March 30, 2012 10:01 pm

Chris Patten on the rise of China

Can the country grow richer indefinitely without becoming more free?
A construction site in Shanghai©Panos

A construction site in Shanghai, with the skyscrapers of the Pudong financial district in the background

Tiger Head, Snake Tails: China Today, How it Got There and Where it is Heading, by Jonathan Fenby, Simon & Schuster, RRP£20, 432 pages

 

Jonathan Fenby is a modest man. Tiger Head, Snake Tails begins with a disclaimer. It is not, the author says, written for China experts – as though he had nothing to teach academic Sinologists. True, he is not himself a life-long scholar of China. But he is an outstanding journalist who has already written a first-class modern history of the country, and his latest book provides an excellent introduction to the problems confronting its people as they embark on the transition to the fifth generation of leadership since the Communist takeover in 1949.

Since outsiders first visited, studied and traded with China, they have divided into two schools. First, there are those who believe that around every corner lies another Chinese triumph. For them China is and always will be the cradle of human civilisation and source of all prosperity. When I was drafting a speech to mark my arrival as governor in Hong Kong, one Sinologist official suggested that I should drop a reference to the partnership of two great and ancient nations in managing the 1997 transition on the grounds that it showed insufficient respect to the greater and more ancient Middle Kingdom.

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Then there are those who believe China is camped on the slopes of a volcano, which is likely at any moment to blow its top. While surprised that this has not happened already, their seismological expectation is that the explosion cannot be long delayed.

Fenby provides a balanced account of the record on both sides of the ledger. Both Sino-enthusiasts and Sino-doom-mongers will find much in this book to confirm their prejudices. For most of the rest of us, seeking a via media between these opposing views, at least one thing is clear. China’s success is important to all of us, not just to the sixth of humanity who are Chinese. Would we really prefer a China in political turmoil and economically on the rocks or a China continuing a relatively peaceful rise? One of the greatest threats to our well­being in the 21st century would come from China’s failure, not its success.

The gee-whiz statistics of China’s economic ascent since it made its peace with capitalism – albeit a pretty rough and sharp-elbowed variety – are all on parade here. China exports as much in a day now as it did in a year when I first clapped eyes on it in 1979. It is the largest manufacturer and exporter, the biggest maker of steel and consumer of energy, and dominates the market in everything from vuvuzelas to sombreros.

While 400m or more Chinese have been lifted out of poverty, problems darken the polluted heavens. The environmental toll of helter-skelter growth has been heavy. As the Gini coefficient shows, the gap between the very rich (often the very seriously rich) and the poor has grown wider. So is China, observers ask, a rich country with a lot of poor people or a poor country with a lot of rich citizens? The population is ageing fast, with an increasingly obvious gender imbalance; the number of favoured males is outstripping the female population. By mid-century, with 1bn Chinese living in water-stressed cities, the largest population in the world will be Indian.

The economy is seriously unbalanced. Just as the US spends more than it earns, so China earns more than it spends. In the decade of fast growth after 1997, pay as a share of national income fell from 53 per cent to 40 per cent – socialism with Chinese characteristics. While exports to America increased by 1,600 per cent in 15 years, the lion’s share of the proceeds went into the frequently misallocated profits of state-owned enterprises and a foreign exchange war chest. Fenby shows how difficult it will be to reform economic management while the currency, capital and labour markets are controlled, credit is politicised, energy and water prices are fixed, and farmland is owned by the state. Yet wide-ranging economic reform is essential for sustainable growth as the World Bank, with the tacit agreement of at least part of the Chinese leadership, has recently argued.

Is political reform necessary too? Not if you believe those who opine that China has discovered a growth model that reflects the long-range decisiveness of an authoritarian regime, which may lock up and beat up its critics but which still gets things done big-time: a can-do system that contrasts favourably with the can’t-do democratic politics of the west and India.

Except that the outgoing Chinese premier Wen Jiabao doesn’t himself seem to think this. His swansong at the end of the recent National People’s Congress (like his speech at London’s Royal Society last year) urged on his colleagues democratic reform, the rule of law and the separation of party and government. Fenby clearly accepts the thrust of the premier’s argument. Wen also denounced the corrosive effects of corruption, perhaps forgetting the remark of the old Maoist Deng Liqun in the 1990s that if the party bosses did not eradicate graft, they would lose the support of the people; but if they did, they would lose party members.

This is one of the many paradoxes that will challenge the man apparently tapped as China’s next leader, Xi Jinping. It is extraordinary that we know so little of the views of one who will have such an effect on all our lives, except that we can presumably reckon that the current vice-president strongly disagrees with the former party boss of Chongqing Bo Xilai, purged this month after a political scandal involving the attempted defection of his police chief. The defenestration of Bo – himself seen previously as a contender for the top leadership – came in a coup that seemed to owe much to the Leninist playbook. What factional fighting does it reflect or portend? Does it have anything to do with the argument about how the party can continue to assert its legitimacy through growth and control, when to secure the one has effects on the other? Perhaps Xi can ride both horses, or transfer safely from one to the other. We should wish him luck.

Xi will know all about the issues covered so comprehensively in Fenby’s book. They constitute his in-tray, which is even more crowded with seemingly intractable problems than the one sitting on the desk of the Oval Office in the White House.

Lord Patten, chairman of the BBC Trust and chancellor of the University of Oxford, was the last governor of Hong Kong

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