China Shakes the World: The Rise of a Hungry Nation
by James Kynge
Weidenfeld & Nicolson £18.99, 304 pages
As James Kynge notes in his balanced and very readable account of China’s metamorphosis from Maoism into the workshop of the world, the Chinese have a penchant for enumeration - from “the one China” principle through “the two whatevers” all the way to “the stinking ninth category”. I was myself once part of the count, clocking in as “the triple violator”. China Shakes the World is an excellent book, far more useful and sensible than most business bestsellers or the majority of general introductions to modern China. It invites us to ponder the answers to what might be called “the Six Great Questions”.
First, was China’s spectacular economic rise planned? Kynge thinks not. After Mao’s death in 1976, Deng Xiaoping believed he could pay for the priorities in the 10-Year Plan through the discovery of new oil deposits. Little oil was found so, searching for an alternative source of growth, Deng took some of the restrictions off the agricultural sector. Given this half-chance to escape Beijing’s clutches, local farmers and local government bolted. Disobeying the centre was the starting gun for China’s economic ascent, and Deng himself was prepared to back whatever seemed to work.
Second, who benefits from China’s rise? Principally, of course, the Chinese themselves, particularly the 400 million people lifted out of poverty and the tens of millions of children who are receiving a better education. Outside China, oil and commodity producers - such as Australia - have hit the jackpot and other Asian countries have seen an explosion in trade with their mighty neighbour. In the US and Europe, consumers by and large gain - but who notices? So, too, do home purchasers whose interest rates would be far higher were it not for China’s use of its vast foreign exchange resources to buy up American debt. On the other hand, producers of the manufactured goods with which the Chinese flood our markets lose their jobs. Part of China’s comparative advantage is relative poverty; part is the overheads loaded on to European and even American business, for instance on to the German “Mittelstand”; part is the cat’s cradle of economic distortions that allows the Chinese to produce at below any real market cost.
Third, who is threatened as China stands up? In one sense, this is a daft question. Do we really believe that for more than a fifth of humanity to raise its living standards is a threat to the rest of us? Would we prefer China dirt-poor and starving? Where China undercuts and outperforms us in the market place, the answer is not protectionism - though I fancy we shall see many more future surrenders to protectionist pressures - but better education and training, more labour flexibility and lower government charges on industry.
The threat, where it exists, is more subtle. It is not to American hyper-power hegemony, but rather to the global environment (as well as China’s own of course) and to the attempt to cope more successfully with humanitarian crises and the assault on existing global defences against disaster. For the time being China will impede, for example, any effort to deal effectively with Uzbekistan, Burma and Sudan, and with Iranian nuclear ambitions (she will have company on this), because of her commodity diplomacy.
Fourth, can China’s pell-mell progress be sustained? Her leaders are desperately keen that it should be, in order to create the jobs required for social stability. But are the theft of intellectual property and the counterfeiting of goods, the politicisation of credit, the abuse of human rights, the official nepotism and corruption and the lack of any checks and balances in both the political and corporate sectors, the foundations of long-term prosperity? The existence of these aspects of the Chinese system increasingly provides the justification for economic nationalism in the west. Jacques Chirac, the French president, always a good weathervane of the most ignorant forms of populist protectionism, has already moved from expressions of “brotherly love” for China to assaults on the import of Chinese bras, though he does not try to justify this by any expressed concern about, say, human rights.
Fifth, which Asian tiger should we bet on - India, with its software engineers and democracy, or China, with its manufacturing prowess and its flaky totalitarianism? The political romantic in me hopes that the answer is both. I keep my fingers crossed that China will change without turmoil.
But if that does not happen, then for any liberal pluralist the comparative performances of India and China in the future will be a test of the correctness of our political philosophy.
Sixth, will the century to come be a struggle between the American hyperpower and the Chinese superpower? It seems as though some on the American right positively will this grim prospect. “Bring them on,” to borrow a phrase. I do not believe the same is true in China. Most Chinese simply want their place in the sun once again, after almost two centuries of misery. Will we allow them to achieve that? As Kynge wisely remarks, China owes its emergence as a global power to the free market system pioneered by the US, but has very different values from those in most countries that have grown up under the Pax Americana. The more it adopts those values, the more the rest of us are likely to applaud and make way for its continued extraordinary progress.
Lord Patten is chancellor of Oxford University and from 1992-1997 was the last British governor of Hong Kong.
