Beijing's Thirty-year Boom

July 12, 2007 Topic: Economics

Beijing's Thirty-year Boom

If getting rich is glorious, than no country has been more glorious over the last three decades than China.

On June 23, Washington hosted the National Capital Barbecue Battle. The smoky smell of ribs wafted down Pennsylvania Avenue in a celebration of American culinary delights, but even this sacred rite of American life might not be safe from China's growing economic clout. After all, the PRC is home to half the world's hogs.

Almost thirty years after Deng Xiaoping's announced the Beijing Spring and famously said that "To get rich is glorious", his countrymen have taken his words to heart. Former U.S. Ambassador Chas Freeman, speaking on China and the global resources balance at The Nixon Center Wednesday afternoon, described the Beijing Spring as "one of the most momentous events in modern history."

The People's Republic's consumption trends are more likely to continue than not, Freeman said. Since 1978, Chinese GDP per capita has increased by a factor of forty. Industry is set to grow 17 percent this year alone. In the first quarter of 2007, disposable income in urban centers rose almost 17 percent year-on-year and over 21 percent in rural areas. Demands for energy, wood, minerals, cement and cars on the up-and-up. China has acquired a vast property-owning middle class of 300,000,000 people, equal to the population of the United States. This growth has placed intense demands on China's highways, which the government is dealing with by spending 9 percent of GDP on modernizing infrastructure. Though there are only seven cars per thousand people right now, experts expect twenty million on the roads-which are already home to one-fifth of the world's accidents-by 2020.

McDonalds, for one, has seen the writing on the wall, teaming up with Sinopec to install drive-thrus at gas stations on super-highways around the country.

"Can the drive-in movie, back-seat sexual acrobatics and ambulance-chasing tort lawyers be far behind?" Freeman joked.

But how long can this unprecedented growth-rate last? A long while, is the short answer for Freeman.

"Chinese production will speed up and rise", he said. And the West better accept it, because "there is no feasible alternative to working with China", Freeman added.

Touching on themes discussed in "A World Without the West", Freeman said that, "Two-hundred and fity years ago the West began to dominate the globe. As the 21st century proceeds, that dominance os fading away." On the commercial front, Freeman noted that, unlike most Western governments, for China, "the business of business is business." Human rights, moral transformations and good governance take a back seat to profits and Western NGOs, for whom Africa has been a "humanitarian theme-park" for decades, Freeman said.

In 2005, China committed $8 billion to Nigeria, Angola and Mozambique, almost four times the World Bank's contributions to all of Africa. Chinese loans to Africa are three times the amount that comes from OECD countries, and have no strings attached. As Antoine Halff writes in The National Interest:

China professes to separate business from politics and to practice a policy of "non-interference" in the domestic affairs of foreign states. Sometimes aid includes a military component: Beijing has been a key arms supplier to the Sudanese junta, has provided Zimbabwe with military equipment to jam opposition radio programs during electoral campaigns and recently has begun to supply the Nigerian regime with arms to quash rebel militias in the Niger Delta.

But there are serious risks-manageable ones, Freeman believes-that come with this massive growth. There is the backlash bound to strike any rising power asserting its influence around the world. In Africa, as Halff notes, "anti-Chinese sentiment is creeping into the mainstream political discourse, while also causing unrest and disturbances that directly threaten Chinese interests."

Furthermore, as with the recent execution of the former head of China's State Food and Drug Administration, Zheng Xiayou, after a series of scandals involving prescription drugs, toothpaste and pet food, Beijing may face what Freeman called its "Sinclair Lewis moment", referencing the author of the The Jungle, who exposed the horrors of Chicago's meat-packing industry in the early twentieth century.

But China's ills are minor compared to its transformative impact on geopolitics, something the U.S. government is failing to cope with. Freeman had especially harsh words for Congress, which he described as a "collective brain deficit" that is taking a "Smoot-Hawley approach to international-trade management."

"How can we craft new rules for the international order [while] denying the phenomenon?" he asked.

It would be nice to hear that question answered at the next presidential debate, but don't hold your breath.

Sean R. Singer is an apprentice editor at The National Interest.