Mon, Nov 23, 2015 page8

• China on the precipice of greatness

  • By Doug Bandow
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  Mao Zedong (毛澤東), China’s so-called “Great Helmsman,” died four decades ago. Only after his totalitarian reign ended could China move forward.

  Mao and his compatriots would not recognize Beijing today, as it has become a sprawling metropolis with night clubs and fast-food restaurants with prolific advertisements for Western goods and finely attired Chinese “princelings.”

  Shanghai’s transformation is equally dramatic. Always more international and commercial than Beijing, it has become a world financial center. The Bund, or waterfront in the old European concession, is overrun with tourists.

  There is a lot more to the People’s Republic of China, including a vast rural territory that remains poor, with average incomes well below urban China, but extreme poverty has given way to a genuine, if modest, prosperity.

  As China has advanced on the global stage there has been discussion of the “Beijing consensus” or “China model.” Who needs free markets and democracy if managed capitalism and autocracy can deliver sustained, even faster, economic growth?

  Dictators around the world want to convince themselves, and more importantly their subjects, that oppression pays.

  However, the “China model” is looking a bit frayed. All is not well in the world’s second-largest economy.

  China has slowing growth, a property bubble, ghost cities, inefficient state enterprises, a stock-market crash, badly skewed demographics, overextended banks stuffed with political loans and unreliable official statistics. Despite Chinese President Xi Jinping’s (習近平) talk of placing more influence on market economics, the regime has moved in the opposite direction.

  In addition, corruption continues, by some estimates costing as much as 3 percent of GDP. The government’s crackdown, though widely welcomed, has not resulted in more efficient administration. Instead, one US diplomat said that it is harder now to get conclusive answers because virtually every official, especially at the local level, is a potential target.

  Beijing also has foreign companies in its sights. This makes Western firms more nervous over investments which have not paid off as expected.

  Economic problems mean political problems. The regime has been cracking down on domestic dissent and foreign influence.

  Although an authoritarian state where public criticism is punished through traditional or social media, China is remarkably open in other ways.

  Dissent is widely expressed, especially by students, who I have been addressing for years. Unsurprisingly, they generally dislike government controls over their lives. In front of classmates they have denounced Internet controls, lauded US democracy, asked about the Tiananmen Square Massacre and expressed concern that Xi is becoming another Mao.

  Yet they are not liberals. They are patriots, with a nationalist bent. For these students Taiwan is Chinese territory. So are the disputed islands in nearby waters, and they are not happy with Washington lecturing their government.

  I met a successful businessman educated in the US who declared that democracy might not be best for the world’s most populous state. He offered little praise for the Chinese Communist Party, but he did not want to be ruled by a peasant majority either.

  Particularly interesting is the question whether growing repression would impede Chinese growth. Beijing recognizes it faces a challenging future. The attempt to tighten central party control might generate widespread political instability.

  A reported 100,000 party members are under investigation. Having taken on the “tigers,” such as former Chinese domestic security head Zhou Yongkang (周永康), Xi has upset the post-Mao policy of not targeting former leaders. There is wide disagreement over whether Xi is secure on the mountaintop or standing on a precipice.

  China has come far. It has even further to go. Where it ends up is likely to depend on whether the government comes to trust its people and becomes accountable to them. If not, the 21st century is unlikely to end up as the Chinese Century.

  Doug Bandow is a senior fellow at the Cato Institute and was a special assistant to former US President Ronald Reagan. He is the author of Foreign Follies: America’s New Global Empire.
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