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Thursday, December 14, 2006

China - both dangerously strong and weak

Joshua Kurlantzick

(click here for the Romanian version)

Some of us still live in the realities of yesterday – the Cold War ended in 1989, the Civil Rights movement was a priority of the sixties, the sexual emancipation had its impetus in the seventies – it is true that these issues were not totally solved, only time is never patient – we are living in a radically different universe, with radically different priorities - new challenges push back the old ones and claim their momentum. Yes, time is not patient at all – even today’s challenges are pushed back by new ones.

For US, the Middle East issues dominated the mid-term elections of 2006. The discussion in 2008 will be all about China. That's the opinion of Thomas L. Friedman. For him, China is the most likely country to shape US politics in 2008. Says Mr. Friedman, the civil war in the Republican Party, which you are about to see, will be all about Iraq -- whom to blame and how to withdraw before the issue wipes out more Republican candidates in 2008. But the coming civil war among the Democrats will be all about China.

And Tom Friedman goes on, I still believe that when the history of this era is written, the trend that historians will cite as the most significant will not be 9/11 and the U.S. invasions of Afghanistan and Iraq. It will be the rise of China and India. How the world accommodates itself to these rising powers, and how America manages the economic opportunities and challenges they pose, is still the most important global trend to watch.

So we can agree that Chinese reality is now a priority. Only in order to deal with a reality, one has firstly to understand it very well.

Democracy – A Journal of Ideas publishes in its most recent issue (#3, Winter 2007) an article written by Joshua Kurlantzick –currently he is a visiting scholar in the Carnegie Endowment’s China Program where he is assessing China’s relationship with the developing world, including Southeast Asia, Africa, and Latin America, and will also explore how China uses its soft power—culture, investment, academia, foreign aid, public diplomacy— to influence other countries in the developing world.

The article is entitled Fragile China. The idea is that China is both dangerously strong and weak.

We all perceive the strengths of today’s China. Which are its weaknesses?

Firstly Mr. Kurlantzick notes the Urban-Rural Divide: even as China’s economy booms, it is leaving behind vast numbers of Chinese, primarily farmers. Most have small plots, a vestige of communal farming, which cannot compete as China opens its markets to the world and faces agriculture giants like Australia. Beijing also has focused state funds on cities, leaving less public money for rural areas. As a result, this will only foster instability. Already, Chinese cities have witnessed rising crime levels, attacks on business people and other elites, and massive protests by laid-off workers. In the long run, this divide could topple the government, as it did in the nineteenth century, when social unrest, catalyzed by the Taiping Rebellion and other movements, helped bring down the last emperor.

Secondly comes the Environmental Destruction. China’s megacities simply cannot cope with the simultaneous influx of new people and the consumption habits of an expanding middle class, which will soon make China the world’s largest consumer of oil, copper, iron ore, aluminum, platinum, and timber. China has 16 of the world’s 20 most polluted urban areas, and 90 percent of its cities suffer from polluted water systems. Industrialization, combined with deforestation, is expanding China’s deserts at an unsustainable pace.

Then comes another factor, the Unrest. Says Mr. Kurlantzick, to an average visitor to China’s glittering eastern cities, the People’s Republic seems a blissful place, with few of the noisy street demonstrations one might find in, say, France. But that’s because many of China’s protests take place away from the east coast cities, in the vast hinterlands, where they are becoming routine events. According to the central government’s own figures, China faced some 87,000 protests in 2005, up from 74,000 the year before. The protests are becoming larger and more sophisticated, with leaders using text messaging and the Internet to organize and to contact reporters. They also are turning violent: Dongzhou marked the first time Chinese police had shot protestors since the Tiananmen crackdown. Chinese media and advocacy groups have documented a litany of recent violent incidents, from 10,000 workers in the city of Dongguan smashing up their factory to mobs in the town of Guiyang destroying police cars after the authorities beat up a migrant worker. As weapons increasingly leak into China from lawless nations like Burma, the potential for social instability and violence will mushroom.

Another factor of weakness noted by Mr. Kurlantzick is the Political Stasis: part of the reason Chinese protests turn violent more quickly than those in democracies like France is that China does not yet possess the political culture and institutions to handle them. In fact, in some respects China’s political institutions, political elites, and political culture actually are less open and less able to channel popular consensus than a generation ago. In the 1980s, Chinese officials created a task force of liberal intellectuals designed to push for political reforms, while Zhao Ziyang, the second most important Chinese leader at the time, advocated for elections. But Zhao was placed under house arrest after 1989 and died last year, and no leaders since have exhibited such liberal tendencies. Meanwhile, the Communist Party has essentially bought out liberal intellectuals who might have reformed the political system.

The fifth factor of weakness is the Graft: Without a modern judiciary or rule of law, China is plagued by high-level corruption and fiscal mismanagement, highlighted by the recent arrest of the highest-ranking party official in Shanghai, for graft. Since China’s state-linked companies still account for nearly 40 percent of its GDP and over 60 percent of the financial sector, this graft infects the entire economy and banking system, making it difficult for China to develop truly modern, innovative companies. One recent study by accounting firm Ernst & Young estimated that China’s banks, riddled with self-dealing and graft, have nearly $1 trillion in nonperforming loans, an astronomical figure.

Thus, notes Mr. Kurlantzick, an irony: China’s increasing wealth and openness mean that its continued–and in some cases worsening–weaknesses will have an undue impact on its neighbors and the rest of the world. A Chinese collapse can be catastrophic for all of us.

And so the challenge for American policymakers is not how to deal with a strong China, but how to prevent it from becoming a weak one.

Yet even as the United States balances between a weak and strong China, it must also find ways to strategically contain China–whether it becomes an aggressive world power or a dangerous basket case. This means, first of all, creating a kind of buffer ring of democratic containment around China, an informal community of Asian democracies with which Washington would consult closely on regional issues. Working with these democracies, America can then deal with China from a position of greater strength, placate Congress, and more easily envision cooperating with Beijing on certain issues.

So Josh Kurlantzick concludes, the right response to Chinese fragility should imply a closer relationship with India.


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