The Land That Failed to Fail - The New York Times - 0 views
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China now leads the world in the number of homeowners, internet users, college graduates and, by some counts, billionaires. Extreme poverty has fallen to less than 1 percent. An isolated, impoverished backwater has evolved into the most significant rival to the United States since the fall of the Soviet Union.
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in Beijing the question these days is less how to catch up with the West than how to pull ahead — and how to do so in a new era of American hostility
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The pattern is familiar to historians, a rising power challenging an established one, with a familiar complication: For decades, the United States encouraged and aided China’s rise, working with its leaders and its people to build the most important economic partnership in the world, one that has lifted both nations.
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During this time, eight American presidents assumed, or hoped, that China would eventually bend to what were considered the established rules of modernization: Prosperity would fuel popular demands for political freedom and bring China into the fold of democratic nations. Or the Chinese economy would falter under the weight of authoritarian rule and bureaucratic rot.
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China’s Communist leaders have defied expectations again and again. They embraced capitalism even as they continued to call themselves Marxists. They used repression to maintain power but without stifling entrepreneurship or innovation. Surrounded by foes and rivals, they avoided war, with one brief exception, even as they fanned nationalist sentiment at home. And they presided over 40 years of uninterrupted growth, often with unorthodox policies the textbooks said would fail.
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There is no simple explanation for how China’s leaders pulled this off. There was foresight and luck, skill and violent resolve, but perhaps most important was the fear — a sense of crisis among Mao’s successors that they never shook, and that intensified after the Tiananmen Square massacre and the collapse of the Soviet Union.
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China’s Communists studied and obsessed over the fate of their old ideological allies in Moscow, determined to learn from their mistakes. They drew two lessons: The party needed to embrace “reform” to survive — but “reform” must never include democratization.
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China has veered between these competing impulses ever since, between opening up and clamping down, between experimenting with change and resisting it, always pulling back before going too far in either direction for fear of running aground.
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The careers of these men from Moganshan highlight an important aspect of China’s success: It turned its apparatchiks into capitalists.
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Party leaders called this go-slow, experimental approach “crossing the river by feeling the stones” — allowing farmers to grow and sell their own crops, for example, while retaining state ownership of the land; lifting investment restrictions in “special economic zones,” while leaving them in place in the rest of the country; or introducing privatization by selling only minority stakes in state firms at first.
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Mikhail Gorbachev, the last leader of the Soviet Union, tried to break the hold of these bureaucrats on the economy by opening up the political system. Decades later, Chinese officials still take classes on why that was a mistake. The party even produced a documentary series on the subject in 2006, distributing it on classified DVDs for officials at all levels to watch.
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Afraid to open up politically but unwilling to stand still, the party found another way. It moved gradually and followed the pattern of the compromise at Moganshan, which left the planned economy intact while allowing a market economy to flourish and outgrow it.
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American economists were skeptical. Market forces needed to be introduced quickly, they argued; otherwise, the bureaucracy would mobilize to block necessary changes. After a visit to China in 1988, the Nobel laureate Milton Friedman called the party’s strategy “an open invitation to corruption and inefficiency.”
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The United States and Japan, both routinely vilified by party propagandists, became major trading partners and were important sources of aid, investment and expertise
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At the same time, the party invested in education, expanding access to schools and universities, and all but eliminating illiteracy
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mainland China now produces more graduates in science and engineering every year than the United States, Japan, South Korea and Taiwan combined.
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In cities like Shanghai, Chinese schoolchildren outperform peers around the world. For many parents, though, even that is not enough. Because of new wealth, a traditional emphasis on education as a path to social mobility and the state’s hypercompetitive college entrance exam, most students also enroll in after-school tutoring programs — a market worth $125 billion, according to one study, or as much as half the government’s annual military budget.
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party made changes after Mao’s death that fell short of free elections or independent courts yet were nevertheless significant
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The party introduced term limits and mandatory retirement ages, for example, making it easier to flush out incompetent officials. And it revamped the internal report cards it used to evaluate local leaders for promotions and bonuses, focusing them almost exclusively on concrete economic targets.
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These seemingly minor adjustments had an outsize impact, injecting a dose of accountability — and competition — into the political system, said Yuen Yuen Ang, a political scientist at the University of Michigan. “China created a unique hybrid,” she said, “an autocracy with democratic characteristics.”
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They were rewarded with soaring tax revenues and opportunities to enrich their friends, their relatives and themselves. A wave of officials abandoned the state and went into business. Over time, the party elite amassed great wealth, which cemented its support for the privatization of much of the economy it once controlled.
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The private sector now produces more than 60 percent of the nation’s economic output, employs over 80 percent of workers in cities and towns, and generates 90 percent of new jobs
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the bureaucrats stay out of the way. “I basically don’t see them even once a year,” said James Ni, chairman and founder of Mlily, a mattress manufacturer in eastern China. “I’m creating jobs, generating tax revenue. Why should they bother me?”
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even as he wraps himself in Deng’s legacy, Mr. Xi has set himself apart in an important way: Deng encouraged the party to seek help and expertise overseas, but Mr. Xi preaches self-reliance and warns of the threats posed by “hostile foreign forces.
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China tapped into a wave of globalization sweeping the world and emerged as the world’s factory. China’s embrace of the internet, within limits, helped make it a leader in technology. And foreign advice helped China reshape its banks, build a legal system and create modern corporations.
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It was a remarkable act of reinvention, one that eluded the Soviets. In both China and the Soviet Union, vast Stalinist bureaucracies had smothered economic growth, with officials who wielded unchecked power resisting change that threatened their privileges.
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Mr. Lin was part of a torrent of investment from ethnic Chinese enclaves in Hong Kong, Taiwan, Singapore and beyond that washed over China — and gave it a leg up on other developing countries
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The timing worked out for China, which opened up just as Taiwan was outgrowing its place in the global manufacturing chain. China benefited from Taiwan’s money, but also its managerial experience, technology and relationships with customers around the world. In effect, Taiwan jump-started capitalism in China and plugged it into the global economy.
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Before long, the government in Taiwan began to worry about relying so much on its onetime enemy and tried to shift investment elsewhere. But the mainland was too cheap, too close and, with a common language and heritage, too familiar.
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Now Taiwan finds itself increasingly dependent on a much more powerful China, which is pushing ever harder for unification, and the island’s future is uncertain
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Many in Washington predicted that trade would bring political change. It did, but not in China. “Opening up” ended up strengthening the party’s hold on power rather than weakening it. The shock of China’s rise as an export colossus, however, was felt in factory towns around the world.
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In the United States, economists say at least two million jobs disappeared as a result, many in districts that ended up voting for President Trump.
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The pro-democracy movement in 1989 was the closest the party ever came to political liberalization after Mao’s death, and the crackdown that followed was the furthest it went in the other direction, toward repression and control. After the massacre, the economy stalled and retrenchment seemed certain. Yet three years later, Deng used a tour of southern China to wrestle the party back to “reform and opening up” once more. Many who had left the government, like Mr. Feng, suddenly found themselves leading the nation’s transformation from the outside, as its first generation of private entrepreneurs.
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The fear is that Mr. Xi is attempting to rewrite the recipe behind China’s rise, replacing selective repression with something more severe.
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The internet is an example of how it has benefited by striking a balance. The party let the nation go online with barely an inkling of what that might mean, then reaped the economic benefits while controlling the spread of information that could hurt it.
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“The basic problem is, who is growth for?” said Mr. Xu, the retired official who wrote the Moganshan report. “We haven’t solved this problem.”
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“The cost of censorship is quite limited compared to the great value created by the internet,” said Chen Tong, an industry pioneer. “We still get the information we need for economic progress.”
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China is not the only country that has squared the demands of authoritarian rule with the needs of free markets. But it has done so for longer, at greater scale and with more convincing results than any other.
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Washington is maneuvering to counter Beijing’s growing influence around the world, warning that a Chinese spending spree on global infrastructure comes with strings attached.
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both left and right in America have portrayed China as the champion of an alternative global order, one that embraces autocratic values and undermines fair competition. It is a rare consensus for the United States, which is deeply divided about so much else, including how it has wielded power abroad in recent decades — and how it should do so now.
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Mr. Xi, on the other hand, has shown no sign of abandoning what he calls “the great rejuvenation of the Chinese nation.” Some in his corner have been itching to take on the United States since the 2008 financial crisis and see the Trump administration’s policies as proof of what they have always suspected — that America is determined to keep China down.
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there is also widespread anxiety over the new acrimony, because the United States has long inspired admiration and envy in China, and because of a gnawing sense that the party’s formula for success may be faltering.
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Prosperity has brought rising expectations in China; the public wants more than just economic growth. It wants cleaner air, safer food and medicine, better health care and schools, less corruption and greater equality. The party is struggling to deliver, and tweaks to the report cards it uses to measure the performance of officials hardly seem enough.
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Now, many companies assign hundreds of employees to censorship duties — and China has become a giant on the global internet landscape.
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Mr. Xi himself has acknowledged that the party must adapt, declaring that the nation is entering a “new era” requiring new methods. But his prescription has largely been a throwback to repression, including vast internment camps targeting Muslim ethnic minorities. “Opening up” has been replaced by an outward push, with huge loans that critics describe as predatory and other efforts to gain influence — or interfere — in the politics of other countries. At home, experimentation is out while political orthodoxy and discipline are in.
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n effect, Mr. Xi seems to believe that China has been so successful that the party can return to a more conventional authoritarian posture — and that to survive and surpass the United States it must
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Certainly, the momentum is still with the party. Over the past four decades, economic growth in China has been 10 times faster than in the United States, and it is still more than twice as fast. The party appears to enjoy broad public support, and many around the world are convinced that Mr. Trump’s America is in retreat while China’s moment is just beginning
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The world thought it could change China, and in many ways it has. But China’s success has been so spectacular that it has just as often changed the world — and the American understanding of how the world works.
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There is no simple explanation for how China’s leaders pulled this off. There was foresight and luck, skill and violent resolve, but perhaps most important was the fear — a sense of crisis among Mao’s successors that they never shook, and that intensified after the Tiananmen Square massacre and the collapse of the Soviet Union.
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But China had a strange advantage in battling bureaucratic resistance. The nation’s long economic boom followed one of the darkest chapters of its history, the Cultural Revolution, which decimated the party apparatus and left it in shambles. In effect, autocratic excess set the stage for Mao’s eventual successor, Deng Xiaoping, to lead the party in a radically more open direction.
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In other words, he appears to have less use for the “opening up” part of Deng’s slogan.
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Now Mr. Xi is steering the party toward repression again, tightening its grip on society, concentrating power in his own hands and setting himself up to rule for life by abolishing the presidential term limit. Will the party loosen up again, as it did a few years after Tiananmen, or is this a more permanent shift? If it is, what will it mean for the Chinese economic miracle?
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The question now is whether it can sustain this model with the United States as an adversary rather than a partner.
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"In effect, Mr. Xi seems to believe that China has been so successful that the party can return to a more conventional authoritarian posture - and that to survive and surpass the United States it must. Certainly, the momentum is still with the party. Over the past four decades, economic growth in China has been 10 times faster than in the United States, and it is still more than twice as fast. The party appears to enjoy broad public support, and many around the world are convinced that Mr. Trump's America is in retreat while China's moment is just beginning"
