China’s impact on the global trading system is so huge, and also in the longer term so uncertain, that this is a difficult question to answer. There are already tensions over China’s relationship with the WTO: on the one hand, there are accusations from the developed countries that China is failing to implement WTO rules as it ought to, while on the other hand, both the US and the European Union are using anti-dumping clauses (designed to prevent countries selling at unfair prices) as a pretext for deploying protectionist measures against Chinese goods. [581] There has been constant controversy around Chinese exports to the US. During 2007 these were concentrated on the safety of Chinese products, notably food and toys, as well as China’s failure to observe intellectual property rights. [582] So far these skirmishes have been at the relative margins of their trading relationships but they could be a harbinger of growing tensions in the future. Although the present era of globalization was designed by and is the creature of the West, above all the United States, the greatest beneficiary has been East Asia, especially China. [583] If the West should decide at some point that China has been the chief beneficiary — and to the West’s growing detriment — then the latter is likely to become increasingly protectionist and the present global system will be undermined. The process of globalization has already ground to a halt with the failure of the latest World Trade Organization Doha Round and is extremely unlikely to be revived. [584] But it remains to be seen whether this will be the prelude to a wider breakdown.
Hitherto, the main losers in the Western world have been those unskilled and semi-skilled workers who have been displaced by Chinese competition. But their grievances have been dwarfed by the winners — the multinationals which have used China as a cheap manufacturing base and the many consumers who have benefited from China prices. What will decisively change this political arithmetic is when China, as it rapidly moves up the value chain, starts to enter spheres of production which threaten the jobs of skilled manual workers and growing numbers of white-collar workers and professionals. The process of upgrading is already taking place in a limited way, as the example of textiles in Prato and Como in Italy illustrates, with design following manufacturing to China. [585] How quickly China upgrades its technological capacity thus lies at the heart of the likely Western response: the quicker that process proceeds, the more likely it is that the political arithmetic will change and that protectionist barriers might be erected; the slower it happens then the more likely it is that trade tensions can be managed and in some degree defused. The first scenario seems at least as likely as the second.
The economic rise of China has already led to a multiple redistribution of global economic power: from South-East Asia to China, from Japan to China, and from Europe and the United States to China. Given that China is only a little over halfway through its take-off phase, with over 50 per cent of the population still living in the countryside, it is clear that we are only in the early stages of this process. [586] It is inconceivable that one-fifth of the world’s population, embracing all the various scale effects that we have considered, can join the global economy with — by historical standards — enormous speed without ramifications which are bound to engender tension and conflict. So far China ’s incorporation has been relatively conflict-free. But the present aura of win-win that has surrounded this process seems unlikely to continue. The political arithmetic will shift in the West as the number of losers rises, with the entirely plausible consequence that the West — the traditional proselytizer for free trade — will lead the charge towards protection and the end of the era of globalization that began in the late 1970s. [587]
These considerations have now been recast in a new context: the most serious recession since the Great Depression of 1929- 33. Global trade is rapidly contracting, capital flows likewise, and unemployment is rising steeply across the world. The present era of globalization has come to a shuddering halt — and gone into reverse. How far this process will go remains entirely unclear. Almost everywhere governments are seeking to provide forms of assistance and subsidy for their threatened industries. There are growing demands for protection, evident in the ‘buy American’ pressure within the US Congress. China, as the world’s second biggest exporter (just behind Germany), will inevitably be a key target of such demands. In these circumstances, a trade war, accompanied by a withdrawal into rival trading blocs, is a distinct possibility. [588] The world is in new territory. The global parameters of China ’s economic rise have, at least for the time being, changed profoundly.
7. A Civilization-State
Hong Kong used to be a byword for cheap labour and cheap goods. It lost that reputation when its employers started to shift their operations north of the border into the similarly Cantonese-speaking Guangdong province. Hong Kong had moved too far up the value chain: the expectations of its workers had become too great to tolerate miserable working conditions, indecently long hours and poverty wages. The old textile factories decamped north along with everything else that required the kind of unskilled labour which Hong Kong once possessed in abundance and which China, as it finally opened its borders, now enjoyed in seemingly limitless numbers. The checkpoints and fences that were thrown up around the new towns in Guangdong were eloquent testimony to the countless rural labourers who were willing to leave their villages, whether they were nearby or in a distant interior province, for the bright lights of the city and what seemed to them, though no longer those over the border in Hong Kong, like untold riches.
Guangzhou railway station was crammed with such bounty-hunters, a human tide of migrants, from morning to night, 24/7. This was the Wild East. No matter the pitiful wages and terrible conditions, welcome to the province of opportunity. Young migrant girls barely out of school, often hundreds, even thousands, of miles from home, would work crazy hours performing the simplest of repetitive tasks, making clothes, toys or fireworks for Western markets that they could not even imagine, and then retire for a few hours’ sleep in their floor-to-ceiling bunk beds in cubby-hole-sized rooms in drab factory dormitories before resuming the drudgery on the morrow. But for them it was far better than eking out a much smaller pittance working the land from which they came.
Just as Hong Kong had earlier climbed the value escalator and seen living standards transformed in just a few decades, the same now began to happen in Guangdong. The expectations of locals grew and their opportunities expanded. From the most humble of beginnings, people began to make their way up their version of the career ladder. Meanwhile, as China ’s own standards and expectations changed, there was growing unease about the merciless exploitation of unskilled workers and migrant labour. They enjoyed no legal protection, with the official trade unions shackled and ineffectual. After years of discussion and debate, a labour law was finally introduced in 2008. It was bitterly resisted by many employers, who claimed that it would make their firms uncompetitive and drive them out of business.
Hong Kong employers were particularly prominent amongst these. Astute businessmen, enormously hard-working and pitiless to boot, they did not cross the border to escape the rising labour costs in Hong Kong in order to find themselves hamstrung by an armful of new regulations and a clutch of new expectations in southern China. Of an estimated 90,000 factories in the Pearl Delta region, nearly 60,000 are Hong Kong-owned. Many mainland Chinese employers supported them. Dubbed the country’s richest woman entrepreneur, Zhang Yin, chairwoman of Nine Dragons Paper Holdings, one of the world’s biggest paper-making and recycling firms, complained that workers were being given an ‘iron rice bowl’, a reference to the workers’ contract under Mao. The powerful All-China Federation of Industry and Commerce joined the opposition, warning of more labour disputes and companies going out of business. American firms with factories in China expressed their concern; the reason why they had gone there in the first place, after all, was the dirt-cheap labour. The All-China Federation of Trade Unions finally found a voice and rejected any concessions to the employers.
T
he new law is a sign of changing times. China, just like Hong Kong, will not always be a byword for cheap goods, even cheaper labour and miserable working conditions. The universal desire to improve one’s lot spells the eventual demise of an economic regime based on the cheapest labour in the world, wholly unprotected either by trade unions or the law, and exposed to the most brutal market forces. China is in the process of moving to a new stage in its development and its political world is beginning to reflect this. Laissez-faire attitudes are being replaced by the recognition that workers’ rights need to be protected.
There is still a widespread view in the West that China will eventually conform, by a process of natural and inevitable development, to the Western paradigm. [589] This is wishful thinking. And herein lies the nub of the Chinese challenge. Apart from Japan, for the first time in two centuries — since the advent of industrialization — one of the great powers will be from a totally non-Western history and tradition. It will not be more of the same — which is what the emergence of the United States largely represented in the late nineteenth century. To appreciate what the rise of China means, we have to understand not only China ’s economic growth, but also its history, politics, culture and traditions. Otherwise we will be floundering in the dark, unable to explain or predict, constantly disconcerted and surprised. The purpose of this chapter is to explain the nature of China ’s political difference. It is a task that is going to occupy, and tax, the Western mind for the next century.
A CIVILIZATION-STATE
China, by the standards of every other country, is a most peculiar animal. Apart from size, it possesses two other exceptional, even unique, characteristics. China is not just a nation-state; it is also a civilization and a continent. In fact, China became a nation-state only relatively recently. One can argue over exactly when: the late nineteenth century perhaps, or following the 1911 Revolution. In that sense — in the same manner as one might refer to Indonesia being little more than half a century old, or Germany and Italy being not much more than a century old — China is a very recent creation. But, of course, that is nonsense. China has existed for several millennia, certainly for over two, arguably even three, thousand years, though the average Chinese likes to round this up to more like 5,000 years. In other words, China’s existence as a recognizable and continuing entity long predates its status as a nation-state. Indeed it is far and away the oldest continuously existing country in the world, certainly dating back to 221 BC, perhaps rather longer. This is not an arcane historical detail, but the way the Chinese — not just the elite, but taxi drivers too — actually think about their country. As often as not, it will crop up in a driver’s conversation, along with references to Confucius or Mencius, perhaps with a little classical poetry thrown in. [590] When the Chinese use the term ‘China’ they are not usually referring to the country or nation so much as Chinese civilization — its history, the dynasties, Confucius, the ways of thinking, their relationships and customs, the guanxi (the network of personal connections), [591] the family, filial piety, ancestral worship, the values, and distinctive philosophy. The Chinese regard themselves not primarily in terms of a nation-state — as Europeans do, for example — but rather as a civilization-state, where the latter is akin to a geological formation in which the nation-state represents no more than the topsoil. There are no other people in the world who are so connected to their past and for whom the past — not so much the recent past but the long-ago past — is so relevant and meaningful. Every other country is a spring chicken by comparison, its people separated from their long past by the sharp discontinuities of their history. Not the Chinese. China has experienced huge turmoil, invasion and rupture, but somehow the lines of continuity have remained resilient, persistent and ultimately predominant, superimposing themselves in the Chinese mind over the interruptions and breaks.
The Chinese live in and through their history, however distant it might be, to a degree which is quite different from other societies. ‘Of what other country in the world,’ writes the historian Wang Gungwu, ‘can it be said that writings on its foreign relations of two thousand, or even one thousand, years ago seem so compellingly alive today?’ [592] The Chinese scholar Jin Guantao argues that: ‘[China ’s] only mode of existence is to relive the past. There is no accepted mechanism within the culture for the Chinese to confront the present without falling back on the inspiration and strength of tradition.’ [593] The Chinese scholar Huang Ping writes:
China is… a living history. Here almost every event and process happening today is closely related to history, and cannot be explained without taking history into consideration. Not only scholars, but civil servants and entrepreneurs as well as ordinary people all have a strong sense of history… no matter how little formal education people receive, they all live in history and serve as the heirs and spokesmen of history. [594]
The author Tu Wei-ming remarks:
The collective memory of the educated Chinese is such that when they talk about Tu Fu’s (712- 70) poetry, Sima Qian’s (died c. 85 BC) Historical Records [the first systematic Chinese historical text, written between 109 and 91 BC, recounting Chinese history from the time of the Yellow Emperor until the author’s own time], or Confucius’s Analects, they refer to a cumulative tradition preserved in Chinese characters… An encounter with Tu Fu, Sima Qian, or Confucius through ideographic symbols evokes a sensation of reality as if their presence was forever inscribed in the text. [595]
The earliest awareness of China as we know it today came with the Zhou dynasty, which grew up along the Yellow River Valley at the end of the second millennium BC. Already, under the previous Shang dynasty, the foundations of modern China had begun to take shape with an ideographic language, ancestor worship and the idea of a single ruler. Chinese civilization, however, still did not have a strong sense of itself. That was to happen a few centuries later through the writings of Master Kong, or Confucius (to use his Latinized name). [596] As discussed in Chapter 4, by this time the Chinese language was used for government and education, and the idea of the mandate of Heaven as a principle of dynastic governance had been firmly established. Confucius’s life (551–479 BC) preceded the Warring States period (403 BC- 221 BC), when numerous states were constantly at war with each other. The triumph of the Qin dynasty (221–206 BC) brought that period to an end and achieved a major unification of Chinese territories, with the emergence of modern China typically being dated from this time. [597] Although Confucius enjoyed little status or recognition during his lifetime, after his death he was to become the single most influential writer in Chinese history. For the next two thousand years China was shaped by his arguments and moral precepts, its government informed by his principles, and the Analects became established as the most important book in Chinese history. Confucianism was a syncretic mode of thinking which drew on other beliefs, most notably Taoism and Buddhism, but Confucius’s own ideas remained by far the most important. His emphasis on moral virtue, on the supreme importance of government in human affairs, and on the overriding priority of stability and unity, which was shaped by his experience of the turbulence and instability of a divided country, have informed the fundamental values of Chinese civilization ever since. [598] Only towards the end of the nineteenth century did his influence begin to wane, though even during the convulsions of the twentieth century — including the Communist period — the influence of his thinking remained persistent and tangible. Ironically it was Mao Zedong, the Chinese leader most hostile to Confucius, who was to pen the Little Red Book, which in both form and content clearly drew on the Confucian tradition. [599]
Two of the most obvious continuities in Chinese civilization, both of which can be traced back to Confucius, concern the state and education. The state has always been perceived as the embodiment and guardian of Chinese civilization, which is why, in both the dynastic and Communist eras, it has enjoyed such huge authority and legitimacy. Amongst its constellation of responsibilities, the state, most importantly of a
ll, has the sacred task of maintaining the unity of Chinese civilization. Unlike in the Western tradition, the role of government has no boundaries; rather like a parent, with which it is often compared, there are no limits to its authority. Paternalism is regarded as a desirable and necessary characteristic of government. Although in practice the state has always been rather less omnipotent that this might suggest, there is no doubting the reverence and deference which the Chinese display towards it. [600] Similarly, the roots of China ’s distinctive concept of education and parenting lie deep in its civilizational past. Ever since Mencius (372–289 BC), a disciple of Confucius, the Chinese have always been optimistic about human nature, believing that people were essentially good and that, by bringing children up in the right manner through the appropriate parenting and education, they would acquire the correct attitudes, values and self-discipline. In the classroom, children are expected to look respectfully upwards towards the teacher and, given the towering importance of history, reverentially backwards to the past in terms of the content of their learning. Education is vested with the authority and reverence of Chinese civilization, with teachers the bearers and transmitters of that wisdom. A high priority is placed on training and technique, as compared with the openness and creativity valued in the West, with the result that Chinese children often achieve a much higher level of technical competence at a much younger age in music and art, for example, than their Western counterparts. Perhaps this stems partly from the use of an ideographic language, which requires the rote learning of thousands of characters, and the ability to reproduce those characters with technical perfection. [601]
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