What China Needs

What China Needs
August 23, 2014

The current issue of The Economist features what the editors of the magazine think China wants at this point in its development.

Here are a few of the major findings/opinions of these writers and editors. China wants:

  • Continued growth.
  • Ideas, markets, raw material, investment.
  • Stability.
  • China feels a long period of its historic prestige and supremacy was lost or stolen and it wants that prestige and recognition back. 
  • China wants a seat at the tables of world power, but China doesn’t want to exert power in those forums by leading global initiatives. China does not want to upend the global order. China does not want to emulate America’s failed global military experience.
  • China does not want to make other nations to be like China.
  • China wants to use its unitary power to its advantage.
  • China wants to use nationalism to distract its citizens from local problems.
  • China wants to protect the control of the maximum empire China ever had–e.g., as in the Qing dynasty, thus the disputes with neighboring countries over small islands.
  • China does want to improve the environment and conduct other reforms.
While The Economist feels China resents the US “Asia pivot,” they say China is nevertheless amenable, as should the US be, to more collaboration of the two great powers–as with the Trans-Pacific Partnership, the new Asia regional trade plan.
The Economist comments on the ideological dilemma China faces in its global image. To the extent that China fails to show steady progress in the resolution of its domestic problems, it weakens what could be a huge advantage. One might say China has everything else going for it–an astounding 30 year unbroken economic miracle, and amazing economic efficiency which most democratic countries cannot match–certainly not the US, gridlocked as we are. William Kirby of Harvard is quoted as saying China once had an ideology, a soft power, so strong that “neighbors converted themselves.” Nowadays, The Economist argues that the world sees the flaws in the ideology.
The Economist argument ends with a prognostication that unless China moves to give more power to the people, its world power will continue to suffer–“neighbours will continue to cling to the coat-tails of Uncle Sam.”

Having studied modern China diligently last year in London, I agree with most of what The Economist says.  No one believes that autocratic rule there for the next century would be best for China’s sustainable development. However, moving sharply to democratic rule is idealistic, impractical, and perhaps not in the best interests of China and the world.

Here’s why:

As we watch other countries struggle with the outcomes of early democracy, we see chaos, conflict, civil war, battling religions and ideologies. Examples include Egypt, Syria, Algeria, Iraq, Afghanistan, and young democracies in Africa. Moving steadily, but cautiously and slowly toward that objective might well yield a better outcome, especially considering that such unrest as we see in other young democracies might be catastrophic, not only for hundreds of millions of Chinese, but for the world, considering that China is nuclear armed, and is generally supportive of world order and peace, plus a critical element of the global economic system. A meltdown in China might bring down the entire world economy.

Second, lets consider what the Chinese want, as somewhat distinct from what the leadership want (the latter being what The Economist is talking about in this edition). Chinese citizens are indeed protesting for more democratic rule, but they’re also protesting about the environment, about inflation, food safety, water, pollution, inequality, human rights, rule of law, poverty, the rights of rural migrants to the cities (“houkou issues), healthcare, corruption, and a slew of local matters. Setting aside democratic rule for a moment, many of these issues can be addressed under the autocratic system just as well as under a democratic system.  Maybe even better.

In fact, significant progress has been made on a number of these issues. For the additional benefit of protecting major cities from the dust and sand from nearby deserts (a major problem in Beijing), The Guardian reports that Chinese citizens have planted 56 billion trees in the last decade. There appears to be an increase in charges and prosecution for corruption, even at high levels, example being the recent investigation of Zhou Yongkang, former security head for the CCP. Progress on these and other faults is insufficient. China ranks poorly on these matters. But, the point is that progress is being made on many of these issues.

Pew studies indicate that of 21 nations surveyed, Chinese surveyed have the highest rating of all nations in seeing their financial status better than their parents at the same age. They are second only to Brazil in seeing their current situation better than 5 years ago. Pew indicated a majority of citizens are strongly favorable to their government. Other studies show the same. Indications from the surveys are that the tradeoff is the benefits of the continuing economic growth, vs. other reforms which are desired. It appears that as long as China can deliver continued economic growth and make some progress on other complaints, albeit slow progress, the citizenry support their government.

One matter some of us liberals wish was not the case is a basic economic reality: There is a necessity for governments to make painful tradeoff decisions between growth and the kind of reforms listed in the above paragraphs–in China and everywhere. Why? Because the government revenue available is always limited. It can be invested in things which produce growth and jobs, like infrastructure. Or it can be invested in controlling pollution, as an example. This usually imposes additional costs on manufacturers, reducing their ability to grow and hire more people. Imposing pollution controls on automobile drivers means more public transportation must be built and paid for, and fewer cars will be sold, meaning fewer jobs in the auto plants. Bottom line–most reforms cost money and many result in slowing growth. These are the kinds of tradeoffs which must be made. And, as indicated above, while Chinese (like Americans) want everything, as indicated in the Pew survey, net-net, up to now, they vote for growth at the expense of these other reforms.  

There is virtually no way to reduce poverty without solid economic growth. China since 1980 prioritized economic growth and reduced poverty from 65% of the population to 10%, according to the World Bank. I would argue that China’s leadership has done a rather good job of making the painful tradeoffs, all things considered. Their citizens complain, as do Americans, but they like their government perhaps more than we like ours.

Finally, let us examine ourselves before urging our system onto others. How well is our democracy working as it relates to reforms? Consider our President’s attempts to regulate coal mining. Fox news and The Heritage Foundation, a conservative think tank argued on Fox News today that our President is impeding growth, costing job, and costing the consumer by trying to reduce pollution from coal. The Keystone pipeline,  to bring oil from Canada to the US, was first proposed in 2005, and it still not decided. Such delays in deciding would never occur under the autocracy of China. 

It may sound unpatriotic to suggest democracy is not always, under all circumstances, the best form of government for all countries. However, history and current events do not support this thesis. I would say that China need not feel too anxious about the pace of its move toward democracy. Our government’s poor performance is hardly drawing converts to the coattails of Uncle Sam. If China makes steady progress yielding visible continuing improvement in the reforms Chinese want, albeit measured and slow progress, while continuing steady growth in its economy, their autocratic government may well have a decent remaining lifespan.
The Economist: http://www.economist.com/printedition/2014-08-23
The Guardian: http://www.theguardian.com/environment/2010/sep/23/china-great-green-wall-climate
Pew: http://www.pewglobal.org/2012/10/16/chapter-1-domestic-issues-and-national-problems/

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