The New York Review of Books

Three superb recent books by John Friedmann, Pun Ngai, and Elizabeth C. Economy explore the effect of China’s economic “rise,” not on the United States but on China. John Friedmann’s China’s Urban Transition looks at it through the lens of urbanization. Mao Zedong was anti-city, partly for military reasons: industries were to be dispersed into western mountains and caves, provinces were to be self-sufficient. The population was divided into a privileged urban minority (17 percent) and an exploited rural majority (83 percent). The Maoist city was seen as a production, not a consumption, unit, with workers coralled into factory barracks. The flow of rural labor to cities was tightly controlled; indeed in the decade of the Cultural Revolution millions of “decadent” urbanites were forcibly sent to the countryside. The one-child-per-family policy, originally introduced in cities, held in check the urban population.

For Mao’s ideas, Deng Xiaoping substituted the “Ladder Step” doctrine. The country was divided into three big regions, coastal, central, and western, each to be assigned a specific task in overall development. Priority was given to the coastal region. Prosperity would be generalized, not so much by trickling down as trickling west. Four hundred and twenty-four focal growth points were identified mainly in two delta areas, those of the Pearl and Yangtze rivers. This approach implied opening up the cities to rural labor and opening up investment to foreign capital. Hong Kong businessmen shifted most of their light industry—toys, clothing, low-end electronics—into the Pearl River delta. Local authorities gave them free land, free factories, and free rein. The resulting increase in rural–urban inequality—the inequality ratio reached the same level as America’s—has shifted attention back to developing central and western China, now being linked to the coast by huge transport and communications projects.

The unique feature of China’s development during the Deng period was the amazing upsurge of rural industries, leading to the creation of vast urban sprawls radiating out from the cities. It was these “township village enterprises” (TVEs), now employing a quarter of China’s workforce, which lifted 200 million people out of poverty in a decade. This was a form of growth that was not so dependent on foreign capital. Why did rural manufacturing, promoted so assiduously and unsuccessfully by aid agencies all over the developing world, happen spontaneously in China?

Friedmann combines several answers: very high rural population densities (comparable to metropolitan densities elsewhere), large numbers of underemployed workers who could be moved out of agricultural production without affecting output, historical antecedents of industrial production in craft traditions, resourceful local leaderships, entrepreneurial talents, and a high level of household savings. TVEs were the product of a remarkable convergence of Party, local government, and private business, often with the local Party boss becoming the leading entrepreneur, and the villages being reorganized as companies or conglomerates, out of whose profits collective services like schools and hospitals could be financed. This is a property system unknown in …