THROUGHOUT the length and breadth of Asia and the Pacific basin,
one imponderable exercises the thinking of government leaders,
politicians, businessmen, military experts, and other policymakers.
It is China and the unpredictability of its future course.
Sixty percent of the world's people live in Asia. While there
are pockets of poverty, and repressive communist regimes continue
to exist, much of it is exploding with economic vitality and a new
sense of freedom.
If, as many predict, the 21st century is to be the century of
Asia, China's direction will determine whether those years will be
filled with continuing economic progress, whether they will be
peaceful or defiled by conflict.
On the one hand, China is experiencing astonishing economic
growth. Recent projections of the World Bank and the International
Monetary Fund see China's economy looming as the world's third or
fourth largest. Development is taking place mainly in the southeast
coastal provinces of Guangdong, Fujian, and parts of Zhejiang. This
development is fueled by investment from, and trade with, the
thriving free-market economies of Hong Kong and Taiwan.
Guangdong's economy, for instance, has been exploding with an
annual growth rate of 12 percent. Indeed, these free-wheeling
coastal provinces of a theoretically communist state have become
economically interlocked with the blatantly capitalist territories
that lie across from them on China's borders.
Beijing can preach what political ideology it likes, but
southeastern China is busy making very non-Marxist and
non-socialist profits in a market encompassing Hong Kong and
Taiwan, which is now being referred to by economists as "Greater
This is fine with China's effective leader, who has encouraged
economic but not political reform. But Deng Xiaoping is in his late
80s and nobody knows what the succession will bring. The
possibilities range from a continuation of his economic policies to
chaos and civil war with enormous negative consequences for China's
Much hinges on whether politics or economics will prevail in
China's handling of two sensitive areas: Hong Kong and Taiwan.
Hong Kong, currently a British colony, is due to revert to
China's ownership in 1997. Beijing has pledged to let Hong Kong's
thriving laissez faire economy continue. But if new leaders in
Beijing go back on that promise and cannot resist the temptation to
crack down politically on Hong Kong, investors would flee both from
Hong Kong and Guangdong.
Similarly, Taiwan is a test for Beijing. Officially, Beijing's
position is that Taiwan is part of China. In fact, Taiwan is a
separate entity that has thrived under the free-market system and
guards its separate identity militantly. …