The World Shakes China
Mini Teaser: China has yet to shake the world; its external influence has been comparatively inconsequential since the industrial revolution. Instead, it is the world that has shaken China.
"One might trace the history of the limits, of those obscure actions,
necessarily forgotten as soon as they are performed, whereby a
civilization casts aside something it regards as alien. Throughout
its history, this moat which it digs around itself, this no man's
land by which it preserves its isolation, is just as characteristic
as its positive values."
--Michel Foucault
In the recent Italian film Il Postino, the Chilean poet Pablo Neruda
teaches an uneducated mailman first the word and then the art of
metafor. The mailman is a quick study, and soon he is asking Neruda
an intriguing question: "Is the world perhaps a metaphor for
something else?" Neruda pauses and then says that he will have to
think about this question. But he never gives the postman his answer.
China has not been a nation for Americans, but a metaphor. To say
"China" is instantly to call up a string of metaphors giving us the
history of Sino-American relations, and fifty years of "China
watching" by our politicians, pundits, and academics: unchanging
China, cyclical China, the inscrutable Forbidden City, boxes within
boxes, the open door, sick man of Asia, the good earth, agrarian
reformers, China shakes the world, who lost China, containment or
liberation, brainwashing, Quemoy and Matsu, the little red book,
ping-pong diplomacy, the week that changed the world, the China card,
the gang of four, the four modernizations, China as insatiable
market, Tiananmen, butchers of Beijing, China shakes the world
(again), cycles of rise and decline (again), unchanging China (yet
again). Beyond all that, our pundits and experts remain captured by a
master metaphor: that of China's unfathomable-in-a-lifetime vastness,
its historical depth and profundity, and (therefore) its overriding
importance to the world we live in.
The accompaniment to this operatic "China" din is a cacophony of
expert opinion offering "scenarios" for where China is going, and
what we must (by all means) do about it. Pick up almost any journal
or magazine of expert opinion and you will read that China is
disintegrating, or that it is united and stable; that Sino-American
relations are frayed to the breaking point, or that they are just
over yet another nettlesome hump; that fearsome China must be
"contained", or that outward-opening China must be "engaged"; that
its military is growing ominously, or that it is underfunded and
fitted out with obsolescent weaponry; that its commerce is
drastically overheated and facing crisis, or that it is in great
shape; that China may attack Taiwan, or that Taiwan may soon be
China's biggest foreign investor; that China may take over the
Spratly Islands, or that it will not because it cannot; that China
will subjugate Hong Kong after it is no longer a British colony in
1997, or that Hong Kong has been colonizing China for years; that a
budding civil society was crushed at Tiananmen, or that the
protesters themselves did not know what they were doing, or wanted;
that post-Deng China will dissolve into chaos, or that a new
leadership will pluralize China's politics. Atavistic China seems to
be lying in wait for the next trough in history's recurring cycle--or
not, as the case may be.
Contrast all this with George F. Kennan's sober remark back in the
1940s, around the time that Mao mounted the Gate of Heavenly Peace
(i.e., Tiananmen) to found the People's Republic: "China doesn't
matter very much. It's not very important. It's never going to be
powerful." China had no integrated industrial base, which Kennan
thought basic to any serious capacity for warfare, merely an
industrial fringe stitched along its coasts by the imperial powers;
thus China should not be included in the containment strategy. Japan
did have such a base, and was therefore the key to postwar American
policy in East Asia.
Such clear-eyed thinking, informed by a shrewd realpolitik, is a
better place to start than with the chorus of alarms and diversions
always surrounding the China issue. If we can think realistically
about where China has been, maybe we can make better judgments about
where it is going. That begins with recognition that China has yet to
shake the world; its external influence has been comparatively
inconsequential since the industrial revolution. Instead, it is the
world that has shaken China.
Castle and Moat
Foucault's metaphor gives us culture as a feudal castle protected by
a moat of ingrained practices, habitual choices, and unconscious
rejections through which the heterodox and the alien are kept at bay
or subdued. It might be taken as a restatement of the reigning
metaphor for Chinese civilization: dignified, aloof, self-contained,
content with itself, always ready to reject the barbarian--or, if it
must succumb temporarily, to dissolve the foreigner in the absorbent
sea of Chinese custom and practice. For centuries this fate awaited
the Mongols, the Manchus, and according to many accounts, the
Westerners.
The Chinese "castle", however, was an empire encompassing for its
occupants the known universe, and its "moat" delimited civilization
itself. Two hundred years ago King George III of England sent a
mission to the Chinese court, asking for the opening of trade
relations. The Qianlong Emperor replied:
"Swaying the four seas, I have but one goal, which is to establish
perfect governance; strange jewels and precious objects do not
interest me . . . the virtue and prestige of the celestial dynasty
have spread far and wide, the kings of the myriad nations come by
land and sea with all sorts of precious things. Consequently there is
nothing we lack..."
Alas, there was all too much that China "lacked." Modern history
began for China when the British banged on its door and when, in C.P.
Fitzgerald's perfect metaphor, "to the amazement of all, within and
without, the great structure . . . suddenly collapsed, leaving the
surprised Europeans still holding the door handle."
A structure that could hold together the entirety of China was not
put together again until the country had experienced a century and a
half of debilitation, rebellion, central collapse, and
disintegration, followed by false starts, blind alleys, civil and
international wars, and an immense social revolution. When Mao
announced atop Tiananmen in 1949 that "China has stood up", he
stirred the hearts of Chinese everywhere, for at least China was
again unitary, the humiliation had stopped, and the foreigner had
been expelled. But, that done, China again pulled up the ramparts and
closed itself off against the Western challenge, only to fall behind
once more. It adopted the modern world's only significant alternative
to industrial capitalism, namely communism, and imagined that in so
doing it was leaping ahead of the decadent West--only to fall behind.
In the 1960s it closed itself off from both the Soviets and the West
in the name of "self-reliance", and fell even further behind. The
only untried strategy was to join up with the West, as Japan had done
after 1868; which meant falling in well behind Japan, a former
tributary.
In the 1980s Chinese intellectuals were able for the first time in
decades to travel to the West and to appreciate the wealth, power,
and civic order of societies long caricatured as capitalist
nightmares; meanwhile the very leaders who had penned the caricatures
were now looking to the West for a way out of China's developmental
impasse. Thus even the one remaining achievement of the Chinese
revolution, the re-establishment of national dignity and pride,
seemed a mere illusion. "No foreigner can understand the depth of our
pain", a respected intellectual told a visiting American.
In all these encounters, spanning two centuries, we can appreciate
the alpha and the omega of China's relationship to the modern world.
Standing at the center of the only world it knew, supremely
self-confident of the inherent superiority of its own civilization,
China has still not overcome the humiliation of encountering a West
that prevailed against all Chinese stratagems. It was not for want of
trying.
Three Strategies
The 1950s produced some classic metaphors for Sino-American relations
but no contact, other than the bloody Korean War, which made mutual
accommodation impossible for a generation. Before that war, Harry
Truman's secretary of state, Dean Acheson, attempted to construct a
different policy, one that Richard Nixon--Acheson's antagonist in the
1950s--was to fulfill only in the 1970s.
That policy was to recognize communist China, as a means of weaning
it away from Moscow and bringing it into the world economy, thus
rendering it dependent on the West. Acheson, like George Kennan,
thought that Moscow could not really do much to rehabilitate and
industrialize China; sooner or later it would have to turn to the
West for help. An Anglophile and an internationalist, Acheson wanted
to work with Britain to keep China open, in the hope that this would
divide Beijing and Moscow, and ultimately scatter China's insurgent
impulses in the solvent of free trade. The way to do that was to try
to stay on the good side of Chinese anti-imperial nationalism, and
hope to enmesh China in the world economy. The direct confrontation
of the United States and China in the Korean War killed that hope for
two decades. It also committed the United States to maintaining the
separation of Taiwan from the mainland, a separation that continues
to this day.
This early 1950s history shaped China's development strategy
profoundly. In essence, three broad conceptions of political economy,
each with a foreign policy corollary, have animated post-1949 China.
All have had the goal on which all Chinese nationalists could agree:
to foster China's wealth and power. All have had the stunning and
unnerving aspect of requiring thorough change abruptly initiated from
the top, first by Mao and then by Deng. And all have sought to
contend with the same circumstance that the Qianlong Emperor faced: a
vibrant world economy, led first by England and then by America.
Orthodox Stalinist industrial policy defined the first phase in the
1950s, something that was perhaps inevitable but that was deeply
reinforced by mutual U.S.-Chinese hostility and American blockade:
extensive, heavy industrial development, taking steel as "the key
link", with the foreign policy corollary that China "leaned to one
side" in the bipolar Cold War conflict. Mao emphasized China's
relative backwardness and its "late" industrialization in world time.
Buoyed by China's strong growth in the mid-1950s, he launched the
Great Leap Forward to catch up with England in fifteen years. Instead
he caught up with a profound economic crisis, compounded by the
deaths through famine of millions of peasants. The foreign policy
corollary of the 1950s program also collapsed, as the Sino-Soviet
split deepened and China found itself under threat by both Washington
and Moscow. But as a book widely circulated in China last year
pointed out, Mao's agrarian policies and institutions also worked to
root China's vast peasantry to the soil for thirty years. Rather than
being allowed to flood the into the cities, as they were doing in
most Third World countries (and as they now do in today's China),
they were kept in place and indoctrinated to believe they were
"making revolution."
No statement captures the reasoning behind China's next dramatic
departure better than Mao's judgment, made in 1961, on Nikita
Khrushchev's doctrine of peaceful coexistence and competition with
capitalism: "This is changing two de facto world markets into two
economic systems inside a unified world market." That is, while
China's lean-to-one-side policy had been predicated on withdrawal
from the capitalist market system and the building of an alternative
socialist system--one in conflict with and seeking to replace the
capitalist one--Soviet revisionism was now effectively giving up this
struggle. What little was left of Stalin's alternative system,
moreover, was corrupt, fostered dependency, and had lost its original
raison d'être. And, of course, a unified world market, led by the
United States, remained as strong as ever.
If this critique of Moscow's revisionism was valid, China was now
faced with a choice: It could either go it alone through a
self-reliant strategy, or join the world market on the best terms it
could get. Broadly speaking, China was to choose the first course in
the mid and late 1960s, and the second course from the late 1970s up
to the present. Both choices assumed a single world economy, but the
first spelled withdrawal from it while the second implied enmeshment.
The self-reliant strategy of the 1960s was pre-eminently and uniquely
a Maoist political economy--drawing upon mass mobilization, moral or
ideological incentives, with "class struggle" as the key link. Its
domestic expression was the Cultural Revolution, and its foreign
policy corollary was solidarity with the Third World. Class struggle
turned out to mean intense political infighting at the top, and
growing chaos, violence, and alienation everywhere else. A certain
nadir was reached in 1971 when Mao's "chosen successor", Lin Biao,
sought to flee to Russia after a failed coup attempt, only to be shot
down. After that, few Chinese could believe anything the central
regime said, and the dictatorial elite did not know what it was doing.
In that same year that Lin Biao was killed, Nixon and Kissinger
opened relations with China, seeking to reinforce Sino-Soviet
differences and thus to use communism to contain communism. It was a
grand diplomatic success, and soon Sino-American relations warmed to
the brink of strategic alliance. In December 1975 Deng Xiaoping
welcomed Gerald and Betty Ford to a sumptuous dinner in the Great
Hall of the People. With maotai glasses held high, they heard Deng
offer this toast to the presidential party:
"There is great disorder under heaven and the situation is excellent.
. . . The factors for war and revolution are increasing. Countries
want independence, nations want liberation, and people want
revolution. . . . The wind in the bell tower heralds a storm in the
mountains."
But what Deng might really have wanted to say was this:
"There is great disorder under heaven and the situation is terrible.
The factors for war are decreasing and those for revolution,
nonexistent. Countries want interdependence, nations want wealth, and
people hate revolution. The wind in the bell tower heralds a
catastrophe in China."
The Man Who Loved Croissants
Within ten months of President Ford's visit Mao would die and his
mandate would end, events that were appropriately accompanied by
China's most destructive earthquake of the century. Slowly,
gradually, all the metaphors with which we had come to understand the
Chinese revolution were now reversed: Mao, it turned out, had not
been the titan who brought revolution, national unity, and
egalitarian prosperity to "the sick man of Asia", but a murderous
despot to be ranked with Hitler and Stalin--except that he also liked
to molest little girls. China's intellectuals were not the effete
scholar-officials who had delivered their nation to
nineteenth-century imperialism--let alone the "stinking ninth
category" abused by Mao's wife, Jiang Qing--but the new hope for an
incipient civil society, the green shoots emerging after a
revolutionary nightmare. And Deng was not the "capitalist-roader"
renegade who had notoriously said it didn't matter if a cat was
yellow or black as long as it caught the rat, but a bridge-playing,
soccer-loving family man who had developed a taste for croissants
when he lived for five years in France as a youth (having, by one
account, been shown by a certain Ho Chi Minh where to find the best
ones). Time magazine's "Man of the Year" twice (in 1978 and 1985),
Deng was the folksy reformer and would-be democrat who in 1979 toured
a Houston rodeo waving a ten-gallon hat. His economic reforms, helped
along by a supportive United States, had finally opened the path to
the wealth and power all of China's reformers had long sought.
Then came the massacre of young people at Tiananmen on June 4, 1989,
and all the West's metaphors for China reversed yet again. But while
the effect of Tiananmen on Western attitudes was profound, its effect
on Deng'seconomic policy was minimal. No change has been deeper, or
more systematically sustained, than China's reform strategy since
l978. There has not been a single lurch or tortuous passage since
then that is comparable to the pre-l978 period; instead there has
been a comparatively steady tendency, almost a textbook example of
how to introduce a developing country into the world economy. Hu
Yaobang, general secretary of the Communist Party in the 1980s, later
claimed that the Third Plenum of the Eleventh Central Committee in
December 1978--which marked the birth of the new policy--was a
turning point in party history comparable only to the changes of 1927
and 1936.
By the beginning of 1980 a new political leadership, led by Deng
Xiaoping, had established firm control over the Chinese state. Always
thorough when embarking on major new programs, the Chinese leadership
made the requisite revisions in basic theory and assumptions. In
place of the Maoist emphasis on class struggle and the relations of
production, Deng Xiaoping pushed the "theory of productive forces"
and the epistemological doctrine of "seeking truth from facts." The
motive force in history was not class conflict, it turned out, but an
all-round development of human and material forces of production.
Deng deemed science and technology to be politically neutral, thus
contradicting Jiang Qing who had declared that a socialist train
running late was better than a capitalist train on time. China's
economists began studying Keynes and Friedman, preferring the former
since he blessed a central role for the state in the economy. More
subtly, the determinist "productive forces" theory nudged communist
China toward learning from capitalist Japan, which had always
emphasized the acquisition of advanced technologies in its march to
economic prowess.
In 1981 the new premier, Zhao Ziyang, said, "We must abandon once and
for all the idea of self-sufficiency . . . all ideas and actions
based on keeping our door closed to the outside world and sticking to
conventions are wrong." He continued, "Greater exports are the key...
we should boldly enter the world market." Zhao cited China's vast
labor pool as its key advantage in the world economy, and was not
above waving the fabled potentialities of the China market in the
face of Western businessmen. By that time China had joined the IMF
and the World Bank, and had most-favored nation status with the
European Community. The broader logic, of course, was that there was
but one world--not three as Mao had said--the world of global
capitalism, Acheson's world.
Slowly the staggering nature of China's "reform" became apparent.
Agriculture was virtually privatized in a massive decollectivization,
prices were decontrolled, the currency floated against the dollar,
central planning moved in the direction of Keynesian macroeconomic
regulation, and the massive state sector began to cut free of the
government's subsidies and umbilical cord. It would take an
unreconstructed determinist to have predicted, however, that the same
treaty ports that fueled China's economy in the imperial era would
now be touted as models to emulate. Yet in April 1981, the State
Council called on everyone to "learn from Shanghai, the coastal
provinces, and the advanced"--not the Shanghai that was a radical
bastion in the Cultural Revolution, but the Shanghai that provides
about 15 percent of China's total exports and 70 percent of its
textile and light-industrial exports (bicycles, clothes, sewing
machines). Soon high communist leaders were referring to "China's
gold coast", while others, hardliners, drew the analogy with the old
treaty ports and foreign concessions. Today China's treaty-port
region is becoming another country, a rapidly growing, vast market
that both fuels and benefits from the export program.
Those experts who project Chinese disintegration have no trouble
locating several Chinas already: the inland provinces where the
peasant majority lives, with a per capita GNP of around three hundred
dollars; coastal provinces with perhaps twice as muchwealth per
capita; and selected enterprise zones and big cities (especially
Shanghai and Canton) where huge fortunes are being made, and where
average wealth is at least fifty percent higher again than in the
non-urban coastal provinces.
But that is a limited perspective, for there are still other Chinas.
The proximity of Taiwan, Hong Kong, and overseas Chinese in Southeast
Asia, all now making enormous investments in China, suggests that
ever-increasing involvement with the several countries of "greater
China" is a far more likely outcome than domestic disintegration.
Counting Taiwan, Hong Kong, Singapore, and the southeast Asian
Chinese diaspora (particularly active in Malaysia and Indonesia), a
Chinese population of nearly fifty million beyond China's mainland
borders deploys a per capita GNP averaging about fifteen thousand
dollars. Here is the advance guard--or the yeast--for the ongoing
transformation of the livelihoods of perhaps five hundred million
Chinese in the coastal provinces. This is why Hong Kong will remain
as a capitalist entrepôt, the centerpiece of an enormously productive
sphere of Chinese capitalism. It will be the nodal point at which the
world economy will continue to shake China.
Many China watchers seem to think that something is amiss because so
much of the "exporting" from the new zones has been to China's
interior. Yet this merely recapitulates within China the triangular
nature of China's trade in the world economy: generally speaking, it
buys from the core and sells in the periphery, and inner China is
still very much peripheral in the world system. In l985 the World
Bank found that the industrial market economies took 32 percent of
China's manufactured exports, the developing economies 63 percent;
its imports were overwhelmingly from the former. This trend has only
deepened in the last decade. Furthermore, a potentially huge domestic
market gives China a great advantage over most other
newly-industrializing countries, which, with low purchasing power in
their home markets, run into trouble when protectionism limits their
access to the American or Japanese market. The five hundred million
people of the coastal zones alone represent ten times as many
potential consumers as South Korea, twenty-five times as many as
Taiwan.
There are, of course, many opponents of reform, now called
"conservatives" in the literature. The debacle at Tiananmen in 1989
energized many aging Stalinists and Maoists, who counterattacked with
the battle cry of communist orthodoxy, claiming that Tiananmen proved
that the noxious, polluting influences of capitalism could not be
prevented while importing Western technologies and ideas "for use."
Jiang Zemin, by now Deng's designated successor, said this about
Tiananmen:
"Hostile forces at home and abroad created this turmoil to overthrow
the leadership of the Party, subvert the socialist system, and turn
China into a bourgeois republic and into an appendage of big Western
capitalist powers once again. The victory and nature of this struggle
represent an acute opposition between the Four Cardinal Principles
and bourgeois liberalization, and it is a political struggle bearing
on the life and death of our party, state, and nation. It is also a
serious class struggle."
The "four upholds", as these principles were known, constituted "the
foundation of the nation", according to Jiang, "whereas reform and
opening to the outside world are means of strengthening the nation."
It was a restatement of the century-old ti-yong formula of Chinese
experience and philosophy as the "base" and Western learning and
technique "for use"--except that the "four principles" seemed to have
been fabricated by a madman. As China deepened its export-led
developmental program, bringing bankers and businessmen running from
all corners of the globe, it was also to uphold "Marxism-Leninism-Mao
Tse-tung thought, socialism, the dictatorship of the proletariat, and
the supremacy of Party leadership." These four principles might have
been appropriate for a communist country like North Korea, which
remained closed (and constantly harped on similar themes), but they
merely became the butt of after-dinner jokes in 1990s China--when,
that is, they were not occasions for despair. The one constant
candidate for such a principled center since 1949 has been China's
zealous and absolute concept of national sovereignty, about which it
has been a good deal more sensitive than the Western powers who
introduced the idea to China in the first place. But then, it is the
only principle China now has left.
"A China That Doesn't Smell"
The economic imperative, together with Chinese jealousy over
sovereign prerogatives, provide perhaps the best starting point for
speculations about China's future. Prognostication about China is no
easy task, as is demonstrated by the well nigh infinite collection of
bad predictions that Americans of every political persuasion have
made over the years. Whether it was the Right arguing for
"unleashing" Chiang Kai-shek against the mainland when he had just
contrived to lose a nation there, or the Left claiming that Mao had
invented a new form of democracy, or Richard Nixon saying all things
about China over the course of his long career, the record is abysmal.
Almost all thinking about China today, whether by trained expert or
grazing pundit, remains colored by the events of June 1989. In a game
that might be called "What's my atavism?" we have heard everything,
from Henry Kissinger lamenting the 1989 events "with the pain of a
spectator watching the disintegration of a family to whom one has a
special attachment", to China expert W.J.F. Jenner's judgment that
"the experience of medieval Europe" should be our guide to "Chinese
futures."
Last year, Deng, now reconverted from the croissant-loving man in the
ten-gallon hat to the "butcher of Beijing", took perhaps his last
stroll through one of his "open cities", the marvelous Sino-European
treaty port of Qingdao. Here is what he said then:
"The policy of taking economic construction as the key link must
never be changed; the reform and open-door policy must never be
altered. The party's basic line must not be shaken for 100 years....
We must properly draw the lesson from the former Soviet Union....
The Chinese Communist Party's status as the ruling party must never
be challenged. China cannot adopt a multi-party system."
There you have it: economic perestroika and glasnost, but political
counterparts of neither. Our newest capitalist "miracle" just happens
to be run by communists. Deng's persistent hypothesis has been that
if China's living standards keep rising, his party can rule forever.
He is probably wrong about his party, but right about the equation
between prosperity and political legitimacy. Since 1978 the economy
has grown at an average rate of 9 percent, quadrupling China's GNP.
While the growth is stunning, his vision makes him no visionary; Deng
is really nothing more than the Park Chung Hee of China.
This comparison is not made lightly: anyone who knows South Korea's
history from 1965 to the present should know that all manner of
political disorder can proceed without disrupting economic growth or
dislodging the ruling groups. Park declared martial law and
promulgated a frankly authoritarian constitution in 1972, ran
thousands of dissidents off to military boot camp, jail, or the
torture chamber, bivouacked his army on the campuses--and at the same
time pushed a state-dominant, radical heavy industry strategy against
all the best advice of our economists. Always his theory was that
economic growth would buy political legitimacy. His own security
chief blew Park's brains out in 1979, his protégé Chun Doo Hwan took
over the security agencies and then (probably) provoked an uprising
in the southwestern city of Kwangju in May 1980 that can be compared
in precise detail to what happened in June 1989 in Beijing, complete
with regular military units exterminating students (the Kwangju death
toll was if anything higher). Seven years later Chun was overthrown
in massive street protests by students, workers, and ordinary middle
class citizens. Meanwhile through the entire period, Korea's growth
rates were usually the highest in the world, and Park still sits atop
Korean public opinion polls as the most respected former president.
Similarly, the economic transformation of Taiwan, Korea's rival in
growth rates, went on under a full martial law regime, enforced from
1949 to 1987.
China is quite frankly pursuing the latest version of the
developmental state theory, one our economists cannot understand but
that makes complete sense to Asians as diverse as former Japanese
Prime Minister Kishi Nobusuke, Chiang Kai-shek, Park Chung Hee, Lee
Kwan Yew, and Deng Xiaoping. The Economist notes that consumption
patterns in China today mimic those of Taiwan around 1970. And
Chinese analysts point to Harvard political scientist Samuel
Huntington's theory that while political instability can be expected
as per capita GNP moves from three hundred to four thousand dollars,
it will end after that, and therefore so will Communist Party rule
(or so it is hoped).
Korea and Taiwan each had a huge state economic sector that owned the
banks and most large industries, courtesy of a half-century of
Japanese colonialism; the state sector produced 57 percent of
Taiwan's industrial production in 1952, 40 percent in 1964, and 15
percent in 1975. Rapid growth rates in Taiwan and Korea occurred in
spite of this state sector, with private firms often expanding by
nearly 20 percent per year. Now in the China of the 1990s, we find a
state sector that is a drag on the economy (though a huge employer of
its people). This sector retards a private sector growth rate of as
much as 20 percent, but is slowly giving way. By the year 2000, the
state sector is expected to account for 30 percent of industrial
production, and by 2010, for 18 percent or less.
The current leadership's model of preference is not Korea or Taiwan
but Singapore, and indeed several newly-emerging cities (designed to
absorb huge rivers of peasants leaving the village