China: Two Current Perspectives

Over the last quarter century China has raised hundreds of millions of its citizens from poverty or near-poverty to middle class status. The Communist Party of China (CPC) rewarded its citizens’ loyalty with a dramatic rise in household consumption. Increased quality and quantity of food, housing, education, health care, cars, phones, and infrastructure have moved Chinese people toward living standards enjoyed by some of the world’s most developed economies. The CPC expects China to increase its power and international role.

China’s future among world powers is the subject of books published in 2016 by Gideon Rachman, a British journalist and foreign affairs columnist for the Financial Times, and Minxin Pei, a professor of government at Claremont McKenna College and an expert on Chinese governance.

Rachman’s book, Easternisation: War and Peace in the Asian Century, observes that three of the world’s four largest economies are Asian – China, Japan, and India. He cites a CIA report saying, “By 2030 Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending and technological investment.” Rachman cites a long list of countries with increasing economic ties with China. In its own back yard, China has made extensive investment in its Southeast Asia neighbors – Singapore, Pakistan, Myanmar, Indonesia, Cambodia, and Thailand. China has invested in infrastructure and manufacturing in Africa.

China is now the European Union’s second largest trading partner behind the United States. Germany and Britain turn to China for trade and are less concerned about U.S.-China power confrontations. Hungary’s Prime Minister Viktor Orban praised China’s authoritarian government for its decisiveness and ability to get things done in comparison to the EU, of which Hungary is a member. Rachman attributes a perceived decline in United States supremacy and its pullback in some involvements as cause for Middle East countries’ increased trade with China. As examples, he cites Saudi Arabia’s sale of oil to China and China’s trade with Israel.

In summary, Rachman notes, “It is economic might that allows nations to generate military, diplomatic and technological resources that translate into international political power. But, over the past fifty years, the West’s dominance of the global economy has steadily eroded.”

Minxin Pei’s book, China’s Crony Capitalism: The Dynamics of Regime Decay, takes a decidedly contrary view. He estimates that by 2030 the CPC autocratic regime will have lost power because of the decay of their ideology and the corruption of the ruling elites. He believes that China’s efforts to modernize have created a kleptocracy with pervasive corruption, income inequality, and social tension. He attributes the current situation to a combination of decentralized decision-making and lack of clarity regarding property ownership. “By forming dense networks of connections with private businessmen, officials can generate lucrative profits by …turning the public authority entrusted to them into instruments to seek private gain.” So as not to endanger the political careers of local and regional officials, “Family members of these officials, but not the officials themselves, are in the private sector.”

Control of land and state-owned enterprises provide officials with abundant opportunities for profit, even while ignoring pronouncements from the CPC. Officials at all levels of government are evaluated on the revenue they generate. So while China’s President Xi Jinping may address the need to hold down soaring house prices, local governments welcome the market’s surge, as land sales represent a big source of their income. Pei’s review of a 2013 report by China’s chief prosecutor revealed over two hundred thousand individuals had been involved in cases of official corruption over the previous five years. He foresees only two options for the CPC to maintain its power – repression and nationalism, and cites a history of autocratic regimes to support his conclusion that the CPC will not survive and China will change drastically.

In fairness to Rachman, he also acknowledges the fragility of China’s domestic political system. Furthermore, he does not foresee China’s currency becoming a global currency unless the CPC relinquishes control over the economy. And he believes that, “In the absence of a politically independent police and court system, few powerful Chinese people can be confident that they are not at risk of being swept up in the wave of arrests.” Yet he expects China to play a prominent role in the future “Easternized” world.

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