The Chinese enigma

Mao Zedong’s favourite Chinese dynasty was the Qin. The first emperor, Qin Shihuangdi, had unified the country, and had himself buried surrounded by a life-sized terracotta army. To Mao, son of a rich farmer from Hunan who had never been abroad and never wished to go, it was an appealing model: a militaristic, inward-looking fortress with a population in fear of its emperor.

Qin Shihuangdi and his warriors are still popular with tourists, but the images of the giant mural at Beijing’s newest airport derive from paintings of the outward-looking T’ang dynasty, which encouraged cultural and political interchange and Silk Road trade.

Only two big Maoist ideas now survive: a truculent nationalism that seeks to restore China’s former pre-eminence, and the proposition that political power belongs exclusively to the Communist Party.

Mao’s successors, by moving towards the market economy, have set in train the social and economic revolution they hope will make China the 21st century’s superpower. Can they succeed?

Progress has been oversold. In 1993, after 15 years of rapid growth, China’s exports had barely crept back to where they were in 1928. By 2000 the dollar economy, hailed as the future engine of global growth, was barely bigger than those of Spain and Holland combined. Even now, China’s gross domestic product is less than a quarter of Japan’s.

The frenzied development of the cities is less a sign of a thriving market economy than the power monopoly of a state free to spend its citizens’ savings on often unwise and ill-planned urbanisation. As Milton Friedman put it when he visited Pudong, Shanghai’s showcase development: ”This is a statist monument for a dead Pharaoh.”

Of the billions of dollars of foreign investment in the past 20 years, almost none has brought a return in the domestic market. China remains an enigma: is this the next superpower, or are the problems too great for a sclerotic Communist Party to solve?

The dash for growth, as the government now admits, has been an unsustainable environmental disaster. China has 16 of the world’s 20 most polluted cities, a rapidly falling water table, appalling river pollution, extensive desertification and a steady loss of scarce agricultural land.

She can no longer feed herself; she can barely keep the lights on. But to sustain the growth required for one-party rule, a further burst of urbanisation is planned that would constitute the largest movement of population ever — of a further 500-million peasants to the cities. To employ them, the economy must keep expanding, regardless of the costs.

The prosperity visitors see in China’s cities has been bought at the expense of the majority — the 900-million rural people who have been robbed of their accumulated surpluses by a state that spent their savings on industrialisation and then urbanisation.

Peasant migrant workers have been the bedrock of China’s boom: the men have built the cities, the women’s cheap labour has driven exports. They have been poorly rewarded: the government recently admitted migrant construction workers were owed $61-billion in unpaid wages. As fast as the economy grows, the gap between rich and poor grows faster.

Millions of former workers in state enterprises have lost jobs, health-care and pensions. In the countryside, school and medical services have collapsed or are so expensive many cannot afford them.

The unchecked power of corrupt rural officials has given them licence to tax the peasants beyond endurable limits and to pack the public payroll with relatives and cronies. A county administration, which in the 1980s typically employed 400 officials, now employs 2 000, all paid for by the peasantry.

In the cities, life for the lucky few has changed beyond recognition. Young Chinese can travel, earn and fall in love without state interference. Even the one-child policy can be circumvented with money. There is a real liberty of opinion, reflected in a tentative emboldening of the Chinese press and thousands of Internet chat rooms that, despite attempted censorship, offer debating space. But to most young Chinese — peasants who have grown poorer — these opportunities are out of reach. Many will not find jobs, however fast China grows.

The limits of freedom are still clear. A Chinese citizen may not found or join an independent trade union, practise Falungong, found a political party, display a photo of the Dalai Lama or join a religious group that does not acknowledge Communist Party leadership, on pain of up to 15 years’ jail. Worse, citizens have no defence against petty tyranny and official corruption. So far, China has confounded those who argue that the market automatically brings political liberalisation.

China’s fiercest ambitions are economic: it needs to export and to attract inward investment, secure oil supplies and maintain access to markets.

Its future as the next superpower is not guaranteed. The past two decades of growth have been similar to that enjoyed by Taiwan, South Korea or Japan in the 1950s and 1960s.

It is likely to remain the world’s manufacturing base for the foreseeable future, but continued growth depends on further difficult reform, which a sclerotic party may not be able to manage. China needs to share internal wealth and build a more equal, educated society. On present trends, India or Brazil are equally plausible superpowers. — Â

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