the ideological threat, many other neighboring countries have more stakes in China's new move. For Southeast Asian nations, the presence of a sizeable and extremely rich Chinese ethnic group and their increasing dependency upon China's economy for growth forced them to be very careful in handling their relationship with China. With a continental size (China has almost two times the territorial and population sizes of all other Asian Pacific countries combined), China consumes a tremendous amount of foreign direct investment and pops out huge volume of exports; other countries feel the competition from China. At this moment, no government in the Asian Pacific region has adopted a clear anti-China policy; but sporadic anti-Chinese riots have occurred in Malaysia, Indonesia, the Philippines; and strong resentment against the Northern economic and cultural invasion has surfaced in Myanmar (former Burma), Thailand, Vietnam, and other countries.

4 Ming, Xia. ""China Threat" or a "Peaceful Rise of China"? - New York Times." The New York Times - Breaking News,
World News & Multimedia. http://www.nytimes.com/ref/college/coll-china-politics-007.html (accessed October 15, 2011).

The combination of stunning economic growth and unpredictable political governance causes deep concerns about China among the nations in the world. The Chinese leadership has realized the urgency to calm down these concerns and to build a supportive international environment for its ascendancy. To make its rise less a threat, the Chinese government has sponsored many PR events, such as exhibitions in foreign countries, promoting Chinese language programs, and so on. But most importantly, the Chinese premier Wen Jiabao put forward the thesis of "China's peaceful rise" in his speech to a Harvard University audience in December 2003. Under this thesis, there are several points: First, China's development depends upon and in return will contribute to the world peace; second, China will resort to peaceful means for development; third, China's development will rely more on its own resources and market; fourth, China is prepared for a long-term process of hard work, even several generations, for economic prosperity. Finally, even as China has achieved its economic development, it will not seek hegemony in the world or come out as a threat to any country.

Key Questions (answer on Worksheet 2)

Why does the structure of the Chinese government require it to have continual economic development? Why might the United States be concerned about the rise of China? Why do the other countries in Southeast Asia feel concerned about China's rise? What are the five components of peaceful rise? Do you think that the promise of peaceful rise helps to assuage fears of Chinese hegemony?

Data Source 2

Both 2) Key Questions (put answers on Worksheetphotographs taken by the author in Beijing, China on July 28

th

, 2011.

You see a tremendous amount of smog in both photographs. What effect does this have on the quality of life of a citizen in China (on some days, it is next to impossible to go outside)? What does this smog suggest about environmental regulations/laws in China? Is the trade-off of profound economic growth and manufacturing power worth the environmental cost?

Data Source 3
Deadly train crash in China provokes outrage5 ... Barely a month after China launched its much-vaunted Beijing-Shanghai high-speed rail link, two so-called bullet trains collided near the eastern city of Wenzhou, south of Shanghai, killing dozens of people and injuring hundreds more. The trains that crashed are technically not part of the high-speed rail network that China has been aggressively building out across the country, but they are said to be the first generation of high-speed technology adopted by the Chinese. Widespread dissatisfaction and complaints were already brewing online days after the launch of the new Beijing-Shanghai high-speed rail link. In at least three separate suspensions of service just after its opening, several new trains were delayed due to poor weather, leaving passengers stuck on trains for hours without air conditioning after the power was shut down. Saturdays collision only fueled simmering anger. Very soon after the crash, Chinese Internet users found a link to a 2007 interview quoting He Huawu, a chief engineer from the Railways Ministry, Our high speed train will not collide, because of our safety design. Zhang Shuguang, another chief engineer who appeared in the same 2007 report, was just suspended this year as part of a corruption investigation. The crash also reinforced skepticism about recent Chinese claims that the country is producing the best rail technology. Two days before Saturdays crash, the state-run Peoples Daily newspaper rebutted criticism of the BeijingShanghai high-speed rail link crowing about its superior technology. A Chinese Railways Ministry spokesman went even further, claiming his countrys high-speed rail technology was far better than that of Japans bullet trains or shinkansen.

Key Questions (answer on Worksheet 2)

These trains are part of China's new infrastructure investment. What does this incident suggest about the Chinese: that they are more interested in growth or safety? What does this article seem to suggest about corruption within the Chinese construction industry?
5 Mong, Adrienne, and Bo Gu. "Behind The Wall - Deadly train crash in China provokes outrage." Behind The Wall. http://behindthewall.msnbc.msn.com/_news/2011/07/25/7157046-deadly-train-crash-in-china-provokes-outrage (accessed October 15, 2011).

Data Source 4
Chinese activists seized in human rights crackdown accuse authorities of torture 6 Activists and lawyers detained in China's human rights crackdown this year suffered beatings, sleep deprivation and multiple interrogations and were forced to make videotaped "confessions", according to accounts obtained by the Guardian. Scores of people were seized in the clampdown. While some were held only briefly, and several activists and dissidents were formally detained or sent to re-education through labour, others were held for weeks or months at unknown locations in breach of the current law, say experts. Most signed guarantees they would not write political material online or speak to foreigners. "People are genuinely scared and that's why they are not talking," said Wang Songlian of the Chinese Human Rights Defenders network. "I think all of the people who disappeared for a period of time have experienced some form of torture or mistreatment. "Even when the [rights] community was being targeted before, people were always quite defiant. This time it is like a bag with a hole punctured: the air has gone out of it." Relatives have also been silent. But a handful of those held have now disclosed details and the Guardian has spoken to sources with knowledge of others' lengthy detentions. Friends say many of those detained lost significant amounts of weight and show clear signs of trauma, including disturbed sleep and memory loss. Many were hooded before they were driven away and several were badly beaten in the first day or two. In most cases they were watched around the clock by two officers at a time and deprived of sleep. Detainees were also forced to sit in stress positions for hours at a time. Although it is common practice in Chinese prisons to make people sit still for long periods, it was much more intensely enforced with these prisoners, so even slumping or closing their eyes could prompt a rebuke or threat. Some were handcuffed for long periods. In other cases, air conditioning was run at full blast until rooms were unbearably cold; one of those thought to have been involved, the lawyer Tang Jitian, has since been diagnosed with tuberculosis, say friends. The ministry of public security and police in Beijing, where many were seized, did not respond to queries. Nor did the ministry of justice comment on the implications for amending the law.

6 Branigan, Tania. "Chinese activists seized in human rights crackdown accuse authorities of torture." The Guardian News Online. http://www.guardian.co.uk/world/2011/sep/13/china-activists-human-rights-torture (accessed October 15, 2011).

Photograph taken by the author in Tiananmen Square, Beijing, China on July 24th, 2011.

Key Questions (answer on Worksheet 2)

What is the current level of political freedom in China? Why is the government becoming more concerned about potential democratic inroads being made into the country? What does the picture above suggest about the police state in China?

Worksheet 5: Analyzing the Beijing Consensus

Photograph taken by the author in Shanghai, China on July 6th, 2011.

As you have seen over the past two days, the Chinese Government has developed a new growth model, referred to outside the country as the Beijing Consensus, as the path to rapid economic growth. And as you saw when you examined the economic statistics, it seems to be a success. However, as you also saw in the political and social analysis of the Consensus, there are some very real problems that China is confronting, as well as inherent contradictions between her goals and her means to achieve them. The photograph on the other side of this page truly captures the dichotomy that is China, and the conflict built within the fabric of the Beijing Consensus. In a well developed essay, you will answer the following question: Explain how this picture presents both the triumph and the inherent challenge of the Beijing Consensus. Your essay should discuss the following: What is the Beijing Consensus? Define it. What are the two most important strategies or actions of the Beijing Consensus? (Hint: look at the two bricks you have on Worksheet 2) What does the presence of a large corporation like Citi suggest about how foreign companies view the country's future? What is the irony of displaying a communist hammer and sickle on the side of a multinational corporate bank? How does this show the contradiction of the Beijing Consensus? What are the two most challenging political/social issues that China must address within the Beijing Consensus? (Hint: look at the two cracks you have on Worksheet 2). Based on the statistics and information you have seen, predict the future of the Beijing Consensus. Are the cracks enough to bring down the bricks? Can this model of growth be replicated elsewhere, such as the United States? Or is China a unique situation?

Photograph of the Shanghai Financial District taken by the author on July 6th, 2011.