Issues, Ideas and Insights by Atul Singh

Enter the Dragon – Making Sense of the Middle Kingdom

The rise of China dominates headlines around the world. It has extremely high economic growth, foreign exchange reserves of over $1 trillion and is preparing to host a most spectacular Olympic games. China is changing at breakneck speed, new cities are sprouting up, old cities are livening up, and the country as whole is experiencing an industrial revolution of a scale and speed unprecedented in world history. And yet, in some ways, there is nothing extraordinary about the rise of China. All we are witnessing is a return to historical normalcy. According to Angus Maddison, economic historian at the University of Groningen, between 1600 and 1900, China’s share of the world GDP ranged from 25% to 33%. During this period China’s agriculture was more advanced than the West’s, its cities were bigger, urban literacy was higher and its ruling classes were more meritocratic. The Middle Kingdom is still a long way from achieving those levels.

Like the Americans and the French, the Chinese have a sense of manifest destiny. It stems from their long history, prolonged periods as a large empire and their humiliation at the hands of foreign invaders in the 19th and 20th centuries. The Chinese want their country to be rich, powerful and respected in the world. They feel they are a unique people with a history unrivalled by any other civilization and, therefore, aspire to attain their rightful place in the world. As China’s economy grows dramatically it is being able to project financial and military power to achieve that goal. China is a powerful player not only in South-east Asia, Central Asia and North Korea but also in Africa. Its rise in Africa has been most dramatic where it is building infrastructure, buying commodities and lending to governments on a scale reminiscent of European powers in the 19th century. China is also an enthusiastic participant in the WTO and, with a trade-to-GDP ratio of around 70%, is one of the world’s most open economies.

For many, especially in the US, China’s rise is causing alarm. Many wonder how far China will go. It is increasingly acquiring economic and military strength but money and guns alone will not be enough for China to become a great global power. It will also need ideas and this is its Achilles heel. China offers no new ideas or paradigms to the world. It is merely trying to adapt to the world as it is but has little vision of what it would like the world to be.

Academics on both side of the Atlantic often comment on lack of creativity that they find among their Chinese students. In the words of a German professor, Chinese students tend to be smart but not bright; they reproduce answers but do not ask questions and find it difficult to think in new ways. Numerous academics and professionals who have worked with the Chinese have come to similar conclusions. During a recent visit to Paris the writer stayed in a youth hostel and in the evening a group consisting of Australians, Americans, Argentineans, Poles and Indians started talking about world issues ranging from the middle-east to climate change. However, none of the Chinese joined the conversation or exchanged pleasantries with us. They kept to themselves and were sightseers rather than open minded inquiring travelers. In the writer’s experience this behaviour forms a pattern and the Chinese are the most difficult community to reach out to. What explains Chinese insularity and lack of curiosity? It is partly cultural snobbery and partly poor English language skills but the key explanation lies in China’s authoritarian system where people prefer the known to the unknown and lose their spirit of inquiry.

China’s attempts to control the flow of information to its citizens are reminiscent of Soviet methods in the Cold War days. Any visitor to the Xinhua website will find that while the Spanish football league is reported better than in the BBC, the rest of the news is barely fit for adolescents. The Chinese are served propaganda instead of news. During the writer’s first visit to Shanghai, he was shocked to find that credible news websites like the BBC were blocked by Chinese authorities. It is not just news which is censored; all forms of expression are controlled. Furthermore, even the past is off limits for any enquiry. June 4th was the 18th anniversary of the suppression of the Tiananmen Square protests and June 8th was the 50th anniversary of the “anti-rightist movement”, launched by Mao to crush dissent. However, there was hardly any reflection on, leave aside re-evaluation of, the two historical episodes in recent Chinese history.

Since the 1980s China has increasingly embraced the market. It has jettisoned communist policies but continues to pay lip service to communism. It is trying to build a capitalist economy in a society where the Communist Party monopolizes power. The party is forcing China to live a lie. Theory and reality do not match. No principles underpin China and a moral vacuum lies at the heart of Chinese life. Abuse of power and corruption are endemic. There is no rule of law or accountability in the country. Corrupt officials are engaged in a massive land grab as property rights remain nebulous and ill-defined. Guangxi, the Chinese word for connections, is all important. The urban elite do not question anything because the party has allied itself with the elite’s interests. Furthermore, members of the elite draw a distinction between themselves and the party, and shrug away social responsibility. Most are too busy getting rich and, if they feel altruistic, they establish charities rather than raise uncomfortable questions.

In some ways, the Cultural Revolution has shaken the core of Chinese society. Intellectuals talk of the loss of an ethical anchor and a moral compass in today’s China. A generation of spoilt single children, little Emperors, is now coming of age which only believes in conspicuous consumption. The Chinese have a valid reason when they say they do not want to commit to carbon dioxide targets as they are trying to industrialize and their development concerns outweigh environmental ones. But they have no excuse whatsoever for not controlling the exploding demand for tiger bones or ivory which is putting endangered species to risk. The elephant, the tiger and the lion are all at risk because of obscene and irrational Chinese greed.

China’s meteoric rise is creating both external and internal tensions for itself. Japan, Russia, India and smaller Asian nations are all wary and, at times, scared as China seeks to expand its influence along its huge borders. At the same time, internal problems are mounting. The gap between the southern coastal states and the rest of China is widening, there is a huge divide between urban and rural areas, income inequality is acute and the peasants in certain areas are getting restive. Given its one child policy, China faces the spectre of turning old before it becomes rich. The Middle Kingdom’s external challenges will be manageable. As long as it does not invade Taiwan, China will not find its envious rivals clubbing together to hammer it down. Its power shall grow and, although it will never be a credible challenger to the US, it shall be the dominant Asian power for some time to come. Internal problems shall test China more. Will corruption, repression and inequality lead to an upheaval? What will happen in a downturn? How will it deal with its ageing society? And most important of all, as it increasingly becomes a market economy, how long can it continue to live a lie?