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<-Back to WTN Archives The world's next superpower
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World Tibet Network News

Published by the Canada Tibet Committee

Wednesday, July 23, 2003

7. The world's next superpower

China is growing with bewildering speed, but it is undergoing social
upheavals on the way to becoming an economic superpower

By Jonathan Fenby
Wednesday, Jul 23, 2003

Conventional wisdom insists that nations ruled by communist parties are
regimented, unimaginative failures. Yet nowhere on earth is changing so fast
and on such a scale as in China, where market economics and rampant
consumerism meet the remnants of Maoism, throwing up paradoxes with profound
implications for its 1.3 billion people -- and for the rest of the world.

It is not clear, however, if even the leadership in its heavily guarded
Beijing compound knows exactly what is going on in the 9.5 million km2
between the booming development zones of the coast and the huge deserts and
mountains on the doorstep of Central Asia.

China is racing to meet its future, confident it will grow into a superpower
within a couple of decades, with all that implies for the West and for its
Asian neighbors. Yet it remains stunted under the authoritarian hand of a
Communist Party for which the retention of power has become an end in

It is the main motor of international expansion, but it contains an
uncomfortable expanse of shady zones and, owing to its size and diversity,
is very hard to control.

China's gleaming airports put Heathrow to shame. The size of construction
projects have led to the joke about the crane being the national bird.
The tycoon class has expanded so substantially that the American business
magazine Forbes produces an annual list of China's 100 richest. Car
production is rising by millions of vehicles a year.

There are about 300 million mobile-phone users. Shopping malls are crammed
with designer clothes, real and counterfeit. Top tickets for Real Madrid's
forthcoming game against a Chinese team are priced at ?125 (US$200) each.

Figures issued last week showed that, despite a dip last spring because of
the SARS epidemic, China's economic growth should still hit the 7 percent
target for the year, with industrial production up by 16 percent in the
first six months. Though there are doubts about the precision of official
figures, this rate is even higher in the special economic development zones
where big, modern factories ally automation with low-cost labour

Having started by making cheap goods, Chinese firms are moving on to more
profitable ones as their country's membership of the WTO guarantees them
access to world markets.

From toys to computer chips, just about everything seems to come from China
these days. Despite SARS, exports in the first half of this year bounded by
34 percent to the equivalent of ?120 billion (US$192 billion). Foreign
investment, bringing money, technology and expertise, rises by the year as
Western and Japanese executives put the country at the top of their plans.

Made in China

A recent article by an American economist was headlined: "What happens when
everything is made in China?"

That raises concern about foreign jobs being exported to China -- as in the
decision by Waterford Wedgwood crystal to close British factories and shift
production to China for lower costs. But, while international pressure on
Beijing to revalue its currency upwards grows, economic expansion is making
the mainland a major importer of raw materials, machinery and factory
components. Its purchases of crude oil rose by a third in the first half of
this year and it could be the salvation of the world steel industry.

On his drive from the airport, British Prime Minister Tony Blair would have
seen Beijing engaged in a huge building program running up to its staging of
the 2008 Olympics. In Shanghai, a new business district has gone up on
marshland and gleaming blocks of flats line the eight-lane roads into the
city. A German magnetic-levitation train whisks passengers in from
Shanghai's new Pudong airport at 402kph, and a Japanese bullet train is
likely to link the city to Beijing. Shenzhen, a pioneering economic
development zone across the border from Hong Kong, has grown from a small
town into a city of millions attracted by work in its fast-growing
factories. Chongqing, capital of the biggest province, Sichuan, is being
transformed from a shabby city notorious for its nasty climate into what
aims to be a model of growth in a special zone containing 30 million people.

The Three Gorges dam, with its enormous hydro-electric potential, has gone
into operation, and there are plans for a mammoth waterway across the
country to check the recurrent pattern of droughts and floods. Visit city
centers from the once-isolated Kunming in the lush south-west to Manchuria
on the border with Russia, and you find the same lines of glass and concrete
offices, shops and flats on proud display as signs of modernity.

A middle class is emerging and, this being China, it is numbered in hundreds
of millions. Artists and writers challenge tradition in a major way. The
"iron rice bowl" of cradle-to-grave welfare promised by Mao Zedong is being
smashed. Beijing's development is demolishing the alleyway hutong houses
that were a characteristic of the capital for eight centuries.

Modern life is eating away at the traditional family: 14 percent of
households now consist of either a single adult or a childless couple who
both work. Older people are deeply worried about the future, as their
children save to pay for health care and private education. At a lunch in
Beijing, the Education Minister spoke to me enthusiastically about the model
set by Warwick University for attracting paying students.

A lot of dark areas lie behind the bright lights on the Yangtze cliffs of
Chongqing and the Shanghai Bund, where the huge Hong Kong and Shanghai Bank
building from before the World War II has been restored as the headquarters
of a local development organization.

Income inequalities are enormous. Factory modernization has boosted
unemployment, and there are periodic demonstrations by workers who have not
been paid. Outside the city centers and modern apartment blocks, China's
urban areas are dirty, unhealthy and overcrowded. Workers newly arrived from
the country sleep out around train and bus stations, and drive down the
already tiny wages paid for manual labor on all those building sites.

Health and safety

Low health and safety standards are highlighted by repeated industrial
accidents and the recent spread of SARS. Pollution and environmental
destruction are high. Floods kill an average of nearly 4,000 people a year.

The government has launched a series of high-profile crackdowns on major
offenders, but corruption is embedded. Badly paid officials exploit their
position -- in one city, police stopped motorists to tell them their cars
contravened cleanliness regulations: they had a friend standing by to wash
vehicles for a small fee.

Much of rural China, which contains most of the country's people, is left
behind. Depending on the criteria adopted, upwards of 100 million Chinese
live below the absolute poverty line. Though cities are linked by a
fast-expanding motorway network, rural communications remain poor. Farmers
stage periodic protests about local officials levying "special taxes" for
their own enrichment.

Many villages are age-old huddles of mud or adobe huts without sanitation.
One villager joked that, if the government really wanted to reduce the
number of children, it should lay on electricity so people could watch
television at night rather than having sex.

Foreign financial houses have started trading in Chinese shares, but the
stock market is run largely for speculation and to direct capital to
well-connected firms. The banking system is shot through with huge bad debts
as a result of channelling money to politically favored enterprises rather
than those which could best use the cash.

The reform of state enterprises seems to be taking longer than expected.
Corporate accounts often bear little relation to reality.

An inquiry found recently that most state firms cooked the books. No wonder
some commentators see as inevitable the scenario outlined in a recent book
called The Coming Collapse of China.

Some of the highest-flying businessmen have crashed to Earth -- the
second-ranking person on the Forbes list for 2001 has just been jailed for
18 years for fraud. Huge smuggling rings involving local dignitaries have
been uncovered. Municipal officials in Manchuria's main city were found to
have been in cahoots with the local mafia.

This is partly the result of such rapid development in a country with no
independent legal system, where favors that bring the chance to make a
fortune are bought and sold. But the way China is developing poses a
distinct problem for the organization that sits obstinately on top of that
system and has used its ability to hand out favors and punishment, as the
glue that holds it together.

As an old Maoist once said, if the Communist Party does not get rid of
corruption, it is done for; but, if does get rid of corruption, it is doomed
anyway. Since the move to the market launched by the patriarch Deng Xiaoping
two decades ago, individual liberty has grown enormously. Walking in the
streets of Chinese cities, you do not feel the oppression that characterized
eastern Europe under communism.
Taxi drivers joke about the leadership, and only the politically ambitious
pay much attention to its ideological forays.

Basic gamble

That is, in its way, is what the leadership is after. Its basic gamble is
that growing wealth will provide a legitimacy to replace the tenets of
Maoism. After the first, second and third ways of politics, welcome to
China's fourth way where the prospect of getting rich means that politics,
in the conventional Western sense, can be pigeonholed for so long as the
economy roars ahead.

So, though there have been some electoral experiments at local
level,democracy is far away, as it has been throughout China's history. For
the new leadership of President Hu Jintao, as for his predecessor, Jiang
Zemin stability is paramount -- the Cultural Revolution is held up as a
terrible example of what can happen when things get out of hand.

Crossing the political line is perilous. Dissidents are out of the headlines
in the West, but they are still persecuted relentlessly. Members of the
deep-breathing Falun Gong exercise group are arrested as a security threat.
Tibet remains tightly policed, and the war on terrorism is a convenient
pretext for cracking down on the mainly Muslim population of the vast
western territory of Xinjiang.

China has put on its best face for the world, particularly since it realized
the benefits to be gained from Sept. 11. Blair and the other leaders beating
a path to Beijing should realize, however, that, useful as foreigners are,
China has never set much store by them. The round-eyes can provide
technology and money, but the country will go its own path, making temporary
alliances that suit it while increasingly using its clout as it chooses, in
its bid to displace Japan as Asia's economic and political motor.

To do that, the leaders Blair met this week have to maintain the breakneck
momentum of "socialism with Chinese characteristics" to demonstrate that
"It's the economy, stupid."

Jonathan Fenby edited the South China Morning Post in Hong Kong from 1995 to
1999 and is the author of Dealing with the Dragon: A Year in the new Hong

Articles in this Issue:
  1. Sikkim will not be an issue in Sino-Indian ties
  2. New momentum to China talks: PM
  3. Indian Communist Party's Delegation Visiting Tibet
  4. Response to Michael Parenti's article on Tibet
  5. U.N.:World can't afford rich China
  6. Tibet Simplifies Tourism Procedures for Taiwanese Tourists
  7. The world's next superpower

Other articles this month - WTN Index - Mail the WTN-Editors

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