China, economic reform and the role of foreign experts

The World Bank
Abhas Jha

Group photos of the participants of the 1985 Bashan river cruise conference
Photo: copyright © / World Bank

I am a policy wonk. I have spent my entire professional career (first in the Government of India and then in the World Bank) watching up close how policy choices are made, how political processes play out and on how institutions and people form coalitions for or against any change based on their incentives. I have also worked in China for close to 8 years, and like so many before me, have fallen in love with the beautiful country, its people and civilizational depth and continue to be amazed at the sheer pace, scale and energy of the massive changes the country has undergone, lifting more than 800 million of its citizens out of poverty.

I just finished reading a majestic book entitled “Unlikely Partners: Chinese Reformers, Western Economists and the Making of Global China” that, in a sense, brings the two parts of my professional work together.

It chronicles in exquisite detail (including 88 pages of notes!) the ideological battles over the course and pace of economic reform in China after the death of Mao Zedong and the immensely positive role played by Western advisers in this process. The astonishing success of China that we take almost for granted today was, by no means, a sure thing. And the remarkable openness to external ideas and their willingness to experiment and adapt these to the Chinese context played a strong part in this success. The World Bank plays a prominent role throughout this journey starting with the April 1980 meeting between Deng Xiaoping and Robert McNamara. The Bank, in addition to producing the first set of comprehensive country reports for China, involving extensive fieldwork and unprecedented access to hitherto secret data, played a crucial convening role, calling upon the top global experts to advise the Government of China on difficult and politically treacherous issues like price decontrols, urban and industrial reform and the reform of state owned enterprises in a series of strategically timed meetings and high-level conferences. Perhaps the most prominent of these was the now famous September 1985 Bashan river cruise conference, in which for a week top Chinese officials sailed along Yangtze River discussed the nuts and bolts of economic reforms with the finest economic minds of the time like James Tobin and Janos Kornai. Several key economic policymaking figures in China today (like current PBC Governor Zhou Xiaochuan) figure prominently as young reformers of the time.

A personal connection for me in the book is the towering presence throughout of Edwin Lim, a former World Bank Country Director of China and later India. I worked with Ed as a rookie Ministry of Finance official in India in the late 1990s. I remember him as a very strong personality with an unwavering commitment to India’s development and a top-notch intellect. Ed looms large in the Bank’s early relationship in China’s reform process, starting from the first Bank mission and report in 1983, through the organization of the Bashan conference to heading up the Bank’s Beijing office as the first decentralized Chief of Mission in Beijing (1985-90). (Side-note: Ed has a wonderful 2002 Bank exit interview that details his professional life and world view, that is well worth reading in full.)

The book set me thinking on whether the Bank could pull something off this scale and ambition today? Needless to say, we live in a world that is very different from the 1980s. To paraphrase Daniel Pink, in a world of Google, where our clients have access to pretty much the same information that we do, our comparative advantage lies in adapting global knowledge to the local context and telling a compelling story. And our work in China today, whether it is strengthening sub-national fiscal reform, supporting the Government of China’s efforts to curb air pollution or promoting sustainable urbanization, reflects this reality and ambition well. The four decades old relationship between China and the World Bank has built up a formidable body of knowledge and learning which we proudly share with the rest of the world in areas like social protection and early warning systems.