When China Rules the World
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Hitherto the world has been characterized by Western hubris — the Western conviction that its values, belief systems, institutions and arrangements are superior to all others. The power and persistence of this mentality should not be underestimated. Western governments feel no compunction or restraint about lecturing other countries on the need for, and overwhelming virtue of, their versions of democracy and human rights. This frame of mind is by no means confined to governments, who, for the most part, simply reflect a popular cultural consensus. Many Western feminists, for example, tend to assume that gender relations in the West are more advanced than elsewhere, and that they are more liberated and independent than women from other cultures. There is a deeply embedded sense of Western psychological superiority which draws on powerful economic, political, ideological, cultural and ethnic currents. The rise of a world of multiple modernity challenges that mentality, and in the era of contested modernity it will steadily be eroded and undermined. Ideas such as ‘advanced’, ‘developed’ and ‘civilized’ will no longer be synonymous with the West. This threatens Western societies with an existential crisis of the first order, the political consequences of which we cannot predict but will certainly be profound. The assumptions that have underpinned the attitudes of many generations of Westerners towards the rest of the world will become increasingly unsustainable and beleaguered. The West has thought itself to be universal, the unquestioned model and example for all to follow; in the future it will be only one of several possibilities. This is a scenario that, at least until very recently, [420] the West has been almost entirely unprepared for, as Paul A. Cohen, cited at the very beginning of this chapter, suggests. In future it will be required to think of itself in relative rather than absolute terms, obliged to learn about, and to learn from, the rest of the world without the presumption of underlying superiority, the belief that ultimately it knows best and is the fount of civilizational wisdom. The bearer of this change will be China, partly because of its overwhelming size but also because of the nature of its culture and outlook. China, unlike Japan, has always regarded itself as universal, the centre of the world, and even, for a millennium and more, believed that it actually constituted the world. The emergence of Chinese modernity immediately de-centres and relativizes the position of the West. That is why the rise of China has such far-reaching implications.
Part II. The Age of China
Although parts of China are already prosperous and developed, around half of the population still lives in the countryside. China remains very much a developing country. As a consequence, Chinese modernity can only be regarded as work in progress. Some of its characteristics are already evident, others are only in embryonic form, while others still are not yet visible. It is abundantly clear, however, that Chinese modernity will differ markedly from Western modernity. The reasons for this lie not only in the present, but even more tellingly in the past. China has little in common with the West. It comes from entirely different cultural coordinates. Its politics, its state and its moral outlook have been constituted in a highly singular way, likewise its relationship with its neighbours. The fact that for many centuries the Chinese regarded themselves as constituting the world, as ‘all land under Heaven’, only serves to underline the country’s unique character. Unlike most developing countries, furthermore, China was never colonized, even though many of its cities were. Colonization was a powerful means by which countries were Westernized, but in China its absence from vast swathes of the country meant this never happened in the same manner that it did in India or Indochina, for example. The sheer size of China, both as a continental land mass and, more importantly, in terms of population, were, of course, indispensable conditions for enabling the Chinese to think in such autarchic and universalist terms. It might be argued that all these considerations lie in the past, but it is history that shapes and leaves its indelible mark on the present. Modernity is not a free-floating product of the present, but a function of what has gone before.
The fact that China, ever since 1949, but more significantly since 1978 and the beginning of the reform period, has been single-mindedly focused on the task of modernization — and, with remarkable self-discipline, allowed itself no distractions — has served to emphasize the extent to which China’s modernization is convergent with the West rather than divergent. Here, China ’s experience closely resembles that of its more developed East Asian neighbours. But as China progresses further down the road of modernization, it will find itself less constrained by the imperatives of development, increasingly at ease with the present, and anxious to find inspiration from its past for the present.
6. China as an Economic Superpower
In August 1993, I visited Guangdong province, north of Hong Kong, for the first time. The experience is engraved on my memory. The road from Shenzhen to Guangzhou (the provincial capital, known as Canton in colonial times) was sometimes made up, occasionally little more than a mud track. Although we were in the middle of the countryside, the road was overflowing with pedestrians and vehicles of every conceivable kind. Played out before my eyes was the most extraordinary juxtaposition of eras: women walking with their animals and carrying their produce, farmers riding bicycles and driving pedicabs, the new urban rich speeding by in black Mercedes and Lexuses, anonymous behind darkened windows, a constant stream of vans, pick-ups, lorries and minibuses, and in the fields by the side of the road peasants working their small paddy fields with water buffalo. It was as if two hundred of years of history had been condensed into one place in this single moment of time. It was a country in motion, its people living for the present, looking for and seizing the opportunity, as if it might never be offered again. I was engulfed by an enormous torrent of energy, creativity and willpower. The British Industrial Revolution must have been a bit like this: speculative, chaotic, dynamic — and a complete bloody mess. Guangdong was certainly a mess. Everywhere you looked there was construction — seemingly everything was in the process of being changed: the half-made road along which we were travelling, the countless half-finished buildings, the land being cleared as far as the eye could see. Guangdong was like a huge construction site.
Just over two years later I tried to retrace my steps with a television crew. There was not a single familiar sight I could find. The dynamic chaos had given way to order. There were brand-new motorways, bridges, factories, warehouses, and a lot more cars; and little sign of the juxtaposition of eras that had so fascinated me two years earlier. I enlisted the help of a couple of officials, but as I described the scenes I wanted to recapture on film they shrugged as if to suggest that they lay in the distant past. For me it was just two years ago; for them it could have been a different century. Guangdong, the brainchild of Deng Xiaoping, was well on the way to becoming the industrial centre of China, full of factories, many Hong Kong-owned, making cheap, mass-produced goods for the global market. This is how and where China ’s economic transformation started.
Now Guangdong, just fifteen years after that first volcanic eruption, is turning over a new page in its history. It can no longer sustain its old comparative advantage. Labour has become too expensive, too demanding, the expectations of its people transformed. Its factories are no longer able to compete with those in Vietnam or Indonesia. In 2007 alone, no less than 1,000 shoe factories closed in Guangdong, one-sixth of the total. [421] Their owners are moving production to the interior provinces, where living standards are as low as they once were in Guangdong, if not lower. And in their place, Guangdong is seeking to move up the value ladder, develop its service industries and shift into new areas of production that rely on design and technology rather than the perspiration of its people and the migrant workers from faraway provinces. Shenzhen and Guangzhou, like many cities in Guangdong, now look prosperous and well maintained, a far cry from former days when they resembled China ’s Wild West. Shenzhen may not yet enjoy Hong Kong ’s Western-style living standards, but it has significantly closed the gap. In little more than two decades,
Guangdong has gone from the early days of the Industrial Revolution to something not too far short of the less developed parts of Western Europe.
At the time of Mao’s death in 1976, who would have predicted that China stood on the eve of a most remarkable period of economic growth that would entirely transform the face and fortunes of the country? Virtually nobody. It was as unpredictable and unpredicted as another enormously significant event — 1989 and the collapse of European Communism. China had been torn apart by the Cultural Revolution, in which the cadre that had largely steered the party through the 1950s and early 1960s had been vilified and banished by a ‘popular’ coup d’état staged at Mao’s behest, involving the mobilization of tens of millions of young people in the Red Guard. The movement was opposed to privilege — whether by virtue of family history or Party position — and super-egalitarian in its philosophy: a very Chinese phenomenon with echoes of the Taiping Uprising in the mid nineteenth century. By the time of Mao’s death, the Cultural Revolution had subsided and stood largely discredited, but the country’s future direction remained deeply uncertain. The vacuum created by Mao’s death was soon filled by the return of those same old leaders who had been persecuted during the Cultural Revolution, with Deng Xiaoping at the helm. They were confronted by the economic ravages and political dislocation that were the legacy of the Cultural Revolution, but free at last to pursue their instincts and inclinations, unimpeded by the wild extremes and excesses of Mao, albeit in a situation where the party faced a severe crisis of legitimacy.
There was one favourable omen. By the end of the seventies China ’s relatively modest growth rate constituted something of an exception in East Asia. Many countries in the region were on the economic move: Japan was booming; South Korea, Taiwan, Singapore and Hong Kong had already experienced take-off; Malaysia, Thailand and others were in its early stages. The Chinese diaspora — centred on Hong Kong and Taiwan, but also in Singapore and Malaysia — were key players in this economic transformation. There were, in other words, examples around China ’s borders of the possibilities that now beckoned. The country’s East Asian hinterland was being transformed by a region-wide economic revolution based on catch-up. Of course China faced unique problems, in particular its vastness and diversity, together with the legacy of civil war, turmoil and occupation. In addition it had been isolated, a condition partly self-imposed and partly a result of an American embargo (involving a total ban on all transactions with China until 1971), plus the withdrawal of all Soviet aid and personnel in 1959. The challenges facing the new Chinese leadership, therefore, were far more formidable than those that had confronted Taiwan or South Korea, especially as these had enjoyed considerable American patronage and munificence during the Cold War.
The process of reform began in 1978 with the creation of a handful of special economic zones along the south-eastern seaboard, including Guangdong province, in which the rural communes were dismantled and the peasants were given control of the land on long-term leases and encouraged to market their own produce. It was based on a step-by-step, piecemeal and experimental approach. If a reform worked it was extended to new areas; if it failed then it was abandoned. Such down-to-earth pragmatism stood in sharp contrast to the grand ideological flourishes that informed the Cultural Revolution era and the Maoist period more generally. As Deng put it, in the time-honoured tradition of pithy and popular quotes by Chinese leaders from Confucius onwards: ‘Seek truth from the facts’; ‘Truth is to be found in practice’; and ‘Cross the river by feeling for the stones’. The new economic approach involved a new kind of mindset and way of thinking in the Party and government, which necessitated a massive change of personnel, starting at the top and working rapidly downwards. In 1978 Deng declared: ‘To make revolution and build socialism we need large numbers of path-breakers who dare to think, explore new ways and generate new ideas.’ [422] The People’s Daily later commented that political reform was:
a gigantic social systems engineering project, which involves straightening out the relationships between the Party and the government, power and judicial organs, mass organizations, enterprises and institutions, and between central, local and grassroots organizations; it concerns hundreds of millions of people. This is an arduous and protracted task. [423]
The reform project has usually been seen in narrowly economic terms, as if it had few political implications. In fact Deng’s project involved not just an economic revolution, but also a largely unrecognized political revolution, which entailed a complete overhaul of the state, both in its modus operandi and its personnel, with the universalist, ideological model of the Maoist era being replaced by something closer to the developmental model of the East Asian tigers. An essential element in this transformation was the decentralization of the state, which was seen as a precondition for the reform of the economic system and economic growth. Decision-making, including the granting of de facto property rights and fiscal power, was decentralized to different levels of local government. [424] As a consequence the central government budget, as a share of GDP, shrank considerably. [425]
Almost from the outset, economic growth rates were transformed from the 4–5 per cent of the Mao period to an annual growth rate of 9.5 per cent between 1978 and 1992. [426] The momentum of reform, however, was seriously disrupted in 1989, little more than a decade after it began, by a massive student demonstration in Tiananmen Square that was brutally suppressed by the army. With the Party leadership seriously divided, it seemed likely that the reform process would be derailed, perhaps indefinitely. In the event, there was only a short hiatus before, in the grand style of Chinese emperors, and to coincide with the Chinese New Year in 1992, Deng made a ‘Southern Expedition’ to the coastal heartland of China’s economic revolution, during which he made a statement in Shenzhen — a brand-new city neighbouring Hong Kong — that not only reaffirmed the central importance of the market reforms but made a clarion call for the process to be intensified and accelerated, suggesting, in a famous passage, that there was nothing wrong in allowing the rich to get richer (and then eventually paying higher taxes to help the poor). [427] Until this point the reform process had largely been concentrated in the south, but now it began to move to the interior provinces and, most crucially of all, to Shanghai and the Yangzi Delta, China ’s former economic powerhouse. There was a further wave of foreign investment, largely from the Chinese diaspora based in Hong Kong and Taiwan (which to this day remains the largest single source of foreign inward investment), while Chinese exports, mainly to the United States, increased rapidly. An economic fever began to grip the country, encouraged by Deng’s call to embrace the market economy and fuelled by the annual double-digit growth rate. Nothing more graphically symbolized the ‘new frontier’ economic spirit than the tens of millions of rural migrants, China ’s reserve army of labour, who left their farms and villages in search of the work and glitz of the city. [428] The Red Guards were now but a distant memory. There was barely a Mao suit in sight.
From the outset, Japan and the Asian tigers had been an important influence on China ’s economic reform. [429] These countries shared with Deng a pragmatic and non-doctrinal view of how to conduct economic policy. It was recognized, however, that none of them could, in themselves, provide a suitable model: the conditions, especially those flowing from China ’s enormous size and diversity, were simply too different. In the era of globalization that began around 1980, moreover, it was no longer possible for China, unlike Japan and the Asian tigers earlier, to grow its industries and companies behind a wall of tariffs until they were ready to compete in the international market. A further complicating factor was that China, as a Communist country, was still viewed with a certain amount of suspicion by the United States: as a result, its entry into the WTO took fifteen years and was the subject of the most detailed agreement ever made with any country — contrasting strongly, for example, with the far less demanding terms required of India a few years earlier. China, for a variety of reasons, had
to invent its own way. [430]
Although China enjoyed nothing like the intimacy of South Korea and Taiwan’s relationship with the United States, it recognized the crucial importance of winning American support and cooperation in its pursuit of economic growth. Just as its approach to economic reform was informed by pragmatism, so too was its attitude towards the United States. The Mao- Nixon accord of 1972 marked a profound change in their relationship, with the establishment of formal diplomatic relations in 1979, the settlement of property claims, the unfreezing of assets and the granting to China of most-favoured nation treatment. These steps created the conditions for China subsequently to join the IMF and the World Bank in 1986 and be granted observer status to GATT in 1982. The value of the United States to China was increasingly evident during the 1980s: it became the most important destination for Chinese exports; growing numbers of Chinese students went to study there, including many sons and daughters of the Party elite; while the US model of capitalism came to exercise a growing influence. The collapse of the Soviet Union only served to accentuate that influence, and the US’s prestige was further enhanced by the economic dynamism associated with Silicon Valley and the internet. Increasingly during the nineties, however, there was a rising tide of nationalist sentiment directed against the US, which found expression in the bestseller The China That Can Say No and the demonstrations against the US bombing of the Chinese embassy in Belgrade. [431] American influence on China’s modernization, nonetheless, remained considerable. Even China’s own economic path and popular mood was to bear some of the signs of neo-liberalism: the worship of wealth, the embrace of entrepreneurs, acquiescence in growing inequality, the retreat of the state from the provision of public goods such as education and health, the rapid lowering of tariff barriers and the adoption of an extremely open trade regime [432] — all of which were closely associated with the reign of Deng’s pro tégé and successor, Jiang Zemin.