India’s recent decision to suspend the IWT brought new crises to Indo-Pakistani relations. Apart from diplomatic appeals, what concrete measures can a relatively disadvantaged country like Pakistan take? River development is an essential part of nation building for any modern state. If India leverages its geographical advantage to develop the Indus River, how should Pakistan respond?²

The Indus River originates in Xizang (Tibet), China, and flows into the sea through Pakistan. Although the name ‘India’ comes from the Indus River, the river’s main basin lies in today’s Pakistani Punjab and Sindh provinces. According to the IWT, India controls the three rivers towards the east (Sutlej, Beas, and Ravi), while Pakistan controls the three rivers towards the west (Indus, Jhelum, and Chenab). Pakistan pays India management fees and India guarantees Pakistan’s water rights over the three western rivers. Pakistan receives 80% of the annual runoff from the main tributaries of the Indus River, while India receives 20%. The treaty acknowledges India’s right to develop hydropower on the three western rivers but restricts it to run-of-the-river hydropower stations to ensure downstream water supply for Pakistan.

The IWT is not only a water rights allocation agreement but also an international cooperative pact for river development. After the agreement was reached in 1960, the World Bank coordinated an international consortium – including the United States, United Kingdom, Canada, and Australia – which provided Pakistan with approximately $895 million in aid to support the construction of irrigation facilities. These included the Tarbela Dam, the Mangla Dam, and a system of link canals. India, on the other hand, used domestic funds to develop its eastern rivers.³

As a symbol of successful mediation between the two countries, the treaty remained unshaken during subsequent Indo-Pakistani conflicts. However, six decades later, the regional situation has dramatically changed – the volume of the Indus River has declined due to climate change, while the population in the upper reaches has increased. Additionally, the power imbalance between India and Pakistan has become more pronounced. When the treaty was signed, both countries had just gained independence and could accept cooperative development under the auspices of international organisations. But over the past 30 years, India’s rapid economic growth has widened the gap between the two countries – Pakistan’s gross domestic product is only one-tenth that of India’s. Whether driven by the need for its own economic development or the long-standing pursuit of regional dominance, India has actively sought to amend the treaty. Since 2009, India has repeatedly proposed amending the treaty and has taken an increasingly tougher stance.⁴ The recent attack in India-administered Kashmir and the subsequent Indo-Pakistani conflict merely provided India with a pretext for direct action. The development of the Indus River is entering a new phase regardless of how the two sides negotiate.

From the Tennessee Model to the Three Gorges Model​

Faced with an assertive India, Pakistan must adjust its strategy and independently develop its rivers. In the 1960s, the World Bank-supported Indus River development projects focused on irrigation to stabilise the newly established Pakistani state. However, the critical challenge for today’s Pakistan is to develop its rivers to serve urbanisation, industrialisation, and overall modernisation.

For a modern nation, to manage rivers is to manage the nation; to develop rivers is to develop the country. The most typical example is the Tennessee Valley development project in the United States during the 1930s. At the time, the Roosevelt administration built cascading hydropower stations on the Tennessee River and established the Tennessee Valley Authority (TVA) to directly manage the entire river basin’s water infrastructure, transforming the region into the fastest-growing economic area in the United States. TVA director David Lilienthal summarised the authority’s mission as ‘making the river serve the people’.⁵ Lilienthal later coordinated and promoted the IWT, and both India and Pakistan’s Indus River development efforts were modelled after the Tennessee experience.

Large-scale water conservancy projects can comprehensively enhance state capacity, which is crucial for a country with a weak infrastructural base like Pakistan. The achievements of water conservancy are evident in Pakistan: the Lahore metropolitan area is surrounded by a narrow irrigation canal, and Punjab province has eight similar canals, forming the famous Green Pakistan Initiative. These canals, with a total length of 622 kilometres, 400 auxiliary structures, and a total water delivery capacity of 300 cubic metres per second, irrigate 2 million hectares of land.

The canals have contributed to Pakistan’s agricultural base, demonstrating the value of the Tennessee model. But Pakistan’s needs have evolved from irrigation to energy – specifically, electricity. According to a 2022 report by China Three Gorges Corporation (CTG), Pakistan’s per capita electricity consumption in the 2020–2021 fiscal year was 584 kilowatt-hours – ranking among the lowest in the world. Importantly, 24% of Pakistan’s population still lacks access to electricity. Even at Lahore’s iconic Wagah Border, where the famous daily Beating Retreat ceremony takes place, the restroom at customs lacks power and has only one functioning faucet.

Increasing hydropower supply has become a priority in Pakistan’s river development. In the 1930s, the TVA was renowned for significantly boosting electricity supply to the central agricultural states of the United States, thereby driving industrial development in the basin. In this century, China’s Three Gorges Dam project is by far the most exemplary case study. Since the first unit began generating electricity in 2003, the Three Gorges Dam has cumulatively produced over 1.7 trillion kilowatt-hours of electricity, setting a world record of 111.8 billion kilowatt-hours of clean energy produced in a single year in 2020.

The CTG’s experience and capabilities align well with Pakistan’s needs for Indus River development. The Karot Hydropower Station, developed under the CTG’s leadership, became the first project funded by the Silk Road Fund and one of the key initiatives in the China-Pakistan Economic Corridor (CPEC). According to the plan, the CTG will carry out cascade development on the Jhelum River, one of the three western rivers. From south to north, three hydropower stations – Karot, Mar, and Kahala – will be constructed. The now-completed Karot Hydropower Station is Pakistan’s fifth-largest, with a main dam height of 95.5 metres, an installed capacity of 720 megawatts, and peak monthly output of 400 million kilowatt-hours during the wet season – capable of supplying electricity to five million people.

Reorganising Social Relations through River Development​

Large-scale infrastructure projects like hydropower stations require substantial investment and long-term management. Human factors are as critical as favourable timing and geographic conditions for transnational hydroelectric projects. This requires both personnel training and organisational restructuring.

Pakistan has a population of 240 million people and a long tradition of agrarian labour. However, Pakistan has yet to fully benefit from its labour supply. Pakistani workers are spread globally; official statistics show that in 2024–2025, one million Pakistanis left the country to work abroad. Many Pakistanis believe there are few job opportunities in their own country. The traditional society, rooted in kinship, village ties, and ethnicity, has strong social and economic units dominated by specific clans or ethnic groups. Within this structure, joining the military (or inheriting a family business) was the only way to break free from traditional constraints.

In such a social context, hydropower stations can offer new opportunities. The construction of large-scale infrastructure projects requires a kind of centralisation of power. This process requires integrating societal sectors, selecting talent across strata, and establishing organisations with mobility. Simultaneously, the CTG’s hydropower development in Pakistan – from dam construction to operation and management – involves comprehensive workforce training, which gradually aligns local labourers’ agrarian work ethic with modern work industrial ethics.

First, the CTG’s human resource development in Pakistan breaks geographical barriers by providing widespread employment opportunities. At the Pakistani branch of the Three Gorges Asia-Africa Company, over half the staff are Pakistani, while the Islamabad office is entirely staffed by locals. Pakistan is often seen as a Punjabi-dominated nation, but Three Gorges employees come from all regions: Punjab, Sindh, Peshawar, and even Pakistan-administered Kashmir.

Second, workforce training breaks kinship-based professional monopolies by cultivating a new generation of professionals, some of whom receive training in China and are hired by Chinese energy companies operating in Pakistan.

Third, training brings about job opportunities for women. Due to patriarchal and religiously conservative tendencies, Pakistani women have few job opportunities despite relatively high education levels. The CTG, through its hiring standards based on fairness and inclusiveness, recruits female employees and trains female senior engineers.

From human resource development to organisational restructuring, the CTG’s investments in Pakistan have created conditions for Pakistan’s talents to contribute to the nation’s development. The significance of this contribution surpasses electricity generation.

Infrastructure as a Form of National Power​

US sociologist Charles Tilly summarised European modernisation through the lens of war, proclaiming that ‘war makes the state, and the state makes war’.⁶ From the perspective of historical sociology, war can both construct a state’s ‘despotic power’ and profoundly develop its ‘infrastructural power’. For Western nations, war was the path to building nation states and achieving modernisation, which rapidly and effectively enhanced state power. However, there are contradictions between despotic power and infrastructural power – the former emphasises hierarchical bureaucratic structures and top-down authority while the latter stresses interaction, negotiation, and integration between the state and society, requiring a networked power system. For early European nation states, war drove the growth of both power systems, making it a convenient path for national construction.

Underdeveloped countries in the Global South must reject the European road due to fundamentally different international environments. Therefore, large-scale national infrastructure projects such as transportation, water conservancy, and electricity have become the primary means for underdeveloped countries to build state power. Nationwide infrastructure can establish direct connections between central governments and grassroots authorities, fostering social networks through universal access and creating cohesive societal ties to balance both power types. For example, the South Korean government’s construction of the Seoul to Busan highway in the 1960s became the starting point for economic take-off and a key node in rapid modernisation.

Electricity infrastructure is much more impactful than roads. This is because while highways connect regions, linking central cities to secondary cities and rural areas, electricity connects individual households. The centralised control and decentralised distribution of power generation and transmission also align with the dual requirements of despotic and infrastructural power. The cycle of electricity production and charging, being both an energy commodity and a public good, reflects the dynamic transformation from state power to state capacity.

However, the uneven spatial distribution of infrastructure and the resulting unequal benefits can create crises of legitimacy. French Marxist philosopher Henri Lefebvre summarised this phenomenon as the binding of state power to space, emphasising that the state shapes social relations within spaces, with spaces forming the foundation of state power.⁷ In terms of electricity supply, the production of electricity represents the starting point of state power, while the access to electricity represents the endpoint and realisation of state power. Failure to coordinate production and access can lead to power struggles.

Pakistan resembles a rectangular shape, stretching long from north to south and narrow from east to west. The north, blessed with mountains and rivers, is ideal for hydropower development. The south – with vast plains, valleys, and deserts – has rich coal reserves suitable for thermal power. During British colonial rule, two electricity supply centres were built in the north and south of Pakistan. The main power grid and most transmission and distribution lines in Pakistan are operated and managed by the National Transmission & Despatch Company (NTDC). In the southern city of Karachi and its surrounding areas, the power supply is independently operated by the Karachi Electric Supply Company. Furthermore, NTDC has established several regional distribution companies across the country to transmit electricity locally. Pakistan relies on a single north-south transmission line, while the construction of branch and feeder lines depends entirely on local capacity. Consequently, major cities with greater resources have better distribution networks, while electricity distribution remains inadequate in remote or underdeveloped areas.

Despite significant regional disparities, Pakistan’s national policy adheres to the principle of fairness and uniformity in electricity consumption. Pakistan’s electricity policy is based on two key principles: first, the ‘joint generation’ policy, which ensures that all provinces share the country’s power generation resources; and second, the ‘uniform tariff’ policy, which requires consumers across the nation to pay the same electricity rate. To facilitate electricity sharing, Pakistan introduced private power supply companies tasked with transmitting electricity to specific regions and groups. At the same time, the Pakistani government introduced a tariff differential subsidy for certain regions and groups in order to maintain the uniform tariff, which ultimately led to a massive fiscal deficit.⁸ Taking the 2010–2011 fiscal year as an example, the federal government provided subsidies amounting to 259 billion Pakistani rupees (approximately 3 billion US dollars in 2011 exchange rates) to the power sector, exceeding 10% of Pakistan’s total federal budget.⁹

The failure to achieve universal access to electricity has not only placed immense pressure on Pakistan’s national finances but also turned public infrastructure projects into focal points of regional and ethnic conflicts. For instance, the prolonged confrontation between Sindh and Punjab originated with the construction of the Tarbela Dam in 1974, marking the emergence of overt regionalism in Pakistan.

The Challenges of Pakistan’s State Capacity ​

China’s lessons for Pakistan extend beyond electricity generation. China has built the world’s largest power grid, which is centred around the Three Gorges Dam. Pakistani experts have noted that grid expertise is the CTG’s strongest asset, as most power generation companies rarely engage in grid building.

Considering the relatively controllable nature of hydropower resources, flexible electromechanical equipment, and simple grid topology, hydropower stations hold advantages as grid hubs. With the advancement of the CPEC, Pakistan has constructed multiple hydropower stations and implemented cascade development on several rivers within the Indus River basin. Consequently, the transmission and distribution grid must be upgraded to avoid challenges in electricity sales. If the construction of large-scale hydropower facilities represents the concentration of resources to accomplish major tasks, then the transition from constructing power stations to building the power grid is a process of moving from the macro to the micro and linking with local units.

State power embodied in electricity infrastructure has dual attributes discussed earlier: large dams and hydropower stations exhibit despotic power, whereas grids constitute infrastructural power. British colonial rule in the subcontinent focused on establishing despotic power systems while minimising infrastructural power investments so as to preserve the traditional social structures. By 1853, British India had built a 20-mile railway test line, which expanded to 45,000 miles by 1947, making it the world’s fourth-largest railway system at that time. Yet, 70% of British Indian railways connected ports to inland raw material production areas – essentially colonial trade corridors – rather than forming an interconnected domestic network.¹⁰ This point-to-point infrastructure exemplifies the power structure of British India. Similar to India’s railways, Pakistan’s earliest power facilities were concentrated in major cities like Karachi and Lahore, as well as military fortresses like Rawalpindi, forming the point-to-line connections that define Pakistan’s grid. Pakistan inherited the British colonial authorities’ power system and its non-standardised infrastructural power features. Since its founding, Pakistan has co-opted local elites and acknowledged their traditional power networks. As for the patronage relationships widespread in Pakistani society, the approach has largely been one of assimilation rather than reform.

As previously mentioned, while Pakistan’s electricity subsidies are substantial, the country also suffers from extreme power losses. Between 2005 and 2015, the average transmission and distribution loss in Pakistan’s power grid was as high as 20.84%, compared to an international standard of just 7% during the same period.¹¹ According to studies by the CTG, 50% of Pakistan’s electricity consumption is attributed to non-technical losses (electricity theft), while other research estimates this figure to be 30–40%. This severely undermines the revenue of local power generation companies. As per calculations by the CTG, the highest electricity bill collection rate in Pakistan is only 85%.

Such theft rates should be viewed as structural issues rather than regulatory failures. US technological historian Thomas Parke Hughes schematised the expansion of electricity systems from 1880 to 1930 into five stages: invention, technology transfer, system growth, substantial momentum, and planning and transformation.¹² Each stage is led by different actors – for example, the first three stages were driven by inventors, engineers, entrepreneurs, and financiers, while the latter two required involvement from government or public institutions. For underdeveloped countries, the construction of electricity systems often rapidly bypasses the first three stages, failing to foster sufficient technological market momentum. Without corresponding financing mechanisms, technicians, and management expertise, large-scale construction cannot be sustained. Similarly, without robust industrial demand, massive electricity supply lacks customers, rendering scale effects unachievable. Without an expanded electricity market, the transition to public services cannot occur, thereby preventing the realisation of infrastructural state power.

When formal electricity supply fails to deliver public services, electricity theft under informal power structures becomes widespread, tolerated, or even abetted by power officials and grassroots officers – this is often intertwined with partisan and ethnic politics. In Balochistan and interior Sindh, 75% and 64% of electricity supply remains unpaid respectively – this is equivalent to an implicit federal subsidy.¹³

For Pakistan, reshaping the grid equates to rebuilding infrastructural power systems, which requires adjustments to long-standing non-standardised power structures. It is clear that a fragile energy system cannot support the electricity demands of 240 million people. Therefore, the Pakistani government has repeatedly pursued power system reforms and attempted to abolish uniform pricing, but ensuing social protests and livelihood pressures have forced the government to stabilise tariffs. The administration of Prime Minister Shehbaz Sharif made power system reform a priority but efforts have focused on resolving the debts of private power suppliers, with no progress on nationwide grid construction.

If large-scale grid construction is not immediately feasible, are there alternative paths to support Pakistan’s electricity supply and residents’ electricity rights? Amid escalating geopolitical tensions, are there other avenues for accessing electricity beyond hydropower-grids?

Photovoltaics as a Means of Enhancing State Capacity​

If the CTG provides a top-down pathway from river development to national power systems, China also offers Pakistan a bottom-up approach to access electricity through photovoltaics (PV).

Due to frequent power outages, affluent Pakistani households, hotels, schools, hospitals, and others typically rely on diesel generators for emergencies. However, PV panels are gradually replacing diesel generators at various levels of Pakistani society and driving the growth of the energy storage industry. In Pakistan, many affluent households and even new residential areas rely on rooftop solar installations. PVs have also been integrated into the lives of middle- and low-income Pakistanis, with solar facilities visible in informal settlements in Islamabad and Lahore. Traveling through rural Pakistan, one can see simple roadside sheds equipped with solar panels, where people can charge their mobile devices.

In 2024, Pakistan imported approximately 16 gigawatts of PV components, nearly one-third of the country’s total installed power generation capacity (45 gigawatts) as of June that year. Of the 16 GW, only 0.63 GW was used for centralised solar, with the rest being distributed PVs. According to a report by Pakistani think tank Renewables First, Pakistan’s power generation capacity increased to 46.2 million kilowatts in 2024 with the commissioning of three new solar power plants, raising the share of utility-scale renewable energy in the country’s installed capacity from 6% to 7%. Distributed energy resources in Pakistan grew significantly, with net metering capacity doubling from 1.3 million kilowatts in 2023 to 2.5 million kilowatts in 2024, and reaching 4.9 million kilowatts by March 2025.¹⁴

In Pakistan, PV installations and distributed power generation have begun replacing previous electricity rationing methods. PVs offer a low-cost path to electricity access, particularly for middle- and low-income Pakistanis. Pakistan is naturally endowed with long hours of sunlight, with Punjab province averaging 6.8 hours of sunshine per day, making it ideal for the use of distributed PV systems. Electricity access becomes possible with just a solar panel and a storage battery. This pathway is made possible due to China’s industrial capacity, which produces 97% of the world’s PVs and accounts for 99% of Pakistan’s PV imports.

Distributed PVs have significantly reduced the burden on Pakistan’s official electricity services. The public power sector can focus on serving industrial and commercial clients, whose large-scale electricity demand aids the construction of Pakistan’s national grid. From a national development and capacity building perspective, PVs are not just clean energy but a tool for strengthening Pakistan’s infrastructural power. By lowering the threshold for accessing electricity, the Pakistani state can provide universal access to electricity and facilitate broader economic participation. In Lahore, 95% of farmland has switched to solar-powered water storage. With an average installation capacity of 5–10 kilowatts per household, this can cover an irrigation area of 2–5 hectares.¹⁵ Emerging economic activities, such as social media content creation, also benefit from electricity.

From a technical standpoint, distributed PV power generation directly links electricity supply to end-users, enabling access to rural areas and urban informal settlements. The basic power units formed by distributed PV systems can be quickly interconnected to establish microgrids, which can then be seamlessly integrated into Pakistan’s still-developing national grid framework. These foundational units of PV-based grids are not only reliable but also resilient, offering the potential to transform severe rent-seeking and electricity theft issues into regulated price negotiations.

For Pakistani farmers living in traditional village communities and relying on kinship ties for economic activities, the emergence of new social relations will drive the formation of new economic networks. This new integration of space and state power is beneficial for enhancing Pakistan’s state capacity.

China as Development Partner and Model

Pakistan’s goal of developing the Indus River remains unchanged despite climate change and regional political-economic developments. To address these new challenges, Pakistan seeks diversified and comprehensive utilisation of the Indus River, transitioning from irrigation to integrated power development. Since its founding, Pakistan has viewed the Indus River’s holistic development as a crucial tool for nation building. While the construction of large-scale infrastructure has, to some extent, enhanced the credibility of the Pakistani federation, its limited equitability created new controversies.

In the face of geopolitical pressures, Pakistan needs stronger state capacity. Without the benefits of conjunctural opportunities or geographical advantage, the country must cultivate its own social conditions. Pakistan must invest in public infrastructure for both economic development and national capacity building – this aligns with the intention of the CPEC.

China offers the Global South both development capabilities and a model for leveraging economic growth to strengthen state capacity. In the past, greater emphasis was placed on China’s role in promoting large-scale public infrastructure projects in developing nations. With the establishment of China’s industrial advantages, the role of new technologies in strengthening state capacity should be recognised. The diffusion of new technologies is critical for structural transformation.

The international order has undergone disruptive changes since the end of the World Anti-Fascist War, creating divergent outcomes within the Global South. The importance of state capacity building has now superseded mere economic development, as economic growth must go hand-in-hand with good governance. Pakistan’s challenges are not isolated cases, but reflective of broader trends in the Global South. The role of China’s hydropower and PV sectors in addressing Pakistan’s energy needs underscores the supportive role that Chinese enterprises can play in enhancing the capacities of Global South countries. Enhanced state capacity can be used to improve public welfare, and vice versa. Together, these two dimensions lead to conducive social conditions for the modernisation of nation states.

This research was supported by China Three Gorges Corporation.

Notes

Li Xiang Li Xiang (李响) is affiliated with the Shanghai Academy of Global Governance and Regional Studies at the Shanghai International Studies University and the Institute of Mediterranean Studies at the Zhejiang International Studies University. He has worked with several Chinese media outlets and reported on regional development, with a research focus on development issues in the Global South.

We live in an interregnum. The neoliberal order that reorganised global production and thought from the 1980s onward has lost its legitimacy, even among its architects. The Washington Consensus – fiscal austerity, trade liberalisation, privatisation, the subordination of the state to market ‘discipline’ – has been repudiated not only by the statistics of stagnation across Africa and Latin America, but by the behaviour of the Global North itself, which now openly pursues industrial policy and protectionism, while forbidding the same to the Global South.

Yet the interregnum is precisely what makes the present moment so dangerous: the old order decays without dying, and the new order cannot yet be born. The Global South finds itself navigating a conjuncture in which the rules of the game are being rewritten by the same powers that wrote them the first time – except now with openly coercive instruments, from ‘reciprocal tariffs’ to new unequal treaties to sanctions and decapitation strikes.

It is against this conjuncture that the four texts in this issue of Wenhua Zongheng must be read. Taken together, they form an emerging Chinese contribution to the theory and practice of modernisation in the Global South. The thread that binds them is neither cultural nor ideological in the narrow sense. It is resolutely material: each text is preoccupied with the concrete question of how states build productive capacity, secure the conditions of their own reproduction, and resist subordination to an international order designed for their permanent underdevelopment.

Qin Beichen and Jing Jun’s ‘Constructing a New Development Theory from the Global South’ provides the theoretical scaffolding for the entire issue. The Washington Consensus, they demonstrate, was never merely a set of economic prescriptions; it was an ideological formation that successfully conflated the freedom of capital with freedom itself, delegitimising any state action that threatened the profit margins of multinational corporations while weaponising international institutions – the IMF, the World Bank, and the dispute settlement mechanisms embedded in trade agreements – against the autonomous development strategies of the South. The consequences are documented with precision: premature deindustrialisation across Africa and Latin America, the accumulation of labour in low-productivity service sectors, the hollowing of state capacity, and the foreclosing of the historical path that every currently industrialised economy actually followed. The authors rightly insist that this was not a failure of neoliberalism, but its achievement – the systematic underdevelopment of the peripheral countries is the precondition, not the unfortunate byproduct, of accumulation in the core countries.

What is especially valuable in Qin and Jing’s contribution is their identification of the three structural obstacles confronting post-neoliberal catch-up: digital technology’s labour-saving tendencies in manufacturing; the oligopolistic grip of multinational corporations over intangible assets (patents, data, brand equity, supply chain protocols); and the intensification of great-power geopolitical competition that compresses the policy space available to Southern governments. These are not separate crises but a unified system of constraint. The task they set for the Global South is accordingly ambitious: not the correction of neoliberal excesses within an existing framework, but the construction of an entirely new theoretical paradigm, rooted in Southern experience, centred on production and employment rather than exchange efficiency, and honest about the constitutive role of the state in any historically successful industrialisation.

It is precisely this theoretical demand – for a grounded, materialised account of how states develop productive forces – that Li Xiang’s ‘China and the Electrification of the Global South: The Case of Pakistan’ attempts to answer at the level of practice. Pakistan is not an abstract case study but a diagnostic site. Here, the colonial inheritance is unusually legible: British infrastructural investment was explicitly designed to connect ports to raw material hinterlands rather than to build an integrated domestic economy. The railways that made British India the world’s fourth-largest railway network were colonial trade corridors, not national development infrastructure. Pakistan inherited this point-to-line logic, including its political consequences – a power grid that concentrates distribution in major cities and military centres while leaving peripheral regions underserved.

What China’s experience and capabilities brings to this situation is not merely electricity, but the material reorganisation of state-society relations. Li Xiang is at his most penetrating when he distinguishes between ‘despotic power’ and ‘infrastructural power’ – the former characterising hierarchical top-down authority, the latter the networked, negotiated penetration of the state through society at the level of the household and the village. Large dams and hydropower stations embody despotic power; grids, and above all, distributed photovoltaics, constitute infrastructural power. The insight that PV panels are now replacing diesel generators in Lahore’s informal settlements, enabling farmers to power irrigation with solar panels, and making grid-independent microgrids available to communities bypassed by formal electricity services, is not a story about clean energy. It is a story about the material expansion of state capacity from below, the extension of the infrastructural reach of the Pakistani state into social spaces that colonialism deliberately left unintegrated.

The strategic lesson here generalises powerfully. The combination of large-scale centralised infrastructure (which concentrates state power and drives industrial demand) with decentralised distributed technology (which democratises access and builds the social fabric of development) offers a two-track model of state capacity building that speaks directly to the fragmented, colonial-inheritance conditions of much of sub-Saharan Africa, South and Southeast Asia, and parts of Latin America. The China-Pakistan Economic Corridor is, from this perspective, not merely a bilateral investment relationship but a laboratory for a new mode of South-South development cooperation – one that explicitly aims to strengthen state capacity rather than erode it, as the conditionalities of Northern multilateral lending historically have done.

Feng Chao’s ‘Silk Road Manufacturing: An Alternative Path to Globalisation’ examines a complementary dimension of the same problematic: not the infrastructure of energy but the architecture of industrial production. The Silk Road Manufacturing model that Feng proposes – Chinese firms constructing transnational manufacturing networks in Vietnam through foreign direct investment, technology transfer, and industrial chain integration – is presented as a response to the crisis of deglobalisation and the systematic attempt by the United States to use technological hegemony, intellectual property regimes, and tariff barriers to freeze China’s industrial development. These are not trade measures in any neutral sense. They are instruments of hyper-imperialist containment, designed to prevent the emergence of transnational production networks that could offer Southern countries an alternative to dependence on Northern corporate value chains.

Feng’s most significant contribution is the concept of the ‘mobile country of origin’ – the idea that Chinese firms can build deeply localised ecosystems in Vietnam (and by extension, across ASEAN and beyond), achieving genuine value-addition, technology transfer, workforce development, and industrial upgrading, rather than simply relocating labour-intensive assembly to exploit tariff arbitrage. The argument is that the BRI can function as a framework for genuine productive integration, one that serves the industrialisation strategies of receiving countries rather than subordinating them to the export demands of the investing country.

The question of whether Chinese industrial expansion in Vietnam and elsewhere replicates the extractive logic of previous waves of foreign investment, or genuinely transfers productive capacity and technological capability to host economies, is precisely the question that distinguishes South-South cooperation from a new variant of dependency. Feng’s answer is not conclusive, but the analytical framework he offers – centred on localisation depth, domestic value-addition ratios, workforce development, and the cultivation of locally embedded supply clusters – provides the criteria by which the progressive or regressive character of any specific investment relationship can be evaluated. For movements and governments across the Global South, this is practically valuable.

Finally, Wang Li’s review of Qiu Shijie’s intellectual biography of Taiwanese economist Liu Shinkei illuminates the historical depth of these debates in unexpected ways. Liu’s intellectual trajectory – from Japanese Marxist theories of ‘non-transition,’ through encounters with dependency theory and world-systems analysis, and ultimately back toward endogenous development theory and economic nationalism – is not merely an episode in the history of ideas. It is a compressed map of the theoretical dilemmas that still confront the Global South. What Wang Li recovers from this trajectory is the productive tension itself: the insistence that understanding any particular economy requires both the rigour of internal class analysis and the honesty about its integration into a structurally unequal world system. Neither endogenism nor world-systemism alone is sufficient. The dialectical synthesis – a theory of how endogenous class forces interact with the structures of global accumulation – remains the unfinished project.

Across all four texts, a convergent argument emerges with increasing clarity. The construction of a new development theory for the Global South requires, simultaneously: a theoretical break from Northern epistemic frameworks that naturalise the subordination of Southern states; the active deployment of state power to develop productive forces, with manufacturing at the centre; the strategic use of South-South cooperation as a vehicle for building state capacity rather than creating new dependency; and the recovery of the intellectual traditions of the Global South itself, as resources for a genuinely Southern theory of development.

The texts assembled here do not offer a complete programme. But they offer the tools for thinking through the problem in its full complexity. Whether the question is the theoretical de-ideologisation of development economics, the relationship between large infrastructure and state capacity, the conditions under which transnational industrial cooperation serves or undermines host-country development, or the long history of Marxist engagement with the problem of late development – the contributors to this issue are engaged in the construction of a theoretical commons that belongs, by right of experience and necessity, to the Global South.

Vietnam, a crucial node for the BRI, possesses natural advantages and catch-up potential for industrial and value chain restructuring, making it a hotspot for Chinese firms expanding overseas.¹ Currently, Chinese manufacturing presence in Vietnam manifests in the spillover of supply chain networks, which indirectly proves the growing mismatch between the spatial scope of economic activities and the rigidity of political boundaries. The relocation of Chinese factories to Vietnam does not signify the transfer of entire industries; rather, China acts as the hub of the industrial chain while Vietnam acts as a vital link to international markets, forming an important component of the ‘dual circulation’ structure. The manufacturing sectors of China and Vietnam have formed a highly integrated and mutually supportive relationship.²

Amid the crisis of deglobalisation, Chinese firms continue to engage in cross-border investment across global industrial chains and multiple national policy frameworks. In this context, this essay proposes the concept of ‘Silk Road Manufacturing’ (SRM) – a new model for industrial collaboration under the BRI where Chinese firms construct transnational manufacturing networks through foreign direct investment, technology transfer, and industrial chain integration. This model helps market entities engaged in transnational business to control cross-border capital flows, coordinate and restructure key economic nodes in industrial chains, share resources, promote an effective international division of labour, and maximise marginal returns.

The practice of SRM in Vietnam reflects China’s need to internationalise its industrial chain while also synergising with Vietnam’s strategy of utilising foreign capital to industrialise. Its strategic significance lies in integrating global industrial chains to form an intertwined production structure. This is not only expected to be an effective measure against protectionism and decoupling, but may also provide an alternative path of globalisation and the basis for a new international economic order.

The Evolution of Vietnam’s Economic Diplomacy

Since the early 2000s, Vietnam has pursued a three-stage strategy for international economic integration. The first step involved proactive integration into the international economy, as proposed by the 9th National Congress of the Communist Party of Vietnam (CPV) in 2001.

The second step, from 2016 onwards, was comprehensive international integration. This entailed establishing trade relations with 230 countries and regions and joining diverse agreements, including the BRI and the

The third step was deep integration, as clarified by the 13th CPV National Congress in 2021. In 2024, Tô Lâm was elected to the position of general secretary of the CPV. In a speech at the Ministry of Foreign Affairs, he highlighted Vietnam’s unprecedented integration into the world economy and demanded that the country’s foreign policy ‘must constantly consolidate position and strength’, ‘disseminate and radiate Vietnam’s soft power to the world through cultural diplomacy and external information’, and ‘present to the world an independent, self-reliant, peaceful, cooperative, friendly, developing, prosperous, and happy Vietnam’.

The Evolution of Vietnam’s Industrial Policy

In recent years, Vietnam has continued the path of international economic integration while retaining a socialist-oriented market economy, limiting reliance on external actors and ensuring independence and autonomy.

Since 2024, General Secretary Tô Lâm has proposed the ‘New Era of National Rise’ and introduced a series of resolutions to promote sci-tech innovation, developing the private economy, renovating legislative and law enforcement work, and deepening international integration. This was combined with an anti-corruption campaign to strengthen socialist rule of law. In addition, the constitution, dozens of laws and regulations, and free trade agreements (FTAs) were amended to meet the needs of economic development.

Measures such as provincial–municipal mergers and institutional downsizing have been used to promote tiered governance, administrative simplification, and decentralisation. Simultaneously, the government has introduced policies like tax exemptions, regulatory streamlining, administrative efficiency, and anti-monopoly rules. These efforts have helped establish a local environment compatible with international cooperation.

Vietnam currently occupies a mid- to low-end position in East Asian value chains, importing intermediate inputs from China, Japan, and South Korea and exporting finished products to Europe and the United States. Unsatisfied with this status quo, the Vietnamese government has taken a series of measures to promote high-end manufacturing development. Following the ‘Socio-Economic Development Strategy 2016-2020’, Vietnam increasingly prioritises developing high-tech industries, including electronic information, biopharmaceuticals, new materials, and renewable energy sectors. Guided by the ‘Strategy for Science, Technology, and Innovation Development to 2030’, the share of high-tech industrial products in Vietnam’s manufacturing sector is expected to increase to over 45%, transforming Vietnam into a modern industrial country by 2030.

Against the dual backdrop of global value chain restructuring and the deepening advancement of the BRI, Vietnam – with its locational advantages, competitive costs, and active participation in regional FTAs – has become a crucial strategic hub for the internationalisation of China’s manufacturing industry. As Vietnam’s demographic dividend fades, it aims to create a ‘technology dividend’ by developing a high-quality workforce, which in turn improves technological capabilities and increases domestic value-addition.

Vietnam’s Strategic Opportunities for Silk Road Manufacturing

The current conjuncture presents Vietnam with strategic opportunities for industrialisation. First, the restructuring of global value chains has pushed Chinese firms to establish a presence in Vietnam. In the textile sector, Chinese spinning companies synergise well with Vietnamese weaving, dyeing, and garment production capabilities. This allows Vietnam to attract China’s upstream supply chain capabilities while Chinese firms benefit from Vietnam’s preferential access to the market. Similarly, Vietnam’s low self-sufficiency in intermediate goods in manufacturing (below 40%) creates opportunities for Chinese suppliers. For example, over 40 Chinese suppliers have set up around Samsung’s factories in Vietnam, providing packaging materials, metal components, and mold development. However, only a few Chinese-invested enterprises in Vietnam, such as Goertek and AAC Technologies, have entered Samsung’s supply chain, indicating significant scope for further integration.³

Second, the growth of the home market creates a range of opportunities for . With a population nearing 100 million, Vietnam’s middle class and consumption patterns are rapidly expanding. This market exhibits three characteristics:

1. Demand is increasingly driven by young consumers, with people under the age of 35 accounting for 65% of the population. This cohort has a strong preference for cost-effective, innovatively designed electronics and small appliances, driving rapid growth in online consumption.
2. The expansion of Vietnam’s middle class has fuelled imports of mid- to high-end consumer goods, accelerated a shift toward health-oriented consumption, and increased consumer acceptance of international brands.

Though local cultural identity remains strong, consumers are not resistant to international products. For example, Chinese company TCL launched televisions with lightning protection and enhanced signal reception in response to Vietnam’s frequent thunderstorms and complex mountainous terrain. This allowed the firm to successfully enter remote rural markets in Vietnam, rapidly turn a profit, and rise to second place in market share for televisions.⁴ If SRM firms place greater emphasis on designing product functionalities tailored to local conditions, they can capture substantial market opportunities.

Third, the strategic alignment between China and Vietnam provides institutional guarantees for SRM. Under the framework of the BRI and Vietnam’s ‘Two Corridors and One Economic Circle’ plan, both sides can advance cooperation at multiple levels.

1. Trade facilitation measures, such as those through the RCEP and the upgraded China-ASEAN FTA, enable enterprises in both countries to benefit from streamlined export and import procedures, thereby effectively reducing transaction and trade costs.
2. Infrastructure connectivity, such as the agreements for three cross-border standard-gauge railway lines (Lào Cai–Hanoi–Haiphong, Lạng Sơn–Hanoi, and Móng Cái–Hạ Long–Haiphong), are anticipated to significantly lower logistics and transportation costs.
3. Vietnam’s industrial policies – such as the ‘National Strategy for the Fourth Industrial Revolution to 2030’ and ‘Green Growth Strategy’ – align with China’s own policies for promoting the internationalisation of the digital economy. This policy convergence facilitates the implementation of cooperation projects in sectors such as photovoltaics and wind power.
4. Technical and vocational talent development, through platforms such as the China–ASEAN ‘Chinese + Vocational Education’ Alliance and the ‘Luban Workshop’ initiative, contribute to improving workforce skills across the region. These initiatives help foster skills formation and support industrial upgrading.

The Core Logic of Silk Road Manufacturing

With the restructuring of global supply chains, Vietnam is transforming from a location for offshoring into an industrial chain hub. Chinese firms are investing in Vietnam to build integrated industrial chains and establish end‑to‑end production capabilities, from raw material sourcing to final product assembly.⁵ These industrial clusters – through mechanisms such as technology spillovers, labour mobility, and inter-firm collaboration – have enhanced the technological sophistication and innovative capacity of SRM, thereby contributing to Vietnam’s industrialisation.

Under the backdrop of the BRI, the enterprises going overseas are not only Chinese but also include third-party partnerships and joint ventures. Despite the capital and technological advantages commonly held by foreign investors, Chinese enterprises relocating abroad must still undergo a transformation from labour-intensive to capital-intensive production, particularly in a global environment dominated by Western management models. This structural shift helps break the binary logic that assigns value-chain ownership exclusively to one country or firm.

At its core, SRM represents a transnational business model in which enterprises integrate local and foreign elements while expanding across industries. Under these conditions, constructing multi-layered corporate identities requires long-term exploration. Moreover, as most Chinese firms in Vietnam operate at the downstream end of local value chains, Vietnamese firms inevitably remain cautious when absorbing industrial capital from China. Consequently, multinational firms must overcome provincialised brand identity. Brand identity is the soul of product design; thus, international brand strategies are necessary for the SRM model.

For example, Haier’s 2011 acquisition of Sanyo Electric’s business in Southeast Asia brought the AQUA brand to the Vietnamese market.⁶ Although AQUA experienced a sharp decline during the , a comprehensive strategy – product upgrades, platform replacement, factory-efficiency improvements, and expanded promotion – helped it regain the first and second positions in Vietnam’s washing machine and refrigerator markets, respectively. Responding to local consumer demands, AQUA introduced refrigerators with ABT dynamic sterilisation and HCS humidity-preserving features, smart washing machines, and energy-saving products tailored to Southeast Asia’s tropical climate. Through active engagement in local cultural spaces (such as social platforms and beauty pageants), AQUA successfully integrated itself into the everyday life of Vietnamese people.

The Challenges and Opportunities Posed by US Tariffs

On 2 April 2025, the US announced ‘reciprocal tariffs’ targeting 57 countries, including Vietnam, which was accused of using entrepôt trade to evade US tariffs on China. The proposed 46% tariff on Vietnamese exports was a strategic attempt to restructure global supply chains and weaken China’s industrial relocation strategies.⁷ The US Customs and Border Protection (CBP) has activated a new origin-verification system, combining strict audits, extended traceability, and criminal deterrence to clamp down on entrepôt trade.

Given Vietnam’s heavy export dependence, ‘bamboo diplomacy’, and pragmatic interests, its state media refrained from commenting when US President Donald Trump unilaterally announced the signing of an unequal ‘Tariff and Trade Framework Agreement’ with Vietnam on 2 July 2025.⁸ During a phone call on the same day, Prime Minister Sử Lựnh agreed with Trump on a ‘Joint Statement on a Vietnam–U.S. Reciprocal, Fair, and Balanced Trade Agreement’, and urged the US to recognise Vietnam as a market economy and lift export restrictions on Vietnamese high-tech goods. While the government adopted a cautious stance, the response from academics and businesses was mixed – some were optimistic due to lower US tariffs on Vietnamese exports while others were concerned about mixed outcomes.⁹

Although the agreement remains controversial, the punitive 40% tariff on ‘entrepôt trade goods’ has been confirmed. Vietnam is required to establish a three-tier traceability system – raw-material invoices, production flow charts, and energy-consumption records – with mandatory inspections for solar panels, furniture, and electronics. This drastically raises the cost of Chinese goods re-exported through Vietnam, undermining the model used by Chinese SMEs relying on labelling or simple assembly. Even without the full text of the agreement, these transshipment provisions will constrain Chinese exporters, reduce intermediate-goods shipments, and raise operational costs for Chinese firms in Vietnam. This signifies the end of the Vietnam transshipment model and poses the urgent need to build a deeply embedded SRM ecosystem.¹⁰

Post-pandemic economic sluggishness and rising labour and environmental constraints have challenged traditional manufacturing models. Geopolitical tensions increasingly affect SRM, as political instability and trade frictions amplify cross-border operational risks. Vietnam imports around $90 billion in goods from China annually, some of which undergo simple processing before being exported as ‘Made in Vietnam’ to US and European markets. Apple’s Vietnamese suppliers increased from 14% in 2018 to 35% in 2024.¹¹ Leveraging RCEP rules of origin (ROO), Vietnam has constructed an efficient model of assembling Chinese components in Vietnam and exporting finished goods globally. If future tariff regimes across China, the US, and Vietnam stabilise, SRM may exhibit fluctuations but ultimately reach a dynamic equilibrium shaped by taxation and market mechanisms.

To adapt, overseas firms must strengthen risk management, optimise production networks, and mitigate geopolitical disruptions. The shifting external environment compels SRM to accelerate industrial upgrading. By enhancing technological innovation, improving industrial structures, and increasing value addition, firms can raise competitiveness under new market conditions. Facing uncertainty, SRM must also deepen regional cooperation, develop joint industrial parks, and enhance connectivity to foster resource optimisation and coordinated industrial development. Ultimately, as an emerging model of manufacturing cooperation under the BRI, SRM transcends traditional original equipment manufacturer (OEM) production or cost-driven industrial relocation. It can evolve into a hybrid system integrating local innovation, regional market service, and upward movement within global value chains.

Towards a Mobile Country of Origin

In Vietnam, SRM demonstrates clear regional characteristics and dynamic industrial evolution. Investors are shifting from labour-intensive (garments, furniture) to technology-intensive industries (electronics, home appliances, renewable energy). This is driven not only by cost advantages but also by strategic motives such as avoiding trade barriers, proximity to consumer markets, and regional resource integration.

The model for collaboration is changing. Chinese firms are encouraged to avoid replicating domestic production structures and instead integrate into Vietnam’s local industrial ecosystem. Leveraging BRI cooperation opportunities, firms can relocate certain production stages to ASEAN members – such as Cambodia, Laos, and Myanmar – where labour is cheaper and tariff preferences apply. Meanwhile, strengthening Vietnam’s local supply capacity and expanding investment in local suppliers increases local sourcing ratios and helps satisfy ROO requirements.

The lesson for Chinese firms is that they must go beyond simple factory relocation and build deeply localised ecosystems. By expanding local processing and achieving 30% (or higher) value-addition in Vietnam, they can meet ROO requirements. Developing localised upstream and downstream supply chains through nurturing suppliers and forming locally embedded clusters can raise Vietnam’s manufacturing capabilities. This will also enable Chinese lead firms to bring supporting firms with them overseas to replicate domestic supply chain ecosystems.

Through industrial upgrading, regional productive chain integration, brand expansion, deep localisation, technology transfer, and compliance with ROO, multinational enterprises can develop distinctive competitive advantages. This ‘mobile country of origin’ model strengthens the competitiveness of Chinese firms while supporting Vietnamese industrialisation – it provides a replicable model for industrial cooperation under the BRI.

Towards a Sustainable Logic of Silk Road Manufacturing

Princeton historian Harold James has argued that China is attempting to construct an alternative path to globalisation – aligned with a new era of high-value goods, services, and data flows – through the BRI. James contends that China and the US are not trapped in a Thucydides Trap but are undergoing a redistribution of power in an increasingly multipolar world, where the US must adjust to a reality where it is no longer dominating the international order.¹²

US maximum-pressure policies and efforts to contain China have inadvertently driven China towards full industrial chain consolidation, granting it substantial ‘anti-involution’ capacity and control over key intellectual property and industrial capacity.¹³ However, China has yet to construct a theory to explain its alternative to globalisation and the role of Chinese firms in manufacturing cooperation along the BRI. This has weakened China’s ability to respond to Western narratives that are rooted in colonial legacies and monopoly finance capitalism. As the West continues to use asymmetric mechanisms – intellectual property regimes, tariff barriers, and others – to sustain an unjust international political-economic order, China must propose a theory for an alternative. The concept of SRM could be a starting point for such an endeavour.

The expansion of Chinese enterprises into Vietnam is a product of supply-chain restructuring and deep regional economic interaction. Today, while facing opportunities in supply-chain reconfiguration, consumption upgrading, policy coordination, and emerging sectors, firms must also overcome bottlenecks in infrastructure, policy volatility, intensifying competition, geopolitics, and compliance requirements. The key to a breakthrough is transcending the traditional ‘cost arbitrage’ model and transitioning toward a higher-quality development model characterised by localised innovation, technological empowerment, and green integration.

The Vietnamese government regarded 2025 as a ‘year of accelerated breakthroughs’. Its two-digit growth rate intersects with China’s strategy for high-quality overseas manufacturing expansion. Seizing this opportunity, a diversified SRM strategy can help firms navigate anti-globalisation headwinds and create a benchmark for BRI cooperation. This could provide new pathways for industrialisation in the Global South and inject new momentum into China’s own economic transformation.

Notes

Feng Chao Feng Chao (冯超) is an associate professor at the School of Asian and African Studies, Shanghai International Studies University, where he also serves as director of the Center for South and Southeast Asian Studies. His research interests include China–Vietnam relations, Vietnamese history, and Southeast Asian cultures. He has published over 40 academic articles in Chinese and international journals and written for media outlets sucTagh as Global Times, Xinmin Weekly, and Observer. He has authored over ten internal policy research reports whose policy recommendations have by Chinese central and provincial-level government agencies.

It is difficult today to imagine the enormous influence that left-wing and Marxist thought had on Japanese intellectuals from the 1920s to the 1970s. Confronted with the profound contradictions of the modernisation process that began with the Meiji Restoration, many Japanese intellectuals turned to Marxist political economy and modernist critiques of Japanese culture.

With the victory of the Chinese Revolution and the onset of the Cold War, the flow of Chinese students to Japan was interrupted. By the time study abroad programmes resumed in the 1980s, the influence of Marxism in Japanese academia had waned. Postmodernist philosophy became dominant and social sciences shifted towards US-style quantitative approaches. Furthermore, against the backdrop of the Reform and Opening Up process, Chinese scholars were understandably more concerned with Japan’s economic successes and showed little interest in the left-wing social scientific critiques of Japan’s feudal or backward character. This orientation gave rise to a vulgar Weberian neotraditionalist tendency – the argument that Japanese culture facilitated Japan’s modernisation.

In this context, Qiu Shijie’s book Liu Shinkei: An Intellectual Biography (2022) provides an invaluable perspective for Chinese academia. The book is a biography of Taiwanese economist Liu Shinkei, who spent much of his intellectual life in Japan during the heyday of Japanese Marxism. Steeped in this intellectual milieu, Liu wrote a groundbreaking PhD thesis titled Analysis of Taiwan’s Post-War Economy (1972), which was published as a book in Japan in 1975 and translated to Chinese in 1992.² Qiu’s book provides both a valuable resource for academics on both sides of the Taiwan Strait on Taiwan’s post-war economy and Japanese Marxist debates through the eyes of Liu.

The Formation of Liu Shinkei’s Resistance

In the first chapter of the book, Qiu Shijie sketches Liu Shinkei’s life trajectory and the process of his intellectual formation. ‘Resistance’ is the keyword of this chapter and indeed the entire book. Liu’s experience of Japanese colonial rule and the 228 Incident were formative to his praxis of resistance.³ During his years of study in Japan, Liu was also influenced by the political movements of Taiwanese people in Japan who opposed the dictatorship of the Kuomintang (KMT); his proximity to these movements prevented him from becoming isolated from the masses as many Japanese left-wing intellectuals had become during wartime.⁴ Qiu shows that Liu’s resistance was both political and scholarly. Politically, he resisted the KMT’s autocratic rule and pursued democracy and national reunification. Through his scholarship, he resisted vulgar economics – a reflection of the spirit of Japanese Marxism at the time. In this sense, Liu’s political and scholarly resistance was highly unified.

During his studies at the Department of Economics at National Taiwan University, Liu was not compelled to accept the tenets of neoclassical economics; instead, he devoted more energy to philosophy.⁵ When he later studied Marxist economics, he felt an immediate affinity with its dialectical methodology. The tension between Liu’s political resistance and scholarly resistance manifests in what Qiu terms ‘the tension between essence and appearance’. As a result of his political orientation, Liu was committed to analysing the feudal essence of post-war Taiwanese capitalism, thereby underestimating its capitalist character and being unable to adequately explain the outstanding growth of post-war Taiwan.⁶ This contradiction led Liu to revise his doctoral dissertation, which had emphasised the strength of the pre-modern vestiges of Taiwanese society.⁷ Following the publication of his book Analysis of Taiwan’s Post-War Economy (1975), Liu sought to provide a critical political economic explanation of Taiwan’s rapid economic development without falling into mainstream frameworks of economic growth theory.

Liu Shinkei and the Debates of Japanese Marxism

Liu Shinkei’s intellectual struggle to understand Taiwan’s economy was, in some ways, inherent to the scholarly tradition he had inherited in Japan. Understanding this requires an elucidation of the intellectual debates of Japanese Marxism.

The second chapter of the book, ‘The Transmission of Scholarship: Marxist Economics at the University of Tokyo in the 1960s’, provides a genealogy of the debates and factions in Japanese Marxism. These include Moritaro Yamada and the ‘Lecture Faction’, Kozo Uno and the ‘Uno School’, and Hisao Otsuka and the ‘Otsuka School of Economic History’. Given the paucity of literature in China on this subject, the significance of this chapter far exceeds the study of Liu’s individual thought.

Liu’s Analysis of Taiwan’s Post-War Economy was structurally modelled upon Yamada’s Analysis of Japanese Capitalism (1934).⁸ Yamada employed Marx’s theory of reproduction to argue that Japanese capitalism was a special ‘type’ that achieved accumulation through a textile industry sustained by ‘semi-servile’ labour at ‘wages below India’s level’, with a semi-feudal ‘petty peasant’ as its foundation, and a military industry forcibly ‘engendered by state power as its pivotal axis’. Qiu offers a profound reading of Yamada, pointing out that his analysis is a theory of non-transition.⁹ For Yamada, semi-feudal agriculture and low-level textile industry constituted a relationship of mutual determination; this type of Japanese capitalism possessed no inherent developmental dynamic. The result was that society stagnated at the stage of absolutism and could not transition to genuine capitalism.

Liu’s absorption of Yamada’s theory of non-transition led him to argue that the essence of the post-war Taiwanese economy was semi-feudal. While his adoption of Yamada’s methodology helped him achieve a high level of theoretical accomplishment, he also inherited the static characteristics and implications of Yamada’s theory, rendering him unable to explain the rapid growth of Taiwan’s post-war economy.

Chapter five of Liu Shinkei: An Intellectual Biography explores how Liu attempted to resolve this problem through dialogue with various theories of development. In this process, Liu explored two frameworks: theories of state capitalism that emphasised economic nationalism, and theories of merchant capital that emphasised the role of private capital and small and medium enterprises. Liu’s conclusions were complex: he affirmed the economic nationalist character of post-war Taiwanese state capital while arguing that it remained an ‘exploitative dictatorial economy’.¹⁰ He affirmed that private capital with a merchant character could create outstanding economic performance while maintaining that merchant capital was nonetheless unproductive and essentially ‘bad capital’.¹¹ As Qiu Shijie states, Liu’s ‘contradictory and complex thinking – building off of Yamada’s Lecture Faction – reflects the tension within Taiwan’s economy’.¹²

In Japan, Yamada’s analysis was criticised by Marxists of the Labour-Farmer Faction, who stood in opposition to the Lecture Faction.¹³ The Labour-Farmer Faction contended that Yamada depicted a Japanese capitalism that was ‘long frozen in a specific type without development’.¹⁴ Kozo Uno further argued that Yamada’s analysis had ossified the English path of capitalist development and failed to recognise that late-developing capitalist countries would necessarily adopt policies appropriate to their respective conditions and need not follow a path of ‘pure capitalism’.¹⁵

Despite these limitations, Yamada provided a more persuasive explanation for the success of Japanese capitalism than Weberian views that simply invoked ‘cultural tradition’.

The Challenge of Dependency Theory

In the first chapter of Liu Shinkei: An Intellectual Biography, Qiu Shijie vividly portrays scenes of Liu Shinkei researching and writing his doctoral dissertation amid the maelstrom of the 1968 University of Tokyo protests.¹⁶ It was around this time that young students attacked the Lecture Faction and modernist thought as products of authoritarian elitism. These students opposed the argument that modern Japan was backward and the corresponding political conclusion that a ‘democratic revolution’ was necessary; the students instead advocated for a ‘proletarian world revolution’.¹⁷

In this social context, Uno School economist Hiroshi Iwata’s World Capitalism: Its Historical Development and Marxian Economics (1964) gained popularity. Iwata opposed comparative analysis premised on the establishment of capitalism in each country and constructed a consistent, unified theory of world capitalist business cycles, starting from the formation of British free trade imperialism in the mid-nineteenth century.¹⁸ Iwata provided a theory in which different parts of world capitalism were interrelated. This was in contrast to Yamada who viewed development as different stages on a single linear model. Although Liu was also influenced by dependency theory in the early 1980s, he ultimately did not adopt dependency theory or world-systems theory to explain Taiwan’s post-war economy. Instead, he continued to adhere to the endogenous perspective of economic nationalism and merchant capital theory.

In fairness, the Lecture Faction, and the Otsuka School of Economic History which it influenced, were not obstinately wedded to a single-track theory of ‘capitalism in one country’. As early as the wartime period, the economist Yoshihiko Uchida, deeply influenced by Yamada, explored themes that resonated with dependency theory in his research on the so-called ‘Greater East Asia Co-Prosperity Sphere’.¹⁹ From the 1950s onwards, Yamada also came to regard post-war capitalism as having formed a ‘world economic circulation’ structured according to the developmental stages of various capitalist countries, with the Japanese economy incorporated into the reproduction process led by the US.²⁰ In the 1960s, Hisao Otsuka began to counter the modernisation theory advocated by US scholars such as W.W. Rostow. Otsuka pioneered the study of industrial development in late-developing capitalist countries and developed his theory of ‘two paths’, arguing that the industrialisation process of late-developing countries necessarily involved ‘antagonism and dependence’ vis-à-vis advanced countries, thereby forming various types of capitalist development within the world movement of capital and creating ‘the simultaneous existence of uneven development’.²¹

Contemporary Relevance of Liu Shinkei

Liu Shinkei’s intellectual trajectory – his refusal to go with the tide of dependency theory and world-systems theory, and his return from dependency theory to theories of endogenous development – is worthy of deep consideration. As Qiu Shijie argues, Liu’s thinking consistently upheld Weberian-Otsuka-style value standards: he firmly believed that a modern separation of public and private spheres, and an autonomous, endogenous national economy were worthy of pursuit.²² This search for an idealised modernity and capitalism was based on values that enabled him to resist the actually existing modernity and capitalism in Japan. Proceeding in the direction of dependency and world-systems theory would inevitably lead to centring the emergence of the world market, relativising the emergence of the capitalist mode of production, and even ‘completely abandoning the dead-end concept of “capitalism”’.²³

Within Marxist economics, there has been a long debate about the transition to capitalism between those who focus on the mode of production and those who focus on developments in the sphere of circulation. In the relevant debates within Japanese Marxists, ‘Otsuka considered that Uno attempted to portray merchant capital as the ancestor of modern industrial capitalism … Uno, in turn, considered that Otsuka’s view of rural industry as the ancestor of industrial capital was overly simplistic reasoning’.²⁴ Since Weberian-Otsuka capitalism constituted a certain ideal that Liu believed in, it was only natural that he ultimately chose to adhere to the perspective of endogenous development in understanding the Taiwanese economy.

Considering that Liu Shinkei’s late-career reflections were accompanied by his experience of travelling constantly between both sides of the Taiwan Strait from Japan, perhaps his propositions concerning economic nationalism and merchant capital were based not only on his contemporary observations of Taiwan’s economy but also on the vigorous Reform and Opening Up process in the Chinese mainland. From the mid-1980s onwards, the intellectuals in the mainland enthusiastically debated China’s path to modernisation and the relationship between traditional culture and modernisation. It is possible that Liu Shinkei had a vision of coordinated development on both sides of the Taiwan Strait based on economic nationalism and the role of overseas Chinese capital, which could ultimately overcome the negative factors of bureaucratic-comprador capital and move towards national reunification and comprehensive industrialisation.

Liu’s economic thought offers both illumination for understanding contemporary Taiwan’s economy and inspiration for current questions of economic development in the Chinese mainland. Economic reforms since the 1990s have promoted the operation of market principles and brought economic vitality. However, state-led investment and development have also contributed tremendously to co-producing China’s economic miracle. Since the 2008 Global Financial Crisis, the overheating of an export-oriented economy reliant on labour-intensive industries and domestic investment has brought about new problems of insufficient and unbalanced development. The unfolding of the US trade war on China has made Chinese people aware of the importance of autonomous innovation and mastering core technologies.

How can the speculative nature of capital’s pursuit of profit be overcome? How can the productive forces be developed to a higher level while balancing the pursuit of profit with the public good? Ultimately, how can history be advanced? Such modernist questions are precisely those that Liu Shinkei sought to answer and remain relevant today.

Notes

Wang Li Wang Li (汪力) is an associate professor at the School of History and Culture, Northeast Normal University.

The Rise and Fall of Neoliberalism​

The precise definition of neoliberalism is debatable but its core principles are uncontested: ‘more market (less state) brings prosperity’.² Neoliberalism’s foundation lies in economics theories with market-fundamentalist traits; these theories assert that the free flow of goods, capital, and labour yields greater efficiency and welfare. At a national level, this implies that minimising all forms of state intervention in the market should automatically increase economic growth rates; internationally, neoliberalism posits that globalisation (increased economic integration among nations) is a win-win strategy for countries in both the Global South and the Global North. Neoliberalism’s policy prescription is the Washington Consensus, which confines the state’s role to providing basic infrastructure, education, and protection of property rights. Concretely, domestic economic policies should prioritise deregulation (reducing government distortions across sectors to let the market and price signals function effectively), while external economic policies should focus on liberalisation (lowering investment barriers and eliminating tariff and non-tariff obstacles to free trade).

In the 1980s, neoliberalism was propelled into mainstream development narratives through an alliance between US business groups and the then-marginalised neoliberal school. During the Third World debt crisis in 1982, the World Bank and International Monetary Fund (IMF) introduced Structural Adjustment Programmes (SAPs) as loan conditions, mandating recipient nations to implement fiscal austerity, trade liberalisation, economic deregulation, and privatisation. Subsequently, SAPs were widely imposed across Asia and Africa, effectively becoming ‘a campaign to shrink the state’ in the Global South.³ Additionally, the US spearheaded numerous multilateral and bilateral investment and intellectual property agreements that asymmetrically safeguarded the interests of US (and other developed countries’) multinational corporations vis-à-vis Global South nations. Concurrently, the notion that ‘more market (less state) brings prosperity’ gained ideological legitimacy as a consensus view. Reports from international organisations dismissed industrial policy as ineffective, reducing the success of state-led industrialisation in East Asia to simplistic explanations like marketisation or trade liberalisation. In 2002, the New York Times even declared, ‘Countries that open their economies and minimise government roles will inevitably achieve faster economic growth and rising income levels’.⁴

However, neoliberalism has failed to deliver the prosperity it promised. Global South countries that adopted Washington Consensus-style policy prescriptions – whether voluntarily or through coercion – have experienced pronounced economic volatility, decelerated growth, surging unemployment, and worsening social inequality. More critically, the Global South has been unable to economically catch-up with the Global North under neoliberalism. Since the 1990s, only a handful of economies successfully transitioned to high-income status, while the vast majority of Global South countries remain trapped in middle- or low-income status.⁵ As for the Global North, core states like the United States and United Kingdom have aggressively pursued domestic privatisation and labour market deregulation since the late 20th century. The resulting rise in income and wealth inequality has fuelled social discontent and political instability. But in recent years, the Global North has witnessed a revival of industrial policy – evidenced by the US Inflation Reduction Act and the use of ‘reciprocal tariffs’, and the European Union’s strategic interventions in the electric vehicle and semiconductor industries. In sum, the experiences of both Northern and Southern states have substantially eroded the theoretical foundations and policy appeal of neoliberalism.

While the neoliberal order has faced increasing scepticism since the global financial crisis, mainstream economists have begun using the concept of market failure to justify industrial policies that support the development of strategic industries (representative scholars include Joseph Stiglitz and Dani Rodrik). These arguments have garnered widespread attention and discussion within mainstream economics – a scenario that would have been unimaginable in the 1990s. In terms of policy practice, countries in the Global South have actively begun exploring state-led, domestically-tailored paths for economic catch-up. Many leaders in the Global South have explicitly rejected Washington Consensus-style policy arrangements and publicly advocated for an active governmental role in areas such as income distribution, foreign investment, and industrial planning.⁶

State-Led Industrialisation Remains Essential

Neoliberalism’s failures underscore that state-led industrialisation is indispensable for the Global South’s economic catch-up. Market mechanisms alone cannot overcome domestic and international barriers; proactive governments are vital for growing the manufacturing sector. The failure of economic catch-up in the neoliberal era has three key lessons:

1. The irreplaceable role of manufacturing.
   The pessimistic outlook for economic catch-up under the influence of neoliberalism largely stems from the stagnation of manufacturing in the Global South. Historically, the global economic North-South divide was a result of disparities in industrialisation. Industrialisation has served as the foundation for the vast majority of successful economic catch-ups. Under the neoliberal order, Africa and Latin America – regions with poor catch-up performance – are also those most severely affected by premature deindustrialisation. In many countries within these regions, labour has consequently accumulated in low-end service sectors characterised by low value-addition and a high proportion of informal employment, while capital has been channelled into rent-seeking or speculative activities in areas such as natural resources, finance, and real estate. These nations may experience rapid growth when global commodity prices are high and interest rates are low, but they quickly fall into crisis when aggregate demand in developed countries is insufficient or major central banks raise interest rates. It is this highly volatile growth pattern that prevents these countries from achieving sustained convergence with the income levels of industrialised countries.⁷ In contrast, China – the most promising example of economic catch-up over the past four decades – is characterised by a manufacturing sector that has continuously expanded in scale and upgraded technologically. Some argue that in the age of digital technology, the service sector can replace manufacturing as the driver of economic catch-up – a view seemingly corroborated by the rapid growth of services in countries like India, the Philippines, Rwanda, and Kenya. Nevertheless, high value-added services (e.g., research and development, production management, and e-warehousing) remain intrinsically linked to manufacturing, making it difficult for them to achieve large-scale expansion in isolation. Moreover, there are no historical precedents of successful economic catch-up driven solely by the service sector.⁸
2. The need for state-led industrial policy.
   The neoliberal order limited the governments’ willingness and ability to support industrial development, leading to the stagnation of industrialisation in the Global South. In the wake of economic and financial crises, many nations were pushed into Washington Consensus-style reforms: vital state-owned enterprises were privatised, controls on cross-border capital and exchange rates were lifted, tariffs were slashed, and policy tools like import quotas or mandatory technology transfers were outlawed. For example, India’s weighted tariff rate on manufacturing products dropped sharply from 42% in 1992 to 12.7% in 2005, and economic liberalisation gave rise to oligarchic and rent-seeking enterprises in sectors such as mining, telecommunications, and energy. This left India’s government with neither the resources nor the will to continuously support the development of manufacturing sectors like automobiles and pharmaceuticals.⁹ However, behind almost all successful economic catch-ups in history, the state has used industrial policy to mobilise various and guide resources into the manufacturing sector. Southern countries lacking proactive state action have experienced insufficient investment in manufacturing (for example, due to high uncertainty for private enterprises) and conflicts of interest surrounding manufacturing (for example, elites from the financial and mineral sectors often obstruct manufacturing development).
3. Foreign dependency hinders upgrading.
   The international division of labour within the neoliberal order is based on fragmented production. Southern countries are therefore easily locked into low value-added production activities. Southern countries participating in the international division of labour heavily rely on imported intermediate products and machinery, and are unable to obtain the necessary capital and technology for upgrading. For example, the local parts utilisation rate in South America’s export processing zones is only between 3–9% (in the Dominican Republic, it is 0.0001%).¹⁰ The reason for this situation is the unwillingness of international investors to upgrade: their incentive is to allocate investment regionally or even globally to reduce costs, and they have no intention of helping Southern countries raise their technological level. If a firm from a Southern country threatens their high value-added production activities (such as research and development, capital goods manufacturing, supply chain management, product marketing, etc.), multinational corporations use various means to limit the potential for upgrading, such as restricting the supply of capital goods and components, sharply increasing prices, or suing through the investor-state dispute settlement mechanisms. In fact, successful economic catch-ups in history have all been based on domestic enterprises with their core production activities located within their own country. Domestic enterprises naturally have the incentive to earn higher profits by upgrading to higher value-added production activities. For example, in South Korea, Taiwan Province, and the Chinese mainland, local companies in industries such as electronics have participated in transnational production through lower value-added activities while gradually moving up the industrial chain to increase domestic value-addition. At the same time, there is no case of achieving economic catch-up solely by relying on foreign investors.¹¹ Therefore, governments should actively provide domestic enterprises with resources and opportunities for manufacturing upgrades through industrial policies.

Challenges to Economic Catch-up in the Post-Neoliberal Era

Policymakers in the Global South have begun to recognise the limitations of neoliberal theory and practice, and have turned to promoting state-led industrialisation. However, achieving this goal in the post-neoliberal era is not easy. Southern countries face at least three interconnected obstacles: digital technology, oligarchic enterprises, and great power competition. The interaction between these three factors places extremely high demands on the governments in the Global South for resource investment, making the difficulty for each country to independently advance its economic catch-up significantly greater.

1. Digital technology reduces the labour absorbed by manufacturing.
   Technology in manufacturing has a clear labour-saving tendency. For example, during their period of rapid industrialisation, the manufacturing sector’s share of employment in Europe and the US was close to 40%, whereas currently in Vietnam (a country with a relatively outstanding industrial performance), it is only 18%.¹² This trend will produce a series of chain reactions. Historically, industrialisation often created a large number of stable employment opportunities, thereby cultivating social groups that supported manufacturing expansion. However, the development of digital technology is gradually reducing the size of this beneficiary group, and correspondingly increasing the difficulty for the state to obtain support for industrial policy from various social groups.¹³ Internationally, the investor appeal of cheap labour in Southern countries may be significantly weakened, which could lead to intense competition and further suppress the value-addition that Southern countries can obtain.Moreover, digital technology increases the investment required for upgrading. The productivity enhancement mechanism of the Fourth Industrial Revolution comes from the interconnection of numerous domains; digital islands in isolated domains (regardless of their level of technological advancement) make it difficult for Southern countries to truly enjoy the dividends of new technologies. In other words, discussing the Internet of Things, artificial intelligence, and big data analytics in an economy that has not set up the internet or popularised sensors is meaningless. However, the popularisation of sensors, network connectivity, and digital skills training in a general sense all require proactive action from the governments of Southern countries. Therefore, the advancement of digital technology makes the task of promoting basic interconnectivity in the Global South increasingly urgent.
2. Oligarchic enterprises squeeze the profit margins of Southern countries.
   Under the neoliberal order, the governments of developed countries, led by the US, were keen to sign bilateral and multilateral free trade agreements with Southern countries. But these agreements established the oligopolistic or even monopolistic status of multinational corporations. Currently, the revenue of oligarchic enterprises from industrialised countries is already comparable to the gross domestic product of many Southern countries; these enterprises have achieved dominance over global value chains through product design, manufacturing standards, process management, and market logistics, and are thus able to squeeze the profit margins of Southern countries. Apple Inc. is representative of this trend: Apple, which does not engage in any manufacturing activities, earns 58% of its final product’s value, while the share earned by labour-intensive production activities is only 1.8%.¹⁴ In the post-neoliberal era, the asymmetrical profits of multinational corporations are very likely to continue to rise. A prominent feature of manufacturing activities in the digital age is the increase in the density of intangible assets.¹⁵ Compared to tangible assets, multinational corporations have an even stronger monopoly over intangible assets. Currently, the Gini coefficient of patent holdings among different countries is close to 0.85 (far exceeding the level of income inequality in any country), and the vast majority of data storage centres and almost all influential trademarks are also located in industrialised countries. Multinational corporations are able to earn excess profits by relying on their monopoly over intangible assets. For example, in 2021, the patent royalty income of developed countries was more than twenty times that of the Southern countries, being $405.5 billion for the former and only $20 billion for the latter. Against this backdrop of multinational corporate oligopoly, it is very difficult for Southern countries to develop their manufacturing sector.
3. Geopolitics increases the uncertainty of economic catch-up.
   First, great power competition creates the risk of further ‘modularisation’ of the world economy, i.e., the division of the world into different modules of ideology, technical standards, payment systems, reserve currencies, and trade systems. This division means that Southern countries may need to purchase higher-priced intermediate and capital goods, and at the same time find it more difficult to access downstream markets to support their domestic production. These adverse conditions require more government support (for example, by subsidising machinery imports and product exports). Second, the probability of economic and financial turmoil has sharply increased. The Russia-Ukraine conflict and the ensuing sanctions caused global wheat prices to suddenly rise by 37% in 2022, triggering food crises in some countries in North Africa and South Asia.¹⁶ Meanwhile, trade-related administrative bans have surged from fewer than a thousand in 2019 to nearly three thousand in 2022.¹⁷ Such events require the state to have sufficient financial reserves to avoid the collapse of the domestic economy. These uncertainties reduce the volume of resources that Southern states can invest in manufacturing development because more resources must be set aside to respond to external shocks. Third, while there are views that ‘decoupling’ and ‘de-risking’ could bring opportunities for industrial transfer to some Southern countries, these transfers are still concentrated in labour-intensive production activities. The growth of Southern countries’ trade with the US has already triggered hostile actions from the Trump administration; in other words, the benefits that industrial transfer can bring may also be relatively limited.¹⁸

Towards a Southern Theory of Economic Modernisation

As economist Dani Rodrik notes, ‘Today we are in the midst of a transition away from neoliberalism, but what will replace it is highly uncertain.’¹⁹ The simple neoliberal narrative that ‘more market (less government) brings prosperity’ is losing its appeal and credibility in the Global South, but a new theory has yet to mature. To economically catch-up in the post-neoliberal era, the Global South must avoid uncritical reliance on and wholesale adoption of economic theories from the Global North. It is imperative to formulate a Southern theory of economic modernisation grounded in the practices and wisdom of the Global South itself.²⁰ The experience of China – a member of the Global South with the most rapid record of economic catch-up – can serve as a crucial point of reference. Specifically, such an inquiry should entail at least three dimensions of effort.

First, it is imperative to advocate for the de-ideologisation of development theory. The evolution of social sciences in the US has always been deeply intertwined with the social values of individualism, liberalism, and universalism.²¹ Proponents and beneficiaries of the neoliberal order have successfully conflated its theoretical foundations with these social values. Consequently, those who oppose free trade, free investment, or free markets are typically cast as either spokespersons for rent-seeking interests or as heretics deviating from orthodoxy. However, as Karl Polanyi famously argued, ‘laissez-faire was planned’.²² The ‘freedom’ in such theories refers only to the unrestricted freedom of capitalists in trade, investment, and transactions; conversely, it entails a restriction on the freedoms of workers and the broader peoples of the Global South. For instance, the free mobility of capital is, in practice, achieved by curtailing the freedoms of numerous other actors, such as workers.²³ Likewise, lowering trade and investment barriers effectively constrains the freedom of Southern countries to formulate economic policies suited to their own national contexts.²⁴ Therefore, theoretical research on economic catch-up must be decoupled from ideological elements specific to the US. Instead, research should be grounded in a scientific examination of relevant historical experiences, particularly the state-led industrialisation of China and other East Asian economies.

Second, research should be focused on issues of production and employment. Since the 1970s, mainstream Western economics has increasingly centred on exchange efficiency and constructed theory on the micro-foundations of consumer utility maximisation. In doing so, it has neglected the intrinsic differences between production activities, beyond the requisite input ratios of production factors.²⁵ While this focus was valuable for rethinking the inefficiencies of some import-substitution strategies, it was instrumentalised by the proponents and beneficiaries of neoliberalism to ignore production and employment. For example, rapid privatisation or stringent fiscal discipline could cause large-scale unemployment in the short term (while simultaneously benefiting creditors in developed nations), yet such policy initiatives were successfully implemented in the name of efficiency. Similarly, in international trade, a focus on primary commodity exports and labour-intensive production could lead Southern countries to lose their existing industrial base and struggle with technological upgrading in manufacturing (a situation that benefits multinational corporations headquartered in industrialised countries). A mechanistic interpretation of the theory of comparative advantage lent these policies the legitimacy of ‘enhancing trade efficiency’. In contrast, China, throughout its process of reform, has consistently focused on expanding the scale and technological sophistication of its manufacturing sector and has always placed employment at the core of its policymaking. If a new theoretical framework centred on production and employment can be developed based on the Chinese experience, it would undoubtedly be more conducive to establishing the legitimacy of actions taken by Southern countries to support their domestic manufacturing sectors.

Third, the role of the state must be re-evaluated and subjected to systematic inquiry. The research paradigm of mainstream Western economics conceives of the market as a sphere entirely separate from society, governed by its own inherent laws and insusceptible to interference from government or other social groups. Within this framework, intervention by non-market factors is posited as the primary reason why efficiency is constrained and the ‘invisible hand’ fails to function. Consequently, the state is typically perceived as an impediment to development and limited government is presented as a universally beneficial direction for reform.²⁶ However, in Southern countries where market institutions are not yet consolidated, constraining state action is prone to generating a series of problems such as the rise of oligarchic monopolies, the erosion of the industrial base, and the prevalence of illicit activities. For example, during the initial phase of its reform and opening-up, China did not pursue the ‘limited government’ model prescribed by mainstream theory. Instead, it leveraged its existing institutional advantages, mobilising the proactiveness of government officials at all levels to engage in investment promotion activities.²⁷ While such an institutional arrangement would be proscribed by the mainstream, it achieved performance far superior to that of the Eastern European countries which undertook reforms to limit government. In reality, the perfect market of the mainstream paradigm may not exist at all; market activities are necessarily embedded in social relations and cannot operate independently of them. The more meaningful question, therefore, is not ‘whether government’, but ‘what kind of government’. Abandoning preconceived notions about the role of the state and engaging in a systematic discussion of its function in economic development is productive for theoretical reorientation.

Notes

Qin Beichen and Jing Jun Qin Beichen (秦北辰) is a PhD candidate at the Institute for International and Area Studies, Tsinghua University. His research focuses on industrial development and the digital economy in Southeast Asia. His publications have appeared in Contemporary Asia-Pacific Studies, Foreign Affairs Review, Chinese Public Administration, Southeast Asian Studies, and other journals. He has served as a visiting researcher at Ateneo de Manila University and a visiting doctoral student at the University of Malaya, conducting extensive fieldwork in Southeast Asia. He is currently a member of the Youth Forum on Area Studies. Jing Jun (景军) is Professor of Sociology and Director of the Centre for Public Health Research at Tsinghua University. He received his PhD in Social Anthropology from Harvard University in 1994. He previously served as tenured Associate Professor at the City University of New York. His book The Temple of Memories: History, Power, and Morality in a Chinese Village was published by Stanford University Press in 1996. His research has spanned historical memory, dam-induced resettlement, environmental protest movements, child nutrition and feeding practices, suicide, and HIV/AIDS. His current research focuses on social and policy issues in public health.

Against this backdrop of systemic crisis, China’s experience with collective land ownership presents a compelling alternative. Rather than representing a relic of the past, China’s collective model has supported rural revitalisation and ensured national food security, offering a viable path forward for rural development.

Rural Chronicles: Why the New Collective Economy Works (乡村纪事：新型集体经济为什么行) by Yan Hairong, Gao Ming, and Ding Ling emerges as a crucial intervention from China into these debates. Based on years of meticulous fieldwork across seven distinct case studies, Tsinghua University professor Yan Hairong and her research team demonstrate a people-centred, collective path to rural development that stands in sharp contrast to the neoliberal model. It serves as a materialist rebuttal to the prevailing narrative of the demise of the small peasant – an ideology that promotes the movement of peasants to cities and the drain of wealth from the countryside, leaving only specialised large households and leading enterprises as agricultural actors.

Confronting the Agrarian Question in Contemporary China

Rural Chronicles addresses a critical challenge born from over four decades of China’s Household Responsibility System: the polarisation and atomisation of rural areas that left individual peasants acutely vulnerable to market volatility and the intervention of capital. To understand the significance of the collective path documented in Rural Chronicles, one must first grasp the deeper structural contradictions within China’s current land system.

China operates a dual land ownership system: urban land is owned by the state and rural land is owned by collectives. The 1978 Household Responsibility System, introduced to address the problems of economic development at the time, established individual contracting rights while maintaining the framework of collective ownership. This system has since evolved into a ‘three-rights separation structure’ – collective ownership, household contracting rights, and management rights.

The fundamental contradiction lies in how this separation undermines collective agency. According to Lu Xinyu, collective land ownership was originally designed to serve community protective functions, allowing villages to adjust land distribution according to demographic changes and ensuring that the land belongs to those who work it. When management rights become tradable commodities, village collectives lose control over how external capital invests in and utilises community land. Smallholder agricultural operations yield lower economic returns from land-based production. Meanwhile, as urban-rural income disparities continue to expand, rural populations increasingly move to the cities for employment, resulting in the widespread abandonment of agricultural land.¹

One response to this crisis is transferring land to leading enterprises or external capital for scaled agriculture. This is essentially a market-based solution to agricultural modernisation. Critics argue that this constitutes de facto land privatisation and dispossesses peasants of land-use rights while dismantling collective economies. From this context, the authors of Rural Chronicles pose the fundamental question: under marketised conditions, how can new collective economies develop that transcend both the vulnerabilities of atomised peasants and the risks of capital-dominated reorganisation? The alternative path of strengthening smallholder-led village collectives forms the core proposition of Rural Chronicles. The authors argue that sustainable rural revitalisation requires reactivating village collectives as the intrinsic force for development, enabling peasants to reclaim their agency in the modernisation process, and building a bulwark against predatory capital.

The political significance of this work is underscored by China’s recent legislative developments. The Law of the People’s Republic of China on Rural Collective Economic Organisations was passed in June 2024, four months before the publication of the book, and came into effect in May 2025.² This legislation legally codifies core principles such as the inalienable collective ownership of rural land and the necessity of democratic management by villagers. The law provides a legal framework to protect collectives from both internal control by a few individuals and external control by capital. This ensures that development is driven from within the communities of over 900 million Chinese peasants.

Pillars of the New Village Collectives

The strength of Rural Chronicles lies in its rich, granular detail which moves beyond abstract theory to the living practice of socialist construction. Across its diverse case studies, the book provides an anatomy of how the new collective economy resolves key contradictions in China’s rural development.

The book elucidates the indispensable role of the grassroots organisation of the Communist Party of China as a political vanguard. This leadership operates not by coercion but through the original aspiration of ‘serving the people’ – a practice that mobilises the grassroots communities and builds trust. In Tangyue Village, Party Secretary Zuo Wenxue committed to leading village-wide prosperity rather than individual enrichment despite personal business successes. When facing fundraising challenges, eleven village committee cadres took personal loans from the credit union to obtain funds for the collective. This pattern of ‘party members taking the lead’ appears consistently across case studies – in Daba Village, Guizhou Province, cadres first trialled risky cash crops to prove viability; in Tugudong Village, Henan Province, the party secretary personally secured a loan of 30,000 yuan and promised to absorb losses if ventures failed.

Crucially, this leadership operates on the principle of the mass line rather than top-down directives. Villages have set up various mechanisms for participation in decision-making. Tangyue Village employs a representative system with one elected villager per fifteen households participating in collective decisions. Gacuo Collective implements circular supervision where production group leaders supervise the members, village cadres supervise the group leaders, and masses supervise the cadres. Cadres and the institutions are dialectically interrelated. Gacou Collective’s 189 management rules are all formulated and updated through a village-wide People’s Congress that is held every one or two years, ensuring the regulations reflect the will of the community.

Rural Chronicles demonstrates how collective ownership serves as the economic foundation for effective rural development. By reintegrating fragmented land and labour, as Tangyue and Daba villages did, collectives achieve economies of scale that enable unified procurement, production, and sales while strengthening their capacity to negotiate with larger market actors. This foundation is crucial not only for market leverage but also for introducing and popularising advanced agricultural technologies – thus fostering the application of ‘new quality productive forces’.³ In Tugudong, the collective engages with private capital from a position of strength rooted in land ownership. Even when private enterprises are contracted to operate on village land, the system maintains a collective orientation because the collective has ultimate ownership of the land and is entitled to a portion of the surplus generated by these enterprises via rent and management fees.

These cases demonstrate how village collectives actively navigate relationships with external forces – government, capital, and enterprises – to develop strategic partnerships while maintaining collective autonomy. Rather than passive recipients of external intervention, these collectives exercise agency in structuring collaborations that serve their developmental goals. The income generated from the collectives is used to fund public welfare projects including pensions, social support through wedding and funeral committees, reading societies, and elderly associations. This ensures that the benefits of development are shared and helps build a resilient rural society that is essential to the broader project of Chinese modernisation.

Rural Chronicles also illuminates fundamental contradictions within collective rural development that threaten sustainability: dangerous over-reliance on individual leaders (evident in Xinqi Village’s difficulties after the former party secretary’s retirement), concentration of decision-making within small collectives of cadres without enough mass participation and unsustainable debt accumulation – with Daba and Xinqi carrying 48 million yuan and 70-80 million yuan in obligations, respectively. While the book identifies these critical problems, its theoretical analysis of systematic solutions is insufficient. Lu Xinyu once argued that socialism’s advantage in rural reorganisation was its ability to directly inject party organisational resources to provide non-market support for rural restructuring. To ensure the sustainability of rural development after resources for poverty alleviation are withdrawn, the grassroots party organisations need to function as the primary agents and driving forces for rural social and economic reorganisation.⁴

From Local Practice to Global Resonance

Rural Chronicles offers more than a detailed documentation of Chinese rural development – it provides insights relevant to global agrarian struggles, with examples of rising incomes, improved welfare, and renewed social cohesion in the villages studied. The principles of collective action find a compelling parallel in the agrarian struggles in Global South movements like Brazil’s Landless Workers’ Movement (MST). The book’s co-author, Yan Hairong, personally visited an MST encampment in northern Paraná in 2015. A detailed account of the movement can be found in the April 2024 dossier from Tricontinental: Institute for Social Research, The Political Organisation of Brazil’s Landless Workers’ Movement (MST).⁵ For four decades, the MST has organised peasants into cooperatives to build political consciousness and material power as part of their broader struggle for social transformation. Their settlements feature agrovilas (agrovillages) that bring households together to coordinate production and socialise domestic labour through collective kitchens and childcare circles.

MST is now drawing on China’s agrarian reform experience by establishing a Farming Agriculture Mechanisation Science and Technology Residence together with Chinese universities and enterprises. It is also introducing Chinese-made, small-scale agricultural machinery to serve family farmers in Brazil.⁶ While the political contexts differ, the underlying lesson is resonant – the organisation of the peasantry into collective productive units is an essential strategy for building people’s power in the struggle for food sovereignty, agrarian reform, and social transformation. For scholars and activists engaged in agrarian struggles globally, the experiences in Rural Chronicles, read alongside the struggles of movements like the MST, provide invaluable political inspiration and strategic insight for the rural masses of the Global South.

Notes

Grace Cao Grace Cao (曹心悦) is the project manager of Wenhua Zongheng and a Chinese-English interpreter. She holds a master’s degree in translation and interpreting from China Foreign Affairs University. Her work focuses on international communication and exchanges across the Global South, in particular cross-cultural understanding and linguistics.

This article, after briefly outlining the structure of the traditional left-right ideological spectrum, seeks to analyse and interpret the processes and driving forces behind this fragmentation, as well as the emerging post-fission ideological ecology. It aims to observe and explore an emerging new ideological spectrum and propose some ideas regarding the 21st-century world order that China is helping to reshape.

From October Revolution to World Anti-Fascist War: The Grand Narrative of Left and Right

The October Revolution inaugurated the grand narrative of the 20th-century ideological spectrum. The ‘Left’ embodied the communist ideal, socialist institutions, and the internationalist worldview championed by the Soviet Union. Although it had been underpinned by more than half a century of Marxist thought, this ‘Left’ arose abruptly as a political force and product of the great October Revolution. The ‘Right’, as a counterforce, evolved over thirty years, beginning with the confrontation of capitalism and feudalism against the Soviet Union and ultimately culminating in fascism, which, with state capitalism as its economic foundation, came to occupy the far-right end of the spectrum.

Within this global grand narrative, the United States and certain Western European countries occupied an intermediate position: they opposed the communism of the left while also resisting the fascism of the right. Their domestic politics unfolded within a small ‘left-right’ narrative – namely, the struggle between the leftist camp influenced by the Soviet Union and representing labour interests, and the rightist camp upholding capitalism and representing the interests of capital. In this smaller narrative, post-war US politics shifted leftward; domestic policy eventually settled on Roosevelt’s New Deal which protected labour, while the US allied with the Soviet Union to wage a decisive war against fascism.¹

During the same period, China’s politics were positioned in an intermediate zone, but with a right-leaning tendency. Following the failure of Kuomintang-Communist alliance, the Kuomintang emerged as a political force firmly defending the interests of the dominant feudal and capitalist classes. Domestically, the Kuomintang government employed fascist methods to suppress the Communist Party of China (CPC). However, because it had to confront Japanese aggression and rely on US support, it was unable to pursue a fascist path internationally.

At that time, the vast majority of colonised and imperialised nations in Africa, Latin America, and Asia generally leaned to the left. Their leftist stance was primarily reflected in their anti-colonial and anti-imperialist positions, as well as in their struggle for national independence, with Marxism-Leninism serving as a critical ideological weapon against colonialism and imperialism.² From that era onwards, the notion of sovereignty transcended the left-right divide. Political forces in anti-colonial countries and regions engaged in left-wing struggles united against imperialism by fighting for sovereignty on a global scale. In the West, in opposition to predominantly leftist internationalism, far-right nationalism (including fascism) and right-wing sovereigntist factions emerged. In the United States, the political forces that opposed participation in the Great War and the World Anti-Fascist War and resisted joining the League of Nations belonged to the latter category.³

Overall, the left-right struggles of this era centred on the social upheavals set in motion by the Industrial Revolution and its disruptive impact across multiple dimensions. Within industrialised countries, the dominance of capital led to severe inequality, leaving large segments of the population without secure livelihoods. Internationally, the early industrialised Western powers engaged in unprecedented global plunder through force. Simply put, the right sought to protect the vested interests of capital and the state, while the left fought for the rights of workers and for the independence and liberation of peoples who had been plundered and colonised.⁴

China’s left-right politics at that time mirrored this global pattern, characterised by the fusion of the communist revolution with the struggle for national independence – a combination that became a foundational element of modern China’s state-building and has profoundly influenced its future trajectory.

The Cold War: Socialism or Capitalism?

After World Anti-Fascist War, the world swiftly entered a Cold War marked by confrontation between the two major camps led by the United States and the Soviet Union, respectively. The ideological spectrum between left and right became particularly clear in this period. During the half-century-long Cold War, the Warsaw Pact bloc, led by the Soviet Union, and the NATO-based Western bloc, led by the United States, shaped a distinct global left-right landscape. Many developing countries in the Third World chose sides, while some remained neutral. For instance, the Philippines and Argentina aligned with the right, whereas most African nations leaned towards the left. In this global landscape, the left was represented by socialism and internationalism led by the Soviet Union, while the right was represented by capitalism and ‘sovereigntism’ led by the United States.⁵

Within these two blocs, political dynamics oscillated along a smaller left-right spectrum. In the West, the ‘left’ encompassed welfare-state politics within a capitalist framework, featuring high taxation, robust welfare systems, and labour protections, while the right represented a politics of protecting capitalist interests through low taxation and limited government. In the Soviet bloc, the left meant strict adherence to socialism and a planned economy, while the right was represented by advocates for introducing elements of a market economy within the socialist framework.

During the Cold War, China’s international stance straddled the ideological spectrum, encompassing both left and right. From the founding of the People’s Republic of China to the Cultural Revolution, China was clearly left-leaning, embracing a planned economy, internationalism, and opposition to revisionism. After the 1970s, however, China grew increasingly estranged from the Soviet Union, established diplomatic relations with the United States, and began to adopt the market economy framework led by the West. This was viewed as a rightward shift in many analytical frameworks. Some scholars have even classified Deng Xiaoping’s economic policies as a form of neoliberalism.⁶

The Post-Cold War Era and Globalisation

After the collapse of the Soviet Union, the global left-right landscape underwent profound changes. The grand left-right divide at the international level essentially disappeared, and the Western-dominated right of the Cold War era established an ideological unipolar hegemony on a global scale. The entire ideological framework of liberalism and neoliberalism transcended the traditional left-right divide, evolving into so-called ‘universal values’ and the ‘end of history’ thesis. Many scholars refer to this period as the ‘unipolar moment’.⁷ This ideological framework repackaged the philosophical concepts of Europe’s Enlightenment into a contemporary ideological complex of political, economic, and geopolitical ideologies which were aggressively promoted worldwide. This complex includes several core elements: the individual is the fundamental atomic unit of human society, endowed with inalienable rights; multi-party elections and the separation of powers with checks and balances are the only legitimate political systems; an independent judiciary, detached from politics, is the only legitimate legal framework; and the capitalist market economy is regarded as the sole effective economic system for the world. Within this framework, rights such as freedom of speech and the press, as well as racial, gender, and sexual orientation identities – and even the choice of gender identity – are viewed as tools and expressions of the ongoing expansion of individual sovereignty. The essence of liberal ideology lies in its claim to universality: liberals believe their values transcend all cultures, religions, nations, and even history, and that these values must ultimately be accepted by all of humanity and embedded in every country’s political system, economic structures, and social institutions.

The universalisation of an ideology rooted in fundamentalist liberalism, combined with neoliberal economic policies, became the overarching narrative dominating the world during this unipolar moment. The ideological spectrum effectively detached from the traditional left-right divide and the political orientation of parties and states came to depend on the degree of their alignment with this liberal grand narrative. Internationally, the United States stood at the most extreme end of liberalism, while the opposite extreme consisted of states such as the Democratic People’s Republic of Korea and the Islamic Republic of Iran that rejected liberalism entirely. There were also cases like Russia, which swung from a full embrace of liberalism during the Boris Yeltsin era to resistance during the Vladimir Putin era. On the domestic front, political parties across countries selected elements from the ‘menu’ of liberalism and neoliberalism according to their interests and positions. For example, the Democratic Party in the United States leaned culturally towards identity politics and championed the continuous expansion of rights related to race, gender, and sexual orientation, thereby advancing individual rights. For this reason, they were labelled as left-wing liberals; however, this ‘left’ had fundamentally diverged from the definition of ‘left’ in the 20th-century ideological spectrum. Economically, the Democratic Party moved ever closer to the Republican Party’s neoliberal agenda, while both parties increasingly tilted towards the interests of capital. This orientation was termed right-wing conservatism, but it too had departed from the ‘right’ of the 20th-century ideological spectrum. In international politics, both the Democratic Party’s liberal interventionists and the Republican Party’s neoconservatives advocated the use of political, economic, and even military means to universalise liberalism.

In this era, China once again occupied an intermediate position. Economically, it embraced and advanced a market economy; politically, culturally, and geopolitically, it rejected liberalism and resisted neoliberalism in the economic domain. As a result, China’s market economy is defined as a socialist market economy, its political system as a people’s democracy led by the CPC, its rule of law as integrated with politics, and its culture as one that prioritises national sovereignty and collective interests over individualism. In the post-Cold War era, China rejected adherence to liberalism and neoliberalism while absorbing aspects of Western market economics, thereby becoming deeply integrated into globalisation and emerging as one of its most significant driving forces. In international affairs, China upheld the Five Principles of Peaceful Coexistence and firmly resisted the universalisation of Western liberalism.⁸

The Ideological Fission Caused by the Transition to a Multipolar World

From the 2008 financial crisis that erupted in the United States and reverberated worldwide to Donald Trump’s first term as president, globalisation in the West experienced a profound transformation, leading to an ideological fracture on a global scale. The wave of globalisation, which began in the early 1990s after the Cold War, peaked with China’s accession to the World Trade Organisation in 2001 and started to recede with Trump’s election in 2016. While this wave of globalisation was primarily led by the United States, which formulated the rules, it manifested through global trade and financial integration. Globalisation’s underlying driving force carried a distinctly ideological dimension. At its core were the liberal political outlook and its economic offshoot, neoliberalism.⁹ China fundamentally rejected this ideological core; yet, it fully integrated into globalisation at the economic-structural level and, by adhering to the framework of globalisation, became an important participant and leader in the process.

Globalisation generated immense economic value: China vaulted to become the world’s largest economy in terms of purchasing power parity, while the overall wealth of the United States and the broader West also grew substantially. However, most countries and regions in the developing world saw limited benefits. More critically, the gains from globalisation were distributed in an extremely unequal manner within the US and across the West. Elite interest groups captured the lion’s share of newly created wealth, while the middle and lower classes bore the heavy economic and social costs of deindustrialisation. At the same time, the cultural disruptions stemming from globalisation and liberal ideology inflicted severe damage on the social fabric of Western societies, undermining the political stability and social consensus established in the West after the World Anti-Fascist War.¹⁰

Meanwhile, US and NATO-led military alliances forcefully intervened in the political and economic affairs of numerous countries and regions. These interventions ranged from economic measures via Western-controlled international institutions (such as the International Monetary Fund) to orchestrating colour revolutions and even wars. Such large-scale coercive interventions were driven both by strategic interests and ideological imperatives, culminating in what British historian Paul Kennedy has termed ‘imperial overstretch’.¹¹ This overstretch imposed enormous structural costs on the US and the West as a whole, deepening their internal social and political fractures.

Against this backdrop, the relatively stable left-right ideological spectrum of the 20th century underwent significant fission.

United States

After the collapse of the Soviet Union and the end of the Cold War, the grand left-right spectrum essentially disappeared within the United States and the broader West. The former right became the entirety of the political spectrum, within which a smaller left-right ideological divide encompassed all political debates. On this narrower spectrum, differences in economic and foreign policy diminished considerably. Economically, the left, represented by the Democratic Party, had, since the era of President Bill Clinton, largely abandoned labour interests and tilted towards neoliberalism – advocating for small government, reduced welfare, protection of capital, and free trade. At the socio-economic level, both parties sided with capitalist interests and promoted the deindustrialisation of the United States. Regarding immigration policy, both parties generally supported immigrant rights and adopted relatively lenient stances on illegal immigration, differing only in degree. In foreign affairs, the Democratic Party largely abandoned the dovish path previously associated with the left by advancing liberal interventionist policies, including the use of military force. Clinton and British Prime Minister Tony Blair were representative politicians of this so-called ‘Third Way’ or ‘Middle Way’, with the former launching military interventions in Yugoslavia and the latter strongly supporting the Iraq War.¹²

The right was represented by the Republican Party which originated neoliberal economic policies. They supported small government, low taxes, limited welfare, the protection of capital, and free trade even more strongly than the Democrats. In foreign affairs, their policy orientation is guided by neoconservatism, which is essentially in the same vein as the Democratic Party’s liberal interventionist policies.¹³ Under this shared political direction, during the twenty-four years of the presidencies of Clinton, George W. Bush, and Barack Obama, colour revolutions and military conflicts persisted without pause, and defence spending rose steadily.

Within this smaller left-right spectrum, the differences between the left-leaning Democrats and the right-leaning Republicans were concentrated more in cultural values, racial politics, and environmental or climate policies. The two sides clashed sharply on values: Democrats insisted on the legalisation of abortion, while Republicans sought to restrict it; Democrats aimed to regulate private gun ownership, while Republicans viewed gun rights as constitutionally guaranteed. Democrats advocated for so-called multiculturalism, advancing identity politics for ethnic and sexual minorities. In policy, they implemented what is known as proactive affirmative action, continually demanding preferential treatment for ethnic minorities and sexual minority groups in school admissions and the job market. Over years of evolution, these political propositions have developed into what is known as ‘wokeism’. Most Republicans oppose these identity-based political agendas and advocate for the preservation of a more classical form of individualism. It is worth noting that the identity politics championed by Democrats is not collectivism but rather a manifestation of amplified individualism – aimed at helping individuals within certain identity groups overcome traditional social values seen as barriers to personal development. The ideological lineage of wokeism stems from an extreme form of modern liberalism.¹⁴ On environmental and climate issues, Democrats typically advocate for stricter regulation of businesses and more stringent environmental laws, while Republicans tend to favour free markets and fewer business restrictions.

This small left-right framework was completely shattered in 2016. At one end of the new spectrum is the entirely new ideology represented by the ‘Make America Great Again’ (MAGA) movement, and at the other is the liberal ideology that spanned the centre-left and centre-right throughout the post-Cold War era. Many media outlets categorise the Trump-led MAGA movement as right-wing or even far-right. Although some of MAGA’s political stances – such as opposing the legalisation of abortion – align with the right in the old small left-right spectrum, this classification is misplaced. Many of MAGA’s core political positions, such as trade protectionism and reindustrialisation, are in fact closer to the left in the Cold War left-right spectrum.

The ideological turbulence caused by MAGA was starkly revealed in the political alignments during the 2024 presidential election. Democratic presidential candidate Kamala Harris received and welcomed the endorsement of former Republican Vice President Dick Cheney, while Cheney’s daughter, Liz Cheney, a Republican congresswoman, actively campaigned for Harris. Cheney has long been a right-wing politician deeply despised by the Democratic Party. Many establishment figures entrenched in the Republican Party, including George H.W. Bush and George W. Bush, have strongly opposed Trump and the MAGA movement since 2016. Contemporary Western academia, political elites, and mainstream media often label MAGA and its European counterparts as ‘populism’. However, the definition of populism here remains vague. This is essentially a negative label applied by the Western establishment to brand a movement that is fundamentally challenging the foundations of liberal ideology as mere ignorance and anti-intellectualism.

The true significance of MAGA extends far beyond what is termed populism; it is dismantling the old small left-right framework and may be creating a new grand political spectrum in the US – and potentially across the entire Western world. In political discourse and theoretical terminology, revolutionary forces are often placed on the left, while conservative forces are placed on the right. Since MAGA is clearly an anti-establishment movement, with its opposing force being the relatively conservative establishment that seeks to preserve the liberal order, it could tentatively be positioned on the left of this emerging political spectrum. Meanwhile, the liberal establishment within both the Republican and Democratic parties could be positioned on the right.

The MAGA faction has now entered the White House, gained majorities in both chambers of Congress, and has a majority of Supreme Court justices who lean toward its political stance. Their domestic policy orientation runs counter to the bipartisan consensus that has taken shape over decades across the small left-right spectrum. In terms of cultural values, the MAGA faction has overturned the mainstream politics of recent decades, swiftly and assertively dismantling numerous woke policies across government and society and attempting to culturally reinstate traditional Christian values. It is also enforcing more stringent anti-immigration measures. In social and economic governance, the MAGA faction embraces a pronounced form of libertarianism, with Elon Musk being a representative figure. It is crucial to note that libertarianism and liberalism are fundamentally different – and in many respects even oppositional. Libertarian freedom is a freedom devoid of liberal values; it is amoral.¹⁵ In foreign policy, the MAGA faction has rapidly and comprehensively discarded the liberal establishment’s entire policy framework. Perhaps the most significant short-term shift is the move from staunchly supporting Ukraine against Russia to largely accepting Russia’s narrative of the conflict, bypassing Europe and Ukraine to pursue negotiations for a ceasefire and moving toward rapprochement with Russia. MAGA’s foreign policy vision appears to combine isolationism with expansionism. While this may seem contradictory, it need not be. The MAGA faction’s political trajectory is likely to resemble Theodore Roosevelt-style hardline expansionism, but this time focused on the Western Hemisphere, primarily driven by realist interests with little ideological content. There is a substantial likelihood of reduced US military presence in the Western Pacific and even Europe. Moreover, MAGA’s libertarian tendencies are sharply reducing the ideological component of US foreign policy; interventions in other countries’ internal affairs on the grounds of ‘universal values’ are likely to diminish significantly. Within the first hundred days of his administration, Trump dismantled several major institutions that had driven ideological propaganda for ‘colour revolutions’ abroad for decades.¹⁶

The most significant developments lie in the ideological domain. The formation of the MAGA movement is rooted in deep social, economic, and historical conditions. During the post-Cold War era, liberal political forces gained dominance within both the Republican and Democratic parties, seizing control of the power mechanisms of the US political system and societal discourse. Their promotion of capitalist globalisation, extreme individualist woke politics, and the global propagation of universal values eroded the internal cohesion of US society, resulting in an internal division unprecedented in nearly a century. Looking back over the ideological trends within the US over the past two decades, the real fault line does not lie between traditional Democratic and Republican politics but between the forces defending the post-Cold War liberal order and the collective backlash of groups disadvantaged by that order. The latter now appears to have taken control of the Republican Party, while the Democratic Party remains firmly in the grip of the liberal establishment. Liberals within the Republican Party are now either silent or openly aligning with the Democrats.

The same applies at the international level. Vice President J. D. Vance’s speech at the Munich Security Conference¹⁷ and the late-February confrontation between Trump, Vance, and Ukrainian President Volodymyr Zelensky at the White House clarified that the US position on the global ideological spectrum has undergone a qualitative rupture, placing it in direct opposition to forces that support the liberal ideological order. The illiberal political forces that had been marginalised in Europe during the post-Cold War era – such as President Viktor Orbán in Hungary and the Alternative for Germany (AfD) – have suddenly found a powerful new standard-bearer. The US is now abandoning the bipartisan consensus of liberal interventionism and neoconservatism that defined the post-Cold War small left-right spectrum, repositioning itself as a proponent of illiberal realism. This shift is exemplified by the tariff-based trade wars launched by the Trump administration. In the past, establishment-driven economic offensives against China were ideologically framed. For example, the Biden administration placed great emphasis on uniting liberal countries that share US values to jointly contain China’s economic rise. In contrast, Trump’s tariff wars target all countries, including liberal Western allies, with a pragmatism where interests override ideology. On the ideological spectrum of US foreign policy, the new divide can be described as follows: on the left, the illiberal realist ‘revolutionary’ faction, and on the right, the liberal conservative establishment faction.

The MAGA movement’s impact on China is undoubtedly profound. Given the central role of US-China relations in shaping the 21st-century global order, its implications for the world are enormous. At present, US policy toward China is undergoing a rapid shift – from the Biden administration’s comprehensive strategy of ideological, political, economic, and military alignment aimed at containment to a more unilateral economic confrontation driven by US interests. Whether this shift will persist remains to be seen. China’s current approach appears to be measured counteraction while closely observing the evolving situation.

Europe

A similar ideological fission that occurred in the US is unfolding in Europe, albeit with varying intensity and for both overlapping and distinct reasons. Intellectually, many European nations have been reflecting on liberalism for years. Europe’s welfare state model has served as a partial counterbalance to the inequality and fragmentation caused by US-style capitalism. However, in many social and cultural domains, the EU’s transnational politics and the large influx of immigrants – especially from Muslim-majority countries – are also reshaping the original political fault lines within European nations.¹⁸ Some countries have moved ahead of the US MAGA movement in seizing power and reshaping their socio-ideological structures, with Hungary and Poland being prominent examples and Italy potentially following suit. In major European nations, anti-liberal and illiberal political forces are steadily gaining ground. France’s National Rally, Germany’s AfD, and the political forces that emerged from Brexit in the United Kingdom command significant popular support and have the potential to seize national leadership. Similar trends are visible in several medium-sized states such as the Netherlands’ Party for Freedom, Slovakia’s Direction – Social Democracy, Austria’s Freedom Party of Austria, as well as Romania, where Călin Georgescu (who was barred from running for the May 2025 elections) and George Simion (who won the first round of the election) have garnered notable influence. It is worth noting that the path to power for Europe’s anti-liberal and illiberal forces differs from that in the US, where the MAGA movement rose to power by taking over the Republican Party. In contrast, in Europe, these forces are often building new parties from the bottom up – a factor that may result in greater resistance faced by illiberal and anti-liberal forces in Europe.

Due to Europe’s diversity and number of countries, there has not yet emerged a political movement or organisation comparable to MAGA that spans the entire continent. For the time being, we may borrow Hungarian Prime Minister Viktor Orbán’s term ‘illiberalism’ to describe this political force that may be in the process of subverting Europe’s liberal ideology and institutional framework.¹⁹ Despite operating within very different domestic political environments, these parties share highly similar stances on many political and policy issues. They are united in calling for stricter immigration policies; for them, immigration is not merely an economic issue but, more importantly, a matter of culture and identity. The perceived dilution and erosion of European culture and society caused by large-scale Muslim immigration has been a critical source of illiberal thought in Europe for decades. At the same time, these parties reject wokeism, which largely originates in the US, insisting that Europe must uphold its Christian cultural foundations. This sense of crisis stemming from the perceived erosion of Western culture has led to an interesting phenomenon: some liberal political forces in European countries have, at least formally, diverged from the US brand of identity-based liberalism when it comes to so-called multiculturalism. Some even advocate for enforcing societal secularism through legal measures, such as France’s legislation banning Muslim women from wearing face veils in public.

Meanwhile, the determination of European illiberals to preserve cultural authenticity has made most illiberal parties and organisations across various countries oppose the expansion of the EU’s political power and the liberal ideology behind it, advocating instead for the preservation of national sovereignty, cultural integrity, and social structures. In foreign affairs outside the EU, the most significant common ground among Europe’s illiberal forces is their pro-Russian stance. With the exception of Italy and Poland, nearly all illiberal parties advocate rapprochement with Russia and, to varying degrees, oppose continued support for Ukraine.

Trump’s re-election in 2024 has provided a strong boost to illiberal thought and politics in Europe. Whether these forces will be able to capitalise on this momentum to expand their influence and capture more governments in the coming years – or whether they will instead be constrained by the negative impact of the Trump administration’s interest-driven ‘America First’ policies – remains to be seen.

For China, Europe’s illiberal ideology and politics have a longer history than in the US, offering valuable points of reference. A clear pattern is that several major illiberal parties and states are particularly friendly towards China. Hungary stands out as the most pro-China government in Europe, and Serbia shares a similar orientation. Germany’s AfD has also maintained a consistently positive stance toward China over the years. Of course, there are illiberal parties that are more hawkish on China, such as those in Poland and Italy, but even these have not been more hardline than the liberal regimes – including the EU itself – toward China. Likewise, some traditional liberal governments have been relatively moderate, such as Spain, which maintains a strong relationship with China.

Russia and Other Western Illiberal Forces

In the ongoing fission and evolution of the global ideological spectrum, Russia is unquestionably a central player. If we were to place countries on the emerging grand left-right spectrum, Russia would undoubtedly fall on the far-left end among the anti-liberal revolutionary forces. In the global transformation of the ideological spectrum, Russia stands out as the worthiest subject of study and analysis. In the post-Cold War era, Russia has experienced one of the most complete cycles of national transformation. With the collapse of the Soviet Union, Russia’s ideology tilted wholly toward Western liberalism: its political system, economic structure, and socio-cultural values were comprehensively modelled on those of the West. Economically, Russia’s neoliberalism has gone even further than that of the US. However, during Yeltsin’s decade in power, the Russian state suffered a dramatic decline, slipping from a global superpower to something close to a failed state. Even so, when Vladimir Putin assumed the presidency in 2000, he initially continued along the path of Westernisation, even expressing Russia’s willingness to join NATO.²⁰

Yet, Russia stands in sharp contrast to the other former Soviet states. While some smaller Eastern European countries fully embraced liberalism and were subsequently economically, culturally, and structurally absorbed into the Western order, Russia’s size and historical trajectory made such swift integration unfeasible. What cannot be integrated must be guarded against. In the more than two decades following the Cold War, the West abandoned the posture and promises made to not expand NATO after the end of the Cold War.²¹ Instead, NATO expanded eastward to include most former Warsaw Pact countries and many former Soviet republics, thereby pressing up against Russia’s borders.

At the same time, Russia’s own situation underwent significant changes. Putin led Russia to a broad economic and social recovery through the centralisation of power and by effectively leveraging the rise in energy prices brought about by global economic growth. Russia’s international status correspondingly improved. During this process of collapse and recovery, Russia’s elites and various social strata began to reflect on the comprehensive Westernisation that followed the Cold War.²² Politically, Russia could not immediately break through the liberal constitution established after the end of the Cold War. However, Putin’s administration used various legal mechanisms to bypass the liberal intent of the constitution and achieve the illiberal political outcomes that Russia required. The most striking example is Putin’s continued hold on power through the strategic swapping of presidential and prime ministerial roles with Medvedev. Socially, Putin consolidated the once highly fragmented liberal civil society which had been in opposition to the government and reshaped it into a relatively unified social structure. The media has also gradually shifted from its previous liberal orientation to an ecosystem largely aligned with the state’s overall interests. The economic dimension is relatively complex. In the decade following the Cold War, privatisation led to Russia’s economy becoming controlled by Western capital and oligarchs, effectively transforming it into an extreme neoliberal economy. After coming to power, Putin eliminated oligarchs with political ambitions, consolidated those willing to develop under the authority of the state, and rebuilt several state-owned enterprises, primarily in the energy sector.²³ Russia’s economy recovered relatively rapidly during Putin’s first two terms.

In terms of cultural values, the Putin era witnessed the re-establishment of Russia’s core traditional culture. Russian Orthodox Christianity has come to shape a comprehensive sense of identity across all aspects of the country’s political and social structures. From the collapse of Soviet ideology, through a phase of wholesale liberal transformation, to a return to its thousand-year-old religious and cultural traditions – and building sustainable social cohesion on this foundation – Russia has achieved a remarkable transformation. In terms of cultural values, Russia has become an ideologically emblematic state for non-liberal and anti-liberal forces across the world. Many of Russia’s ‘anti-woke’ policies strongly resonate with non-liberals in the West.²⁴ Non-liberal political movements in various European countries generally regard Russia as an ideological ally, a sentiment shared by numerous anti-liberal institutions and anti-woke figures in the US as well.²⁵

From NATO’s plan for continued eastward expansion in 2008 to the Crimea conflict in 2014, the tensions between Russia and the US-led Western military alliance reached a boiling point during the Ukraine conflict in 2022, culminating in a complete rupture. Building on its political, economic, and cultural foundations, this break with the West has made Russia the world’s foremost non-liberal or anti-liberal power, occupying a distinct and pivotal position on the emerging new grand left-right ideological spectrum and continuing to shape its evolution worldwide.

Ideologically, Hungary is now the country most closely aligned with Russia. Under Viktor Orbán’s leadership, Hungary has undergone a comprehensive political, cultural, and social transformation, laying claim to a model of governance and an ideological identity characterised as illiberal democracy.²⁶ With the continued rise of the MAGA movement, non-liberal forces in Western societies are likely to emerge in greater numbers, and some may gain political power. This will further promote and solidify the formation of the new grand left-right ideological spectrum at a practical level.

The trajectory of Russia’s ideological evolution and development has profound implications for China, and vice versa. The collapse of the Soviet Union and the consequences of its wholesale liberalisation deeply influenced China’s political and intellectual circles. China’s engagement with globalisation after the 1990s – while maintaining Communist Party leadership and the ideology of socialism with Chinese characteristics – was, to a large extent, shaped by lessons drawn from the Soviet and Russian experiences. Over the past decade, China and Russia have stood united in resisting the unipolar dominance of Western liberal ideology despite their own differences in ideology and political systems. The close partnership forged between China and Russia in the post-Cold War era, together with China’s remarkable developmental success, has provided Russia with a powerful example for its own reflection on liberalisation.²⁷

The Global South

The Global South encompasses the vast majority of countries and regions outside the Western nations and Japan. It includes the poorest African states, the wealthiest West Asian oil powers, military powers such as Russia, and, of course, the two major developing countries, China and India. The Global South is highly diverse, with vast differences in culture, religion, history, ethnicity, economic foundations, and social structures. Ideologically, many countries in the Global South were once caught within the 20th-century left-right political spectrum for various reasons. Some were former Western colonies, heavily influenced by Western political systems. Others took sides during the Cold War, adopting either the Soviet Union’s leftist ideology or the capitalist systems and values of the US and the West. Most importantly, after the Cold War, most developing countries embraced the ‘end of history’ thesis, transplanting Western liberal political systems wholesale into their own countries – many even copying constitutions verbatim.²⁸ This led to the artificial replication of the Western ‘small left-right’ spectrum in many Global South nations.

As this post-Cold War ‘small left-right’ spectrum rapidly collapses, the trajectory of the Global South deserves close attention. Most Global South countries will gradually disengage from liberal ideology and shift toward the non-liberal and anti-liberal side of the new grand left-right spectrum. There are two main reasons for this. First, most Global South countries inherently lack the ideological ‘genes’ of liberalism; their liberal values and systems were transplanted rather than homegrown. Many of these countries’ cultures and values are fundamentally anti-liberal. The Islamic world is a striking example: countries such as Saudi Arabia and the UAE, despite their close economic and security ties with the United States, have successfully resisted liberal politics and values at the ideological level. Most Islamic countries – such as Indonesia, Malaysia, and Turkey – are likely moving in a non-liberal or even anti-liberal direction. The second reason is that the post-Cold War embrace of liberal ideology and institutions yielded disappointing results and unsatisfactory economic development. In stark contrast, China, which rejected liberalism, has emerged as the winner of globalisation – a fact whose significance has become increasingly clear.²⁹

The ideological relationship between China and the Global South has evolved through three eras. After the founding of the People’s Republic, China actively participated in and helped lead Third World political thought. Beginning with the Bandung Conference, China was a core member of the Non-Aligned Movement. Although its stance differed from that of the Soviet Union within the Cold War framework, China’s orientation was clearly leftist and socialist. In the post-Cold War era, China became ideologically estranged from the former leftist Third World countries while economically integrating into the Western-led globalised economy. Politically, however, China rejected the liberal ideology that the West sought to universalise, while the vast majority of developing countries adopted liberalism and implemented political systems based on it. Since the 18th National Congress of the CPC, China’s relationship with the Global South has entered a third stage. Through initiatives such as the Belt and Road Initiative, the Three Global Initiatives, and the vision of a Community with a Shared Future for Humanity, China and the broader Global South are shaping an entirely new era of political thought – one that will be inherently non-liberal and transcend the 20th-century left-right spectrum.

The New Grand Ideological Spectrum: Liberalism versus Illiberalism

Across global media, academia, political circles, and even corporate and financial sectors, a new grand left-right ideological spectrum appears to be emerging. The right consists of the universalist liberal unipolar camp, while the left is composed of non-liberal and anti-liberal multipolar forces. On the ideological front, right-wing representatives continue to uphold the liberal unipolar structure of the post-Cold War era and persist in promoting the universalisation of liberal ideology and political systems worldwide. The most influential political forces within this camp are the still-powerful US establishment, followed by the other Five Eyes countries, US allies in the Pacific, and mainstream political forces within the European Union. The left, by contrast, consists of a broad camp of diverse illiberal and anti-liberal governments and political forces. While the internal differences within the right lie mainly in degrees, the left exhibits a much greater diversity. What unites the right is a shared interest in maintaining liberalism’s ideological dominance in the world, albeit to varying extents. What unites the left, on the other hand, is a shared interest in rejecting liberal unipolar hegemony – though their visions for the future differ.

The differences within the right can be broadly categorised into two camps: the universalist hardliners and the advocates for multipolar coexistence. The former Biden administration and the EU’s mainstream political forces are aligned with the universalist hardliners, as evidenced by their stance toward China. In recent years, the US, the Five Eyes alliance, NATO, Australia, the EU establishment, and certain EU member states have increasingly positioned China as a strategic competitor or adversary. In their policy documents, beyond highlighting conflicts of interest with China, they consistently cite ideology as one of the primary criteria for designating China as an adversary.³⁰ When calling on allies to unite in containing China – whether for trade-related or military interests – they routinely invoke shared values as a key rallying cry. The multipolar coexistence advocates are the moderates within the right. While they believe in liberal values and support policies and laws based on liberal ideology domestically, they take a more moderate approach toward universalising liberalism. They oppose the aggressive imposition of liberal ideology on other nations through economic or military means and instead favour peaceful coexistence with non-liberal countries and societies. Spain’s Sánchez government, France’s left-wing party led by Jean-Luc Mélenchon, New Zealand within the Five Eyes group, and US Asia-Pacific allies such as South Korea and Japan can, to varying degrees, be classified as advocates of multipolar coexistence. Argentina’s right-wing Milei administration is ideologically aligned with extreme liberalism – particularly in its embrace of radical neoliberal economic policies. While initially highly antagonistic toward China, it has adopted a relatively more moderate stance after taking office and can likely be classified as part of the multipolar coexistence camp.

The left wing of the new grand left-right spectrum is also fragmented and can tentatively be categorised into three main groups: anti-liberal political forces emerging within the West, major powers that have undergone their own transformations, and explorers seeking new paths of progress. The first group consists of the US MAGA movement and various non-liberal and anti-liberal governments and parties in Europe. The second group comprises China and Russia. The third group includes the majority of developing countries in the Global South. The differences among these three groups lie in the distinct driving forces behind their non-liberal or anti-liberal orientations.

The first group includes the continually emerging anti-liberal political forces within the US and various European countries. Their ideological struggle targets their own liberal establishment elites, and they believe that the liberal global order established by these elites has betrayed the interests of their own people and sold out national sovereignty for the benefit of their own class. Economically, they generally oppose neoliberalism, arguing that extreme market fundamentalism has hollowed out domestic industries, concentrated wealth in the hands of a tiny elite, and eroded social structures. At the same time, they feel that the liberal values of the elite have evolved into extreme wokeism and immigration policies that promote openness to foreign cultures, leading to the erosion of traditional national cultures.

In the second group, China and Russia have had fundamentally different experiences under the liberal order. China achieved rapid development within the framework of Western-led globalisation while preserving its political system. Russia, by contrast, adopted Western political systems but suffered severe, near-fatal blows to its economy and security. China is seeking to build on its success and continue developing but it faces dual obstructions from the US and the West. Liberal political forces view China as an ideological and strategic adversary while anti-liberal political forces see China as a rival primarily due to economic interests. Trump’s trade war was primarily driven by the latter. Russia, having learnt from its experience, has ideologically parted ways with liberalism, becoming the epicentre of global anti-liberal ideology and a primary target of the Western establishment. This conflict is irreconcilable and leaves no room for compromise. However, the Western anti-liberal forces in the first group do not have fundamental ideological disputes with Russia; in many areas, they even share commonalities. While their interests are not fully aligned with Russia’s, they are not entirely opposed either. This tacit ideological understanding and the space for compromise on interests are clearly reflected in the current positions of the US and Russia on the conflict in Ukraine. However, whether their relationship will move toward compromise or further conflict remains to be seen.³¹

The third group, composed of developing countries in the Global South, is both large and highly diverse. Most of these countries saw disappointing developmental outcomes following the adoption of liberal political systems after the Cold War. Many nations in Southeast Asia, Africa, and Latin America span the traditional left-right political spectrum, yet their development has been constrained by the liberal political framework. As a result, they are all exploring new ideas and alternative models. Examples include Argentina’s government, which emerged from the traditional right; South Africa’s government, rooted in the traditional left; and Asian countries such as Malaysia, Indonesia, Thailand, and India, each with unique cultural and religious traditions. All are experimenting with non-liberal governance approaches within the frameworks of their post-Cold War liberal political systems. Additionally, some countries that have outright rejected liberal ideology and political systems – such as major Islamic states like Saudi Arabia and Iran, as well as traditionally leftist countries like Venezuela – are also actively exploring and experimenting with ideologies and institutions suited to their survival and development in the post-grand left-right spectrum era.

Despite their vast internal diversity, the countries within this group share a common feature: a refusal to accept a universal ideology, political system, or unipolar global order imposed upon them or transplanted from outside. This rejection of universality and unipolarity defines a new illiberal bloc within the Global South – one that can be positioned on the left of the new ideological spectrum.

Multipolarism and 21st Century Re-Globalisation

The world is undergoing a profound transformation marked by fragmentation on all fronts. Observing the present and predicting the future is as difficult as viewing the Big Dipper from due south. I propose a hypothesis: the global ideological spectrum is in transition. The left and right wings of the new spectrum are divided by their differing visions for the future of the world order. The left seeks a multipolar world order (multipolarism) while the right aims to preserve a unipolar world order (unipolarism). The ideological core of unipolarism is liberalism, which encompasses the full set of liberal values along with their claims to universality and singularity. The left, by contrast, is extremely diverse, encompassing all ideologies and values beyond liberalism, as well as certain political forces that hold liberal values but reject their universalisation. The left includes both anti-liberal and non-liberal elements; the latter merely oppose the universal and monolithic nature of liberalism. The ideologies of the left are highly varied, rooted in different religious, cultural, and political traditions. Their interests also differ greatly and sometimes even clash. Nevertheless, their greatest common denominator is opposition to liberal unipolarity. We can attempt to locate all nations, political parties, or other forms of political power on this new left-right spectrum.

Within this framework, the tension between multipolarism and unipolarism will constitute the primary contradiction in the first half of the 21st century. Historically and in practice, China is destined to be a major force in favour of multipolarism. At the practical level, the past few decades of globalisation have been built on an ideological foundation of liberalism. However, today’s unipolar model of globalisation has become unsustainable. Interestingly, it is the Trump-led MAGA administration in the United States that is now working hardest to dismantle the unipolar world order, believing that unipolarity does not serve the interests of the populace it represents. While MAGA regards China as a rival, the world it envisions is also multipolar, much like China’s vision. MAGA promotes a multipolar world through de-globalisation, which, however, conflicts with China’s objectives.

China and the overwhelming majority of countries in the Global South must continue to develop, which requires further enhancing connectivity. Meanwhile, humanity faces existential global challenges – including climate change, nuclear proliferation, artificial intelligence, and others – which require cooperation among nations. Under the current wave of de-globalisation promoted by the US and the West, China and the Global South must champion a re-globalisation grounded in a multipolar ideological narrative, seeking both sustained development and solutions to humanity’s existential crises. Historically, China has been both the originator and advocate of a multipolar world order. In March 1990, Deng Xiaoping became the first political leader in the world to formally introduce the concept of ‘multipolarity’.³² At a time when the global order was transitioning from bipolarity to unipolarity, Deng’s vision of a multipolar world was remarkably farsighted. Since then, the pursuit of multipolarity has become a cornerstone of China’s international political theory and strategy.³³ In 1997, a new global order based on multipolarity was formally introduced to the world stage through a joint Sino-Russian statement.³⁴

Fast forward thirty years and China has proposed major global initiatives that concretise and strategise the vision for a multipolar world across three key dimensions: development, security, and civilisation.³⁵ These initiatives articulate China’s vision of an inclusive and pluralistic multipolarism, which stands in stark contrast and opposition to the liberal unipolar world. They represent the only viable path for humanity to sustain development and overcome existential crises. China is also the most capable nation today of actively leading the construction of a multipolar order. Its experience of successfully engaging in globalisation while maintaining its own political system and path offers valuable lessons for many nations in the Global South. In modern times, China combined communist ideology with the struggle for national liberation to achieve the founding of the modern state. In contemporary times, it has further integrated Marxism and the market economy with traditional Chinese culture.³⁶ This represents a key embodiment and example of the pluralistic foundations needed for re-globalisation. To achieve the vision of a multipolar world order, China’s strategic interest lies in uniting all forces that can be united ideologically. Contradictions are inevitable among multipolar states and political forces, and they will undergo phases of tension, conflict, and compromise. However, the principal contradiction in today’s world is between multipolarism and unipolarism. Only the victory of multipolarism can achieve a 21st-century re-globalisation – aligned with the long-term interests of both China and the world – and pave the way for building a community with a shared future for humanity.

Notes

Eric Li Eric Li (李世默) is a venture capitalist and political scientist based in Shanghai. He is the founder and chairman of Guancha, one of China’s largest media platforms. He is a trustee of Fudan University’s China Institute and chairman of its advisory council, a trustee of Asia Society Hong Kong, and a member of the board of the SciTech Business School at the University of Science and Technology of China (USTC). He is a frequent contributor to international media platforms.

How should we understand the governing patterns of the Trump 2.0 era? What underlying factors are at play behind his seemingly arbitrary behaviour? What impact will the Trump 2.0 era have on China and the world? How will the world change as a result? These questions are urgent and pressing for people around the world who are filled with anxiety.

The period from Trump’s first term in office in 2016 to the dawn of the Trump 2.0 era in 2024 has made it clear that his political base consists of the vast disenfranchised segments of US society and the new right-wing conservative social movements driven by these disenfranchised groups. Trump did not emerge out of nowhere, nor does he act on a whim; he is a product of this powerful ideological movement rather than its cause. To understand the underlying logic behind Trump’s action, one must begin with his social base and ideological movement.

This new wave of right-wing conservatism, which has spread widely in Western societies, differs from traditional US neoconservatism. It is characterised by a clear anti-liberal stance, with outward manifestations such as opposition to immigration, gender relativism, and free trade. Its underlying traits, however, reflect anti-globalisation, anti-democracy, and anti-establishment sentiments. It no longer seeks the universality of Western liberal values or believes in the promises of a liberal utopia, instead retreating to the US and prioritising ‘America First’. Additionally, its behavioural values have generally returned to Christian traditions, particularly the fundamentalist traditions of white Christianity.

The sweeping rise of the new right-wing conservative movement stems from the rampant spread of free-market capitalism. Over the past thirty years since the end of the Cold War, there has been an unstoppable global expansion of capital and individualistic values under the banner of liberalism. The greed of the US bourgeoisie has reached unprecedented levels, which has led to exacerbating income inequality, eroding social morality, and the dismantling of the fabric of communities. In this context, society urgently needed a movement of social protection to counter market forces. The new right-wing conservatism is a symptom of this need for social protection.

From the perspective of Marxist political economy, capitalism is characterised by cyclical patterns of expansion and contraction. Excessive accumulation becomes widespread due to overproduction, leading to a decline in the average rate of profit and the disruption of capitalism’s internal equilibrium. In the era of globalisation, where national borders are constantly broken down, this cyclical movement manifests itself as unbalanced rapid expansion across all corners of the world, thereby driving the rise of emerging powers and the decline of traditional powers. The new right-wing conservative ideology is a feature of the decline of traditional capitalist powers.

New right-wing conservatism is a social ideology that emerges during the decline of liberal capitalism. Its emergence and development follow certain patterns. First, its emergence is on a world scale – it is a product of the global expansion of the capitalist mode of production. Secondly, it is long-lasting – as long as the wealth gap and the disintegration of communities caused by liberal capitalism remain unresolved, the ideology of new right-wing conservatism will persist. The scale and influence of this ideology are inversely proportional to the governance flaws of liberal capitalism. Thirdly, it has local characteristics – new right-wing conservatism will combine with the history and national conditions of different countries, resulting in ideologies with distinct features. Fourthly, it has the characteristics of its times – for instance, the new right-wing in Europe today cannot openly oppose the democratic system because Western-style democracy has become politically correct and denying it would come at a significant cost.

Given the long-term nature of the new right-wing conservative ideology, the Trump era is merely its beginning. Therefore, it is extremely urgent and necessary to analyse its relationship with the world and China.

The world order will undergo a drastic reorganisation, and chaos will become the norm in the face of the new right-wing conservative ideology. Because the values of the new right-wing conservatism are anti-liberal, US-led alliances based on Western liberal values will split, and friend-enemy relations in the Western world will change. The traditional allies of the US will seek strategic autonomy and break away from dependence. Some medium-sized powers in the West will form new alliances. At the same time, the new right-wing conservatism emerging worldwide will seek to establish a coalition of right-wing values – particularly between the new right-wing movements in the US and Europe – which will rapidly forge deep spiritual and material connections. In this context, Global South countries will find themselves marginalised by the new right-wing US because their development and security concerns will not be prioritised. This harsh reality will force some Global South countries that once followed the Global North to seek new avenues. More importantly, as the new right-wing conservative ideology sweeps the globe, the rules and norms that have governed the world since the end of the Cold War will be shattered (or even completely destroyed). As the world faces the narrow nationalism of ‘America First’, existing global rules will largely cease to function, and a new international system will be difficult to establish. The effectiveness of international organisations such as the World Trade Organisation and the World Health Organisation will significantly decline.

Under the influence of neo-conservative right-wing ideology, Western countries are dominated by nationalism and populism, making conflicts between nations and ethnic groups highly likely. In such an international environment, it is not difficult to imagine that contradictions and conflicts will lead to war. For China, the rise of the new right-wing conservatism will also present significant challenges while also offering numerous new opportunities.

First, under the influence of the new right-wing conservative ideology, China’s external relations will undergo profound adjustments. If the Trump administration continues to view China as its primary strategic competitor, then the EU – which previously prioritised values as its first principle in diplomacy – will distance itself from the US and readjust its relations with China for its own self-interest. Similarly, Asian allies of the US, such as Japan and South Korea, will also adjust their relations with China in response to the US narrowly pursuing its own national interests.

Second, the nature of the struggle between China and the US-led Global North will change significantly. The focus will shift from the ideological struggle, centred on Western concepts of ‘democracy, freedom, and human rights’, to a struggle over national interests characterised by the ‘America First’ policy. Because the new right-wing conservatism is anti-liberal and xenophobic, it no longer possesses a claim to universality and therefore significantly loses its appeal to human society. As a result, the primary contradiction of China’s ideological struggle in international politics will shift from one of values to one centred on national interests.

Third, China’s advocacy for a ‘community of shared future for humanity’ is a profound response to human society’s growing desire for new universal values in times of great turmoil.¹ With the launch of the ‘Global Development Initiative’, ‘Global Security Initiative’, and ‘Global Civilisation Initiative’, China has proposed a set of values capable of replacing the decaying Western liberal order and charting a new direction for human society.² At a time when new right-wing conservatism is widespread in the US, China should further advocate the concept of the ‘community of shared future for humanity’ and provide political-economic and philosophical interpretations of its profound theoretical connotations. The concept should be theorised and systematised to rally the people’s hearts and minds in this era of turmoil.

Finally, at a time when relations among friends and enemies are undergoing drastic changes, China should adhere to the Global South as its main strategic direction, unite the majority of the Global South countries, and form a united front in the new era. The reasoning behind this is not complicated. The US will not give up its strategic intention to contain China, and the EU will waver due to its liberal values. Only the Global South, especially those countries that seek to break away from the unipolar world dominated by the US, could be China’s friends in building a new multipolar international system. The difference between this and Mao Zedong’s ‘Three Worlds’ strategy lies in the fact that China’s current strategy is not merely about carving out a vast intermediate zone amid US-Soviet rivalry but about leading Global South nations in striving to create an equal and orderly multipolar world.

The arrival of the Trump 2.0 era marks the onset of a great era of chaos, with future turmoil only intensifying and constantly surpassing our expectations. Therefore, we must be prepared.

Notes

Yang Ping Yang Ping (杨平) is a leading scholar and editor in China’s intellectual and cultural community. He is the founder, president, and editor-in-chief of Wenhua Zongheng (文化纵横), a leading journal of contemporary political and cultural thought in China. Since its founding in 2008, the journal has grown into one of China’s most important thought platforms. He also founded the magazine Strategy and Management (战略与管理) in 1993.