We see the progress today that China has developed a treasure of modernity in terms of its World figure both in economic development and its strong military power with countless path of ups and downs in the past. We are more concerned with the historical study of its institutional modernization than a mere philosophical debate over its development and can discuss its various levels of struggle for ‘Substitute Modernity’2 since mid-19th century(the two opium wars) to till date.China, Institutional Modernization

Sahoo, Ganeswar

English

Research Papers in Economics

 
     
PATH OF CHINESE INSTITUTIONAL MODERNIZATION 
                  GANESWAR SAHOO                                                                                                                             
                  Master in Development, Innovation & Change  
 
 
INTRODUCTION:  
       The term ‘Modernization’
1 is sort of competition for  making modern in appearance or 
behavior. But in more concisely we can describe ‘Modernization’ is sort of modernity in 
many ways specially economical, social, scientific, technological, industrial, cultural and 
even  more  we  can  say  political  progress.  As  we  are  discussing  the  institutional 
modernization  that  cover  all  the  above  modernity,  can  be  rural  development  , 
rationalization  and  even  urbanization  to  add  few.    In  my  opinion,  ‘Institutional 
Modernization’  is  a  process  of  development  and  a  progress  of  various  degrees  of 
institutions in a society. 
If we see the progress today that China has developed a treasure of modernity in terms of 
its  World  figure  both  in  economic  development  and  its  strong  military  power  with 
countless path of ups and downs in the past. We are more concerned  with the historical 
study  of  its  institutional  modernization  than  a  mere  philosophical  debate  over  its 
development and can discuss its various levels of struggle for ‘Substitute Modernity’
2 since 
mid-19
th century(the two opium wars) to till date. 
FIRST MODERNIZATION: China’s Historical Background 
After the two opium war from 1840-1860, all high ranking mandarins Zeng Guofan, Zuo 
Zongtang,  Zhang  Zhidong  and  Li  Hongzhang  during  the  late  Qing  Dynasty  actively 
predicated in country’s development what was known as self-strengthening movement. 
Since the Chinese culture was based on westernization, so the state leaders were keen 
interested to modernize its military with western techniques but this effort brought down 
__________________________ 
1.  The first definition of the term ‘modernization’ is cited from the word web dictionary. 
2.  I used the term ‘Substitute Modernity’ instead of ‘Alternative Substitute’ used in ‘From Westernization to 
Globalization-a brief history  of Chinese  modernity’ by Chen Lichuan.  Though the both terms have same 
meaning but I prefer the term ‘substitute’ as China is replacing its old modernity with a new one from time to 
time instead of finding an alternative. This is my own view and not a contradictory to the old one in any ways.  
     
during the period 1894-1895 war against Japan. In 1898, a reform had been initiated by 
prominent reformer Kang Youwei and his disciple Liang Qichao to imitate the function of 
the Meiji Restoration in Japan in keeping an eye to transform the Manchu Dynasty into a 
constitutional  monarchy.  This  reformist  movement  and  the  self-strengthening     
movement is called as ‘defensive modernization’  by Luo Rongqu
3. This reformer suddenly 
took a new turn when the Empress Dowager Cixi acted against Emperor Guangxu, who was 
in favour of the reform. Finally, It turned into a radical revolution under the leadership of 
Zhongshan  alongside  Huang  Xing  and  Zhang  Binglin.    After  a  remarkable  process  of  
questioning and uncertainties over the Chinese future, the revolutionaries and Chinese 
reformists agreed on that radical or gradual reforms that lead to a new modernity to China 
and consented upon the western concept of revolution that will bring a rapid growth in 
Chinese society. 
 
SECOND MODERNIZATION: 
A new revolution began in 1911 with the leadership of Sun Yat-Sen, the founder and the 
first president of the republic of china. Though it changed the two thousand old political 
regime but the political culture remained same as before.  As Sun became the provisional 
president but could not handle the power due to substantial pressure from the imperial 
army and turn power over to Yuan Shikai, the commander of imperial army and the prime 
minister of then Qing government. In 1913, Chinese National Party(KMT) headed by Yuan 
Shikai won the country’s first legislative election. Song Jiaoren who was prepared to form 
the government based on the western democracies model, assassinated and as a successor 
Yuan formed the government, elected himself as the president of republic of china and 
dissolved the Chinese National Party(KMT) and the parliament. The president as a military 
dictator enjoyed unlimited powers and made several changes in Chinese constitution that 
gave him rights to designate his successor, presidency for life and he himself declared as 
proclaimed emperor of China on December 2, 1915 and China became a monarchy again. 
In June 1916,  Yuan’s death brought China a power vacuum and shattered the republican 
government and most part of the country was ruled by shifting coalitions of competing 
provincial military leaders. 
In 1919, the May Fourth Movement began in protest to the insult imposed on China by the 
Treaty of Versailles ending world war I and the transfer of German owned advantages and 
concessions to Japan.  It was a true political and cultural revolution combining both  
__________________________________ 
3.  Luo  Rongquo  is  a  Chinese  historian,  a  former  professor  at  Peking  University  and  an  expert  in  Chinese 
modernization.  
     
sciences and democracy  of the western political ideas. This movement gave birth to the 
Chinese Communist Party(CPC) and was the true progenitor of Chinese modernity. The 
founder of Chinese Community Party(CPC), Chen Duxiu and the prominent advocate of 
Chinese liberalism, Hi Shi,  were the prominent figures of the may fourth movement. Both 
were in favour of western modernization and new civilization. 
In 1920, Sun Yat-sen established his revolutionary base in south china and made efforts to 
unite the fragmented nation. He entered into an alliance with the Chinese Communist 
Party(CPC) with the assistance from the Soviet. In 1925, Sun died from cancer and Chiang 
Kai-shek controlled the nationalist party and secured the south and Central China under his 
rule in a military campaign known as ‘Northern Expedition’.  The period 1916-1928 was 
known as ‘Warlord Era’. 
In 1931, Japan occupied Manchuria resulted a massive and bloody conflicts between China 
and Japan in 1937. The Sino-Japanese war between 1937-1945 was part of the world war 
II.  In  1945,  Japan  defeated.  At  the  end  of  world  war  II  in  1945,  Japanese  troops 
surrendered to republic of China troops and gave consent to Chiang as the controller or 
ruler of Taiwan. In 1949, Chiang was defeated by the Communist of Party of China(CPC) in 
mainland China and fled to Taiwan with his government, army, and large supporters. By 
1949, the Chinese Communist Party(CPC) occupied almost all parts of China. 
 
THIRD MODERNIZATION: 
The  third  modernization  began  with  the  establishment  of  People’s  Republic  of  China, 
otherwise  called  as  the  Socialist  Era.  Wang  Hui
4  believes  that  “The  socialism  of  Mao 
Zedong is presented on the one hand as an ideology of modernization, on the other as a 
criticism of the capitalist modernization of  Europe and the United States. The socialist 
thought of Mao Zedong is to some extent a theory of modernity set against capitalist 
modernization”. This debate was based on the fact that communism and capitalism, as the 
two rivals in the race for the modernization.  
The period 1949-1960 was called the Soviet Model. During this period, the economy was 
based  on  public  ownership  means  of  production  and  the  democracy  was  centralized. 
_______________________ 
4.  Wang Hui is a renowned professor of history based at the Qinghua University of Bejing, China. He is the 
author of China’s New Order: Society, Politics and Economy in Transition(Harvard 2003 and 2006), an English 
translation  of  his  original  Chinese  book.  His  researches  focus  on  contemporary  Chinese  literature and 
thinking. He was the executive editor (with Huang Ping) of the influential magazine Dushu (读书, Reading) 
from May 1996 to July 2007. The US magazine ‘Foreign Policy’ named him as one of the top 100 public 
intellectuals in the world in May 2008.  
     
 
During 1960-1975 there was a struggle for political power among the measure regional 
organization. After the death of Maozedong in 1976, agricultural reform was taken place in 
December 1978. Various policy reforms by Deng Xiaoping set openness in the markets, 
liberalizing the service sector and privatizing the state industries.  
In 1979, many developments occurred in the legal system. Law on equity joint ventures, 
law on people’s court and several legal transplants and legal reforms were executed and 
implemented. 
 
ECONOMIC MODERNIZATION: 
Republic  of  China  government  with  the  help  of  China  Aid  Act  of  1948  and  Chinese-
American  joint  commission  of  rural  reconstruction  implemented  a  highly  successful 
Economic reforms on Taiwan during 1950.  Lands were redistributed to small farmers from 
large landowners and larger landowners were compensated in the form of commodities 
certificates  and stock in state-owned industries.  These rural reforms were very successful, 
in  turn  those  landowners  were  compensated  with  shares,  they  started  their  own 
enterprise and became very success. Taiwan’s phenomenal economic growth earned  a 
spot in Asians four tiger along with Hong Kong, Singapore and South Korea.  
Privatization of state owned industries and various economic reforms from time to time 
lead China as one of most powerful economic state in the world. 
In 2003, China belonged to the world elementary developed countries and the extent of 
realization of modernization was 82% where as in 2004 it reached 83%. In 1952, China’s 
exports and imports were $0.82bn and $1.12bn respectively and in 2004 the exports and 
imports  significantly  increased  to  $593.40bn  and  $561.40bn  respectively.  Nevertheless, 
China’s gross domestic product multiplied  ten times between 1978 and 2004. In 2008, 
China’s  Gross  Domestic  Product(GDP)  reached  $7.8  trillion,  the  2
nd  largest  in  terms  of 
Purchasing Power Parity(PPP) after the United States. The Growth of the GDP was 9% in 
2008. 
 
DIPLOMATIC MODERNIZATION: 
Many development had been made in diplomatic recognization from the Republic of China 
to People’s Republic of China in the 1970s. After world war II, Republic of China had been 
one of the founding member of the United Nations(UN) and secured the security council  
     
seat.  The  People’s  Republic  of  China  refused  to  maintain  diplomatic  relation  with  any 
government  which  formally  recognized  the  Republic  of  China,  leading  to  a  complex 
political  status  of  China.  In  2001,  China  became  a  member  of  world  trade 
organization(WTO).  Today  China  maintains  a  significant  intelligence  and  diplomatic 
relationship with all leading countries of the world. 
 
DEMOCRATIC MODERNIZATION: 
Chiang  Kai-shek,  the  dictator  ruler  of  Taiwan  was  the  first  who  slowly  began 
democratization progress in Taiwan with the elections of local offices. He also reformed 
the  political  party  systems.  His  son  Chiang  Ching-Kuo  brought  a  rapid  liberalization  in 
political system of Taiwan.  
The  Kaohsiung  Incident  in  1979  foregrounded  need  for  change in  the  political  system. 
Various group like Amnensty International called up propaganda against the government 
and  president  Chiang  Ching-Kuo.  Though  Chiang  Ching-Kuo  was  from  the  mainland  of 
republic of China, but he declared himself as Taiwanese, also named some of his top party 
leaders  and  Lee  Teng-Hui,  the  vice  president  of  Taiwan  and  likely  successor.  In  1986, 
Chiang Ching-Kuo granted permission to form new political parties and the Democratic 
Progressive Party(DPP) was born as the first opposition party. In 1987, the government 
cancelled  officially  the  martial  law  decree  and  imposed  ban  on  veterans  to  visit  their 
relatives who live on mainland of Republic of China. In 1988, government removed the ban 
on registration of new newspapers. 
In 1988, Chiang Ching-Kuo passed away and his successor Lee Teng-hui taken over the 
administration and continued to democratized the government. In 1991, citizens elected 
their legislators and full democracy were achieved. In 1994, the president Lee urged and 
the people of Taiwan had taken part in the presidential election of the  People’s Republic 
of  China  .  Under  Lee  administration,  Taiwan  went  through  a  significant  change  in  the 
process  of  localization  in  which  both  local  culture  and  history  were  promoted.  Lee’s 
reforms were able to make Taiwan very independent like printing of banknotes with the 
Provincial Bank of Taiwan instead of central bank, consolidating  the power of Taiwan 
Provincial government, giving access to media and schools to its citizens. 
Though  liberalization  and  localization  were  developed  but  democratization  had  its 
problems.  Political parties were banned during the period of early process. No supports 
were given to Independent candidates to compete the elections. Democratization process 
was modernized smoothly without major changes to the constitution or restructuring of 
the government.  
     
MILITARY MODERNIZATION: 
China is continuously making effort to modernize and strengthen its national defense and 
its  armed  forces  keeping  in  mind  the  strategic  interests  of  national  security  and 
development. In January 2007, China proved its military strength by destroying its satellite 
in  space  with  a  ground  based  missile.  The  whole  world  is  always  keeping  eyes  on  its 
military budget. In 2008, China’s military budget was $58.8 billion, an increase of 17.6 per 
cent over the year 2007. China is continuously increasing its expenditure on research and 
development,  modernization  of  strategic  and  paramilitary  forces  and  foreign  arms 
procurement.  Today China is one of the powerful country in the world in terms of its 
military expansion. China is developing new technologies, building of combat capabilities, 
improving new weapons, reforming institutional and its defense system by quality training 
to  armed  forces,  diversification  of  sources  of  strong  and  intelligent  military  personnel, 
outsourcing common use goods for maintenance of military organization and developing 
new war fighting doctrines with high technologies. China is developing a new war theory 
with its defense R & D system and joint operations of three military services and plan to 
maintain  strategic  nuclear  deterrence.  The  increasing  responsibilities  of  China  in  the 
today’s world in fact urge to modernize its military factor. People’s Liberation Army(PLA) of 
China is a great threat to pentagon in future that the US is considering. However, bearing 
in  mind  all  measure  nuclear  weapon  countries  like  India,  Russia  and  the  US  ,  China’s 
credible military will remain a crucial factor in future .  
 
POLITICAL MODERNIZATION: 
The opposition party came into the power in the 2000 presidential election and ended the 
Kuomitang’s ruling. After the election, Soong formed the People First Party (PFP). On 8 
December  2004,  the  Kuomintang-PFP  dominated  Pan-Blue  alliance  gained  a  narrow 
majority  resulting  the  resignation  of  the  president  of  Chen  as  Democratic  progressive 
Party(DPP) chairman and the cabinet of premier Yu Shyi-Kun. On 25 January 2005, FranK 
hsieh became premier. The first lady Wu Shu-chen was prosecuted for corruption in charge 
of illegal use of state fund for personal purpose and the president Chen promised to resign 
if his wife is found guilty. However, his wife was obtained absence  from the court 16 times 
citing ill health before the completion of President Chen’s term. 
 
In December 2006, municipal and mayoral elections took place in Taipei and Kaohsiung, 
Chinese  National  Party(KMT)  gained  majority  in  the  capital,  while  the  Democratic 
Progressive Party(DPP) and the Chinese National Party(KMT) obtained very close results in 
the southern city of Kaohsiung and Chen Chu became the first lady mayor of  a special 
municipality of Republic of China. In 2007, Republic of China applied for membership in the 
United Nations under the name ‘Taiwan’ and got rejected by the General Assembly.   
     
 
In the 2008 presidential election Democratic Progressive Party(DPP) candidate Hsieh lost 
from the Chinese National Party(KMT) Candidate Ma Ying-jeou. Ma Ying-jeou ran on a 
platform supporting both friendlier relations and economic reforms. 
 
CONCLUSION: 
The adventure of modernization for China was not so easy as its history witnessed many 
seesaw changes and massive revolutions and a constant search for ‘Substitute Modernity’ 
between  tradition  and  modernity.  Nevertheless,  the  ancient  civilization  was  always  a 
source of ‘Substitute Modernity’ for China. Undoubtedly, China will add many treasure of 
modernization to its history in coming days.    
  
References: 
1.  Carter, Aston B. and Bulkeley, Jennifer C.(2007), “America’s Strategic Response to 
China’s  Military  Modernization”,  Harvard  Asia  Pacific  Review. 
http://www.hcs.harvard.edu/~hapr/winter07_gov/carter.pdf 
2.  Lichuan,  Chen(2008).  “From  Westernization  to  globalization  -  a  brief  history  of 
Chinese modernity”. 
3.  Mao, Mao(2004). “The Road to democratization in China: A path to legitimacy and 
modernization”.  
4.  History  of  China  From  Wikipedia,  the  free  encyclopedia(dated  13/07/2009, 
15.07PM),  http://en.wikipedia.org/wiki/History_of_China 
 
5.  History of the Republic of China( dated 13/07/2009, 15.10 PM)                   . 
http://en.wikipedia.org/wiki/History_of_the_Republic_of_China 
6.  ChinaModernizationReport2006,   
http://ww.modernization.com.cn/cmr2006%20overview.htm 
7.  China’s  Military  Modernization,  China  Rise,  Peterson  Institute  for  International 
Economics,  www.petersoninstitute.org 
8.  http://en.wikipedia.org/wiki/Economy_of_the_People's_Republic_of_China 
9.  http://www.chinability.com/Trade.htm 
10.  Word Web Dictionary 
 

C.(2007), “America’s Strategic Response to China’s Military Modernization”, Harvard Asia Pacific Review.

Path of Chinese institutional modernization

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