China’s market economy with socialist characteristics rose from the ashes of Mao Zedong’s failed experiments with central planning. Under that repressive regime, private enterprise was outlawed and individuals become wards of the state. When Deng Xiaoping became China’s paramount leader, he abandoned Mao’s class struggle as the centerpiece of the Chinese Communist Party (CCP) and embarked on economic liberalization. There was hope that greater freedom in trading goods and services would also lead to a freer market in ideas.



That hope was dashed when troops cracked down on protesters in Tiananmen Square on June 4, 1989. Deng’s famous “Southern Tour” in 1992 resumed economic reform—and China has become the world’s largest trading nation—but protectionism in the market for ideas remains intact. Under President Xi Jinping, who advocates globalization but has cracked down on the free flow of information, China has become less free.



In the just released World Press Freedom Index, published by Paris-based Reporters sans Frontières (RSF), China is ranked 176 out of 180 countries, just a few notches above North Korea—and President Xi is referred to as “the planet’s leading censor and press freedom predator.” In preparation for the 19th CCP Congress later this year, there has been an uptick in the war on free speech.

Without notice, in January the Beijing Municipal Cyberspace Administration shut down the internet of the Unirule Institute of Economics, one of China’s leading free-market think tanks, co-founded by Mao Yushi, a strong critic of the one-party state and the lack of a free market in ideas. Without access to the global flow of ideas, Unirule’s work has been all but cut off. Other internet sites have been shut down and China’s cyber bullies have gone after virtual private networks (VPNs) that allow users to circumvent the “Great Firewall.”



Beginning on June 1, new rules governing the news content permitted on various internet platforms will be implemented, and editors will be subject to stronger oversight by the state and the Party. Cyber security law is intended to ensure that the CCP’s overriding objective of “stability and order” is realized. Yet that goal conflicts with the creation of a dynamic civil society and with innovation and globalization.



Xi Jinping, in his belief that “freedom is the purpose of order, and order the guarantee of freedom,” fails to understand a basic tenet of liberalism—namely, that individual freedom is the source of an emergent order. That idea was known in China long before it was stated by Adam Smith in 1776. In the 6th century BC, Lao Tzu explained that when the ruler leaves people alone (the principle of noninterference or wu wei), “people are spontaneously transformed” and “increase their wealth.” They do so through voluntary market exchanges under a just rule of law.



China has allowed greater economic freedom, which has enabled millions of individuals to lift themselves and their families out of poverty, but the CCP’s monopoly on power has prevented a corresponding expansion in freedom of the press—even though Article 35 of the PRC Constitution states that “Citizens . . . enjoy freedom of speech.”



Top-down control of ideas must eventually clash with bottom-up economic reform. China cannot become a global financial center, like Hong Kong, without the free flow of information. Insulating the political elite from the competition of ideas is not a recipe for long-run prosperity and peace. As Liu Junning, an independent scholar in Beijing, has noted, “Whether China will be a constructive partner or an emerging threat will depend . . . on the fate of liberalism in China.”



The Western liberal ideas that President Xi and the CCP reject place the individual before the state and see the state as the protector of individual rights, including free speech. A just rule of law is designed to limit the power of government and enhance individual freedom. By expanding markets—both in goods and ideas—such an institutional arrangement increases the range of choices open to people, which is the true measure of development.



If China is to become a beacon for globalization and free trade, as President Xi advocated at the Davos World Economic Forum, there will have to be movement toward a free market in ideas. China can’t continue to be near the bottom in terms of freedom of the press and speech without losing ground in the information age.