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FINANCIAL TIMES
How the Beijing
elite sees the world
MARTIN
WOLF
How does the Chinese
ruling elite view the world? Over the weekend, I participated in a
dialogue between a handful of foreign scholars and journalists and top
Chinese officials, academics and business people, organised by the
Tsinghua University Academic Center for Chinese Economic Practice and
Thinking. The discussion was franker than any I have participated in
during the 25 years I have been visiting China. Here are seven
propositions our interlocutors made to us. China needs strong
central rule. This idea went with the notion that China is in
important ways a divided society: one participant even remarked that
500m Chinese people love Deng Xiaoping’s reforms, while 900m favour the
world view of Mao Zedong. Another pointed to the fact that the central
government spends only 11 per cent of the total by all levels of
government and employs just 4 per cent of all civil servants. Others
emphasised that China is a developing country with huge challenges. The conclusion
participants drew was that the Chinese Communist party, with some 90m
members, is essential to national unity. Yet corruption and factional
infighting has threatened the legitimacy of the party. One senior
official even stated that Xi Jinping “has saved the party, the country
and the military”. This perspective also justifies the suspension of
term limits on the presidency, which, it was stressed, does not mean
perpetual one-man rule. Western models are
discredited. The Chinese have developed a state system run by a
technocratic elite of highly educated bureaucrats under party control.
This is China’s age-old imperial system in modern form. The attraction
that western-style democracy and free-market capitalism may have
exercised on this elite has now withered. They stressed the failure of
western states to invest in their physical or human assets, the poor
quality of many of their elected leaders and the instability of their
economies. One participant added that “90 per cent of democracies
created after the fall of the Soviet Union have now failed”. This risk
is not to be run. All this has
increased confidence in China’s unique model. Yet this does not
mean a return to a controlled economy. On the contrary, as a participant
remarked: “We believe in the fundamental role of the market in
allocating resources. But government needs to play a decisive role. It
creates the framework for the market. The government should promote
entrepreneurship and protect the private economy.” One participant even
insisted that the new idea of a “core leader” could lead to strong
government and economic freedom. China does not
want to run the world. This sentiment was repeated. Its
internal problems are, in the view of participants, too big for any such
ambition. In any case, it has no worked-out view of what to do. But, as
a senior policymaker insisted, in the specific context of relations with
the US, “we must co-operate, to deal with shared problems”. China is under attack by
the US. One participant argued that “the US has now shot four arrows
against China: over the South China Sea, Taiwan, the Dalai Lama and now
trade”. This then is a systematic attack. Many expect this to get worse.
That is not because of what China has done, but because Americans now
view China as a threat to US economic and military hegemony. US goals in the
trade talks are incomprehensible. People closely engaged in the
trade talks are puzzled by what the US is after. Does Donald Trump even
want a deal, they wonder, or is his aim just conflict? In any case, top
officials say they understand and accept the legitimacy (and value to
China itself) of demands for better protection of intellectual property.
They also understand the case for unilateral liberalisation, including
of financial services. China would, one official suggested, like to make
the Made in China 2025 programme a “win-win for the world”. But China’s
technological upgrade is non-negotiable. Also, how is China expected to
reduce the bilateral imbalance with the US if the latter imposes tough
controls on exports of strategically sensitive goods and lacks the
infrastructure to ship coal or oil competitively? China will survive
these attacks. The Chinese participants seemed reasonably
confident that their country could endure the tests to come. One noted
that China is already a huge industrial country. Its manufacturing
sector is almost as big as those of the US, Japan and Germany together.
It has enormous numbers of skilled people. The economy is also less
dependent on trade than it used to be. Furthermore, noted
another, US business is highly involved with and dependent upon the
Chinese economy. The Chinese people, stressed others, are probably
better able to bear privation than Americans. They are also highly
resistant to being bullied by US power. Indeed, the Chinese leadership
could not ignore public opinion in considering concessions. Whatever
happened, some insisted, China’s rise was now unstoppable. (See charts.) Furthermore, they noted,
while China cannot challenge US global military dominance, that is less
the case in the western Pacific, where China is increasingly potent. In
the longer run, China will develop a “first-class” military. This will be a
testing year. China and the US will have a complex and fraught
relationship over the long run. But, one participant remarked, “this
will be a testing year. If it goes in the right direction, it will be
fine; if it goes in the wrong direction, it will be earth-shaking.” The
progress made over Korea, an area of Chinese and American co-operation,
could be a harbinger of the former; friction over trade presages the
latter. The direction taken may reshape our world. |