Thursday, December 5, 1996

A Realistic Perspective on China

President Clinton has avowed that Asia will be an integral part of his foreign policy for the second term. An essential part of Asia is China and indeed his administration has already designated constructive engagement as the preferred approach over containment--a term dusted off from the Cold War days. However, to succeed, the Administration needs the support of Congress. This in turn requires a knowledgeable population that understands today's China and what's at stake. Unfortunately, the way the media has been slanting their coverage of China, the general public stands virtually no chance of getting the information needed to make a sound and objective judgment.

The Chinese nation makes up one-fifth of the world's population and the size of its economy is expected to overtake the U.S. sometime early next century and become the largest in the world. While its economic impact alone justifies a role on the center of the world stage, its growth does not have to come at the expense of U.S. interests. Instead of going out of the way to turn China into a belligerent adversary, the U.S. has much to gain from China's successes by promoting economic cooperation.

China is neither the understudy taking over the mantle of the evil empire from the fallen Russians nor, as any visitor to China can attest, the oppressive police state suggested by the images from Tiananmen Square in 1989. To look at the real China rationally, it will be necessary for the popular press to present objective findings from credible sources.

Most Americans probably do not know that the current Chinese government operates under a parliamentary system structurally similar to the French form of government. Michael Dowdle, a law professor at New York University, has been studying China's constitutional development for the last three years with support from the Ford Foundation. He reports, "The 1982 constitution is becoming increasingly relevant to China's decision making process."1 He pays particular attention to the activities of the National People's Congress (NPC), the highest constitutional body, consisting of almost 3000 elected delegates.

While NPC used to be known as a rubber stamp of the Chinese Communist Party, Dowdle reports that the body is beginning to take independent action and getting away with it. In April 1995 for the first time, an unprecedented one-third of the delegates rejected Jiang Chunyun for vice premier notwithstanding that he was President Jiang Zemin's nomination. Earlier this year, NPC drafted and passed amendments to the criminal procedure code greatly liberalizing the provisions handling criminals. These procedures were passed despite opposition and displeasure from the Ministry of Public Security.

Henry Rowen, a senior fellow of the Hoover Institution and professor emeritus of Stanford Business School, confirms Dowdle's findings in his recent research paper.2 He says, "The National People's Congress is rewriting the criminal laws to state that defendants shall not be presumed guilty, that they shall have lawyers, and that the police shall no longer be able to hold them without charge. Doubtless, for some time to come these new laws will often be observed in the breach, but their passage is an indicator of the growing demand for democratic procedure."

Rowen makes the case that China is likely to become a democracy around 2015. His prediction assumes that China's economy will continue to grow and the country will continue to follow the worldwide pattern wherein the personal degree of freedom increases with per capita income. He points out that Spain, Portugal, Chile, Argentina, Taiwan and South Korea all made the transition to democracy when they reached a certain income range--the income range China is expected to reach in 2015.

The reason the rule of democracy follows personal income is really quite simple. Growing wealth is accompanied by a better educated populace with increasing expectations, if not for themselves then, for their children. Better education also leads to a population more likely to understand that privileges in a democracy also come with responsibilities and obligations. Without that understanding, the practice of democracy is a mere pantomime or worse--every so often, Americans need to be reminded that Hitler was first elected to power in Germany.

Make no mistake, the Beijing regime, in transition from a planned economy to a market driven one, does not willingly liberalize its grip on the society but the rulers have no choice. As Rowen, former assistant secretary of defense in the Bush Administration,3 points out, it's not possible for China to import advanced technology without letting in foreign businessmen and experts with the attendant exchange of ideas and exposure to external sources of information. As its standard of living rises, China has become a major producer and consumer of TVs, VCRs, satellite dishes, and, in a recent emerging trend, PCs with Internet connections. Try as they might, the Chinese authorities simply cannot control the deluge of information. Information and knowledge change attitudes.

This October, I visited an interior city of China. Over a casual lunch with some local government officials in the presence of an official from Beijing and one other Chinese American "foreign expert," the conversation was informal and lighthearted. One of the officials reminisced about how he was successful in convincing some of the student leaders to tone down their protest during the "June 4 movement"--Chinese euphemism for the Tiananmen protest. Thus their political indiscretion did not lead to arrests though costing them chances for promising careers in government. Instead they have since become highly successful entrepreneurs, the official noted with a touch of paternal pride.

While sightseeing in the countryside, a funeral dirge wafted from the PA system of a nearby village. One of the young officials in our group said, "Hey, who died? This is the funeral music played whenever somebody important dies. May be it is for Lao Deng (meaning old Deng Xiaoping)." Another member of the group replied, "Probably not. Nowadays anybody can use that music, including anyone in the village." Sure enough, at the conclusion of the solemn piece, the village disc jockey said that he simply played it for enjoyment. The official who took the music to heart became the butt of some good-natured ribbing from his colleagues.

These casual conversations could not have taken place a few years ago. They serve as a barometer of how relaxed a place China has become. Americans with the opportunity to visit China invariably comes home saying they saw the vitality of a purposeful people but did not see or feel the presence of a police state. Sadly, not enough Americans can go and see for themselves.

Americans also need to understand that China, with five times the population of the U.S. and about one-fourth the amount of arable land, is a challenge for any form of government. In opening their economy, the officials have to loosen the controls which in turn multiplies the complexity and difficulty of government. If China does not continue to overcome and solve their very real problems, the consequence could be catastrophic, not just for China but for the world.

With the loosening of its internal controls, the underworld has found China's southern border to be an attractive conduit for heroin from the infamous Golden Triangle to Hongkong and beyond, to the West. While China is cracking down on illicit drug trade, it needs cooperation from the West, not condemnation every time they execute a few drug runners.

As its economy continues to expand, China will have to meet increasing demands for energy. This means increased coal-firing power stations, more vast hydroelectric projects such as the controversial Three Gorges Dam, more nuclear power generation and an increase in offshore drilling for oil. All comes with worrisome environmental risks, dangers that respect no national boundaries. The technologically more advanced nations can help China avert global-scale disasters by selling their pollution control technology to China.

With an improved standard of living, the Chinese population now enjoys a higher quality diet. A whole lot more grain is needed to produce the cattle and hogs that make up a meat laden diet than if the grain is consumed directly in a predominantly vegetarian diet. While China can afford to buy grain on the world market to supplement their shortfalls, there is increasing concern that a booming economy from one-fifth of world's population could be taking basic food from the backward economies leading to starvation elsewhere.

The opening of China's markets has led to uneven economic development. The result is massive internal migration of a population that some estimate as large as 100 million on the move at any one time. This migration comes from the interior of China to the coastal regions and from the rural areas to the cities. Such a massive movement has de-stabilizing consequences resulting in homelessness, prostitution, worker exploitation and breakdown in public order. The human rights infringement associated with this sort of social disorder is magnitudes more severe than the fate of a few prominent dissidents. But these human rights problems are in common with those found in the West and is perhaps the reason why they are seldom discussed. (Imagine the chaos of a hundred million or two breaking out of China, if for unforeseen reasons the economy should suddenly collapse.)

In conducting his research, Rowen4 discovers that since January 1991, major American media, as represented by New York Times, Washington Post, Wall Street Journal, Time and Newsweek, has published 12 negative articles about China to every one talking about the reform under way in China. The media coverage of China's problem with intellectual property rights (IPR) is a clear example. During the peak of the controversy last summer, the American public can't help but conclude that the Beijing government is itself the biggest pirate. Yet recently, David Buxbaum5 , a Hongkong based attorney who has represented western clients in thousands of IPR cases in China, was interviewed by an affiliate of The Economist. He said, "The problem of piracy in China is comparable to what it was in Taiwan ten years ago. But in terms of willingness of government to attack the problem, China is 30 light-years ahead of where Taiwan was. It may even be ahead of Taiwan today." No popular press has yet to find this quote.

Corruption remains a problem from the highest rank to the lowest customs official and is one problem widely discussed inside and outside of China. Outside discussions almost invariably imply that graft is a way of life in China condoned by the authorities. That is not exactly the reality. Chen Xitong, former mayor of Beijing is under house arrest pending formal charges of corruption. Zhou Beifang was given the death sentence, albeit suspended, for corruption which was upheld by China's Supreme Court early in November. Zhou's father was ousted as chairman of Capital Iron and Steel Works even though this family has long enjoyed the close personal support of Deng Xiaoping. Of course, when lower ranking officials without powerful connections are caught embezzling, they can and have been summarily executed.

One can correctly surmise that the application of law is rather uneven in China, but that does not mean the government sanctions piracy of IPR or officials on the take. On the contrary, the leaders in Beijing fully appreciate that the elimination of piracy and corruption is essential for ensuring future growth of the economy. It is simply a matter easier said than done.

It may amaze the American public to hear that the Chinese Minister of Justice, Xiao Yang, has publicly stated that China needs to govern all its affairs by the rule of law. He also admitted that China is not there yet. In the June 18, 1996 issue of China Daily, the quasi-official English daily of Beijing government, Xiao indicated that "the aim is to ensure over 80% of the villages, 80% of State-owned enterprises and 70% of other institutions conscientiously administer affairs by law by year 2000." I personally have no idea if those percentages are realistic, but I find the candor refreshing and the recognition that China needs rule of law encouraging.

Just because China is inexorably on the road of reform doesn't mean the road isn't bumpy. Furthermore, whether it's economic reform, social reform or political reform, it will always be with "Chinese characteristics." China will not simply follow historical templates from the West. American engagement and sharing of common interest will allow us to exert positive influence on the future course of China. Engagement doesn't mean quiet acquiescence, but hopefully sincere criticisms will be based on facts and not based on lurid tales emanating from grinding axes of professional China bashers.
1 Michael Dowdle, "Realizing Constitutional Potential," The China Business Review, (the magazine of the Washington-based US-China Business Council) p30ff, Nov.-Dec. 1996
2 Henry S. Rowen, "The Short March, China's Road to Democracy," The National Interest, p61ff, Fall 1996
3 Neither Rowen, former assistant secretary of defense in the Bush Administration or the Hoover Institution can remotely be regarded as "friends of China."
4 His Lexus/Nexus search covered the New York Times, Wall Street journal, Washington Post, Time and Newsweek from January 1991 through June 1996.
5 "Business China," a high priced publication of The Economist Intelligence Unit, November 11, 1996.

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