[A-List] Re: [csgboston] China's success inspires envy and awe in Third World

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

The case of China provides important evidence that  the claim by US
ideologues, both liberal and conservative, that Western democracy  is a
prerequisite for economic prosperity is not gospel truth.  The CPC's
role as the vanguard political party leading the revitalization of China
is in line with traditional Chinese political culture.  The Dictatorship
of the Proletariat is a political notion parallel with the Mandate of
Heaven, which is political responsiveness to the needs and the will of
the people (Baixing - Hundred surnames).  The moral mandate is based on
the well being of the people, not the sanctity of  the market.

Shanghai of course is not China any more than New York is the US.  The
bubble economy of Shanghai and its distorted priorities are however not
critical to the success of China's economic development.  For one thing,
much of the speculative investment in real estate is done by foreign
capital.  Aside from the cyclical problem of disjointed cash flow, even
if developers should fail financially, the hard assets will benefit the
economy in the long run, as New York and London have repeatedly
demonstrated.  Buildings that fell into financial distress in a down
cycle, after bankruptcy of the original developers, actually become
healthy assets in subsequent up cycles, due to long term inflation.
What's more, Shanghai is a mere drop in the Chinese economic bucket.
The Chinese economy is large enough to prop up Shanghai regardless of
the market fundamentals of development economics.  This is why foreign
capital pours into shanghai real estate, not because foreign capital
expects the emergence of a free market, but because foreign investors
know that China has the will and the power to make sure Shanghai will
not fail financially.  That power comes from China's central control of
the economy, by keeping market fundamentalism at bay, not from China
turning toward free makets.

For the past few years, there was a danger that Deng's notion of letting
some people get rich first in order to bring up the rest of the
population within a short time was being forgotten, or overwhelmed by
corruption and greed.  The signs now are that the CPC is back on track,
and requiring the prosperous regions to subsidize the development of the
interior regions and the financially well-off segment of the urban
population to subsidize the improvement of peasant income.  The current
emphasis on green economics, poverty reduction, full employment,
balanced development  etc. are components of the Mandate of Heaven,
which justifies the CPC claim to leadership.  The CPC will allow the
market to operate unrestrained if it supports these developmental
goals.  If the market resists these goals, the market will be regulated
or reduced to subordinate roles.

The effectiveness of the Chinese government in implementing its policy
comes from the mass movement political tradition that had been imbedded
in Chinese political culture in the Great Leap Forward and the Cultural
Revolution.  With lessons learned from these historical, experimental
movements,  the programmatic flaws have now been corrected, and the
political/cultural infrastructure developed during these historical
events is preserved to yield visible, positive results.

China is successful, not because it tolerates a measure of market
economy, but because it applies the political tradition of mass movement
as developed in the GLF and the CR toward a new development program,
this time without the obstacle of US-led, global embargo.

Resistance to Western democracy is the key factor of China's success.
China has enhanced internal party democracy within the CPC, and defined
the role of the CPC as the leader, not dictator of a multi-party
government.  The CPC absorbs and incorporates the diverse views of the
People's Political Consultative Conference, an important branch of
government incorporating noncommunists and giving them official poltical
and governmental voice, where multi-party politics is given full play,
an institution with no equivalent, the nearest being the British House
of Lord.   China's success comes from its philosophy that the market
exists to serve the nation, rather than the nation exists to serve the
market.

The rest of the Third World needs to learn this lesson from China.


Henry C.K. Liu


Al Sargis wrote:

> Financial Times (UK)
> 5/27/04
>
>
>
> > China's success inspires envy and awe in 3rd World
> >
> > Muyingo Steuem has been dazzled by Shanghai in the
> > three days he has spent in China's commercial
> > capital at the World Bank conference on poverty
> > alleviation this week .
> >
> > "China is doing a wonderful job," says Mr Steuem, a
> > government adviser in Uganda, gazing at the
> > skyscrapers surrounding the conference site. "I was
> > told 10 years ago this was a wetland, but now it may
> > boast what Manhattan has achieved in 100 years."
> >
> > Leaving aside the fact that Shanghai is barely
> > representative of China and that many skyscrapers
> > have struggled to find tenants, Mr Steuem's
> > admiration is mirrored among many of the conference
> > delegates.
> >
> > "In developing countries, China is regarded with a
> > mixture of envy, admiration and awe," says Mark
> > Malloch Brown, the head of the UN Development
> > Programme.
> >
> > According to a World Bank release, China has reduced
> > the number of its people living in poverty from 490m
> > in 1981 to 88m today.
> >
> > While tens of thousands of Chinese leave the country
> > every year to study in the west, China is developing
> > a form of what diplomatic analysts call "soft power"
> > - admired in the developing world as an economic
> > success which has resisted pressure for political
> > reform.
> >
> > China attracts respect, too, because it has grown
> > into a powerful trading nation while retaining a
> > foreign policy largely at a distance from the US and
> > the western alliance.
> >
> > In rhetoric reminiscent of the old Non-Aligned
> > Movement, President Luiz Inacio Lula de Silva of
> > Brazil has embraced China as a potential global
> > political partner, saying this week th at the two
> > countries should align with Russia as a
> > counterweight to the US and Europe.
> >
> > "We dream that in the near future it will be a G5,
> > which will be with Russia and China (along with
> > India, Brazil and South Africa)," Mr Lula de Silva
> > said.
> >
> > But China and Brazil's demand for freer trade,
> > especially in farm goods, sets them apart from the
> > old Non-Aligned Movement and its sense of
> > post-colonial entitlement.
> >
> > Homi Kharas, chief economist of the World Bank's
> > poverty reduction unit, says one of the secrets of
> > China's success in alleviating poverty in the two
> > decades since it began dismantli ng the command
> > economy stemmed from liberalising the agricultural
> > sector.
> >
> > "Cheap food prices are the single most important
> > driver of poverty reduction," says Mr Kharas.
> >
> > This is counter-intuitive for many, because China's
> > farmers are the poorest group in a poor country, a
> > status that in many developing countries prompts
> > government to shelter them beh ind protective
> > barriers.
> >
> > India, for example, has long sheltered its farm
> > sector.
> >
> > But China's unwillingness to provide much protection
> > for its farmers has resulted in millions of them
> > leaving the land to supplement their families'
> > income through employment in the cities. In some
> > provinces, farm households earn more income through
> > remittances from family members working in cities
> > than from working the land, which offers meagre
> > returns.
> >
> > Many delegates' admiration for China this week,
> > however, focused less on free trade and farms than
> > on the effectiveness of the Beijing government in
> > enforcing its policies throu ghout the vast country.
> >
> > "What is striking for me is their ability to
> > synchronise a message about poverty reduction
> > programmes right through the entire government
> > structure," says Edak Iwuchukwu, a developme nt
> > officer in Calabar, Nigeria
> >
> > Uganda's Mr Steuem reflects this view, saying: "We
> > African countries have ideas, but most of the
> > projects are left hanging.
> >
> > "The African governments should learn from China the
> > ability of implementation," he says.
> >
> > Mr Malloch Brown says he was struck during a visit
> > he paid to China in the 1980s how the message of the
> > central authorities filtered effectively down to the
> > grassroots.
> >
> > "I can remember being told something by a
> > policymaker in Beijing and then going out to the
> > countryside and have the local party official repeat
> > the same policy to me."
> >
> > Mr Kharas puts less emphasis on Beijing, saying he
> > believes "the China development story is really one
> > of local governments and local entrepreneurs in
> > action".
> >
> > Many of the same delegates who applaud China's
> > achievement of more than two decades of
> > uninterrupted economic growth have been less
> > enthusiastic about the overarching sense of contro l
> > and policing they have sensed in Shanghai.
> >
> > Ms Iwuchukwu from Nigeria says the Chinese ought to
> > be more open and "relax".
> >
> > "I think they have a system which is too closed,"
> > she says, "to make the kind of transition they
> > want."