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Introduction
Since 2006, the Bertelsmann Transformation Index (BTI) has provided a biennial summary of the state of transformation of democracy, the quality of governance and the market economy in 137 countries around the world. This qualitative analysis of transformation tendencies is complemented by the assignment of scores, from one to ten, for each of the 52 indicators that assess issues against the 17 criteria in the report. Thus, the BTI allows us both to compare between the performances of individual countries as well as their performance over time.
Authors’ own elaboration based on BTI data 2006-2024.
This article will present some aspects of the transformation process of the People’s Republic of China according to the BTI’s results of the last eighteen years of publication. As the graphic shows, China has gone through very few changes with respect to political, economic and governance transformation assessed by the BTI. No clear trend can be observed in any of these three dimensions mentioned, with scores ranging between differences of less than one point since the BTI 2006. While China’s economy status and governance were evaluated with medium scores, the lack of democratic openness has positioned China within the last of the BTI’s categories regarding political transformation.
The status of political transformation
Since the beginning of the BTI’s assessments, China has always been categorized as a hard-line autocracy. Indeed, even though the Chinese system proclaims itself as such, it does not constitute a democracy. In this sense, the BTI reflects this fact by demonstrating the Chinese people’s lack of opportunities for political participation: they cannot choose their political representatives in free and fair elections; nor do they possess the rights of assembly and association or freedom of expression that characterize pluralistic democracies.
Additionally, the system has been described as autocratic given the lack of the separation of powers. Power is highly concentrated in the Chinese Communist Party (CCP), which is superior to the people, the Constitution and the law. In this line, it should come as no surprise that China has received the lowest score (of one point) on the indicators of separation of powers and free and fair elections during the last decade. Similarly, the lack of democratic institutions and the one-party system explain why China has consistently received the minimum score for those indicators that refer to such features of democracies.
However, this categorization is not only due to the lack of democratic institutions, but also to the autocratic character reflected in human rights violations and state interference in civil rights, despite the existing constitutional guarantees. Here, the BTI has observed a deterioration in China’s performance, reducing the civil rights indicator score from three to one point between 2006-2024. Indeed, the BTI reports point to the abuse and torture of prisoners, political and economic discrimination against ethnic minorities and forced labor to justify those low scores. For the first time in the BTI 2024, this indicator is rated at the minimum score, a decline attributed to the restrictive measures that were taken during the COVID-19 pandemic, the repression of human rights lawyers, and the incarceration of more than one million people in the so called “re education centers” in Xinjiang. Under its anti-terrorism legal system, which includes vague typifications of terrorism and extremism, Beijing arbitrarily deprives members of the Uyghur and other Muslim minorities of their liberty in this region. According to various testimonies and investigations by journalists, human rights organizations and the UN, this system involves serious human rights violations, including ill-treatment and torture of prisoners.
Since the BTI’s inception, China has not exceeded a score of 2.7 for political participation, rule of law, democratic institutions and social and political integration. In spite of this, China’s Democracy Status has maintained an average score above three (see graph), which is mainly due to the fact that the nation-State and its power structures are well established. Thus, no significant challenges to the monopoly of force are observed, state institutions are governed by secularism, and China’s administrative structure allows for the provision of basic public services. Therefore, China was rated with consistently high scores (above 8) in this area. On the other hand, only the score for state identity suffered a decline in the last two editions of the BTI. This is because of the government’s increasingly stringent assimilationist policies that repress ethnic minorities and generate tensions between them and the Han majority.
Finally, although China's Democracy Status in the BTI has not been subject to very few modifications throughout the analysis of these reports, it seems that these changes have coincided with Xi Jinping's rise to power. This is due to the sum of the concentration of power in his person over the last few years, which led to a deterioration in the Democracy Status, most pronounced in the indicators referring to state identity, civil and political rights, and commitment to democratic institutions. Additionally, the slight improvement in the BTI 2020 is attributed to the successes of Jinping's anti-corruption campaign.
The status of economic transformation
On the economic side, from the 1980s onwards, China was characterized as a capitalist economy, but with ‘Chinese characteristics’. The use of this term is due to Beijing’s intentions to expand itself internationally and, at the same time, to preserve its economic security through an authoritarian and protectionist regime.
In this way, the BTI’s reports show how the CCP intervenes in the organization of the Chinese market. Indeed, this can be seen in the noticeable lack of changes over time, in which the respective indicator scores hover around the average of 5.6. This is particularly true in the asymmetry of access to capital between private and public enterprises: the former have more legal barriers to borrowing than those connected to the government. On the other hand, superficially, the Chinese government wants to appear internationally as if their plans are being drawn up to curb this kind of monopoly by SOEs. Thus, in 2004 an Anti-Monopoly Bureau of the Ministry of Commerce was established, and in 2006 an anti-monopoly law was passed, although both measures were not as successful as expected. Especially after the 2008 crisis, the CCP imposed more protectionist barriers against private companies and investments, the consequences of which can be seen today.
On the other hand, although the BTI reports a stable score (6.0), Beijing's banking system fares no better. This is due to the fact that the Chinese state owns the main banks and that its interventionism makes it difficult to carry out the necessary reforms in this system. In this regard, it is important to remember that, given the absence of legal-regulatory frameworks, between 40-50% of the loans granted by these banks did not yield future profits and, consequently, these banking institutions ended up in debt. In this line, the solution to this problem does not seem to be so clear, since, in general, this type of operation takes place in the informal sector of the economy.
For its part, China's liberalization of international trade expanded when it joined the World Trade Organization (WTO). According to the BTI 2006 scores, China's assessment on the respective indicator averages 7.7. In this way, Beijing was able to implement free trade agreements and increase the volume of its bilateral and multilateral relations in forums such as the Association of Southeast Asian Nations (ASEAN) and the BRICS. At the same time, while these policies reduced state intervention and fostered ties with various Western bloc countries, the CCP continues to have a monopoly on decision-making. Indeed, this explains the small variation in its score in the reports.
Regarding the Chinese welfare regime, it shows that there was a small increase in its score since the 2010 BTI, however, on average it is still around 5 points. This is because of two issues that continue to be problematic: socio-economic and ethnic gaps. The former refers to the difficulties that the rural population has in accessing wages, health and education compared to the urban population; and the latter refers to how those individuals who do not belong to the Han community in China - such as the Uighurs and Tibetans - are largely discriminated against by the Chinese government.
Lastly, it is pertinent to conclude this section with the effects of COVID-19 economic policies. China strengthened its protectionist policies towards the outside world, thereby reducing its exports and foreign reserves. While its aim was to encourage domestic consumption and implement favorable policies for domestic infrastructure, this was not very successful: Beijing is currently pursuing various programmes to regain the confidence of foreign investors and recover some of its lost reserves.
Governance Index
As mentioned above, Chinese governance is somewhat different from what can be observed in democratic countries: in Beijing there is an authoritarian one-party political system. Thus, the Chinese government's leadership does not seek democratic transformations but is governed by another logic, which affects the BTI's rating of its quality of governance. This was categorized as moderate throughout the analysis of the reports, as there are some shortcomings. Particularly those related to difficulties in vertical coordination between the central government and its local subordinates, corruption and clientelism, the limited involvement of public opinion in decision-making processes, and China's lack of credibility at the international level.
First, the Chinese government generally succeeds in pursuing its main policy priorities effectively, basing its decision-making on: evaluation of the impact of past policies, long-term strategic planning, and proven practices in other parts of the world. In this way, the Chinese leadership receives external advice on legislative and budgetary matters. In turn, the Chinese leadership showed the ability and willingness to recognise the negative impacts of strict prioritization of economic development on wealth distribution and the environment.
Indeed, the BTI examines these factors under the steering capability, which saw an increase between BTI 2020 and 2022. However, it should be recalled that China's policy priorities are limited to the social and economic spheres. In other words, the aim is not to open up democracy but, on the contrary, to counteract these trends and consolidate the hegemony of the single party. Furthermore, the government's handling of the pandemic situation and its failure to recognise the mistakes that it has made were rated as a setback in the positive trend of the government's leadership, which is why the average score in this area dropped by one point to 6.7 in the BTI 2024.
Second, there are basic consensuses within China, the stability of which is reflected in the average BTI score (4.1). In this sense, the population believes in building a socialist market economy; and affirms that national sovereignty, defense and maintenance of territorial integrity, and economic growth should be the pillars of the government's agenda. In addition, some Chinese citizens believe that Western democracy should not be a political regime option. On the other hand, this population also presents social cleavages: the first refers to the socio-economic inequality between rural and urban inhabitants, as well as between the more developed coastal regions in the east and the western parts of the territory. The second refers to discrimination against minorities, such as Uighurs and Tibetans, who are not part of Han culture. Finally, it should come as no surprise that China receives the lowest score (1.0) on the indicator of anti-democratic actors as of the BTI 2016. Indeed, the main anti-democratic actor is the Chinese government itself, which verbally, virtually and physically represses popular expressions when they are problematic for the political functioning of the party.
Third, international cooperation plays an important role for the CCP and, in general, this is reflected in its stable and progressive BTI average (6.5). This can be seen in the early 2000s, when China sought support from international institutions such as the International Monetary Fund and the World Bank. Subsequently, the Asian giant embarked on other organizations such as the BRICS and coordinated the creation of the Silk Road to strengthen its international leadership. In this line, although it positions itself as a good trading partner, it does not comply with and - even worse - questions international norms. Thus, the West denounces that China does not meet the WTO's economic liberalization requirements and consequently generates an asymmetry of power to the detriment of this bloc. In addition, there are allegations of human rights violations and the absence of democratic openness. Finally, regional cooperation within the ASEAN framework is obstructed for two reasons: China's military modernization plan and its economic progress. These issues further strain territorial disputes in the area, particularly over Taiwan and the South China Sea.
Conclusion
It is necessary to remember that all decisions taken by China must be read in line with its competition with the US and its continued challenge to the international liberal order. In addition, Xi Jinping's centralization of power and the CCP's autocratic record hinder any possibility of transformation around the issues addressed by the BTI. The idea that a powerful country can have a ‘market economy’ while its political regime is authoritarian calls into question all the ideological foundations that have governed the international system since 1989.
