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Taiwan Research Programme
London School of Economics and Political Science
Houghton Street
London, WC2A 2AE


Professor Stephan Feuchtwang

Dr Fang-Long Shih

Modernity Disconnecting from Tradition: the dilemma of China's transition to modernization

Presented by Jim Shen (Department of Management, LSE)

Presented at the conference 'Cultural Heritage: tradition in dialogue with modernity'

Venue: Room AGWR (the Graham Wallas Room), Old Building,  London School of Economics (LSE)

Date: Thursday 11 July 2013, 2.30pm-3.30pm


In 1978, China adopted policies of reform and opening-up, marking the beginning of its transition from a planned to a market economy. Though the the next thirty years brought rapid economic growth, the transition has seen problems ranging from poisonous milk powder scandals to oil spill disasters. Such issues have a direct impact on the stability of China’s future economic development. This paper suggests that China’s transition to a modern market economy should seek support from the concept of righteousness and  benefit, as found in the traditional Confucian culture that China has discarded. The first section briefly introduces the background of the development of China’s market economy and the negative incidents that have appeared in this period. The second section analyses the causes of these problems. The third section discusses why and how using aspects of Chinese traditional culture such as the Confucian concept of righteousness and benefit could arouse moral behaviours in the market economy. It also presents some specific cases illustrating how ancient Chinese merchants practised Confucius’ concept of righteousness and benefit in their daily commercial activities. The fourth section analyses why the development of a market economy governed by the rule of law in China needs the traditional Confucian concept of righteousness and benefit, and then shows how institutional determinists’ view of the uselessness morality is incorrect.