Three Scenarios for 21st-Century China: How China's Post-Deng Government Fares Will Have Global Impacts

Article excerpt

As China recovers from the death of Deng Xiaoping and reclaims control over Hong Kong this year, speculation is rising over the future of China.

"The most urgent issues complicating forecasts about China's future are what types of political leadership and structure will emerge," notes Impact 21, a New York-based Asian business journal.

Three alternative scenarios are offered by economists Murray Weidenbaum and Samuel Hughes in their new book, The Bamboo Network: How Expatriate Chinese Entrepreneurs Are Creating a New Superpower in Asia (Free Press, 1996).

Scenario 1: Successful transition to a market economy. Economic reformers among the Chinese Communist Party (CCP) maintain control of the government, and market reforms continue at their recent rapid pace. Hong Kong, newly reintegrated into China, serves as a model for marketization.

In this scenario, China's relationship with Taiwan becomes more amicable and mutually beneficial economically. Political unification still may not be in the cards, but Taiwan has less fear of military force from the mainland. A "chopstick union" links Japan and Korea with China.

The market-driven power of China in this scenario causes massive shifts in global investment, trade, production, and employment. Economically, China catches up with Japan in the year 2004 and then begins to rival the United States by 2019.

Scenario 2: Reversion to communism. China after Deng resembles the former Soviet Union: Crime, ethnic violence, and ultranationalism abound.

Some Chinese Communist Party members bitterly resent the economic reforms of the last decades of the twentieth century, and the army backs a hard-line faction pushing to end those economic reforms.

Foreign investors and capital take flight. Economic growth comes to a halt.

A more-communist China has little economic impact outside of Southeast Asia, though the world's other developing economies, particularly Latin America and India, gain new attention from Western investors seeking alternative markets. …

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