Saturday, August 07, 2004
China and its sovereignty
Written February, 2002
By The Erudite Redneck
China's growing dependence on foreign capital and global markets is leading to de facto erosion of China’s sovereignty – its power as a state to be politically independent and to self-govern without outside interference. The paradox of China’s increasing economic power yet decreasing political-economic autonomy has great implications for its relationship with the United States and other leading countries. The following will outline a largely unspoken aspect of China’s growing openness and developing market system: In yet another contradiction, China says it is achieving one status, national independence, but in fact is arriving at another, global interdependence.
The same could be said, and is increasingly said, of the United States with its historical openness, relative political transparency and growing involvement in global governance.[i] But there is one big difference: the United States is a great power capable of disentangling itself from the rest of the world as its people and elected leaders see fit. China, despite recent economic advances, does well to take care of itself.
In a speech at Voice of America in October 1997, just before Chinese President Jiang Zemin’s first official state visit to the United States, President Bill Clinton made a case for the United States’ continued engagement in dialogue with the People’s Republic and against attempts to isolate or confront China.[ii] In 1995-1996, there had been high tension between the two countries. Growing democracy in Taiwan had caused the People’s Liberation Army to “test” medium-range missiles off the Taiwan coast; the United States, pledged to ensure Taiwan’s defense through the Taiwan Relations Act, responded by sending two aircraft carrier groups to the area.[iii]
In the United States, from Congress to coffee shops, Americans were debating the nature of U.S.-China relations. In his speech, Clinton gave six reasons for the United States to maintain peaceful relations: He outlined the United States’ interest in promoting peace and stability in the world in general; in peace and stability in Asia in particular; in keeping sophisticated weapons away from terrorists and rogue states; in fighting illegal drugs and international organized crime; in making global trade free, fair and open; and in maintaining global efforts to protect the environment.[iv]
Buried in Clinton’s speech was this remark: “China’s economic growth has made it more and more dependent on the outside world for investment, markets and energy.”[v] The observation is obvious to anyone who knows what it means for a country to seek foreign investment and open itself to world markets. But it is ironic. The whole point of the economic reforms Deng Xiaoping initiated in 1978 was to create wealth and increase China’s strength, or, to make it self-reliant and independent.
So, what did Clinton mean when, in his speech, Clinton also said the following of China? “… We welcome its emergence as a great nation.”[vi] The greater question is this: What is a “great nation”? What is a great power in this time of increasing market and political globalization? Is it a nuclear power? An economic power? An isolated, solitary power? An engaged, interdependent power? A bellicose bully on the global playground? A boisterous but peaceful democracy?
One political theorist has supplied this definition of a modern great power:
It is a state that easily ranks among the top five in the primary global structures – economic, military, knowledge and normative – and that enjoys relatively low sensitivity, vulnerability and security interdependence because of massive resource and skill differentials and relative economic self-sufficiency. A great power is a strong state with the ability to mobilize the country’s human and material resources in the service of its world view and policy objectives. There is also the normative-behavioral requirement of great power status: A great power is and becomes what a great power does.[vii]
Almost none of that applies to modern China. If China’s economic growth continues in the haphazard manner it has since Deng’s reforms began in 1978, the nation’s real power will continue to diminish vis-a-vis the world at large.
China craves power. More than 150 years ago, Imperial China’s presumed place in the sun was shaken, its prestige diminished to the point of humiliation, by defeat at the hands of the British in the Opium Wars. The latter half of the nineteenth century saw China picked apart by Western powers, with one European country after another demanding trade concessions and extraterritorial treaty ports that functioned as slivers of European sovereignty on China’s own soil.
The twentieth century brought more defeats, from abroad and from within, and more humiliation: the failed attempt by the Empress Dowager to use the Boxer Rebellion to expel foreigners in 1900, the overthrow of the Qing dynasty in 1911, the following civil war, invasion and occupation by Japan, and continued internal strife until Mao Zedong’s formation of the People’s Republic of China in 1949. Mao brought excesses that only start with the Communist Party’s Great Leap Forward and the Cultural Revolution. All combined to forge a nation desperate for control of its own destiny and renewed dominance on the world stage.[viii] To Western eyes, Deng’s logic appeared flawed, but his aim was clear:
"China must take its own road and build socialism with Chinese characteristics – that is the only way China can have a future. We must show foreigners that China’s political situation is stable. If our country were plunged into disorder and our nation reduced to a heap of loose sand, how could we ever prosper? The reason the imperialists were able to bully us in the past was precisely that we were a heap of loose sand."[ix]
China’s “own road,” Deng believed, was to be paved in gold. After nearly a quarter-century of reform, evidence of China’s economic growth abounds. The People’s Republic doubled per-capita output between 1977 and 1987. China has become the world’s second largest economy. Its gross domestic product is projected to surpass that of the United States by 2010.[x] The World Bank estimates that the collective domestic product of “Greater China,” including Taiwan, Hong Kong and Singapore, could surpass that of the United States in 2002.[xi] Real urban incomes doubled between 1989 and 2000. Increased prosperity in the 1990s afforded the Chinese computers, designer clothes and home electronics, just as growth in the 1980s provided them with refrigerators, television sets and other basics.[xii]
Such growth, however, comes at great cost, as China grows more reliant on the capitalist world and more dependent on the West. For example, China’s external debt was $120 billion and growing in 1997.[xiii] Put another way, that means outsiders held the note on $120 billion of China’s worth. Put another way, China had mortgaged $120 billion of itself to foreigners. From 1978 to 1995, as China’s foreign trade increased 13 times, from $21 billion to $280 billion, its external trade dependence also exploded from 10 percent to more than 56 percent.[xiv]
Some critics insist that China’s boon since 1978 is overrated in historical terms. In 1800, China accounted for one-third of the world’s manufacturing production, compared to 28 percent for Europe and 0.8 percent for the United States; by 1900, China’s share had plummeted to 6.2 percent, Europe’s had blossomed to 62 percent and the United States’ had grown to 23.6 percent. In 1997, China produced only 3.5 percent of the world’s gross production.[xv]
In any case, whatever the exact magnitude, outsiders, not the Chinese, have driving China’s economic growth since 1978.
Nor is China managing its own economic system. No one is. Market forces are – those nameless, faceless, mysterious forces of supply and demand that can be difficult to control even in an admitted capitalistic system, which China most certainly is not. In China, partial decentralization of business decision-making, continued internal barriers to market development, and limited deregulation of the state-controlled financial system have created a Communist-capitalist hybrid that, as it is, cannot maintain itself.
Economic growth is one thing. Economic development is another. China is experiencing rapid economic growth. It has seen little economic development. What China has are warped versions of the kind of institutional support and infrastructure necessary to maintain a stable economic system.[xvi] China’s economic development is further hobbled by the lack of rule of law, declining government revenues, corrupt business practices, growing unemployment and the drain of inefficient, resource-gobbling state-owned enterprises.[xvii] China’s economic growth, within such a confusing and weak economic arrangement, could evaporate amid unchecked chaos and waste.
Not that the Chinese leadership isn’t trying. Those with an eye to China’s long-term security realize that sustained economic success – not just more money flow and capital investment today – is necessary to produce the kind of orderly and well-off society they associate with the great Chinese societies of the past. They know that economic restoration and stability are necessary to return China to the global status it held before the modern era. They know that economic sustainability is necessary for China to truly have, and deserve, a place at the global table.[xviii]
That means more actual reform is needed, not just more foreign investment and openness. A 2000 RAND study conducted for the U.S. Air Force outlined these needed steps: more “price, tax, fiscal, banking and legal reforms; the further liberalization of foreign investment practices, trade, and currency convertibility; the reform or abandonment of many state-owned enterprises, and the implementation of more effective environmental protection measures.”[xix] Such reforms, while creating sustainability and stability in the long term, could create negatives for China in the short term, by reducing growth rates, making existing social problems worse, and challenging “deep-rooted bureaucratic and political interests,” according to the RAND study.[xx]
Nonetheless, economic reform continues in China, and the People’s Republic continues to shift its sovereignty to outside players. By dwelling on perceived threats by other nations, the Chinese Communist Party appears to miss the point that the real threat to its power comes from lesser players within those nations. For example, in a report in the Beijing News in November 1989, a response to global protests of human rights abuses six months earlier in Tienanmen Square, the writer concentrated on the interplay of legal codes of sovereign countries.[xxi] The protests “sparked great indignation and opposition from the Chinese people.”[xxii] Despite the great breadth of the thwarted democracy movement that culminated in Tienanmen Square, the Chinese people as a whole probably were insulted by the audacity of foreigners’ complaints. Underlying the Chinese people’s conception of themselves is a “sense of grievance toward the outside world” and a popular nationalism owing to the atrocities committed on them by outsiders.[xxiii]
Despite a burgeoning nationalism borne on increasing wealth and, despite the Communist Party’s unceasing efforts, increased awareness of how China is perceived by the outside world, China continues to weaken geo-politically, even as it grows stronger economically. Because of the side effects of growing foreign investment, China is experiencing tremendous increases in person-to-person contact between the Chinese and foreigners. It is increasingly involved in multilateral economic institutions, including its recent membership in the World Trade Organization. The People’s Republic is feeling accompanying pressure from foreign governments, which is sure to increase. China is feeling the influence of multinational corporations as well as transnational manufacturing networks that have production, distribution and marketing systems that cross national and territorial borders.[xxiv] In short, China’s growing economic interdependence is “creating a diplomatic context in which significant constraints are placed on Chinese behavior.”[xxv]
China’s newfound wealth leads to another irony: By growing economically stronger, while more geo-politically dependent, China is playing to the interests of the United States. Clinton said, before Jiang’s visit in 1997, “Of course, China will choose its own destiny”[xxvi] – a necessary bit of high-level rhetoric and diplomacy that was fitting for the imminent arrival of the Chinese president. Then Clinton added the U.S. function of the Sino-American equation: “Yet by working with China and expanding areas of cooperation, dealing forthrightly with our differences, we can advance fundamental American interests and values.”[xxvii] China’s increasing economic interdependence, Clinton said, “will draw China into the institutions and arrangements that are setting the ground rules for the twenty-first century – the security partnerships, the open trade agreements, the arms control regime, the multinational coalitions against terrorism, crime and drugs, the commitments to preserve the environment and to uphold human rights.”[xxviii]
All of this is more than Deng seemed to be bargaining for by starting and maintaining economic reform. However, the facts of China’s growing economic interdependence came from his own mouth in a speech to military officers in June 1989: “As far as some of our methods of work are concerned, such as the direction of investment and the direction of the funds to be used, I agree to strengthening our basic industries and agriculture. We need to increase investment in the basic industries for another ten to twenty years, including the industries of raw and processed materials, transportation, and energy.”[xxix] But this is the key: “We will do so even at the cost of going into debt.”[xxx] Debt is dependence – on creditors, investors and the foreign nations where they are domiciled – a reality that could be ameliorated, not exacerbated, by robust cooperation with those foreign nations.
Global collaboration could start at China’s doorstep. The Dalai Lama observed that for China to change its controlling attitude and antagonistic policy toward Tibet, Chinese leadership would have to look “forward instead of backward”[xxxi] – look to the present and evolving world order and away from China’s admittedly humiliating past. The same could be said for China’s attitude and policy toward the rest of the world. However, despite the obvious, China’s leaders continue to dwell in the past and fail to embrace the future they aim to create for the People’s Republic.
China is rife with contradictions, the chief one being its rhetorical adherence to Communism to its embryonic but unacknowledged capitalism masquerading as “socialism with Chinese characteristics.” However, it is failing to embrace the present contradiction of simultaneous growing economic strength and loss of unfettered sovereignty.
It all combines to make the implicit fear underlying China’s reluctance to reciprocally engage the world seem ludicrous. Chen Xitong, major of Beijing at the time of the Tiananmen Square melee in 1989, said afterward: “Some political forces in the West always attempt to make socialist countries, including China, give up the socialist road, eventually bring these countries under the rule of international monopoly capital, and put them on the course of capitalism. This is their long-term, fundamental strategy.”[xxxii]
How is this different than what is playing out in China now at China’s own hand? What Deng called “socialism with Chinese characteristics” sounds like capitalism except for a few seemingly misplaced words. In a speech on education, Deng declared:
"We all hope that everyone will do his best to make progress because, when all is said and done, progress depends on individual effort. Collective effort is the sum of all individual efforts. And individual effort will continue to differ even in communist society. … We must take these differences into account and do everything possible to enable each individual, in accordance with his particular circumstances, to keep pace with the general movement of society toward socialism and communism."[xxxiii]
One could substitute “socialism” and “communism” with words like “freedom” and “democratic” and it would make more sense. Yet Deng clung to the precepts of Mao Zedong. In an interview, he told a journalist:
"In the final analysis, the general principle for our economic development is still that formulated by Chairman Mao, that is, to rely mainly on our own efforts with external assistance subsidiary. No matter to what degree we open up to the outside world and admit foreign capital, its relative magnitude will be small and it can’t affect our socialist ownership of the means of production. Absorbing foreign capital and technology and even allowing foreigners to construct plants in China can only play a complementary role to our effort to develop the socialist productive forces."[xxxiv]
China, then, continues to seize what it can from its professed ideological enemies, gaining strength of one kind while frittering away the antidote to the simultaneous ebbing of its old-world sovereignty: a legitimate, earned role in the global debate, not just a seat at the table. True strength will come by embracing the mutual constraints of the growing economic interdependence of leading nations, not by simply, and reluctantly, accommodating itself to the new structure of shared power.[xxxv]
China is attempting to rely on “hard power,” the ability to reach its objectives through threats and rewards, in a developing system of “soft power,” the ability to reach objectives by coalition building among other players that want the same things.[xxxvi] The same could be said for the United States, which has its own struggles balancing traditional notions of sovereignty against the development of global economic, security and legal regimes.[xxxvii] But there is a critical difference. In the United States, there is unabashed academic and popular debate over the nature of national power. The Chinese Communist Party brooks no such discussion. For example, in China, university students, who help shape the future of truly great powers, remain blind to the mechanisms by which the party manipulates their education and worldview.[xxxviii]
By accepting the outside world’s wealth with one hand, and keeping it at bay with the other, China leaves itself out of balance with global markets and global political structures, therefore at a strategic disadvantage, “a beacon to no one – and, indeed, an ally to no one.”[xxxix] Whether China’s leaders choose deeper integration into the world order or opt to keep China’s involvement limited largely will determine whether the People’s Republic emerges as a full partner with leading nations.[xl] Leading experts agree that China’s economy will become the world’s largest in the twenty-first century.
Alongside economic strength is evidence of a strengthening culture: a growing ethnic awareness with an emphasis, rooted in Confucianism, on discipline, thrift, work and stress on the collectivity rather than the individual.[xli] Economic liberalization is expected to continue, if not pick up speed, this year after Hu Jintao becomes leader of the Communist Party and state president soon after. Hu, now leader of the Chinese Communist Party’s Central Party School, has shown innovation and willingness to pry open China’s vast bureaucracies, but has given no indication that China will ease up on political critics and other dissidents.[xlii]
In the meantime, with more than one-fifth of the world’s population, China, the oldest functioning organization in the world and arguably the most successful in history in terms of sheer endurance,[xliii] continues to grow relatively weaker, not stronger, in the present, because of the inflexibility of the Chinese Communist Party.
NOTES
[i] Peter F. Spiro, “The New Sovereigntists: American Exceptionalism and Its False Prophets,” in Foreign Affairs 79, no. 6 (November-December 2000), 9-15.
[ii] William Jefferson Clinton, “China and the National Interest,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 479-487. First presented as a presidential address at the Voice of America (October 1997).
[iii] David Shambaugh, “China’s Military: Real or Paper Tiger?” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 444. First published in The Washington Quarterly (spring 1996); also Shambaugh, “The United States and China: Cooperation or Confrontation?” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 470. First published in Current History (September 1997).
[iv] Clinton, 479.
[v] Ibid., 484.
[vi] Ibid., 487.
[vii] Samuel S. Kim, “China As a Great Power,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 450. First published in Current History (September 1997).
[viii] Jasper Becker, The Chinese (New York: The Free Press, 2000), 12, 13-114, 380-383.
[ix] Deng Xiaoping, “Taking a Clear-Cut Stand Against Bourgeois Liberalization,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 184-185. First published in Fundamental Issues in Present-Day China (1987).
[x] Kim, 450.
[xi] Orville Schell, Mandate of Heaven: The Legacy of Tiananmen Square and the Next Generation of China’s Leaders (New York: Touchstone, 1995), 333.
[xii] George Gilboy and Eric Heginbotham, “China’s Coming Transformation,” in Foreign Affairs 80, no. 4 (July-August 2001), 29.
[xiii] Kim, 450.
[xiv] Ibid., 450-451.
[xv] Gerald Segal, “Does China Matter?” in Foreign Affairs 78, no. 5 (September-October 1999), 25.
[xvi] Hang-Sheng Cheng, “A Midcourse Assessment of China’s Economic Reform,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 320. First published in the U.S. Congress Joint Economic Committee report China’s Economic Future: Challenges to U.S. Policy (1995).
[xvii] Bates Gill, “Limited Engagement: Fixing China Policy,” in Foreign Affairs 78, no. 4 (July-August 1999), 72.
[xviii] Michael D. Swaine and Ashley J. Tellis, Interpreting China’s Grand Strategy Past, Present and Future (Santa Monica, California: RAND Corp., 2000), 99.
[xix] Ibid.
[xx] Ibid., 99-100.
[xxi] Yi Ding, “Opposing Interferences in Other Countries’ Internal Affairs Through Human Rights,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 415-419. First published in the Beijing Review (November 1989).
[xxii] Ibid., 416.
[xxiii] Michel C. Oksenberg, Michael D. Swaine and Daniel C. Lynch, “The Chinese Future,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 520. First published by the RAND Center for Asia-Pacific Policy and the Pacific Council on International Policy (1998).
[xxiv] Thomas G. Moore and Dixia Yang, “ Empowered and Restrained: Chinese Foreign Policy in the Age of Economic Interdependence,” in The Making of Chinese Foreign and Security Policy in the Era of Reform 1978-2000, ed. David M. Lampton (Stanford, California: Stanford University Press, 2001), 193-198.
[xxv] Ibid., 191.
[xxvi] Clinton, 480.
[xxvii] Ibid., 480.
[xxviii] Ibid., 483.
[xxix] Deng Xiaoping, “Speech to Officers at the Corps Level and Above from the Martial Law Enforcement Troops in Beijing,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 102. First published in Population Trends (Xuanchuan Dongtai) (June 14, 1989); first published in translation in Chinese Law and Government (spring 1992).
[xxx] Ibid.
[xxxi] Robert Thurman, “The Dalai Lama on China, Hated and Optimism,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 492. First published in Mother Jones Magazine (November-December 1997).
[xxxii] Chen Xitong, “Report on Checking the Turmoil and Quelling the Counterrevolutionary Rebellion,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 80. First published by Xinhua News Agency (July 6, 1989).
[xxxiii] Deng Xiaoping, “Speech at the National Conference on Education,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 219. First published in The Selected Works of Deng Xiaoping (1975-1982), vol. 2 (1984).
[xxxiv] Deng Xiaoping, “Answers to the Italian Journalist Oriana Fallaci, in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 35. First published in The Selected Works of Deng Xiaoping (1975-1982), vol. 2 (1984).
[xxxv] Moore and Yang, 229.
[xxxvi] Robert O. Keohane and Joseph S. Nye Jr., “Power and Interdependence in the Information Age,” in Foreign Affairs 77, no. 5 (September-October 1998), 86. Keohane and Nye’s article on the effect of growing global information technology includes a discussion on definitions of national power in general.
[xxxvii] Spiro, 9-15.
[xxxviii] Peter Hessler, River Town: Two Years on the Yangtze (New York: HarperCollins, 2001), passim.
[xxxix] Segal, 33.
[xl] Oksenberg, Swaine and Lynch, 525.
[xli] Samuel P. Huntington, The Clash of Civilizations and the Remaking of World Order (New York: Simon & Schuster, 1996), 88, 107-109.
[xlii] Charles Hutzler, “New Guard: China’s Next Leaders Keep a Low Profile as They Push Reform,” Wall Street Journal, 3 January 2002, p. A1.
[xliii] Becker, 1.
END
By The Erudite Redneck
China's growing dependence on foreign capital and global markets is leading to de facto erosion of China’s sovereignty – its power as a state to be politically independent and to self-govern without outside interference. The paradox of China’s increasing economic power yet decreasing political-economic autonomy has great implications for its relationship with the United States and other leading countries. The following will outline a largely unspoken aspect of China’s growing openness and developing market system: In yet another contradiction, China says it is achieving one status, national independence, but in fact is arriving at another, global interdependence.
The same could be said, and is increasingly said, of the United States with its historical openness, relative political transparency and growing involvement in global governance.[i] But there is one big difference: the United States is a great power capable of disentangling itself from the rest of the world as its people and elected leaders see fit. China, despite recent economic advances, does well to take care of itself.
In a speech at Voice of America in October 1997, just before Chinese President Jiang Zemin’s first official state visit to the United States, President Bill Clinton made a case for the United States’ continued engagement in dialogue with the People’s Republic and against attempts to isolate or confront China.[ii] In 1995-1996, there had been high tension between the two countries. Growing democracy in Taiwan had caused the People’s Liberation Army to “test” medium-range missiles off the Taiwan coast; the United States, pledged to ensure Taiwan’s defense through the Taiwan Relations Act, responded by sending two aircraft carrier groups to the area.[iii]
In the United States, from Congress to coffee shops, Americans were debating the nature of U.S.-China relations. In his speech, Clinton gave six reasons for the United States to maintain peaceful relations: He outlined the United States’ interest in promoting peace and stability in the world in general; in peace and stability in Asia in particular; in keeping sophisticated weapons away from terrorists and rogue states; in fighting illegal drugs and international organized crime; in making global trade free, fair and open; and in maintaining global efforts to protect the environment.[iv]
Buried in Clinton’s speech was this remark: “China’s economic growth has made it more and more dependent on the outside world for investment, markets and energy.”[v] The observation is obvious to anyone who knows what it means for a country to seek foreign investment and open itself to world markets. But it is ironic. The whole point of the economic reforms Deng Xiaoping initiated in 1978 was to create wealth and increase China’s strength, or, to make it self-reliant and independent.
So, what did Clinton mean when, in his speech, Clinton also said the following of China? “… We welcome its emergence as a great nation.”[vi] The greater question is this: What is a “great nation”? What is a great power in this time of increasing market and political globalization? Is it a nuclear power? An economic power? An isolated, solitary power? An engaged, interdependent power? A bellicose bully on the global playground? A boisterous but peaceful democracy?
One political theorist has supplied this definition of a modern great power:
It is a state that easily ranks among the top five in the primary global structures – economic, military, knowledge and normative – and that enjoys relatively low sensitivity, vulnerability and security interdependence because of massive resource and skill differentials and relative economic self-sufficiency. A great power is a strong state with the ability to mobilize the country’s human and material resources in the service of its world view and policy objectives. There is also the normative-behavioral requirement of great power status: A great power is and becomes what a great power does.[vii]
Almost none of that applies to modern China. If China’s economic growth continues in the haphazard manner it has since Deng’s reforms began in 1978, the nation’s real power will continue to diminish vis-a-vis the world at large.
China craves power. More than 150 years ago, Imperial China’s presumed place in the sun was shaken, its prestige diminished to the point of humiliation, by defeat at the hands of the British in the Opium Wars. The latter half of the nineteenth century saw China picked apart by Western powers, with one European country after another demanding trade concessions and extraterritorial treaty ports that functioned as slivers of European sovereignty on China’s own soil.
The twentieth century brought more defeats, from abroad and from within, and more humiliation: the failed attempt by the Empress Dowager to use the Boxer Rebellion to expel foreigners in 1900, the overthrow of the Qing dynasty in 1911, the following civil war, invasion and occupation by Japan, and continued internal strife until Mao Zedong’s formation of the People’s Republic of China in 1949. Mao brought excesses that only start with the Communist Party’s Great Leap Forward and the Cultural Revolution. All combined to forge a nation desperate for control of its own destiny and renewed dominance on the world stage.[viii] To Western eyes, Deng’s logic appeared flawed, but his aim was clear:
"China must take its own road and build socialism with Chinese characteristics – that is the only way China can have a future. We must show foreigners that China’s political situation is stable. If our country were plunged into disorder and our nation reduced to a heap of loose sand, how could we ever prosper? The reason the imperialists were able to bully us in the past was precisely that we were a heap of loose sand."[ix]
China’s “own road,” Deng believed, was to be paved in gold. After nearly a quarter-century of reform, evidence of China’s economic growth abounds. The People’s Republic doubled per-capita output between 1977 and 1987. China has become the world’s second largest economy. Its gross domestic product is projected to surpass that of the United States by 2010.[x] The World Bank estimates that the collective domestic product of “Greater China,” including Taiwan, Hong Kong and Singapore, could surpass that of the United States in 2002.[xi] Real urban incomes doubled between 1989 and 2000. Increased prosperity in the 1990s afforded the Chinese computers, designer clothes and home electronics, just as growth in the 1980s provided them with refrigerators, television sets and other basics.[xii]
Such growth, however, comes at great cost, as China grows more reliant on the capitalist world and more dependent on the West. For example, China’s external debt was $120 billion and growing in 1997.[xiii] Put another way, that means outsiders held the note on $120 billion of China’s worth. Put another way, China had mortgaged $120 billion of itself to foreigners. From 1978 to 1995, as China’s foreign trade increased 13 times, from $21 billion to $280 billion, its external trade dependence also exploded from 10 percent to more than 56 percent.[xiv]
Some critics insist that China’s boon since 1978 is overrated in historical terms. In 1800, China accounted for one-third of the world’s manufacturing production, compared to 28 percent for Europe and 0.8 percent for the United States; by 1900, China’s share had plummeted to 6.2 percent, Europe’s had blossomed to 62 percent and the United States’ had grown to 23.6 percent. In 1997, China produced only 3.5 percent of the world’s gross production.[xv]
In any case, whatever the exact magnitude, outsiders, not the Chinese, have driving China’s economic growth since 1978.
Nor is China managing its own economic system. No one is. Market forces are – those nameless, faceless, mysterious forces of supply and demand that can be difficult to control even in an admitted capitalistic system, which China most certainly is not. In China, partial decentralization of business decision-making, continued internal barriers to market development, and limited deregulation of the state-controlled financial system have created a Communist-capitalist hybrid that, as it is, cannot maintain itself.
Economic growth is one thing. Economic development is another. China is experiencing rapid economic growth. It has seen little economic development. What China has are warped versions of the kind of institutional support and infrastructure necessary to maintain a stable economic system.[xvi] China’s economic development is further hobbled by the lack of rule of law, declining government revenues, corrupt business practices, growing unemployment and the drain of inefficient, resource-gobbling state-owned enterprises.[xvii] China’s economic growth, within such a confusing and weak economic arrangement, could evaporate amid unchecked chaos and waste.
Not that the Chinese leadership isn’t trying. Those with an eye to China’s long-term security realize that sustained economic success – not just more money flow and capital investment today – is necessary to produce the kind of orderly and well-off society they associate with the great Chinese societies of the past. They know that economic restoration and stability are necessary to return China to the global status it held before the modern era. They know that economic sustainability is necessary for China to truly have, and deserve, a place at the global table.[xviii]
That means more actual reform is needed, not just more foreign investment and openness. A 2000 RAND study conducted for the U.S. Air Force outlined these needed steps: more “price, tax, fiscal, banking and legal reforms; the further liberalization of foreign investment practices, trade, and currency convertibility; the reform or abandonment of many state-owned enterprises, and the implementation of more effective environmental protection measures.”[xix] Such reforms, while creating sustainability and stability in the long term, could create negatives for China in the short term, by reducing growth rates, making existing social problems worse, and challenging “deep-rooted bureaucratic and political interests,” according to the RAND study.[xx]
Nonetheless, economic reform continues in China, and the People’s Republic continues to shift its sovereignty to outside players. By dwelling on perceived threats by other nations, the Chinese Communist Party appears to miss the point that the real threat to its power comes from lesser players within those nations. For example, in a report in the Beijing News in November 1989, a response to global protests of human rights abuses six months earlier in Tienanmen Square, the writer concentrated on the interplay of legal codes of sovereign countries.[xxi] The protests “sparked great indignation and opposition from the Chinese people.”[xxii] Despite the great breadth of the thwarted democracy movement that culminated in Tienanmen Square, the Chinese people as a whole probably were insulted by the audacity of foreigners’ complaints. Underlying the Chinese people’s conception of themselves is a “sense of grievance toward the outside world” and a popular nationalism owing to the atrocities committed on them by outsiders.[xxiii]
Despite a burgeoning nationalism borne on increasing wealth and, despite the Communist Party’s unceasing efforts, increased awareness of how China is perceived by the outside world, China continues to weaken geo-politically, even as it grows stronger economically. Because of the side effects of growing foreign investment, China is experiencing tremendous increases in person-to-person contact between the Chinese and foreigners. It is increasingly involved in multilateral economic institutions, including its recent membership in the World Trade Organization. The People’s Republic is feeling accompanying pressure from foreign governments, which is sure to increase. China is feeling the influence of multinational corporations as well as transnational manufacturing networks that have production, distribution and marketing systems that cross national and territorial borders.[xxiv] In short, China’s growing economic interdependence is “creating a diplomatic context in which significant constraints are placed on Chinese behavior.”[xxv]
China’s newfound wealth leads to another irony: By growing economically stronger, while more geo-politically dependent, China is playing to the interests of the United States. Clinton said, before Jiang’s visit in 1997, “Of course, China will choose its own destiny”[xxvi] – a necessary bit of high-level rhetoric and diplomacy that was fitting for the imminent arrival of the Chinese president. Then Clinton added the U.S. function of the Sino-American equation: “Yet by working with China and expanding areas of cooperation, dealing forthrightly with our differences, we can advance fundamental American interests and values.”[xxvii] China’s increasing economic interdependence, Clinton said, “will draw China into the institutions and arrangements that are setting the ground rules for the twenty-first century – the security partnerships, the open trade agreements, the arms control regime, the multinational coalitions against terrorism, crime and drugs, the commitments to preserve the environment and to uphold human rights.”[xxviii]
All of this is more than Deng seemed to be bargaining for by starting and maintaining economic reform. However, the facts of China’s growing economic interdependence came from his own mouth in a speech to military officers in June 1989: “As far as some of our methods of work are concerned, such as the direction of investment and the direction of the funds to be used, I agree to strengthening our basic industries and agriculture. We need to increase investment in the basic industries for another ten to twenty years, including the industries of raw and processed materials, transportation, and energy.”[xxix] But this is the key: “We will do so even at the cost of going into debt.”[xxx] Debt is dependence – on creditors, investors and the foreign nations where they are domiciled – a reality that could be ameliorated, not exacerbated, by robust cooperation with those foreign nations.
Global collaboration could start at China’s doorstep. The Dalai Lama observed that for China to change its controlling attitude and antagonistic policy toward Tibet, Chinese leadership would have to look “forward instead of backward”[xxxi] – look to the present and evolving world order and away from China’s admittedly humiliating past. The same could be said for China’s attitude and policy toward the rest of the world. However, despite the obvious, China’s leaders continue to dwell in the past and fail to embrace the future they aim to create for the People’s Republic.
China is rife with contradictions, the chief one being its rhetorical adherence to Communism to its embryonic but unacknowledged capitalism masquerading as “socialism with Chinese characteristics.” However, it is failing to embrace the present contradiction of simultaneous growing economic strength and loss of unfettered sovereignty.
It all combines to make the implicit fear underlying China’s reluctance to reciprocally engage the world seem ludicrous. Chen Xitong, major of Beijing at the time of the Tiananmen Square melee in 1989, said afterward: “Some political forces in the West always attempt to make socialist countries, including China, give up the socialist road, eventually bring these countries under the rule of international monopoly capital, and put them on the course of capitalism. This is their long-term, fundamental strategy.”[xxxii]
How is this different than what is playing out in China now at China’s own hand? What Deng called “socialism with Chinese characteristics” sounds like capitalism except for a few seemingly misplaced words. In a speech on education, Deng declared:
"We all hope that everyone will do his best to make progress because, when all is said and done, progress depends on individual effort. Collective effort is the sum of all individual efforts. And individual effort will continue to differ even in communist society. … We must take these differences into account and do everything possible to enable each individual, in accordance with his particular circumstances, to keep pace with the general movement of society toward socialism and communism."[xxxiii]
One could substitute “socialism” and “communism” with words like “freedom” and “democratic” and it would make more sense. Yet Deng clung to the precepts of Mao Zedong. In an interview, he told a journalist:
"In the final analysis, the general principle for our economic development is still that formulated by Chairman Mao, that is, to rely mainly on our own efforts with external assistance subsidiary. No matter to what degree we open up to the outside world and admit foreign capital, its relative magnitude will be small and it can’t affect our socialist ownership of the means of production. Absorbing foreign capital and technology and even allowing foreigners to construct plants in China can only play a complementary role to our effort to develop the socialist productive forces."[xxxiv]
China, then, continues to seize what it can from its professed ideological enemies, gaining strength of one kind while frittering away the antidote to the simultaneous ebbing of its old-world sovereignty: a legitimate, earned role in the global debate, not just a seat at the table. True strength will come by embracing the mutual constraints of the growing economic interdependence of leading nations, not by simply, and reluctantly, accommodating itself to the new structure of shared power.[xxxv]
China is attempting to rely on “hard power,” the ability to reach its objectives through threats and rewards, in a developing system of “soft power,” the ability to reach objectives by coalition building among other players that want the same things.[xxxvi] The same could be said for the United States, which has its own struggles balancing traditional notions of sovereignty against the development of global economic, security and legal regimes.[xxxvii] But there is a critical difference. In the United States, there is unabashed academic and popular debate over the nature of national power. The Chinese Communist Party brooks no such discussion. For example, in China, university students, who help shape the future of truly great powers, remain blind to the mechanisms by which the party manipulates their education and worldview.[xxxviii]
By accepting the outside world’s wealth with one hand, and keeping it at bay with the other, China leaves itself out of balance with global markets and global political structures, therefore at a strategic disadvantage, “a beacon to no one – and, indeed, an ally to no one.”[xxxix] Whether China’s leaders choose deeper integration into the world order or opt to keep China’s involvement limited largely will determine whether the People’s Republic emerges as a full partner with leading nations.[xl] Leading experts agree that China’s economy will become the world’s largest in the twenty-first century.
Alongside economic strength is evidence of a strengthening culture: a growing ethnic awareness with an emphasis, rooted in Confucianism, on discipline, thrift, work and stress on the collectivity rather than the individual.[xli] Economic liberalization is expected to continue, if not pick up speed, this year after Hu Jintao becomes leader of the Communist Party and state president soon after. Hu, now leader of the Chinese Communist Party’s Central Party School, has shown innovation and willingness to pry open China’s vast bureaucracies, but has given no indication that China will ease up on political critics and other dissidents.[xlii]
In the meantime, with more than one-fifth of the world’s population, China, the oldest functioning organization in the world and arguably the most successful in history in terms of sheer endurance,[xliii] continues to grow relatively weaker, not stronger, in the present, because of the inflexibility of the Chinese Communist Party.
NOTES
[i] Peter F. Spiro, “The New Sovereigntists: American Exceptionalism and Its False Prophets,” in Foreign Affairs 79, no. 6 (November-December 2000), 9-15.
[ii] William Jefferson Clinton, “China and the National Interest,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 479-487. First presented as a presidential address at the Voice of America (October 1997).
[iii] David Shambaugh, “China’s Military: Real or Paper Tiger?” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 444. First published in The Washington Quarterly (spring 1996); also Shambaugh, “The United States and China: Cooperation or Confrontation?” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 470. First published in Current History (September 1997).
[iv] Clinton, 479.
[v] Ibid., 484.
[vi] Ibid., 487.
[vii] Samuel S. Kim, “China As a Great Power,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 450. First published in Current History (September 1997).
[viii] Jasper Becker, The Chinese (New York: The Free Press, 2000), 12, 13-114, 380-383.
[ix] Deng Xiaoping, “Taking a Clear-Cut Stand Against Bourgeois Liberalization,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 184-185. First published in Fundamental Issues in Present-Day China (1987).
[x] Kim, 450.
[xi] Orville Schell, Mandate of Heaven: The Legacy of Tiananmen Square and the Next Generation of China’s Leaders (New York: Touchstone, 1995), 333.
[xii] George Gilboy and Eric Heginbotham, “China’s Coming Transformation,” in Foreign Affairs 80, no. 4 (July-August 2001), 29.
[xiii] Kim, 450.
[xiv] Ibid., 450-451.
[xv] Gerald Segal, “Does China Matter?” in Foreign Affairs 78, no. 5 (September-October 1999), 25.
[xvi] Hang-Sheng Cheng, “A Midcourse Assessment of China’s Economic Reform,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 320. First published in the U.S. Congress Joint Economic Committee report China’s Economic Future: Challenges to U.S. Policy (1995).
[xvii] Bates Gill, “Limited Engagement: Fixing China Policy,” in Foreign Affairs 78, no. 4 (July-August 1999), 72.
[xviii] Michael D. Swaine and Ashley J. Tellis, Interpreting China’s Grand Strategy Past, Present and Future (Santa Monica, California: RAND Corp., 2000), 99.
[xix] Ibid.
[xx] Ibid., 99-100.
[xxi] Yi Ding, “Opposing Interferences in Other Countries’ Internal Affairs Through Human Rights,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 415-419. First published in the Beijing Review (November 1989).
[xxii] Ibid., 416.
[xxiii] Michel C. Oksenberg, Michael D. Swaine and Daniel C. Lynch, “The Chinese Future,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 520. First published by the RAND Center for Asia-Pacific Policy and the Pacific Council on International Policy (1998).
[xxiv] Thomas G. Moore and Dixia Yang, “ Empowered and Restrained: Chinese Foreign Policy in the Age of Economic Interdependence,” in The Making of Chinese Foreign and Security Policy in the Era of Reform 1978-2000, ed. David M. Lampton (Stanford, California: Stanford University Press, 2001), 193-198.
[xxv] Ibid., 191.
[xxvi] Clinton, 480.
[xxvii] Ibid., 480.
[xxviii] Ibid., 483.
[xxix] Deng Xiaoping, “Speech to Officers at the Corps Level and Above from the Martial Law Enforcement Troops in Beijing,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 102. First published in Population Trends (Xuanchuan Dongtai) (June 14, 1989); first published in translation in Chinese Law and Government (spring 1992).
[xxx] Ibid.
[xxxi] Robert Thurman, “The Dalai Lama on China, Hated and Optimism,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 492. First published in Mother Jones Magazine (November-December 1997).
[xxxii] Chen Xitong, “Report on Checking the Turmoil and Quelling the Counterrevolutionary Rebellion,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 80. First published by Xinhua News Agency (July 6, 1989).
[xxxiii] Deng Xiaoping, “Speech at the National Conference on Education,” in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 219. First published in The Selected Works of Deng Xiaoping (1975-1982), vol. 2 (1984).
[xxxiv] Deng Xiaoping, “Answers to the Italian Journalist Oriana Fallaci, in The China Reader: The Reform Era, ed. Orville Schell and David Shambaugh (New York: Vintage Books, 1999), 35. First published in The Selected Works of Deng Xiaoping (1975-1982), vol. 2 (1984).
[xxxv] Moore and Yang, 229.
[xxxvi] Robert O. Keohane and Joseph S. Nye Jr., “Power and Interdependence in the Information Age,” in Foreign Affairs 77, no. 5 (September-October 1998), 86. Keohane and Nye’s article on the effect of growing global information technology includes a discussion on definitions of national power in general.
[xxxvii] Spiro, 9-15.
[xxxviii] Peter Hessler, River Town: Two Years on the Yangtze (New York: HarperCollins, 2001), passim.
[xxxix] Segal, 33.
[xl] Oksenberg, Swaine and Lynch, 525.
[xli] Samuel P. Huntington, The Clash of Civilizations and the Remaking of World Order (New York: Simon & Schuster, 1996), 88, 107-109.
[xlii] Charles Hutzler, “New Guard: China’s Next Leaders Keep a Low Profile as They Push Reform,” Wall Street Journal, 3 January 2002, p. A1.
[xliii] Becker, 1.
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