TJ, here's a contrarian: West blind to China’s problems
By Philip Stephens
Published: June 30 2005 20:24 | Last updated: June 30 2005 20:24
A small admission. I am bored by the China speech. You know the one. It has become the standard text of politicians and business leaders on the international conference circuit. When it is not being delivered from the podium of some cavernous hotel ballroom, it is there on the front cover of a glossy news magazine.
The formula is beguilingly simple. A rush of statistics, an occasional nod to history, a Confucian aphorism or two and, hey presto, we can all grasp the vast meaning of the Middle Kingdom’s re-emergence as a global power. Or rather we can all pretend to.
At first telling, the raw figures do generate a certain amount of shock and awe. As I recall, China is now the largest consumer of copper, tin, aluminium, lead, zinc, platinum, steel, iron ore and of a lot of other things I have forgotten. Its thirst for energy is second only to that of the US. It makes two-thirds (or is it three-quarters?) of the world’s DVDs, television sets, watches and other domestic electronic gadgets. And lest we forget, it is also a market with 1bn consumers.
I admit that until I first heard the speech a couple of years ago I had forgotten that China was a global economic power during 18 of the past 20 centuries; and that, as recently as 1830, China and India together accounted for more than half of world output. Nor had I appreciated that today’s China educates more engineers every year than there are overweight teenagers in the US.
All right, I made that last one up. But you see the problem. By the umpteenth telling, the striking becomes the banal. I can recite by heart China’s output of digital cameras, the number of communist millionaires in Guangdong and how many billions Wal-Mart spends in renminbi. After a while, though, the senses are dulled. The news that China manufactures more digital radios than McDonald’s sells quarter-pounders-with-cheese is no longer enough to drag me from that after-lunch conference slumber. What does it all mean?
More sophisticated versions of the speech do touch on the relationships and networks now being built around China’s voracious appetite for raw materials. Whether it is through oil deals with Iran and Venezuela or mining joint ventures in Australia and Africa, China is recalibrating the geopolitical compass. We all know the central place that competition for raw materials and secure supply routes played in the building of past empires.
The standard narrative, though, is two-dimensional. The speech assumes that the world travels in straight lines. The Chinese economy has been growing by 7 per cent-plus annually since the 1990s. Ergo, it will continue to do so into an indefinite future. By the close of the next decade, its gross domestic product will be second only to that of the US.
That seems to me a fair probability. Business executives with operations in China speak of the raw energy of the place. The explanation may lie in the country’s demography. By 2020 the population will be ageing fast – 400m will be over the age of 65. This generation seems determined to get rich before it gets old.
For all that, it seems equally plausible that something will happen in coming years to disrupt, if not derail, China’s ascent. Doesn’t every economist agree that the financial system is an accident that is bound to happen? How would the economy fare in the event of a slump in the US triggered by global imbalances? Even China must admit the economic cycle.
And what about the politics, the risks of conflict with Taiwan or of confrontation with Japan? All those statistics and clever Confucianisms too often seem a comfortable cloak for blissful ignorance. The speech invariably glosses the difficult bits. We look elsewhere for clues. The controversy in Washington over Chinese takeover bids for US companies is a small pointer to the turbulence in the geostrategic system that will accompany China’s emergence as a great power and a likely rival to the US. Meanwhile, the fact that Microsoft is obliged to ensure that “democracy” and other dangerous words do not appear on computer screens in Beijing reminds us of the grave tensions inherent in a system seeking to combine liberal capitalism with authoritarian politics.
To raise such issues, I acknowledge, is to pose questions without obvious answers. Who knows whether China’s Communist party can retain a monopoly on power in the face of rising prosperity and a fast-growing middle class? Scholars of China’s politics tend to doubt that the present Hukou system of citizen registration and entitlement, which rigidly defines the rights of individuals and buttresses the country’s social hierarchies, can survive intact the flight from the land to the cities. Logic would say that urban prosperity will greatly intensify demands for political participation. And if China does intend to be a global player, censoring the internet cannot shut out indefinitely the outside world.
The signs are that the existing leadership is awake to the strains. With customary diligence, party officials have been travelling extensively to see what, if anything, might be gleaned from western political models. Only this week, the Foreign Policy Centre in London hosted a seminar for a delegation studying Tony Blair’s third way politics. There were few hints of what they would take away from the presentations given by the British prime minister’s officials. But the visitors left the impression that this was part of a much wider search.
We can be sure, though, that everything else – from its economic power to the way it shapes strategic relationships with the rest of the world – depends on China’s success or otherwise in resolving these internal contradictions. The less confident the political leadership is at home, the more aggressively nationalist it is likely to be abroad. Perhaps it can adapt the status quo; perhaps there is indeed a Chinese third way; or possibly, the leadership will give way to pressure for greater pluralism.
Social unrest, growing income disparities or unexpected economic dislocation could force its hand. What does seem obvious is that we will only begin to understand the meaning of China’s rise if we have a stab at understanding how economics is transforming the political dynamics. It is time to rewrite the China speech |
