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1:12PM

Still optimistic on China

OP-ED: "China Needs an Einstein. So Do We." By THOMAS L. FRIEDMAN, New York Times, April 27, 2007

OP-ED: Changing China, Trade's Power - and Limits, by George Will, April 26, 2007

This is a tendency to want to slice and dice globalization along various planes in order to: 1) simplify the process in people's minds and 2) to express some great concern about a potential destabilizing trend within.

One great horizontal slice is, of course, global warming. People get hugely focused on it and want the whole discussion on globalization to center around it, in a profound trumping effect. Related to that is peak oil. Both get you arguments that say, "Everything you say about globalization and security may be true, but this changes everything!"

A version of vertical slicing is to see all of globalization within a few key players. Americans, naturally, tend to see our role as paramount. Now, there's a rising sense of similar impact by China--a sort of, "as goes China, so goes the whole concept of globalization." Because there's so much hyperbole on China, the natural pushback is to argue the null hypothesis: this must fail and here's why.

All of these vertical and horizontal slices are useful, if not taken to extremes. They are not overriding guides to action. They are serious data points, though.

All of these slices are presented as incisive explorations of the usual have-havenot argument: China will fall apart because the have-havenot split will get too big, global warming will dramatically expand the have-havenot split, peak oil will . . . well, most peak oilers jump straight to the "we're all going to hell" argument.

On the China argument in particular, this concern is what drove me to write the section in "Blueprint" called "The Train's Engine Can Travel No Faster Than Its Caboose," essentially the Core-Gap argument taken below the level of nation-states to that of society. Go too fast, and you end up with revolution, like with the Shah's Iran. But go too slow and things will go badly too.

In China today, the balance of opinion is that the extension of globalization's benefits to the rural poor has gone too slow. The resulting peasant unrest (something like 65k events last year) is real caboose-breaking, serious enough to become a bit of an obsession with 4th Gen leaders Hu and Wen. The correlating fear is that this slow pace is ossifying into a sort of caste-like Domestic Core that permanently disenfranchises and exploits the disconnected Domestic Gap. It's a natural and logical fear, and all I can tell you is that it's not something unknown inside Beijing, but rather something the elite talks about all the time and seeks to work.

Naturally, the Party is going to try to finesse this process historically in such a way as to maintain its firm grip on power. As I have stated consistently, I don't think that's possible over the long run, so I'm looking for a China, on its current trajectory, to experience a lot of political evolution by 2025, coming fairly close to what most people would define as political pluralism, albeit one grown--in spurts that will often be tumultuous--originally from within the ranks of the party itself (first wings, then serious factions, then parties-within-parties).

I remain optimistic but realistic on this pathway. It won't be pretty. It will be marked by spasmodic incidents of crisis and patching-over change. China will need many great leaders to arise to make it happen, and I described a few in the "Heroes Yet Discovered" ending of "Blueprint."

So yeah, I'm with Friedman on China needing plenty of new smart guys to alter paradigms (and America too). As a professional self-described grand strategist, I want to be one of those people and create others in my wake--not just on my side but on China's too.

Having taken on such a life-defining task, I'm naturally optimistic about it happening and unfolding in positive ways (otherwise, why would I try), so I don't share Will's or Mann's deep pessimism (Will, for example, expresses pessimism given China's 35 years to change following Nixon's opening; I would argue China's change has been huge, but largely concentrated in the last 10 years of opening up incredibly to globalization, which, quite naturally, replicates some of the same have-havenot dynamics of globalization writ large). I find the Chinese to lack no ingenuity, which--again--I consider to be an inexhaustible global resource not defined by any Anglosphere or WASP universe-unto-itself.

But I also expect the Chinese to remain Chinese. I expect many of their answers to initially confound us, because their history, as I argued in BFA, is not ours.

So yeah, I tend to be more patient than most people, who can't wait to declare crises all over the dial and to prematurely define failure, whether it's with China or the Big Bang or globalization itself.

But hey, it sell books.

Although I would note that optimistic books (especially those focused on individual-led self-help) tend to outsell pessimistic ones.

Thanks to John for sending this.

Reader Comments (1)

Another reason to be optimistic about China is that they are less vulnerable to a disruption in Mideast oil production than they were a few years ago.

When the big expansion in Chinese manufacturing started, the Chinese electrical infrastructure was completely unprepared for it. Because of the enormous increase in electric demand, blackouts were common because there simply was not enough electric production to keep up with it. In response, factories installed diesel fueled electric generators to keep the plants running when the electric grid went down.

Well, the Three Gorges Dam is now built and generating capacity is being added at the rate of another Hoover Dam worth of electric capacity every few months.

Of course, the growing economy means that there is more demand for transportation fuel but a major disruption of Saudi Arabian oil production as was planned by the 172 terrorists who's arrest the Saudis just announced would no longer shut down Chinese factories.

China is more resilient than it was.
April 28, 2007 | Unregistered CommenterMark in Texas

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