|The Economist recently announced a dedicated weekly section on China. It said, China is the second country for them to have done this for, followed only by their singling out the United States since 1942. In my view, the extra attention they give to ‘China’ as a topic is hardly going to help Westerners’ understanding of China. Their editorial staff really needs an overhaul, as one of their reader observes:
The Economist’s coverage of China is bigoted, as exemplified by their debut article – which I am rebutting in this post (my rebuttal on the right). If The Economist is genuinely interested in improving China for the Chinese, they’d be able to discuss the issues and policies specifically – not a wholesale rejection of the China ‘model.’
|“The paradox of prosperity“For China’s rise to continue, the country needs to move away from the model that has served it so wellJan 28th 2012
|IN THIS issue we launch a weekly section devoted to China. It is the first time since we began our detailed coverage of the United States in 1942 that we have singled out a country in this way. The principal reason is that China is now an economic superpower and is fast becoming a military force capable of unsettling America. But our interest in China lies also in its politics: it is governed by a system that is out of step with global norms. In ways that were never true of post-war Japan and may never be true of India, China will both fascinate and agitate the rest of the world for a long time to come.
|Former U.S. Secretary of State, Brzezinski, recently argued that our world is safer when there is a hegemonic power to enforce a world order. Sure, so long as that world order is fair and just.Comparing to our world’s past, my personal opinion is our current world order maintained by the U.S.-led West has generally been better.On the point China’s rise is able to ‘agitate,’ the U.S. should be expected to make room for China too. Our world order should not be rigid, and perhaps even one day to pass the hegemonic baton, to China, India, Russia, or whomever. The alternative to this arrangement is obviously a multi-polar world or a very strong U.N..Calling China’s “system” as “out of step with global norms” is ridiculous. What is this ‘global norm’ anyways?
|Only 20 years ago, China was a long way from being a global superpower. After the protests in Tiananmen Square led to a massacre in 1989, its economic reforms were under threat from conservatives and it faced international isolation. Then in early 1992, like an emperor undertaking a progress, the late Deng Xiaoping set out on a “southern tour” of the most reform-minded provinces. An astonishing endorsement of reform, it was a masterstroke from the man who made modern China. The economy has barely looked back since.
|China still has a long ways to go from being a superpower. The Chinese constantly remind themselves of this too. They have tremendous problems to solve internally – pollution, corruption, food safety, poverty, and wealth inequality.The Economist is clever enough to no longer outright call the 1989 incident a Tiananmen ‘massacre,’ but is careful to say it ‘led to a massacre.’ Leaked U.S. cables of the U.S. government have corroborated with Chinese government official figures of deaths – in the couple of hundreds outside the square involving mostly Chinese worker protesters clashing with the army.Has the Economist call on the British government their NATO bombings of Libya – resulting in thousands of dead Libyans a ‘massacre?’China in fact has legal basis for suppressing the protest, whereas the NATO bombing was against international law – bombing of a foreign country without U.N. authorization.The students and workers protested because by 1989, China had already underwent 10 years of privatization reforms. The protesters feared their jobs and social safety net would no longer be guaranteed. They were against corruption too.The Western lead isolation was an “anti-Communist” knee-jerk reaction from the Cold War.
The Chinese are clearly better off with the 1989 protest failed. Look at where China is today. As we see in Egypt, a revolution does not guarantee a timely and positive transition towards something ‘better.’
|Compared with the rich world’s recent rocky times, China’s progress has been relentless. Yet not far beneath the surface, society is churning. Recent village unrest in Wukan in Guangdong, one province that Deng toured all those years ago; ethnic strife this week in Tibetan areas of Sichuan; the gnawing fear of a house-price crash: all are signs of the centrifugal forces making the Communist Party’s job so hard.
|China is indeed a society in transition. The country is undergoing an industrial revolution. For the first time, there are more urban dwellers than there are farmers. Hundreds of millions of Chinese are to continue to move into cities. This phenomenon causes tremendous social stress.China’s progress is overwhelmingly a positive one, though there are certainly problems as I pointed out above.”gnawing fear of a house-price crash” is another stupid narrative. The Chinese government have actively been combating escalating housing prices by limiting the number of homes a citizen can purchase and tightening lending rules. The result has been a resounding success – housing prices have dropped by 20%! (Update Feb 8, 2012: Reader Stu took issue with this 20% in the comments below. Please see my response beneath his comment.) Again, The Economist is an ignorant fool on this issue.The Economist often likes to repeat this idea that there are “vacant cities” in China in trying to argue a ‘housing collapse.’ That’s rather stupid too. Let’s suppose there are such cities in China. Are we talking about 100,000 vacant apartments? What about the 100 MILLION Chinese who are yet to move into cities in the next few years?
|The party’s instinct, born out of all those years of success, is to tighten its grip. So dissidents such as Yu Jie, who alleges he was tortured by security agents and has just left China for America, are harassed. Yet that reflex will make the party’s job harder. It needs instead to master the art of letting go.
|This logic is backwards. If China becomes more rich and affluent, the trend then is more freedom. The Chinese Internet is vibrant. Criticisms of the Chinese government is plenty abound.Compared to few decades ago, China is more open society today.Chinese dissidents get into legal trouble for the most part because they violate Chinese law. One may argue there are perhaps too many loopholes giving Chinese authorities too much room for abuse.
|China’s third revolution
|The argument goes back to Deng’s insight that without economic growth, the Communist Party would be history, like its brethren in the Soviet Union and eastern Europe. His reforms replaced a failing political ideology with a new economic legitimacy. The party’s cadres set about remaking China with an energy and single-mindedness that have made some Westerners get in touch with their inner authoritarian. The bureaucrats not only reformed China’s monstrously inefficient state-owned enterprises, but also introduced some meritocracy to appointments.
|Talking about legitimacy – the West needs more self introspection. PEW and other reputable organizations consistently showed the Chinese government enjoying popular support, and in contrast broad disappointment in the West.Why must this dichotomy be viewed as a ‘authoritarian’ vs ‘democracy’ issue?Within the Chinese government there are liberals and conservatives too. The reason they have a plan is because they don’t politicize everything.What is the reason for democracies not being able to compromise and turn economics into politics?So, instead of propagandizing China’s progress as a ‘authoritarianism’ challenge to ‘democracy,’ The Economist should educate its readers that when a society politicizes everything, it bogs down and is unable to solve problems.
|That mix of political control and market reform has yielded huge benefits. China’s rise over the past two decades has been more impressive than any burst of economic development ever. Annual economic growth has averaged 10% a year and 440m Chinese have lifted themselves out of poverty—the biggest reduction of poverty in history.
|I really can’t blame the Economist’s ignorance here, but it is still vacillating in its own convoluted thinking. If we look at China’s history, she’s had dynasties where her economic output dwarfed any other civilization on the planet.China’s rise is also because she is not being invaded and colonized. Her freedom is giving her a chance to develop.
|Yet for China’s rise to continue, the model cannot remain the same. That’s because China, and the world, are changing.
|China’s reform continues for sure, because her society is changing. She is going through an industrial revolution as I mentioned above. But this is not what the article had in mind.
|China is weathering the global crisis well. But to sustain a high growth rate, the economy needs to shift away from investment and exports towards domestic consumption. That transition depends on a fairer division of the spoils of growth. At present, China’s banks shovel workers’ savings into state-owned enterprises, depriving workers of spending power and private companies of capital. As a result, just when some of the other ingredients of China’s boom, such as cheap land and labour, are becoming scarcer, the government is wasting capital on a vast scale. Freeing up the financial system would give consumers more spending power and improve the allocation of capital.
|This paragraph contradicts itself. China is weathering the global crisis well, because exports is not the gravy train for China as much as The Economist would like to paint it. China’s over-all import-export is basically balanced. (For a discussion of how we think trade actually benefits China, look here.)China needs a lot of investment in infrastructure. For example, she has to build the highways and rail systems to connect the country. That is a must. There is still massive demand for infrastructure. The Economist has to be blind to not know 200+ million Chinese rode the railway system alone during the Chinese New Year week. People wait days to buy tickets!In China’s latest 5-year plan, it is certainly calling for more domestic consumption.This narrative that “the model cannot remain the same” is plainly stupid. Who is telling The Economist China is not changing and not reforming?
|Even today’s modest slowdown is causing unrest (see article). Many people feel that too little of the country’s spectacular growth is trickling down to them. Migrant workers who seek employment in the city are treated as second-class citizens, with poor access to health care and education. Land grabs by local officials are a huge source of anger. Unrestrained industrialisation is poisoning crops and people. Growing corruption is causing fury. And angry people can talk to each other, as they never could before, through the internet.
|This paragraph is first of all contradicting few paragraphs above. 440m have been lifted out of poverty. If that is not trickling down, I don’t know what is!Certainly, Chinese society is more delicate because there are still hundreds of millions of people below the poverty line.Chinese society is still largely unscathed, managing 9% growth in GDP despite the softening in demand from U.S. and Europe. That is sound governance, and the Chinese government should be applauded.Certainly, there are mistreatment of migrant workers, issues with access to healthcare, pollution, and corruption, income inequality, and so on. The Chinese are not happy with these problems. But, the government is also sober about these issues.Again, whats wrong with ‘the model?’ What does The Economist suggest China do instead?
|Party officials cite growing unrest as evidence of the dangers of liberalisation. Migration, they argue, may be a source of growth, but it is also a cause of instability. Workers’ protests disrupt production and threaten prosperity. The stirrings of civil society contain the seeds of chaos. Officials are particularly alive to these dangers in a year in which a new generation of leaders will take power.
|The general trend in the current Chinese industrial revolution is that majority of the population will continue to migrate to cities.
|That bias towards control is understandable, and not merely self-interested. Patriots can plausibly argue that most people have plenty of space to live as individuals and value stability more than rights and freedoms: the Arab spring, after all, had few echoes in China.
|For once, it acknowledges some truth.
|Yet there are rights which Chinese people evidently do want. Migrant workers would like to keep their limited rights to education, health and pensions as they move around the country. And freedom to organise can help, not hinder, the country’s economic rise. Labour unions help industrial peace by discouraging wildcat strikes. Pressure groups can keep a check on corruption. Temples, monasteries, churches and mosques can give prosperous Chinese a motive to help provide welfare. Religious and cultural organisations can offer people meaning to life beyond the insatiable hunger for rapid economic growth.
|Yet, none of these ‘values’ are new to the Chinese. And to say that there is no organization in labor or freedom to worship in China is ludicrous. It says The Economist is completely ignorant about China.What China opposes is Vatican trying to exert political control over Christians worshipers in China.Many Westerners in fact lament the power of the church in Western governments. Freedom from religion is also a value Chinese and Westerners alike share.
|Our business now
|China’s bloody past has taught the Communist Party to fear chaos above all. But history’s other lesson is that those who cling to absolute power end up with none. The paradox, as some within the party are coming to realise, is that for China to succeed it must move away from the formula that has served it so well.
|China’s bloody past was far worse when invaded by Japan and the West.The Chinese lesson is not to let foreign political forces undermine their own government. When the government is weak, the people are open to foreign exploitation.
|This is a matter of more than intellectual interest to those outside China. Whether the country continues as an authoritarian colossus, stagnates, disintegrates, or, as we would wish, becomes both freer and more prosperous will not just determine China’s future, but shape the rest of the world’s too.
|China will certainly continue to evolve and her people become more free.We also hope that China can inject a more humane culture into our current international relations climate. The West has been way too aggressive in bombing and invading foreign countries.A more peaceful world is also a possibility with China’s rise.If The Economist wants to expand coverage of China with more ignorance and bigotry, I guess it’s just nothing new.