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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (5749)	3/2/2006 4:44:34 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

[LOL. Be careful what you wish for]--Report: A democratic China could be 'great risk' to Asia An Australian think tank suggests democracy might lead to a hostile, populist Beijing. By Arthur Bright \| csmonitor.com posted March 2, 2006 at 11:00 a.m. A democratic China may bring as much harm to Asia as it does good, according to a new report from an Australian defense think tank. In an Australian Strategic Policy Institute report, economist David Hale warned that the peaceful, predictable economic engagement policies of the current Beijing could be undone by the greater democracy the next generation of Chinese leaders might bring, writes Agence France-Presse. "When a fifth generation of leadership assumes power in ten to fifteen years, China could become more open and tolerate greater dissent," the report said. "Such a political opening could then open the door to forces such as nationalism and populism. There is no way to predict exactly how Chinese politics will evolve in a more democratic era, but it is a development which could produce new challenges for the countries of East Asia after 2020. "An authoritarian China has been highly predictable. A more open and democratic China could produce new uncertainties about both domestic policy and international relations." Such uncertainties could include military threats to other nations in the region, Hale writes, though he notes that such threats would be likely only if "domestic political instability... produced an upsurge in nationalism and a search for external scapegoats." Australian newspaper The Age reports that Mr. Hale sees similiarities between a democratic China and the "banana republics" of Central and South America, in part due to the increasing economic divide in China between the rural population and wealthy urbanites. "If China had a democratic regime, there is a great risk that the increasing income inequality in the country could produce a populist regime which would suspend economic reform and plunge the country into the kind of inflationary crises which have characterised Latin America for much of the modern era," Mr Hale said in the report. The potential for trouble is already apparent from the Chinese government's own admission of a seven-fold increase in protest marches in the last 10 years, many by rural people upset about the loss of their land to property developers or urban people concerned about job losses. Hale adds that China needs "more freedom of the press, greater transparency plus other developments to increase government accountability and allow more debate about policy choices." While he underscores the peaceful predictability of current Beijing policies due to its reliance on foreign trade within Asia, Hale acknowledges that the risk of hostile Chinese action still exists, especially because of flash points like Taiwan and North Korea. In a portion of his report published in The Australian daily newspaper, Hale draws comparisons between the rise of China and that of pre-World War I Germany. The fact that Germany helped to launch a war with Britain in 1914 is a reminder that economic integration does not guarantee that a country will have a benign foreign policy. On the eve of World War I, 76 per cent of Germany's foreign trade was with other European countries. As Norman Angell wrote in 1911, there should never have been a European war because it was economic madness for the players. Angell was vindicated by events but Germany nevertheless allowed her alliance with Austria-Hungary to set the stage for a conflict that engulfed all the major European nations.... The experience of 1914 is a warning that one cannot depend upon economic factors to resolve political conflicts, but the situation in East Asia today contains fewer political risks than Europe during the early 20th century. The challenge for the US, China and Japan is to continue minimising the potential for conflict through effective dialogue, while pursing the economic integration that will encourage further political co-operation. One way for the US to minimize the potential for conflict with China is by strengthening ties with India, reports The Christian Science Monitor. As part of his diplomatic trip to India, President Bush looks to build ties with India as a way to influence the other - communist - giant in the neighborhood, China. A commentary in the Hindustan Times argues that the US aims to create such influence by promoting democratic values hand-in-hand with India. [Bush and US secretary of State Condoleezza Rice] are in search of substantive partners in this global endeavour of pushing democratic values. The partners themselves must be deeply wedded to free electoral process and pluralism. Thus the fateful words on the Bush-Singh accord of July 18, 2005 : "create (together) an international environment conducive to promotion of democratic values, and to strengthen democratic practices in societies which wished to become more open and pluralistic". These are activistic words indeed. Of course, the balance of power in Asia in the 21st century between a dictatorship of the proletariat, China, and a thriving democracy, India, is of major significance in the Bush-Rice decision matrix. But if economic reform in China is widely seen as, at least indirectly, fostering democratization, democracy in India is seen by some as a drag on the kind of economic progress that would make India a stronger counterweight to China. Opinions differ on how much democracy has helped economic growth in India, and democracy's effect on economic growth will likely play a large part in China's decision to adopt democratic reform. Trudy Rubin, a columnist for The Philadelphia Inquirer, writes that democracy gives India opportunities for innovation and productivity that China cannot match. And India's democratic openness and rule of law have encouraged a wave of technological innovation that China still lacks. "There is a degree of freedom that creates aspirations," says Anand Mahindra. This Harvard M.B.A. returned home and now is vice chairman of a family firm, Mahindra & Mahindra Ltd., that produces automobiles and farm equipment, among other items. Indian democracy means that no one censors Google, and the country is way ahead of China in the information-technology sector. Independent thinking also produces better managers. Although it receives fewer foreign and investment funds, India uses the capital more productively, I was told by Massachusetts Institute of Technology professor Huang Yasheng at Davos. Maybe that productivity comes from the fact that managers and local officials aren't protected from scrutiny the way they often are in China. India's democracy provides a check on corrupt government officials. But Carl Mortished writes in The Globe and Mail that obstacles in India's democratic society snag economic progress, whereas no such obstacles exist for China. csmonitor.com