China: navigating the future

S P SETH

There is a proliferation of books on China these days. A recent one, Age of Ambition by Evan Osnos, a US journalist who reported from China from 2005 to 2013 consecutively for Chicago Tribune and New Yorker, raises some important issues. We will come to it a later. But the fact that China is attracting so much attention is not surprising considering that the country is now an economic powerhouse. China’s economic success owes much to Deng Xiaoping who took over the country’s leadership after Mao Zedong’s death, and propagated the motto that: to get rich is glorious. And his successors have since built on it, following the same precept and broad policies. But the accelerated process of economic growth has created some serious problems. The most dangerous, in some sense, is the ever-widening income disparity between the rich and the poor, between urban and rural areas as well as between costal regions and the interior. It is dangerous because it engenders social instability about which the Communist Party of China remains extremely worried. The culture of greed and moneymaking has also entrenched corruption, which is self-perpetuating at the higher political levels. That, in turn, tends to reinforce cynicism about the political system.

Even though President Xi Jinpiang is said to be undertaking an anti-corruption drive, there is also a strong view that such campaigns are highly political. Take, for instance, the highly publicized corruption investigation against Zhou Yongkang, the country’s former security czar and a member of the all-powerful Politburo Standing Committee, as well as his family and inner circle. He is in serious trouble because of his association with Bo Xilai’s failed attempt to hijack the political transition and leadership from Xi Jinping. Bo Xilai, a former party chief of Chongqing, is now serving a long prison term. Xi obviously feels quite secure and confident now to take on and snuff out the dangerous political cabal around Bo Xilai, apparently led by the then security chief and then member of the Politburo Standing Committee. There is now a highly publicized campaign under way to root out high level corruption, intended to burnish XI’s credentials as a new age leader to reform and modernize the party.

While this is going on, another of Xi’s worry is the slowing growth of China’s economy. By standards of other countries, China’s economy is still putting up stellar performance at over 7 per cent. But it is down by about 3 percent from an average growth of 10 per cent over the last three decades. And the worry is that it might slow down to 7 percent and even lower in successive years. Around 7 per cent it will still be healthy growth by international standards but China is said to need a consistent growth rate of over 7 per cent to absorb 10 million new entrants every year to the labour market. The old model of growth through exports and investment in heavy industry and infrastructure, including real estate, has run out of steam. Indeed, the real estate has built up a bubble that might burst creating serious problems for the economy. According to reports, there is a glut of new flats and apartments in new housing colonies that remain unoccupied.

There is, therefore, need for restructuring or “rebalancing” the economy away from exports and investment in heavy industry. There is over-supply in sectors like steel. The country needs to reorient more to consumer spending and services sectors like education and health. That is where new jobs will need to be created for the new labour force. The Chinese government is aware of this and other related economic problems and is taking measures to restructure the economy. The problem, though, is that pressing a button here and there cannot do this. It would take time and might not always produce the desired results. It is, therefore, a time of some economic uncertainty in China, where much of the legitimacy of the Communist Party’s rule has come to be identified with healthy economic growth. Combined with this is the deeply entrenched culture of widespread corruption. And it doesn’t help when, even as China’s GDP rises, the rich-poor gap is widening all the time. In other words, the country’s leadership has a lot on their plate not only to stimulate the rate of growth, but also to deal with some of its unintended but serious consequences, such as growing economic inequality and systemic corruption.

At the same time, there is considerable concern about the danger to China’s political system from western notions of universal values and human rights, and the need to guard against is “subversive” effects. According to a widely reported Document No. 9, circulated at a Communist party forum, the party members were cautioned against the ‘subversive’ nature of western values such as “universal values [of human rights], western ideas of the freedom of press; civil society, civic rights… and judicial independence.” The Chinese leadership has long regarded that the collapse of the Soviet Union occurred precisely because Gorbachev sought to politically liberalize the system bringing it under tremendous strain. China is determined not to repeat the Gorbachev experiment with, what they regard as, disastrous results. The way China dealt with the 1989 democracy movement by using the army was a clear indication that Deng Xiaoping, its then-supreme leader, was not interested in the western experiment. And as the danger from western “universal values” persists, the Xi Jinping regime has clearly articulated its position that it wouldn’t stand for it. And it will take all the necessary measures to prevent it from subverting the CPC’s political monopoly.  

But the question then is how to separate economic and political aspirations of the Chinese people? One way is to control the flow of ‘subversive’ information from the west. Which is happening in all sorts of ways. However, a growing modern economy exposed to western influences by way of trade and cultural exchanges like, for instance, thousands of Chinese students studying in the west now and over the years including children of the top leadership, tends to create its own momentum for liberal political values. Whether or not western “universal values” are superior or not is not the question? As Evan Osnos has written in his book, Age of Ambition, “The Party has unleashed the greatest expansion of human potential in world history—and spawned, perhaps, the greatest threat to its own survival.” This struggle between people’s soaring aspirations and the limits of monopoly power to mediate and guide will define where China will go into the future. 

Note: This article was first published in the Daily Times.

Contact: sushilpeth@yahoo.com.au