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China: Two myths and one in the making


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POSTED: Sunday, December 14, 2008

The study of China is exciting because of its long history of great cultural achievements and often mysterious, spellbinding politics. After all, its influence has greatly affected many Asian neighbors through Buddhism, Confucianism, social revolution, Marxism and a market economic approach to development embedded in authoritarianism. As a worldly Vietnamese once told me, "If you want to understand Asia, you first need to understand China."

As captivating as the study of China is, scholars, journalists, analysts and others who daily consume themselves with deciphering China's every move constantly need to reassess their assumptions to seek balance in their interpretations and assessments. Unfortunately, there has always been a lot of starry-eyed hype about China from both the left and the right. While I was an undergraduate during the 1970s, "Mao worship" was in vogue. As more recent, balanced research shows, he was hardly a saint and was responsible for the deaths of millions. The American right tends to interpret China's epic economic transformation over the last 30 years in a way that validates, if not exaggerates, their own economic instincts.

In 1978, there was no private property in China. All commercial enterprises, banks, cars, etc., were owned by the state. There were no stock exchanges. After China began to accept loans from abroad, the economy began to grow until finally market economic mechanisms replaced command economy ones. As the economy began to sizzle at unprecedented growth rates, stock markets were created and many state-owned enterprises began to be privatized.

 

All of this leads to:

Myth No. 1: China is just as capitalistic as America. Or, economically they are just like us.

In fact, in many "privatized" stock companies, the Chinese government is still the largest stockholder, if not a significant minority stockholder. A prime example is the Haier Corporation, often touted as China's premier corporation, which specializes in home appliances and seeks to mold itself as a player in the ever-competitive global economy. China's commercial airlines are another case in point.

American-style laissez faire has no philosophical or practical traction in the Middle Kingdom. Through the use of what we might call "administrative guidance," the government picks winners and losers by giving tax and financial incentives on one hand and policy and regulatory preferences on the other to certain companies. In this way, it is no different from Japan, South Korea, Taiwan, Germany and France.

At the most, Chinese capitalism is "guided capitalism." Nevertheless, China has lifted 350 to 400 million people out of poverty.

Myth No. 2: As China continues to develop economically, the growing middle class will demand a liberal democracy.

No! At least not for quite some time to come. Chinese history records nearly 5,000 years of a society imbued with authoritarianism. When has China ever really shown broad-based democratic instincts? When the Nationalists ruled China, they held only one election, and that was under U.S. pressure in 1947. In today's China, elections are held only at the village level, after a careful vetting of all candidates by the party.

China and other Asian countries are more concerned with political stability and economic growth than with democracy. They tend to see democracy as though it were a car speeding wildly out of control, squealing on two wheels around a corner at 90 mph, not knowing whether it is going to safely make its way through the turn and land back on four wheels.

There is little fear of big government and often a need to feel dependent on some larger force. Many of the members of the new middle class fear that democracy would somehow result in legislation that would diminish their newly gained wealth.

Democracy is built on institutions that ultimately have the power to check the power of other institutions. China has only one such institution of any significance: the Chinese Communist Party. The legal system, for example, is getting better but is designed primarily to protect the state. Like everything else, it is subservient to the party. Mass media are carefully controlled.

Nevertheless, China's national leadership is much more sensitive to opinion polls than it has been.

Myth No. 3, in the making: China is strongly devoted to non-interference in the internal affairs of other countries.

After the establishment of the People's Republic of China in 1949, China largely cut itself off from the outside world, and most countries still recognized the Republic of China government on Taiwan as the government of China. However, in its earliest international dealings in the mid-1950s, which took place with India, the "Five Principles of Peaceful Co-Existence" were signed and promulgated by both countries. From the principles, China adopted the notion of non-interference in the internal affairs of other countries as a basic pillar of its foreign policy.

China's foreign policy is largely based on securing access to natural resources. In the Sudan, China has invested more than $10 billion in the energy industry and stationed 4,000 People's Liberation Army soldiers to guard its investment. What if the Sudanese were to suddenly announce nationalization of all oil assets in the country? The International Business Daily alleges that "China is the unindicted co-conspirator in Khartoum's genocidal campaign" in Darfur. China supports the Sudanese government with weapons and diplomatic support at the United Nations, where it can use its Security Council veto to blunt criticism of the African nation.

China supports the Myanmar (Burmese) junta politically, plus with economic aid and arms because of the strategic advantage the country and its offshore islands offer on seaborne routes to Middle Eastern oilfields, proximity to rival India and natural resources. China has built four naval bases in the country where Chinese naval engineers have been spotted wearing civilian clothes. For some time, China has been involved in attempting to dilute the historic Vietnamese influence in Laos by vigorously wooing the country to the point that a growing number of Laotians question China's influence on the government.

It might have borrowed elements of American capitalism; however, China has created its own model of economic development that holds no foreseeable role for democracy. For some countries, it's an enviable model. The challenge for America is to reinvigorate its economy and ever build its democracy in a way that buoys America's soft power and global image.

 

Bill Sharp teaches classes about the domestic and international politics of East Asia at Hawaii Pacific University. He writes a monthly commentary for the Star-Bulletin. Reach him at .(JavaScript must be enabled to view this email address)