The Beijing Blues

Article excerpt

Byline: Fareed Zakaria

A rising power is plagued by doubts.

Over the last few months, foreign diplomats have privately groused to me about a world power's arrogant foreign policy. Except that they're talking about China, not the United States. A senior official from a developing country said, on background so as not to anger Beijing, "Chinese officials used to meet with us with a great sense of solidarity and warmth. Now they read us a list of demands." Diplomats in Beijing report that Chinese officials now treat them differently than they did just a few years ago. One complained that even getting meetings with senior officials had become difficult. "People I used to see routinely now refuse to give me an appointment," one said to me in Beijing last week.

Some of this is understandable. Success breeds confidence, as Americans well know. And China has been very successful. By common consent, the country has come out on top after the global economic crisis. Its massive fiscal stimulus is building a new generation of infrastructure, its banks are stable, its consumers have high savings rates, and the government keeps piling up reserves, which now total almost $2.5atrillion. But in a series of discussions with people in and out of the Chinese government last week, I was struck less by arrogance than by the doubt, uncertainty, and apprehension that seemed to be plaguing the Chinese.

My interlocutors remained confident about the regime's technical ability to handle the economy. While Wall Street frets about an overheating China, most people here seemed sure that the government would be able to adjust to keep growth steady--as it has in the past. Worried about a frothy real-estate market in Beijing? Well, banks have been ordered to stop giving mortgages, and property taxes are set to be raised. Beijingers now cannot buy more than one apartment per family. Once the froth subsides the rules will, in all likelihood, be revoked.

But a series of deeper changes is also underway. China has seen dramatic labor protests in recent weeks, from strikes at a Honda factory to grim accounts of suicide at the vast Foxconn complex, where iPhones are assembled. One scholar calls this "the end of the world-factory model," under which China would be the globe's low-wage manufacturer. "Our economy can't keep squeezing labor benefits because workers are unwilling to accept it," says Chang Kai, director of the Renmin University's Labor Institute. …