China's coming Collapse or Ascendancy?

In Foreign Policy (January 7, 2012), Gordon Chang, who has been consistently predicting the "Coming Collapse of China" in a decade since the launch of his 2001 book of the same title (Random House), resumes his conviction that the Year 2012 will prove him right, or wrong only by one year. Click here

Arguments are deployed about China's shrinking foreign investment, slowing growth, diminishing workforce, imploding unrests, a squabbling leadership resulting in sluggish decison-making (not the US Congress?), and an impending fall as the biggest victim of the imploding European crisis.

This dismal list of ills, however, coincides in stark contrast with a glowing forecast in an interactive article in The Economist (31 December 2011) "The year when the Chinese economy will truly eclipse America’s is in sight". Click here

Of all countries, China is certainly no bed of roses. A nation in rapid transition, she has all the apparent paradox and contradictions of a sphinx's riddle. It is easy to spotlight only some of the more glaring warts to make the "coming collapse" theory perennial.

However, this type of predictions often chooses to ignore the reality that China needs to restrains herself from growing too fast, that the country is changing deliberately towards a slower, more consumption-oriented and more sustainable model with higher value-added and less labour and energy-intensity, that inflation and unhealthy property prices are being brought down, and that a changing leadership, notwithstanding internal rivalry (or competition), knows which side its bread may continue to be buttered - by promoting more people-based governance.

In tandem with his article in Foreign Policy, Gordon Chang also wrote a lengthy piece in The Diplomat (January 5, 2012) entitled "China's Unstoppable Billion", which seems to insinuate that China's allegedly repressive regime risks being swept aside by a billion Chinese people with rising aspirations and personal freedoms. Click here

The article however reveals as many contradictions in China as those in its own arguments.

One side of the picture is a billion people getting used to behaving with much more personal freedom, disobeying or finding ways to ignore government diktats. The other side is a leadership trying to exercise authoritarianism and repression.

It begs the question that if the repression is so severe, there simply won't be so much personal freedom as depicted. On the other hand, if there is indeed such a rising tide of individual freedom, it must mean that the government is becoming much less repressive than it seems.

The article portraits President Hu and Premier Wen as reverting to the repression of Chairman Mao's days. This is hardly credible. Both Hu and Wen have realized that former President Jiang Zemin's pro-business policies alone won't ensure the stability of the Party as the society is becoming increasingly unequal. They have initiated the policy of "People-based Governance", trying to make government policies more responsive and relying more on public feedback, often through the internet. They have also formulated the pro-people change in direction in the latest Five Year Plan (2011-15).

As highlighted in the article, public opionions are playing a more and more important role, even in sentencing policies. Even projects decided by the State Council are now known to be allowed to retract in the light of public outcry. This is not exactly a picture of die-hard totalitarian repression.

The article's allegation also doesn't ring true that Hu and Wen tried to curb foreign investment or roll back China's globalization. Indeed, under their tutelage, China has become the world's favourite investment destination and China's economy has become the world's second largest. According to the above-mentioned article in The Economist, China's economy is set to overtake that of the United States by most measures by 2018.

The stellar growth has spawn a massive middle class, rising worker wages, and much higher farmers's disposable income. In the process, China's place in the world has gained gravitas. For the first time in over a century, the Chinese people can hold their heads high in the world. The Party's credibility has hugely benefited as a result.

Despite limited no-go areas where repression no doubt continues to apply, and a rising number of unrests caused by isolated local governance failures, the overall landscape is hardly a tinder-box for spantaneous combustion.

But the article is absolutely right in highlighting the rise of spontaneous citizen action worldwide, including the Arab Spring, empowered by the internet and social media networks. The recent Occupy Moverment started in Wall Street is another example spreading across the globe. Even Russia is experiencing this tide of rising aspirations and citizen protests. There is no doubt that China's leadership is on its toes.

Contrary to perceptions, the Politburo is seriously re-learning the need for higher standards of social justice from the rapid resolution of the high-profile stand-off in Wukan, a small county, where bold citizen action against local corruption and misfeasance forced the high-level provincial leadership to intervene and back down.

Some of China's litany of critical challenges, including the seriousness of local government indebtedness, the alleged "investment bubble" in "ghost shopping malls" and "roads to nowhere", and her elusive consumer economy, are addressed in depth in my earlier posting ëntitled "Another Coming Collpase of China" dated 1 December 2011. Click here

Compared to many Western democracies, the Party still enjoys amongst the world's highest popularity ratings, according to successive, independent citizen surveys conducted by the PEW Research Center for the People and the Press, a public opinion research organization based in Washington DC. Nor can the positive hard data in The Economist's article above be entirely dismissed as pure numbers divorced from reality.

It is correct to say that the Chinese people are becoming an unstoppable force in the world, whose creativity and aspirations have been unleached partly by a Party continuing seeking to reform and re-invent itself. The degree of openness and personal freedom in China nowadays would be unthinkable a few decades ago.

But China is in no hurry to copy the Western model of multi-party confrontational democracy, which is becoming dysfunctional in America, the very vanguard of this type of democracy where a small minority of powerful vested interests could shortchange the interests of the majority.

In an era of global challenges and paradigm shifts, the Communist Party of China is changing its policies and will need to redouble its efforts to reform itself. There may be a mismatch in the speed of change during different stages of China's development. However there is no convincing evidence that the Party will necessarily fail to harness the unstoppable force for good of the Chinese people.

Neverheless, in an age of increasing resource scarcity and geo-political and geo-economic volatility, coupled with a rapidly ageing population profile and dramatic domestic changes, China should be well advised to stay ever vigilant. While any major downturn in her fortunes is likely to invite another bout of "coming collapse" predictions, China should indeed remain thankful for these regular reminders that many black swans lie ahead and that any success would be hard-earned and by no means guaranteed.

Above all, even if China's eonomy should, as The Economist suggests, overtake that of America by 2018, the country will still remain at best a moderately well-off nation, similar to Turkey, for many more decades to come.

Best regards,

Andrew

Comments

[aaobama]

It is time for Gordon Chang to seek psychatric help. He is suffering a bad political delusion.

delusion: In Psychiatry, delusion is a false belief strongly held in spite of invalidating evidence, especially as a symptom of mental illness.

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