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The world's next superpower
Taipei Times ^ | 07.23.03 | Jonathan Fenby

Posted on 07/23/2003 3:49:12 AM PDT by Enemy Of The State

The world's next superpower

China is growing with bewildering speed, but it is undergoing social upheavals on the way to becoming an economic superpower

By Jonathan Fenby
Wednesday, Jul 23, 2003,Page 9

Conventional wisdom insists that nations ruled by communist parties are regimented, unimaginative failures. Yet nowhere on earth is changing so fast and on such a scale as in China, where market economics and rampant consumerism meet the remnants of Maoism, throwing up paradoxes with profound implications for its 1.3 billion people -- and for the rest of the world.

It is not clear, however, if even the leadership in its heavily guarded Beijing compound knows exactly what is going on in the 9.5 million km2 between the booming development zones of the coast and the huge deserts and mountains on the doorstep of Central Asia.

China is racing to meet its future, confident it will grow into a superpower within a couple of decades, with all that implies for the West and for its Asian neighbors. Yet it remains stunted under the authoritarian hand of a Communist Party for which the retention of power has become an end in itself.

It is the main motor of international expansion, but it contains an uncomfortable expanse of shady zones and, owing to its size and diversity, is very hard to control.

China's gleaming airports put Heathrow to shame. The size of construction projects have led to the joke about the crane being the national bird.

The tycoon class has expanded so substantially that the American business magazine Forbes produces an annual list of China's 100 richest. Car production is rising by millions of vehicles a year.

There are about 300 million mobile-phone users. Shopping malls are crammed with designer clothes, real and counterfeit. Top tickets for Real Madrid's forthcoming game against a Chinese team are priced at ?125 (US$200) each.

Figures issued last week showed that, despite a dip last spring because of the SARS epidemic, China's economic growth should still hit the 7 percent target for the year, with industrial production up by 16 percent in the first six months. Though there are doubts about the precision of official figures, this rate is even higher in the special economic development zones where big, modern factories ally automation with low-cost labour

Having started by making cheap goods, Chinese firms are moving on to more profitable ones as their country's membership of the WTO guarantees them access to world markets.

From toys to computer chips, just about everything seems to come from China these days. Despite SARS, exports in the first half of this year bounded by 34 percent to the equivalent of ?120 billion (US$192 billion). Foreign investment, bringing money, technology and expertise, rises by the year as Western and Japanese executives put the country at the top of their plans.

Made in China

A recent article by an American economist was headlined: "What happens when everything is made in China?"

That raises concern about foreign jobs being exported to China -- as in the decision by Waterford Wedgwood crystal to close British factories and shift production to China for lower costs. But, while international pressure on Beijing to revalue its currency upwards grows, economic expansion is making the mainland a major importer of raw materials, machinery and factory components. Its purchases of crude oil rose by a third in the first half of this year and it could be the salvation of the world steel industry.

On his drive from the airport, British Prime Minister Tony Blair would have seen Beijing engaged in a huge building program running up to its staging of the 2008 Olympics. In Shanghai, a new business district has gone up on marshland and gleaming blocks of flats line the eight-lane roads into the city. A German magnetic-levitation train whisks passengers in from Shanghai's new Pudong airport at 402kph, and a Japanese bullet train is likely to link the city to Beijing. Shenzhen, a pioneering economic development zone across the border from Hong Kong, has grown from a small town into a city of millions attracted by work in its fast-growing factories. Chongqing, capital of the biggest province, Sichuan, is being transformed from a shabby city notorious for its nasty climate into what aims to be a model of growth in a special zone containing 30 million people.

The Three Gorges dam, with its enormous hydro-electric potential, has gone into operation, and there are plans for a mammoth waterway across the country to check the recurrent pattern of droughts and floods. Visit city centers from the once-isolated Kunming in the lush south-west to Manchuria on the border with Russia, and you find the same lines of glass and concrete offices, shops and flats on proud display as signs of modernity.

A middle class is emerging and, this being China, it is numbered in hundreds of millions. Artists and writers challenge tradition in a major way. The "iron rice bowl" of cradle-to-grave welfare promised by Mao Zedong is being smashed. Beijing's development is demolishing the alleyway hutong houses that were a characteristic of the capital for eight centuries.

Modern life is eating away at the traditional family: 14 percent of households now consist of either a single adult or a childless couple who both work. Older people are deeply worried about the future, as their children save to pay for health care and private education. At a lunch in Beijing, the Education Minister spoke to me enthusiastically about the model set by Warwick University for attracting paying students.

A lot of dark areas lie behind the bright lights on the Yangtze cliffs of Chongqing and the Shanghai Bund, where the huge Hong Kong and Shanghai Bank building from before the World War II has been restored as the headquarters of a local development organization.

Income inequalities are enormous. Factory modernization has boosted unemployment, and there are periodic demonstrations by workers who have not been paid. Outside the city centers and modern apartment blocks, China's urban areas are dirty, unhealthy and overcrowded. Workers newly arrived from the country sleep out around train and bus stations, and drive down the already tiny wages paid for manual labor on all those building sites.

Health and safety

Low health and safety standards are highlighted by repeated industrial accidents and the recent spread of SARS. Pollution and environmental destruction are high. Floods kill an average of nearly 4,000 people a year.

The government has launched a series of high-profile crackdowns on major offenders, but corruption is embedded. Badly paid officials exploit their position -- in one city, police stopped motorists to tell them their cars contravened cleanliness regulations: they had a friend standing by to wash vehicles for a small fee.

Much of rural China, which contains most of the country's people, is left behind. Depending on the criteria adopted, upwards of 100 million Chinese live below the absolute poverty line. Though cities are linked by a fast-expanding motorway network, rural communications remain poor. Farmers stage periodic protests about local officials levying "special taxes" for their own enrichment.

Many villages are age-old huddles of mud or adobe huts without sanitation. One villager joked that, if the government really wanted to reduce the number of children, it should lay on electricity so people could watch television at night rather than having sex.

Foreign financial houses have started trading in Chinese shares, but the stock market is run largely for speculation and to direct capital to well-connected firms. The banking system is shot through with huge bad debts as a result of channelling money to politically favored enterprises rather than those which could best use the cash.

The reform of state enterprises seems to be taking longer than expected. Corporate accounts often bear little relation to reality.

An inquiry found recently that most state firms cooked the books. No wonder some commentators see as inevitable the scenario outlined in a recent book called The Coming Collapse of China.

Some of the highest-flying businessmen have crashed to Earth -- the second-ranking person on the Forbes list for 2001 has just been jailed for 18 years for fraud. Huge smuggling rings involving local dignitaries have been uncovered. Municipal officials in Manchuria's main city were found to have been in cahoots with the local mafia.

This is partly the result of such rapid development in a country with no independent legal system, where favors that bring the chance to make a fortune are bought and sold. But the way China is developing poses a distinct problem for the organization that sits obstinately on top of that system and has used its ability to hand out favors and punishment, as the glue that holds it together.

As an old Maoist once said, if the Communist Party does not get rid of corruption, it is done for; but, if does get rid of corruption, it is doomed anyway. Since the move to the market launched by the patriarch Deng Xiaoping (鄧小平) two decades ago, individual liberty has grown enormously. Walking in the streets of Chinese cities, you do not feel the oppression that characterized eastern Europe under communism.

Taxi drivers joke about the leadership, and only the politically ambitious pay much attention to its ideological forays.

Basic gamble

That is, in its way, is what the leadership is after. Its basic gamble is that growing wealth will provide a legitimacy to replace the tenets of Maoism. After the first, second and third ways of politics, welcome to China's fourth way where the prospect of getting rich means that politics, in the conventional Western sense, can be pigeonholed for so long as the economy roars ahead.

So, though there have been some electoral experiments at local level,democracy is far away, as it has been throughout China's history. For the new leadership of President Hu Jintao, as for his predecessor, Jiang Zemin stability is paramount -- the Cultural Revolution is held up as a terrible example of what can happen when things get out of hand.

Crossing the political line is perilous. Dissidents are out of the headlines in the West, but they are still persecuted relentlessly. Members of the deep-breathing Falun Gong exercise group are arrested as a security threat. Tibet remains tightly policed, and the war on terrorism is a convenient pretext for cracking down on the mainly Muslim population of the vast western territory of Xinjiang.

China has put on its best face for the world, particularly since it realized the benefits to be gained from Sept. 11. Blair and the other leaders beating a path to Beijing should realize, however, that, useful as foreigners are, China has never set much store by them. The round-eyes can provide technology and money, but the country will go its own path, making temporary alliances that suit it while increasingly using its clout as it chooses, in its bid to displace Japan as Asia's economic and political motor.

To do that, the leaders Blair met this week have to maintain the breakneck momentum of "socialism with Chinese characteristics" to demonstrate that "It's the economy, stupid."

Jonathan Fenby edited the South China Morning Post in Hong Kong from 1995 to 1999 and is the author of Dealing with the Dragon: A Year in the new Hong Kong.

TOPICS: Business/Economy; Crime/Corruption; Culture/Society; Editorial; Foreign Affairs; Front Page News; Government; News/Current Events; Philosophy
KEYWORDS: china; chinastuff; next; superpower
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To: logic
Plse don't forget History, ie that China war totally feudal and only began to modernize in 1911, but even then this modernization process were disruped again and again and again, first by Japan attacking in 1938, (WW2 1938-1945), the Civil war between the Communist and the Nationalist 1945-1949, the Great-leap foward Madness of Mao, the Cultural revolution 1965-1978. And overall , China did not invent anything much from 1922-1978, is because they were too busy with either fighting or politicing. also they DID NOT spend any money resorces on R & D. R & D cost money

But plse observe that once they began the Reform nd Open-Door policy in 1978, they began to modernizes pretty fast---too fast for comfort
101 posted on 07/23/2003 9:18:01 AM PDT by The Pheonix
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To: Jeff Head
China ping.
102 posted on 07/23/2003 9:22:03 AM PDT by Travis McGee (----- -----)
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To: Enemy Of The State
"Try not paying your taxes and see what happens!"

Heck, just try re-roofing your house without (Government permission) a permit....

103 posted on 07/23/2003 9:24:38 AM PDT by logic ("all that is required for evil to triumph, is for good men to do nothing")
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To: Quix
<< Your declarations seem overwrought to me . . . >>

That's a nice way to put it. Droll! That was my intent.

The Peter-Principled I was referring to, though, are those in America's corporations not in China's. My wife and half of my famaily are of Chinese ethnicity and, as the experience of Once-Free-British Hong Kong demonstrates and I can vouch, outside of Peking there aren't too many idiots among the Chinese People.

But our Peter Principled are of the execrable variety that will sell Peking's psychopaths the rope with which they would hang us -- and weapons with which those mandarin-wannabe thieves and liars and mass-murderers would, if they could, destroy Our Nation and with US, Human Civilization.

And Chase and BoA and CitiBank et al, who will bump our credit card interest rates a few points to pay for it all -- and the institutionalized fraud misnamed the "ExIm Bank" will send the bill for the balance to Treasury.
104 posted on 07/23/2003 9:24:49 AM PDT by Brian Allen ( Rebellion to tyrants is obedience to God - Thomas Jefferson)
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To: Brian Allen



in what you say.

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To: logic

AT least seemingly.
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To: Enemy Of The State
You're probably right about the disappearances.

They must have video coverage of every public nook and crany and vista.

And they are ruthless, relentless, persistent and patient about revenge.
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To: the
"Siberia is supposed to be vast and rich in resources..."

It is, and the Chinese will be demanding 'access' soon enough.

They may also wish to 'revisit' certain old border-adjusting treaties with Russia.
108 posted on 07/23/2003 9:32:03 AM PDT by headsonpikes
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To: The Pheonix
But in view of the fact that the US has enough nuclear might (superiority) to vaporize the whole of China, this alone will make the Chinese think twice before they even dare to dream of world conquest

It doesn't have to be an out-right military conquest. They can be subtle and long-range about it, with Chinese investors coming in and opening companies that would hire Filipinos to do various things. With that would come pressure to allow more Chinese "executives" and "technicians" in, along with some bribes to officials to make it easier. At no point would China need to be openly aggressive.

Then if "civil unrest" threatened the safety of Chinese nationals, they could "help".

Yes the US has nukes. So does China. Will the US be willing to trade the major cities on our west coast to stop China taking the Phillipeans? We may find ourselves in that position some day. And the Chinese can wait until we have a prez that would not be interested in the trade

109 posted on 07/23/2003 9:32:57 AM PDT by SauronOfMordor (Java/C++/Unix/Web Developer === will work for food)
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To: Always Right
Aren't all of the tycoons communist party elite?
110 posted on 07/23/2003 9:33:46 AM PDT by Constitutional Patriot
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To: Travis McGee
Thanks bro. Harpseal pinged me at 28, gillman spoke to me at 67 and I responded at 77.

The evidence and actions regarding the PRC's intent and plans are obvious for all to see who want to open their eyes. I pray more will open their eyes.

It was with that hope that I embarked on the entire Dragon's Fury Series project.

111 posted on 07/23/2003 9:34:55 AM PDT by Jeff Head
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To: SauronOfMordor

You brought out good , valid points

That's why it is vital for the US to take advanstage of her wealth to spend more on R&D in order to be always ahead of China.

it is thru R&D that the US could maintain her miltary superiority, in order to keep China in check

Having true meritocracy in American universities is important for the US to be the best in the IT and Scientific field
112 posted on 07/23/2003 9:38:11 AM PDT by The Pheonix
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To: wbill
What do you think a population gender imbalance of 60-40 men to women (or worse) would be like?

According to CIA World Factbook, it's more like 109 boys for every 100 girls in the 0-14 generation, so it's not that bad

113 posted on 07/23/2003 9:38:50 AM PDT by SauronOfMordor (Java/C++/Unix/Web Developer === will work for food)
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To: The Pheonix
"But in view of the fact that the US has enough nuclear might (superiority) to vaporize the whole of China, this alone will make the Chinese think twice before they even dare to dream of world conquest"

I don't think the MAD idea works nearly as well with them as it did with Russia. We always enjoyed a pretty sizeable technological advantage over Russia, we either are loosing that advantage with China or we have already lost it thanks to the 'Felon in Chief.' They know we would never launch unless we were backed to a wall or recieved a first strike. I think they would attack in such a way that we look like we have hope until they gain enough control to prevent us from launching, then they would show who really was in control.

Not necesarily factual, but it's my take on the situation. : )

114 posted on 07/23/2003 9:40:31 AM PDT by logic ("all that is required for evil to triumph, is for good men to do nothing")
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To: sergeantdave
The Chinese Supermen, who have created all the many inventions we enjoy today, including...uh, ummmm, uh...

The Chinese had moveable type in 1045 A.D. They were making paper perhaps has early as 5 A.D., but certainly by 105 A.D. They invented Gunpowder in the eighth century. They were using magnetic compasses for marine navigation by the 11th century.

Say what you will about the Chinese, but they are not historically an ignorant or uninventive people.

115 posted on 07/23/2003 9:43:25 AM PDT by RogueIsland
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To: Jeff Head
I should have figured! Nothing like having a network of pingers looking out for you!
116 posted on 07/23/2003 9:43:59 AM PDT by Travis McGee (----- -----)
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To: Enemy Of The State
You will first have to translate that into English for me. I dont speak any German. :)

Translates in English as "Night and Fog". References Nazi Germany, where those that got uppity got quietly "disappeared". Since doing stuff like Tianamen Square is too public, it's better (for the guys at the top) to just "disappear" dissidents quietly, so the regime doesn't get the PR hit.

117 posted on 07/23/2003 9:44:15 AM PDT by adx (Will produce tag lines for beer)
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To: Quix
"I think now, they'd bring out the water canon and remove people with a minimum of deaths if at all possible. "

Don't you mean: I think now, they'd bring out the water canon and remove people with a minimum of PUBLIC deaths if at all possible. Then kill them later....

Not to put words in your mouth or anything..... : )

118 posted on 07/23/2003 9:44:23 AM PDT by logic ("all that is required for evil to triumph, is for good men to do nothing")
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To: The Pheonix
That's why it is vital for the US to take advanstage of her wealth to spend more on R&D in order to be always ahead of China.

Currently, the bulk of US R&D will be done by Chinese and Indian grad students in US universities -- who will return with those skills to their native countries

The most valuable intellectual wealth of a country is not in its patent files or published scientific papers -- it is in the skulls of the people who are doing the work. It's hard to transfer skill purely by books and papers -- sometimes you need to work alongside people who know what their doing and absorb it by osmosis.

The way the US lost its immense tech lead was by letting in so many foreign tech students, who then returned to their home countries with knowledge that US companies had spent large fortunes to figure out.

119 posted on 07/23/2003 9:49:26 AM PDT by SauronOfMordor (Java/C++/Unix/Web Developer === will work for food)
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To: SauronOfMordor

Re you post # 119

Too true
120 posted on 07/23/2003 9:51:28 AM PDT by The Pheonix
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