The Post-American World: Release 2.0 (13 page)

It is awkward to point out, but unavoidable: not having to respond to the public has often helped Beijing carry out its strategy. Other governments enviously looking on have taken note of this fact. Indian officials like to observe that their Chinese counterparts don’t have to worry about voters. “We have to do many things that are politically popular but are foolish,” said a senior member of the Indian government. “They depress our long-term economic potential. But politicians need votes in the short term. China can take the long view. And while it doesn’t do everything right, it makes many decisions that are smart and far-sighted.” This is evident in China’s current push in higher education. Recognizing that the country needs a better-trained workforce in order to move up the economic value chain, the central government committed itself to boosting scholarships and other types of aid in 2008 to $2.7 billion, up from $240 million in 2006. Officials expanded overall government spending on education, which was a measly 2.8 percent of GDP in 2006, to 4 percent in 2010, a large portion of which is devoted to a small number of globally competitive elite institutions. Such a focus would be impossible in democratic India, for example, where vast resources are spent on short-term subsidies to satisfy voters. (India’s elite educational institutions, by contrast, are under pressure to limit merit-based admissions and accept half their students on the basis of quotas and affirmative action.)

It is unusual for a nondemocratic government to have managed growth effectively for so long. Most autocratic governments quickly become insular, corrupt, and stupid—and preside over economic plunder and stagnation. The record of Marcos, Mobutu, and Mugabe is far more typical. (And lest one veers into cultural explanations, keep in mind that the record of the Chinese government under Mao was atrocious.) But in China today, the government, for all its faults, maintains a strong element of basic pragmatism and competence. “I’ve dealt with governments all over the world,” says a senior investment banker, “and the Chinese are probably the most impressive.” This view is broadly representative of business leaders who travel to China. “People have to . . . make their own value judgments against what they deem to be the greater good all the time,” Bill Gates told
Fortune
magazine in 2007. “I personally have found the Chinese leaders to be fairly thoughtful about these things.”

This is not, however, a complete picture. While China is growing fast and opportunities abound on every level, the state—thanks to the incremental reform approach—still commands many heights in the economy. Even today, state-owned enterprises make up about half of GDP. Of the thirty-five largest companies on the Shanghai stock market, thirty-four are either partly or wholly owned by the government. And state control is often at odds with openness, honesty, and efficiency. China’s banks, which remain mostly government entities, disperse tens of billions of dollars a year to shore up ailing companies and funnel money to regions, groups, and people for noneconomic reasons. Corruption appears to be rising, and the share of corruption cases involving high-level officials is up dramatically, from 1.7 percent in 1990 to 6.1 percent in 2002.
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Regional differences are widening, and inequality is skyrocketing, causing social tensions. A much cited statistic—from the government itself—tells of an important trend. In 2004, there were 74,000 protests of some kind or the other in China; ten years earlier, there were just 10,000.

These two pictures can be reconciled. China’s problems are in many ways a consequence of its success. Unprecedented economic growth has produced unprecedented social change. China has compressed the West’s two hundred years of industrialization into thirty. Every day, tens of thousands of people are moving from villages to cities, from farms to factories, from west to east, at a pace never before seen in history. They are not just moving geographically; they are leaving behind family, class, and history. It is hardly a surprise that the Chinese state is struggling to keep up with this social upheaval. In describing the declining capacity of the Chinese state, Minxin Pei points out that the authorities cannot manage something as simple as road safety anymore: the fatality rate is 26 per 10,000 vehicles (compared with 20 in India and 8 in Indonesia).
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But it is, at the same time, crucial to note that the number of cars on China’s roads has been growing by 26 percent a year, compared with 17 percent for India and 6 percent for Indonesia. When India overtakes China in growth, as it is set to do, I would wager that it will also see a marked rise in its accident rate, democratic government or not.

Consider the environmental consequences of China’s growth—not to the planet as a whole but to China itself. Some 26 percent of the water in China’s largest river systems is so polluted that they have “lost the capacity for basic ecological function.”
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There are nine thousand chemical plants along the banks of the Yangtze River alone. Beijing is already the world’s capital according to one measure—air pollution. Of China’s 560 million urban residents, only 1 percent breathe air considered safe by European Union standards.
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But it is also worth pointing out that almost all these figures and assessments come from the Chinese government. Beijing has placed environmental considerations higher on its agenda than most developing countries have. Senior officials in China talk about the need for green GDP and growth with balance, and environmental considerations figure prominently in President Hu Jintao’s plan for a “harmonious society.” One Western consulting firm has examined China’s new laws regarding air pollution and calculated that demand for products that remove particulates from the air will increase 20 percent a year for the foreseeable future, creating a $10 billion market. Beijing is trying to manage a difficult dilemma: reducing poverty requires robust growth, but growth means more pollution and environmental degradation.

The greatest problem China faces going forward is not that its government is incurably evil; it is the risk that its government will lose the ability to hold things together—a problem that encompasses but goes well beyond spiraling decentralization. China’s pace of change is exposing the weaknesses of its Communist Party and state bureaucracy. For several years, the government’s monopoly on power allowed it to make massive reforms quickly. It could direct people and resources where needed. But one product of its decisions is economic, social, and political turmoil, and the insular and hierarchical structure of the party makes it less competent to navigate these waters. The Communist Party of China—the party of workers and peasants—is actually one of the most elite organizations in the world. It is composed of 3 million largely urban educated men and women, a group that is thoroughly unrepresentative of the vast peasant society that it leads. Few of its high officials have real retail political skills. Those promoted tend to be good technocrats who are also skilled at the art of intraparty maneuvering and patronage. It remains to be seen whether these leaders have the charisma or ability to engage in mass politics—the skills they will need to govern a population of 1.3 billion people that is becoming increasingly assertive.

In places like Taiwan and South Korea in the 1970s and 1980s, economic growth was accompanied by gradual legal, social, and political reforms. Those regimes were authoritarian, not totalitarian—an important distinction—and thus did not seek all-encompassing control over society, which made loosening the grip easier. They were also pushed to open up their systems by the United States, their greatest benefactor. Beijing faces no such pressures. As China changes, the totalitarian structure has cracked, or become irrelevant, in places. People have many more choices and freedoms than before. They can work, move, own property, start businesses, and, to a limited extent, worship whomever they want. But political control remains tight and shows little signs of easing in certain core areas. For example, Beijing has developed an elaborate system to monitor use of the Internet that has been surprisingly effective. It restricts or completely blocks any site that carries information it cannot control, including Google and the West’s most popular social media tools, Facebook and Twitter. When a teacher uploaded photos of poorly built schools that collapsed in the 2008 Sichuan earthquake, he was sent to a labor camp for a year.

The Communist Party spends an enormous amount of time and energy worrying about social stability and popular unrest. This is surely a sign that it faces a problem of uncertain dimensions and with no clear solution. Compare that with China’s democratic neighbor to the south. India’s politicians worry about many things—mostly losing elections—but rarely about social revolution or the survival of the regime itself. They don’t panic at the thought of protests or strikes, instead viewing them as part of the normal back-and-forth between ruler and ruled. Governments that are confident about their systemic legitimacy don’t get paranoid about an organization like the Falun Gong, whose members gather together for breathing exercises.

Many American writers have rushed to claim that China disproves the notion that economic reforms lead to political reform—that capitalism leads to democracy. China might yet prove to be an exception, but it is too soon to tell. The rule has held everywhere from Spain and Greece to South Korea, Taiwan, and Mexico: countries that marketize and modernize begin changing politically around the time that they achieve middle-income status (a rough categorization, that lies somewhere between $5,000 and $10,000).
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Since China’s income level is still below that range, it cannot be argued that the country has defied this trend. And as Chinese standards of living rise, political reform is becoming an increasingly urgent issue. The regime will almost certainly face significant challenges over the next fifteen years, even if this does not mean that China will turn into a Western-style liberal democracy overnight. It is more likely to evolve first into a “mixed” regime, much like many Western countries in the nineteenth century or East Asian countries in the 1970s and 1980s, which combined popular participation with some elements of hierarchy and elite control. Keep in mind that Japan is the most mature democracy in East Asia, and one of its political parties held on to power for sixty years.

In late 2006, in a meeting with a visiting American delegation, Chinese Premier Wen Jiabao was asked what Chinese leaders meant by the word “democracy” when they spoke about China’s movement toward it. Wen explained that for them it contained three key components: “elections, judicial independence, and supervision based on checks and balances.” John Thornton, the Goldman Sachs executive turned China scholar who was leading the delegation, researched those three areas thoroughly and found that there had been some (small) movement toward provincial elections, more anticorruption measures, and even more movement toward a better system of law. In 1980, Chinese courts accepted 800,000 cases; in 2006, they accepted ten times that number. In a balanced essay in Foreign Affairs, Thornton paints a picture of a regime hesitantly and incrementally moving toward greater accountability and openness.
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Incremental steps may not be enough. China’s ruling Communists should read, or reread, their Marx. Karl Marx was a lousy economist and ideologist, but he was a gifted social scientist. One of his central insights was that, when a society changes its economic foundation, the political system that rests on it inevitably changes as well. As societies become more market-oriented, Marx argued, they tend to turn toward democracy. The historical record confirms this connection between market economics and democracy, though naturally with some time lags. Excluding countries whose wealth comes from oil, in the entire world today there is only one country that has reached a Western level of economic development and is still not a fully functioning democracy—Singapore. But Singapore, a small city-state with an abnormally competent ruling elite, remains an unusual exception. Many leaders have tried to replicate Lee Kuan Yew’s balancing act, creating wealth and modernity while maintaining political dominance. None has succeeded for long. And even Singapore is changing rapidly, becoming a more open society—even, on some issues (especially cultural and social issues like homosexuality), more open than other East Asian societies. Looking at dozens of countries over decades of development, from South Korea to Argentina to Turkey, one finds that the pattern is strong—a market-based economy that achieves middle-income status tends, over the long run, toward liberal democracy. It may be, as many scholars have noted, the single most important and well-documented generalization in political science.

Many in China’s younger generation of leaders understand the dilemma their country faces and talk privately about the need to loosen up their political system. “The brightest people in the party are not studying economic reform,” a young Chinese journalist well connected to the leadership in Beijing told me. “They are studying political reform.” Ministers in Singapore confirm that Chinese officials are spending a great deal of time studying the system Lee Kuan Yew built, and the Communist Party has also sent delegations to Japan and Sweden to try to understand how those countries have created a democratic polity dominated by a single party. They look at the political system, the electoral rules, the party’s formal and informal advantages, and the hurdles outsiders have to cross. Whether these are sham exercises or efforts to find new ways to maintain control, they suggest that the party knows it needs to change. But the challenge for China is not technocratic; it is political. It is a matter not of reconfiguring power but of relinquishing power—breaking down vested interests, dismantling patronage networks, and forsaking institutionalized privileges. None of this would mean giving up control of the government, at least not yet, but it would mean narrowing its scope and role and authority. And with all its new management training, is China’s Communist Party ready to take that great leap forward?