Multinational corporations and China's own companies are setting their sights on the market sectors to move into once China enters the WTO. The Chinese media is calling this race the "enclosure movement" (圈地運動). But hidden behind this movement are China's immature, unstable market mechanisms and the moral crises facing Chinese society.
China's economy has avoided an all-out collapse by not strictly following Soviet-style "shock therapy" in its reform efforts. However, it has been implemented in some segments of the economy and, as a result, China is feeling some negative political and social effects. When it started down the path of economic reforms, China generated "instant capitalists" who amassed immense wealth overnight through their political connections -- just as the former Soviet Union was later to do.
Rampant crime, corruption among officials, complicity between officials and criminal gangs in the smuggling of contraband and massive piracy of intellectual property are all indicators of organized crime that have received relatively little attention so far.
The enclosure movement comes at a time when many of China's industries are still under government protection and before competition between local conglomerates has had a chance to intensify. The aim of the movement is simply political leverage. By relying on political power, all kinds of businesses -- both legal and illegal -- can generate massive wealth.
A speech by the late Deng Xiaoping (
When markets are still in their adolescent period, good political connections are the ticket to market access. After entering the market, some businesses will begin to reap profits within that framework. Others, however, will place risky bets and try to get rich quick.
The best examples are the numerous instant brand names that flood the China market. The media, unfamiliar with market functions, become mouthpieces for the promotion of these brand names. And because media hype is valued more than manufacturing and business operations, many of these brand names vanish just as quickly as they appeared.
This day-trader's approach to doing business has been the cause of chaos and uncertainty in the China market.
Many China-watchers overseas are shifting their focus to China's economic development. But the nation's economic statistics conceal the social crises hidden in Chinese society. Along with the introduction of a market economy, the social values that supported Chinese society in the past are disappearing.
Nationalism now serves as a foundation for unity and helps mitigate the grudges generated by the rich-poor and urban-rural gaps. Apart from this, the pursuit of individual wealth is the sole value underpinning Chinese society. But the pursuit of individual wealth also deepens distrust between people.
The absence of a reflective civil society allows the law of the jungle -- that of the strong killing the weak -- to prevail.
With China about to join the WTO, many Western scholars are bringing traditional relationships -- based on trust -- into market analyses. But they may find that Chinese society defies such analysis.
Hsu Tung-ming is a freelance writer based in Beijing.
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