Bull in the China Shop: The U.S. Is Betting That a Rich PRC Will Be Democratic. Beijing Disagrees

Article excerpt

TWO BETS ARE ON THE TABLE. One has been placed by the Washington establishment, the other by the Chinese Communist Party.

Analyzing China's prospects in terms of fashionable globalist ideology, Washington is betting that a rich China will be a free one. The theory is that the only way China can continue to grow is by embracing Western democracy and capitalism. Moreover, the very process of China's enrichment is supposedly undermining the Beijing government's authoritarianism. More wealth means more freedom means more wealth.

Here is how President George W Bush has put it: "As China reforms its economy, its leaders are finding that once the door to freedom is opened even a crack, it cannot be closed. As the people of China grow in prosperity, their demands for political freedom will grow as well."

Similar optimism pours forth from the American press. The Wall Street Journal has commented: "Sooner or later China's economic progress will create the internal conditions for a more democratic regime that will be more stable, and less of a potential global rival."

The Washington view has become so widely accepted that almost no one has noticed that there is a second bet on the table--that of the Chinese leadership. It is wagering on a disturbingly different outcome: that a future China can be both rich and authoritarian.

If Washington is right, the future is unclouded, and a fast-rising China can readily be accommodated within the existing Western-defined world order. But what if China's leaders turn out to understand the Chinese character better than anyone in Washington? What if in 2025 or 2030 the United States finds itself facing off against a China so rich that it has surpassed all other nations in military technology yet remains resolutely opposed to Western values? The implications are hard to exaggerate.

In the great debate over China's future, Chinese leaders' jobs, if not their heads, are on the line. It is reasonable to conclude that they have considered their options carefully. Moreover, they enjoy the advantage of local knowledge. They have studied their nation's history and know its mind.

Those on the other side are pathetically uninformed. To start, they don't understand that the Chinese economic system is not capitalism, nor is it converging toward capitalism. China is operating an adaptation of the East Asian economic system. Launched by the Japanese in Manchuria in the 1930s, perfected in Japan proper in the 1950s and 1960s, this system is now widely copied throughout East Asia.

As itemized by Richard Bernstein and Ross Munro in their 1997 book, The Coming Conflict with China, key features of the Chinese version of the East Asian economic model include a labyrinthine system of trade barriers; an artificially undervalued currency; an industrial policy focused on developing pillar industries and using export subsidies to give them competitive advantage; and pressure on foreign companies to transfer their production technologies.

In some ways, the East Asian model resembles capitalism--it makes extensive use of markets, for instance--but its fundamental logic is quite different. Whereas authoritarian political controls constitute a hindrance to growth in the West, they are really essential in the East.

Part of the West's comprehension problem is ideological: American opinion leaders hold as a matter of high ideology that Western logic is universal and thus destined to sweep the globe. It has not helped that East Asian leaders have gone to extraordinary lengths to keep their Western opposite numbers complacently misinformed.

From a Western point of view, the most glaring problem with the East Asian economic system is its mercantilist approach to trade, but the U.S. continues to unilaterally open its markets ever wider to "one-way free trade." American policymakers have allowed themselves to be persuaded that East Asian protectionism is merely a temporary adjustment problem and that an enlightened West should simply be patient while the East Asians sort things out. …