The real battle on markets in China is just beginning
Wednesday, March 1, 2006 at 6:51AM ARTICLE: “Challenging change: why an ever fiercer battle hinders China’s march to the market,” by Richard McGregor, Financial Times, 28 February 2006, p. 11.
OP-ED: “The flight to Asian cities needs managing, not curbing,” by Victor Mallet, Financial Times, 28 Feburary 2006, p. 13.
ARTICLE: “Nigeria shifts to China arms: U.S. accused of failing to protect oil assets; Lagos turns to Beijing for military hardware; Pentagon ‘hot and cold’ on assistance,” by Dino Mahtani, Financial Times, 28 Febuary 2006, p. 1.
Fascinating piece in the FT by McGregor, probably the best thing I’ve read on change in China in the last year. Really lays out the battlefield between those who argue that the state needs to retain a larger role (otherwise China “changes its color” and risks too much rural tumult) and those who argue that the state’s still large role is the biggest obstacle to serious reform (that, and the artificial undervaluing of rural land that incentivizes local party leaders to reclassify land as “urban” so peasants can be thrown off and land valuation can skyrocket).
The Fourth Gen leaders, Hu Jintao (Pres.) and Wen Jiabao (PM) have staked their first (2002-2007) administration and presumably their second (2007-2012) on addressing the “caboose” that is the rural poor. They get their official stamp of leadership in next year’s Party Congress, but even more important about that congress will be the positioning of the next slate of leaders, the so-called Fifth Generation that was mostly educated in the U.S. (one standard bearer, Zhou Xiaochuan, governor of the People’s Bank of China, is already under attack [“Ominous undertones of an attack on reforms” on same page] from the economic hardliners who fear he’ll become PM in 2012).
Hu and Wen promise the New Socialist Countryside to deal with all that rural unrest, but in many ways, they swim against the vast tide that will not be stopped, and that is the continuing huge flow of Chinese humanity to the cities. China’s urban population was 11% of its total in 1949, but now it’s 43%, meaning China goes majority urban in the next few years. Remember when the U.S. did that around 1920? A lot of political and social and economic change ensued, including a huge revamping of our government to accommodate that reality. Same will happen with China.
Hu and Wen want to do some caboose braking on China’s development, making sure the rural poor don’t fall too far behind, but many economic observers say that more and not less privatization is needed to truly deal with that mass of largely disconnected humanity (almost a billion people, mind you), so China’s path is still very much under debate even as those who criticize the marketization process become increasingly marginalized politically and probably will largely disappear once the Fifth Generation types like Zhou start taking the reins within a few years (remember, once designated by next year’s Congress, the rise of the heirs apparent becomes one long tease that begins well before the actual assumption of power in 2012).
Meanwhile, expect the 4th Generation Hu and Wen to do whatever it takes to keep feeding the beast of rapid development, because the train, while accommodating some caboose braking, can’t possibly slow down without derailing. So expect China to continue to scour the world for resources, especially energy.
Our job? We need to move China toward some larger stewardship of the global economy and the global security system, otherwise we’ll bumble into stupid races with them inside the Gap for resources logically rendered fungible by global markets.
But alas, we have the Bush II Generation of Cold Warriors to move off the stage as well. Good news is, the new crews on both sides hit the ground around the same time: 2009. Will our side be ready?
Reader Comments (3)
Our job? We need to move China toward some larger stewardship of the global economy and the global security system, otherwise we’ll bumble into stupid races with them inside the Gap for resources logically rendered fungible by global markets.
Well, here's a plan that helps China engage in stewardship of a global problem while helping to prevent us from a stupid race for fungible resources.
We invade Iran, round up and kill off most of the Mullahocracy, search the whole place for WMD development programs and expunge those programs without mercy, secure the oil production facilities and then hand the whole place over to China.
Exclusive ownership of Iran's oil resources ought to be keep China's economic development growing even as the rate of growth increases for the rest of the petroleum energy era. This will lower the stakes for any other competition for energy resources since the Chinese will be relatively secure in satesfying their energy needs. All that we ask in return is that no trouble come out of Iran. If there is one thing the Chinese know, it is how to make querelous populations less troublesome.
I would be curious as to how heavy or light a hand the Chinese would use to run Iran after the initial period of adjustment, but it would be a matter for the Chinese to decide for themselves. I suspect that running Iran would consume a lot of Chinese talent for a while.
Neutralizing the single most destabilizing entity in the Middle East would significantly advance the time table when we could start working on shrinking the Gap in Africa.
Mark,
You have defintely left the Box behind, my friend. For that reason alone I salute your thinking.
Good commentary...
As an aside I preface saying we in America often seem to think we can create good to better outcomes accross the globe. This esp true of libs. We can't. And it seems this belief at times prevents our doing the possible.
China has been, for the most, 80% serf and 20% master since time immemorial. When not 80/20 it has been 98/2 and dying horribly! Why oh why would we think we can move that more than incrementally and small increments at that.
At best we may be able to discourage bullying and encourage justice in China's dealings, both internally and externally. Day by day with the carrot and stick... and faith in our intentions. We ought be prepared for any progress to make that in Iraq seem light-like in its speed; and be prepared, at least intellectually, to deal with an abject collapse into chaos within the Middle Kingdom.
Ben Cook