Why Did China’s Rise Succeed and Iran’s Fail? the Political Economy of Development in China and Iran

Abstract

There are many shared historical experiences and similarities between Iran and China. Both are legacies of the long-lasting empires and civilisations in West and East Asia, respectively. Like other great Asian empires, Iran and China were confronted with the expansion of the European imperial powers in the early-nineteenth century which ultimately led to the dislocation of these ancient empires. Both countries had resisted pressures towards peripheralization in the global economy by the creation of nationalist popular revolutions and by building modern nation states and identities in the first half of the twentieth century, despite different political systems, cultures, and external relations. Both Iran and China have been trying to escape from the external pressures and internal socio-economic backwardness by the modernization of their states, societies, and economies via a state-led catch-up development strategy. These efforts led to the rise of China in the late-20th century and the emergence of post-Islamic revolutionary Iran 1978/79 as a ‘contender state' to the hegemony of the United States (US) in West Asia. This development raises two key questions: why did China succeed in rising as an industrialised regional and global power, and has Iran’s development strategy failed so far? I argue that the main reason for post-revolutionary Iran failure to become the regional hegemon comes from two interconnected issues: (i) the failure of its economic development strategy, which was mainly caused by (ii) the ‘offensive' external involvement in its own region before a successful catch-up process. Iran's catch-up development strategy, which is the main material basis for the country's rise, was hampered after the revolution by its ‘offensive, revolutionary and military oriented foreign policy'. This strategy blocked Iran from access to capital, information and technology concentrated in the core area of the global economy dominated by the US. Unlike Iran, China's successful catch-up industrialisation was driven, in part, through rapprochement and consensus between Chinese leaders and the US and its allies in 1970s. This strategy led China to distance itself from Mao's revolutionary offensive foreign relations and replace it with ‘defensive’ and peaceful foreign relations in the era of its catch-up industrialisation (1980-2000s).