Is This China’s Century?

This month marks the end of the first quarter-century of China’s reform era. During the groundbreaking Third Plenum of the 11th Party Congress in 1978, Deng Xiaoping launched his agenda of change, which has restructured the People’s Republic beyond recognition. Once painted in pale shades, China today is dynamic, sassy, exciting, and, yes, colorful. We no longer have to peer inside; we can travel there, talk to the Chinese, share their lives. We can even live there if we care to. The country is more open than it has been in five decades.

As we learn more about the People’s Republic, we understand less. Once, there was a monolithic system, and even though we did not know details, we grasped the essential nature of the country Mao Zedong led. Today, however, there are many Chinas for us to see. Because it is so large and diverse, it is hard to figure out. We can view a sliver and know that portion well, but it is often hard to tell whether we comprehend the whole. Yet on this milestone anniversary, it’s important to measure just how far the Chinese have progressed-and where they are going.

One thing we do know: the People’s Republic will profoundly affect the shape of tomorrow. Today it has arrived, perhaps barged, onto the world scene, an economic powerhouse and diplomatic heavyweight. In just a couple of years inside the World Trade Organization, for instance, China has affected the balance of power among nations involved in commerce. And it has skillfully used its resources to make its influence felt in most other multilateral institutions. With a message that appeals to much of the world, Beijing is becoming a geopolitical force.

With strength comes influence on the great issues of our day. We in America would like to think that free markets and open political systems are the only way to go, but elites in Asia and elsewhere are not so sure. The apparent economic success of the People’s Republic tells many that a state-led economy coupled to an authoritarian political system may be the correct formula for national strength. Now much of Asia, even traditional rival India, looks to China as a model for development and growth, and soon Beijing’s formula could be copied elsewhere. As traditional alliances come undone and new ones form, there could be a decidedly China-centric look to the developing world. Not just Asians tell us this is “China’s Century,” which means that it is not ours.

The emergence of great powers can always be a time of geopolitical discomfort. America and the West have, for reasons both altruistic and selfish, tried to ease China’s transition from Marxist economics and Maoist political institutions. We have engaged Beijing’s leaders, with only a short interruption after the Tiananmen massacre, and have encouraged China to integrate itself into global institutions and world commerce. Ronald Reagan delegitimized the Soviet Union, but we have taken the opposite tack with the other large communist state, supporting the People’s Republic at almost every turn. Our working assumption is that the Chinese people want a market economy and will eventually develop representative government. This belief-perhaps faith is a better word-was the primary argument for opening the door to China’s role in the W.T.O.

If we adopt a broad perspective, we know that the ordinary citizens of this most extraordinary country will succeed in remaking their society for the better. In the short run, however, there is no certainty as to what will happen. It could take decades, perhaps even centuries, for the Chinese people to get it right. In the meantime, we could be creating another Soviet Union, one more dangerous than the first. A large and economically-powerful dictatorial state-with or without the Chinese Communist Party-could be a foe that we’re not able to tame.

We had better figure out this one fast, because, for good or ill, the People’s Republic is on a tear, racing up the league tables in all sorts of categories. Let’s look at the most important one: sometime in the first half of this century, the analysts say, China, not America, will preside over the world’s largest economy.

Washington has just realized that Beijing is becoming more than just a nuisance. Last year the People’s Republic ran up a trade surplus of U.S.$103.2 billion against the United States, and this year the figure will be about U.S.$20 billion worse, at least worse from the American perspective. Then there are complaints that Beijing has not kept the specific promises it made to join the World Trade Organization and has done almost nothing to stop the subsidization of its state-owned enterprises. And what should we make of China’s pledges-all of them-to eliminate piracy? If that were not enough, Beijing has been pegging its currency, which gives the People’s Republic an important trade advantage and, worse, triggers irresponsible currency behavior in other nations.

“Since China’s population is more than those of North America and Europe combined, the rapid economic development of its economy was bound to present challenges to the global economic order,” writes Stephen Lewis in a commentary carried by Dow Jones. “The specific trading practices that China is pursuing add to the difficulties of integration.”

That integration is not complete, however, and we have the ability at this particular moment to influence how the People’s Republic will evolve. China runs an enormous trade deficit with the rest of the world (U.S.$67.2 billion in 2002) and a monumental surplus against us. That means a good portion of the Chinese economy-and its most vibrant sector-depends on continued access to our market. We can, therefore, restrict access to the WTO’s biggest bad boy if we so choose.

In a time of Beijing’s regrettable trade behavior virtually no one talks about the power we have to remake Chinese society for the better. This was, after all, the rationale expressed a few years ago for opening the WTO’s doors to the People’s Republic. Today, we can demand the immediate compliance with trade promises, the end of piracy, and a cut-off of subsidies to state enterprises. Or we can, by ourselves or perhaps with allies, use our leverage to open up China’s political system to undermine the authoritarian state. Beijing’s leaders will not leave the scene willingly, but we have 103.2 billion ways to effect change.

So should we try to facilitate change now? Beijing’s technocrats have created perhaps insurmountable problems for themselves in order to prolong economic growth by eliminating the down portions of the economic cycle. They have, for instance, created the largest collection of non-performing bank loans in the world and accumulated large piles of national and local debt. They have neglected social welfare obligations, and they have permitted, and even participated in, the destruction of their nation’s environment, perhaps the most degraded on the planet at this time. They have not provided education, health care, and other essential social services for hundreds of millions of Chinese. We have a choice: we can use our leverage now when Communist Party leaders are under stress and need our help-or we can act later when they might not.

“It has become almost a cliche to talk about the fact that China is changing rapidly, and therefore doesn’t require the kind of pressure that was needed with the Soviet Union,” writes Robert L. Bernstein, the founding chairman of Human Rights Watch. It is true that there has been great change in China since the nation joined the WTO. Many observers would like to think that reform-minded officials are going about their business of reforming the country.

Yet that perception is a mistake. Most of the change we see is the result of the Chinese people pushing their government out of the way. The cadres in Beijing have moved little, if at all, on their own accord recently. Some months there are advances in human rights and democracy, and other months there is retreat. What we have not seen is the current leaders committing themselves to democracy in the real sense of the word. Until we do, we are dealing with an unreformed, and essentially unreformable, political system that creates problems for its own people and for most everyone else.

We can buy shoes, and toys, and garments from the People’s Republic, or we can buy them from democratic Latin America. If we choose to buy them from the world’s largest one-party state, we should do what we can to steer that nation in the right direction. That’s the least that we as a nation can do in light of Washington’s new democracy strategy enunciated by President Bush last month.

We owe that much to the people of China-and to ourselves.

Gordon G. Chang is the author of The Coming Collapse of China, published by Random House.