Thursday, July 14, 2011

Why is China afraid of the Dalai Lama? - Fred Hiatt (WP)

Why is China afraid of the Dalai Lama?
By Fred Hiatt
The Washington Post, Thursday, July 14, 9:14 PM

“If China overnight adopted a democratic system, I might have some reservations.. . . If central authority collapsed, there could be a chaotic situation, and that’s in no one’s interest.”

The words of caution might have come from a Communist Party leader, once again lecturing the West not to push too hard on human rights. But, no; this was the party’s nemesis, the Dalai Lama, the exiled leader of Tibet, explaining in an interview Thursday why he favors “gradual change.”

Listening to his moderate, sensible advocacy of step-by-step democratization, it was impossible not to marvel at the fear that leads Beijing to view this 76-year-old Buddhist leader as such a mortal threat — not to mention the confusion he seems to cause within the Obama administration, which once again was declining to answer the seemingly simple question of whether the president and the Dalai Lama would meet during the Dalai Lama’s 10-day visit to Washington.

We talked in a room in the bowels of Verizon Center. Above us, thousands of Buddhists from around the world were making their way into the stands for a religious teaching. But before the day’s lesson would begin, their spiritual leader, alternately serious and jolly, had some political thoughts to impart.

He chortled as he pointed to Lobsang Sangay, 43, the former Harvard Law School researcher who was recently elected prime minister by Tibetans in exile. “This young man,” the Dalai Lama said gleefully, “he took my power.”

Unlike the Dalai Lama in his monk’s robes, the prime minister-elect was dressed in a politician’s sober dark suit, a symbol of the serious point beneath the Dalai Lama’s ribbing: After four centuries, Tibet has separated spiritual from political authority. The Tibetan government is democratizing. The Chinese Communist Party, the Dalai Lama is too polite to say explicitly, might do well to follow suit.

Born in 1935, and having fled Communist China in 1959, the Dalai Lama takes a long view. Initially, he said, he believed that the Communists, who took power in 1949, had principles — that they were “dedicated to the people.” But Mao Zedong’s emphasis on ideology proved “unrealistic” — a tactful understatement of policies that led to the starvation of tens of millions — and Mao’s successor, Deng Xiaoping, realized that China had to embrace capitalism and allow people to improve their living standards.

So today’s China, he continued, is entirely different from Mao’s. The economy is thriving and connected with the world. Thousands of Chinese have studied abroad.

But capitalism without an independent judiciary or a free press, the Dalai Lama said, brings a “very bad side effect: corruption.” And rising power without transparency breeds fear and suspicion among China’s neighbors.

“They always say, ‘We have no intention to expand,’ ” he said. “I tell my Chinese friends, if everything is transparent and policy is open, there is no need to keep saying that. And if everything is a state secret, then you can 1,000 times deny such intentions, and still no one will believe you.”

The upshot: The United States and other free countries were right to open trade with China and help bring it into the mainstream of global commerce. “Now the free world has a responsibility to bring China into the mainstream of world democracy.”

But, he said, it makes sense to start by urging gradual progress: legal reform, and an end to internal censorship.

You might think President Obama would be interested in discussing these matters with his fellow Nobel peace laureate (the Dalai Lama was awarded his in 1989), but it’s not so simple. Obama declined to meet with him in October 2009, then welcomed him to the White House four months later; this week, administration officials have declined to say whether another meeting will take place. The absence of clarity only encourages Beijing’s bullying and discourages other world leaders from engaging with the Tibetan leader.

Meanwhile, a half-century of exile has not tempered his optimism. Noting that even Chinese Premier Wen Jiabao has talked about the need for political reform, the Dalai Lama said that intellectuals and party members understand the contradictions in the current state of affairs. “Things will change,” he said.

Wednesday, July 13, 2011

Dissident Chinese Writer Flees to Germany - Liao Yiwu (NYT)

Dissident Chinese Writer Flees to Germany
The New York Times, July 12, 2011

BEIJING — After being denied an exit visa 17 times, yanked off planes and trains by the police and threatened with yet more prison time, one of China’s most persecuted writers, Liao Yiwu, slipped across the border into Vietnam last week and then made his way, via Poland, to Germany, where he promptly declared himself an exile.

“I’m ecstatic, I’m finally free,” he said in a telephone interview from Berlin on Monday morning before plunging into a day of interviews and photo shoots. “I feel like I’m walking through a dream.”

Of course, his escape — arranged by friends whom he declined to name — has not brought unadulterated joy. By fleeing his homeland, Mr. Liao, 52, made the difficult decision to abandon the wellspring of his work, much of it journalistic explorations of China’s downtrodden: the political outcasts, impoverished farmers, death row inmates and others who have been traumatized by famine and Communist-inspired zealotry, then cast aside during the nation’s manic embrace of material wealth and collective amnesia.

He also leaves behind his family in southwestern Sichuan Province, including his mother, his son, two siblings and a girlfriend. “I’m trying to convince myself that I won’t be away from China very long, that things will change sooner than later,” he said.

In the West, Mr. Liao is best known for “The Corpse Walker: Real-Life Stories, China from the Bottom Up,” which was banned in China soon after it was published in Taiwan in 2001. The book, a collection of interviews with people he encountered in prison and during wanderings in the southwest, tells the unadorned stories of 27 people, among them a public toilet attendant, a persecuted landlord, and the men, known as corpse walkers, whose job it is to transport the dead back to their hometowns for burial.

After it was published, his already strained relationship with the authorities worsened. He was barred from traveling to literary festivals in Germany, Australia and the United States, and was forced last spring to sign a vow to cease publishing outside China. Breaking the pledge, he was warned cryptically, would bring even greater torment.

Given the predicament of his friend Liu Xiaobo, the Nobel Peace Prize winner and writer who is serving an 11-year sentence for subversion, Mr. Liao knew what might await him. The threat gained greater urgency with the impending publication in the United States of “God Is Red,” a book by Mr. Liao about Chinese Christians, and a memoir about his time in jail, “The Witness of the 4th of June.” The memoir, whose title refers to the military suppression of the Tiananmen Square protests in 1989, has been delayed several times by skittish publishers in Germany and Taiwan.

His most recent travails are part of a wholesale stifling of creative expression and dissent by the ruling Communist Party. Rattled by turmoil in the Arab world, the government began cracking down on scores of activists and rights lawyers in February. The most prominent victim has been Ai Weiwei, the caustic artist and social critic.

“I think Liao Yiwu’s decision to leave really reflects the extreme unease that writers in China are facing right now,” said Larry Siems, the director of international programs at the PEN American Center, an advocacy group. “It’s a shame, because he is one of China’s most interesting writers, and he has his eyes on some of the great human dramas that accompany China’s emergence as an economic power. China should be unleashing the imagination of its writers instead of trying to restrain and control them.”

The Chinese government has yet to respond to news of his escape. The public security bureau in his hometown would not discuss his case; calls and e-mails to the Chinese Embassy in Berlin were not returned.

Like many of his generation, Mr. Liao has endured a numbing cascade of hardships. He nearly starved to death as an infant during Mao’s disastrous Great Leap Forward, when famine killed more than 20 million people. When he was a child, he and his classmates were forced out of school by the Cultural Revolution, the decade in which education was maligned as a bourgeois indulgence. Much of what he learned came from his father, a teacher of Chinese literature, and his mother, a music instructor.

“As a boy, my dad would make me stand high up on a table and not allow me to come down until I finished reciting the classics,” he said.

As early as 1987, he drew the ire of cultural bureaucrats for poetry, printed in official journals, that was condemned as too pessimistic and anti-establishment. After the Tiananmen crackdown, he experienced the stinging limits on free expression. Inspired by Allen Ginsberg and by Dante’s “Inferno,” he and five friends circulated poems recited on video that lamented the bloodshed in Beijing. Mr. Liao called the piece “Massacre.”

Not long afterward, in 1990, he and the others were jailed as “counterrevolutionaries.” His four years of confinement were characterized by torture and the terror of watching 20 inmates be dragged out for execution. Twice, he said, he tried to kill himself.

But it was in jail that Mr. Liao met many of the characters who would fill “The Corpse Walker.” It was also where he learned to play the xiao, an ancient flutelike instrument that sustained him as a street musician during long bouts of joblessness after his release. Those were bitter years, he said, when friends and even his wife found him politically radioactive.

“I never imagined they would distance themselves from me as if I were the plague,” he said. “From this, I concluded that people’s memories can be easily erased.”

Since then, Mr. Liao has devoted himself to collecting the memories of people on the margins of society. For “God Is Red,” he sought out Christians in rural Sichuan and Yunnan Provinces who had endured years of official persecution.

Mickey Maudlin, the executive editor of HarperOne, described it as refreshingly devoid of polemics. “Liao isn’t trying to score ideological points,” Mr. Maudlin said by phone from San Francisco. “He’s just trying to describe how people survived in an environment that is not very friendly.”

Mr. Liao said that since he reached Germany, he has been too overwhelmed and excited to eat or sleep much. Having arrived with no money, he is relying on the generosity of friends, his German publisher and, he hopes, royalties from his forthcoming books. He speaks neither German nor English, and said he was unsure whether to plunge into learning a new language.

“Germany, the U.S. and Australia have all welcomed me,” he said. “But the place I really want to be is China.”

Li Bibo contributed research.

(Non) Democracy in China - The Economist

Democracy v China
What China challenges

by M.S.
Blog Democracy in America, The Economist, July 11th 2011, 13:54

MY COLLEAGUE at Free exchange made a series of good points in arguing that the rise of China shouldn't really challenge our certainty that in order for countries to become and remain wealthy, they need to be democratic. He's quite right that an overwhelming majority of wealthy countries are democratic, and that China isn't wealthy yet. I think there are two questions here. The first is whether China is in the long run going democratic as it gets rich. The second is whether, if it doesn't, this implies anything broader about the inevitability of democracy in other wealthy modern countries.

My views on this subject are influenced by having lived for many years in the world's other fast-growing capitalist communist confucian country, Vietnam, and watching predictions that rising wealth leads to democratisation fail to bear any but the most modest of fruit. China and Vietnam have structures and cultures of governance that are about as similar as one can expect for cross-country comparisons. And what's striking in both countries is the remarkable absence of any serious challenge to Communist Party domination of every corner of political life. Both countries have dissidents aplenty; but these dissidents have no public organisations, and, at the first hint that organisations are beginning to form, they're quickly dismantled through arrest and intimidation.

Of course, many autocracies are competent at attacking and dismantling political threats. Fewer repressive autocracies have been able to produce well-founded economic growth for decades in a row, though there, too, there are success stories. But what sets China and Vietnam apart is the ability of their governing institutions to carry out long-term stable political succession. The communist parties of Vietnam and China are very different from the relatively flimsy and short-lived governing parties of most single-party dictatorships, usually constructed around a single personality and his relatives and cronies. Since the late 1970s, they have managed transitions to new generations of leadership every five years with very little disruption. In part this is due to mechanisms and traditions within these parties that provide for some level of internal democracy, or at least of peaceful factional competition. But the ability to recruit new cadres, allow them to rise through the system, assume top leadership positions, and then push them into retirement, without being overwhelmed by nepotism or personality cults, makes this type of autocracy markedly different from the weak family-run shell parties or military fronts that have run or are running autocratic shows in Indonesia, South Korea, Syria, Iraq, Chile, Spain, Burma and so on. And, obviously, China and Vietnam no longer have to worry about the great weakness that doomed single-party rule in most of the ex-communist world, ie pointless and crippling state-socialist economic policies.

The combination of smooth political succession and strong economic growth helps explain why China is more stable than the USSR was at a similar level of development. In 1990, just before its collapse/democratic transition, the USSR had a PPP-adjusted per-capita GDP of just under $7,000 (in 1990 Geary-Khamis international dollars), according to Angus Maddison, whose research everybody seems to use on this. Mr Maddison put China at $4,800 (same units) in 2003; since then its economy has grown by 8-10% a year, suggesting it's now richer than the USSR ever was. Having spent a few months in the USSR in 1990, I wouldn't be surprised if this were the case. (Though Chinese PPP conversions are controversial. IMF and World Bank figures put Chinese incomes lower than Mr Maddison's. But others warn the IMF/WB figures are based on 2005 price surveys that were too high, which would mean current Chinese per capita GDP is 21% of America's, and China will become the world's largest economy in 2012, not 2016 as the IMF estimates. This ADB paper suggests China is now as rich as the USSR was even as a percentage of contemporaneous US per-capita income, but it puts that figure at almost 30%, which seems absurdly high.) Anyway, China appears to be hitting income levels where other countries have experienced democratic transitions without any sign of a plausible challenge to CPC rule.

Why would that be? Political scientists looking at the relative stability of different autocracies break the category up into subgroups with varying characteristics. For example, a recent paper by Krister Lundell, delivered at what sounds like a truly awesome panel in February in Sao Paulo (“Bad Guys, Good Governance? Varieties of Capitalism in Autocracies”), runs through a bunch of different categorisation schemes in trying to sort out what characteristics might distinguish autocracies that go democratic (or "hybrid", ie part of the way towards democracy) from those that remain permanent autocracies. He doesn't come up with much. Income levels, interestingly, don't seem to be that important. The oil-exporting factor is important, as my colleague mentions. Islamic countries are more likely to stay autocratic, but that's confounded by the oil-export factor so it's not clear how important it is. Another significant factor is that autocratic countries that are large, especially in terms of land area, are less likely to cease being autocratic than small ones. And military dictatorships are pretty short-lived, while single-party states and monarchies last longer. China, obviously, is a very large one-party state. But I feel the variables on offer here don't do justice to the uniqueness of the Chinese and Vietnamese systems. The combination of successful capitalist economies with monopoly parties that can successfully manage non-fatal non-nepotistic leadership transitions six times in a row is new. It's a big deal.

Now, maybe the Chinese and Vietnamese communist parties will fail to manage economic growth to truly developed levels, or will be torn apart by the stresses of increased demand for participation from empowered, educated, wealthy middle classes. Maybe they're too slow and unwieldy for the modern media environment, as James Fallows writes about the silly internet censorship surrounding rumours of Jiang Zemin's death. But then again, maybe not. Maybe this morally troubling type of rule, in which the responsibility and privileges of governance are essentially assigned to a guild or corporation with internal but not external competition and mainly informal, not formal, accountability to the broader population, is a sustainable model of governance for a modern society. Or maybe it's only viable in East Asia, for cultural reasons; anyway, China isn't seeking to export it anymore, and it's hard to see how any other country could start to build such a model in an era when peasant revolutions seem to be a thing of the past.

I confess I can't really imagine what a fully developed wealthy society with a single-party state would look like. But a few years back I visited the then-leader of Singapore's tiny opposition party in his apartment, where he was under house arrest. He was under house arrest because he was unable to pay his debts, and he was in debt because the state had convicted him of slander and fined him hundreds of thousands of dollars for saying, in effect, that Singapore is not a democracy. Which is a nice little manoeuvre. People in Singapore are, in my experience, even more afraid of talking about these kinds of issues than people in Vietnam are. But Singapore is extremely well-governed on most dimensions, and it's not clear when a transition in power is ever going to occur. Singapore is also significantly richer than the United States. All of which is why it's often cited as a model by Vietnamese and Chinese political elites. Many people feel this system of government can't be scaled up from an island city-state like Singapore to a large country like Vietnam or China, which is perhaps why my colleague restricted his survey of wealthy countries to those with populations over 10m. But the thing is, political-science researchers widely conclude that small countries, and especially islands, are more likely to be democracies, not less.

But granting for the sake of argument that China could become as wealthy as Singapore, or at least Spain, without becoming a democracy. So what? Would this say anything about democracy in the modern world overall, or would it just say something about China? Obviously, there is zero risk of a single-party takeover in any developed multiparty democracy in the world. This isn't the 1930s; it's not even the 1970s.

Rather, I'd phrase the risk this way. My broad feeling is that representative democratic institutions are not functioning right now as they did 20 or 30 years ago. When we look at countries trying to make the transition to stable democratic rule, such as Thailand or Russia, we see that they're trying to institutionalise democracy as it exists in the early 21st century, and that it's very hard to do, because the forces enlisted are often too powerful to be contained by institutional restraints. Just like wealthy democracies these days, they have personality-driven political campaigns fueled by wealthy donors who fund or control integrated media empires, candidacies shaped by professional consultants, and internet/flashmob street rallies and self-branded grassroots movements ("colour" movements, tea-party groups and so on). The "Daily Me" phenomenon simultaneously organises and polarises partisan participants into angry camps who can barely understand each others' language. It often seems impossible for contestants for power to win and consolidate legitimacy, because it's easy to build resistance to legitimacy and the rewards are high. It feels to me like there's a relationship between the "birther" phenomenon and the years of Yellow Shirt refusal to accept Shinawatra legitimacy, between the "Not a cent for Greece" brinksmanship of the Party for Freedom and the no-taxes debt-ceiling brinksmanship of the tea-party GOP, between constant filibusters in the Senate, the record-length coalition negotiations in Belgium and the rash of hung parliaments recently in Westminster systems.

I think this has to do with the way democracy functions in the current communications environment. Democracy is supposed to build public legitimacy for governance. I think there's a legitimacy deficit because of the way communications work nowadays. Democracy is also supposed to communicate problems to government so that government can respond. I think the constant crisis-atmosphere contrarianism of the current media and internet environment overwhelms the signal-to-noise ratio there, and preoccupies government with addressing blaring non-issues. And I think this has all weakened the advantage that democracies have generally enjoyed over autocracies in addressing real problems and in generating public support for fixing them. I think the result of that could well be that an increasing number of important policymaking issues are gradually shifted to non-democratic institutions, while political democracy increasingly devolves into a form of reality-TV contest.

Or maybe I'm just contributing to the blaring non-issue alarmism here. Thailand has recently taken a strong turn back towards democracy; maybe the Red Shirt/Yellow Shirt years were just growing pains, no worse than what France went through on its way to democracy in the 19th century, and a lot less bloody. The Arab world has just seen a bunch of autocratic regimes fall, and if some of those countries move towards democracy while others don't, that'll be par for the historical course. Here in America, well, if we throw away a perfectly good 200-year-old credit rating, that'll be pretty dumb, but nobody's killing each other yet. And American politics were often mean and stupid in the old days too, long before the internet arrived. But what I would say is that we should not be comfortably sure of anything. We're not in an era when fascism is on the march, but we are in an era when democracy is not generally showing its best governing face. What that means, I think, is that people who believe in democracy on moral grounds should make the case, again, on moral grounds, rather than relying on a comfortable assumption that countries will naturally go democratic as they get richer. And I think the fact that autocracies sometimes enjoy real advantages in policymaking should remind us of the need to behave responsibly in democratic activity and to make sure that our representative institutions are actually capable of governing, and are not paralysed by political brinksmanship.

As for my other colleague's comments, I pretty much agree with everything he says. He's probably right that increasing the role of automatic stabilisers would actually be a move towards enhancing democracy by letting political debate focus on deep public issues of what our society should look like, rather than short-term issues of the interaction between unemployment, inflation, private liquidity preference and government spending that Congress really isn't well equipped to handle agilely.

O modelo chines de desenvolvimento - Rubens Antonio Barbosa

O modelo chinês de desenvolvimento
Rubens Barbosa
O Estado de S.Paulo, 12 de julho de 2011

O crescimento médio de 9% da China nos últimos 30 anos tem despertado a atenção de todo o mundo, em especial dos países em desenvolvimento. Qual é o fundamento do modelo chinês? O êxito econômico da China não decorre apenas da aplicação de políticas econômicas stricto sensu, mas de alguns princípios inspirados no pragmatismo de Deng Xiaoping, chefe do governo chinês nos anos 70: a importância da inovação, a rejeição a medir o desenvolvimento pelo crescimento do PIB e da renda per capita, a busca de melhoria na qualidade de vida e a crença na autodeterminação e soberania.

Recentemente Stefan Halper, no livro O Consenso de Pequim, procurou mostrar como o modelo chinês, classificado como "autoritarismo de mercado", começa a ganhar adeptos entre países em desenvolvimento. Embora sendo discutível se esse modelo pode ser replicado em outros países com o mesmo êxito, o sistema chinês oferece uma alternativa ao Consenso de Washington, que enfatizava a prevalência do mercado e da austeridade econômica doméstica, mas ficou associado às condicionalidades impostas pelas instituições financeiras internacionais, como o Banco Mundial e o Fundo Monetário Internacional (FMI).

Segundo o economista chinês Ping Chen - que esteve há algum tempo na FGV em São Paulo -, o que ocorre na China não configura o aparecimento de um modelo de desenvolvimento econômico porque o país está em constante experimentação e mudança com o objetivo de se ajustar a um mundo em transformação. O Congresso do Povo está permanentemente modernizando leis e regulamentos, úteis no passado, mas obsoletos no presente. Ao contrário do Consenso de Washington, o modelo chinês parte do pressuposto de que cada país enfrenta desafios diferenciados e por isso não pode aceitar soluções padronizadas. Nas últimas três décadas a China descartou as barreiras ideológicas e históricas e testou as mais diferentes ideias, implementando-as e corrigindo os erros cometidos.

Não chega a ser surpresa constatar a forte presença do Estado, uma das características dos regimes comunistas, como o aspecto fundamental do modelo. O capitalismo de Estado é a sua marca registrada, combinado com a abertura a investimentos externos, com transferência de tecnologia e associação compulsória com empresas estatais e com o câmbio congelado.

Dada a natureza controvertida dos comentários apresentados por Chen, pareceu-me útil resumi-los, sem questionar suas premissas, pela limitação de espaço.

Refletindo as peculiaridades do sistema político e social chinês, Chen alinhou nove princípios responsáveis pelo êxito da China num mundo de incertezas e complexidades:

Buscar oportunidades para o crescimento da economia e adotar reformas ousadas para aproveitá-las. Nos países em desenvolvimento, os governos têm mais capital e recursos humanos do que o setor privado para ativar um mercado pouco sofisticado. A economia neoliberal tem pouca experiência nos países mais pobres e por isso frequentemente recomenda práticas de mercados desenvolvidos, de forma equivocada, aos mercados emergentes.

Necessidade de manter um sistema dual para a estabilidade e a inovação. A dualidade é representada pela atuação do governo e do setor empresarial. As regulamentações são adotadas por consenso entre a liderança política, empresários e a comunidade.

Clara divisão de trabalho entre o governo central e o local. O governo central é responsável pela segurança nacional e pela coordenação regional. O governo local lidera as experiências institucionais e de desenvolvimento. A experiência de descentralização é o motor das inovações, não a imposição de regras de cima para baixo por conselheiros externos.

Para o desenvolvimento regional a liderança política é mais importante do que o capital, recursos e infraestrutura.

Economias mistas (capitalismo de Estado) oferecem financiamentos públicos para favorecer reformas e desenvolvimento sustentável. Políticas liberais nunca funcionam em países com grande população, poucos recursos e frequentes desastres naturais. O setor estatal e coletivo serve de anteparo para os ciclos de negócios.

A disciplina da economia chinesa é alicerçada na competição em todos os níveis, e não na negociação com grupos de interesse, no estilo ocidental. A democracia na China não é uma competição verbal, mas uma corrida por ações concretas. A legitimidade do governo não deriva do eleitorado, mas dos resultados políticos e econômicos.

A coordenação entre governos, homens de negócios, trabalhadores e setor agrícola tende a gerar uma nova parceria.

Os governos podem criar e orientar o mercado, mas não devem ser conduzidos por ele. A condição fundamental é o fator humano.

As ações do governo devem focalizar o desenvolvimento econômico interno, sem perder de vista as turbulências externas.

Segundo Chen, a alternativa asiática de desenvolvimento é representada por valores compartilhados pelo governo e pelos cidadãos, tendo como pano de fundo crescentes pitadas de ensinamentos de Confúcio. O Consenso de Pequim, baseado no apoio familiar, na edificação da nação e no governo central que interage com a população, é a alternativa ao sistema ocidental, fundado no individualismo, no consumismo e no equilíbrio entre os grupos de interesse.

Para países como o Brasil, não se trata de tentar replicar o capitalismo de Estado, mas de reconhecer a influência da China no processo produtivo global e procurar melhorar a competitividade da economia para poder enfrentar o grande desafio que esse país coloca hoje ao setor produtivo nacional, sobretudo o industrial.

Temos de superar a visão ingênua derivada da percepção equivocada das vantagens que a China oferece e definir nossos próprios interesses.


American entrepreneur finds US an underdeveloped country, compared to China

China vs. America: Which Is the Developing Country?
The Wall Street Journal, JULY 9, 2011

From new roads to wise leadership, sound financials and five-year plans, Beijing has the winning approach.

Recently I flew from Los Angeles to China to attend a corporate board-of-directors meeting in Shanghai, as well as customer and government visits there and in Beijing. After the trip was over, in thinking about the United States and China, it was not clear to me which is the developed, and which is the developing, country.

Infrastructure: Let's face it, Los Angeles is decaying. Its airport is cramped and dirty, too small for the volume it tries to handle and in a state of disrepair. In contrast, the airports in Beijing and Shanghai are brand new, clean and incredibly spacious, with friendly, courteous staff galore. They are extremely well-designed to handle the large volume of air traffic needed to carry out global business these days.

In traveling the highways around Los Angeles to get to the airport, you are struck by the state of disrepair there, too. Of course, everyone knows California is bankrupt and that is probably the reason why. In contrast, the infrastructure in the major Chinese cities such as Shanghai and Beijing is absolute state-of-the-art and relatively new.

The congestion in the two cities is similar. In China, consumers are buying 18 million cars per year compared to 11 million in the U.S. China is working hard building roads to keep up with the gigantic demand for the automobile.

The just-completed Beijing to Shanghai high-speed rail link, which takes less than five hours for the 800-mile trip, is the crown jewel of China's current 5,000 miles of rail, set to grow to 10,000 miles in 2020. Compare that to decaying Amtrak.

Government Leadership: Here the differences are staggering. In every meeting we attended, with four different customers of our company as well as representatives from four different arms of the Chinese government, our hosts began their presentation with a brief discussion of China's new five-year-plan. This is the 12th five-year plan and it was announced in March 2011. Each of these groups reminded us that the new five-year plan is primarily focused on three things: 1) improving innovation in the country; 2) making significant improvements in the environmental footprint of China; and 3) continuing to create jobs to employ large numbers of people moving from rural to urban areas. Can you imagine the U.S. Congress and president emerging with a unified five-year plan that they actually achieve (like China typically does)?

The specificity of China's goals in each element of the five-year plan is impressive. For example, China plans to cut carbon emissions by 17% by 2016. In the same time frame, China's high-tech industries are to grow to 15% of the economy from 3% today.

Government Finances: This topic is, frankly, embarrassing. China manages its economy with incredible care and is sitting on trillions of dollars of reserves. In contrast, the U.S. government has managed its financials very poorly over the years and is flirting with a Greece-like catastrophe.

Human Rights/Free Speech: In this area, our American view is that China has a ton of work to do. Their view is that we are nuts for not blocking pornography and antigovernment points-of-view from our youth and citizens.

Technology and Innovation: To give you a feel for China's determination to become globally competitive in technology innovation, let me cite some statistics from two facilities we visited. Over the last 10 years, the Institute of Biophysics, an arm of the Chinese Academy of Science, has received very significant investment by the Chinese government. Today it consists of more than 3,000 talented scientists focused on doing world-class research in areas such as protein science, and brain and cognitive sciences.

We also visited the new Shanghai Advanced Research Institute, another arm of the Chinese Academy of Science. This gigantic science and technology park is under construction and today consists of four buildings, but it will grow to over 60 buildings on a large piece of land equivalent to about a third of a square mile. It is being staffed by Ph.D.-caliber researchers. Their goal statement is fairly straightforward: "To be a pioneer in the development of new technologies relevant to business."

All of the various institutes being run by the Chinese Academy of Science are going to be significantly increased in size, and staffing will be aided by a new recruiting program called "Ten Thousand Talents." This is an effort by the Chinese government to reach out to Chinese individuals who have been trained, and currently reside, outside China. They are focusing on those who are world-class in their technical abilities, primarily at the Ph.D. level, at work in various universities and science institutes abroad. In each year of this new five-year plan, the goal is to recruit 2,000 of these individuals to return to China.

Reasons and Cure: Given all of the above, I think you can see why I pose the fundamental question: Which is the developing country and which is the developed country? The next questions are: Why is this occurring and what should the U.S. do?

Let's face it—we are getting beaten because the U.S. government can't seem to make big improvements. Issues quickly get polarized, and then further polarized by the media, which needs extreme viewpoints to draw attention and increase audience size. The autocratic Chinese leadership gets things done fast (currently the autocrats seem to be highly effective).

What is the cure? Washington politicians and American voters need to snap to and realize they are getting beaten—and make big changes that put the U.S. back on track: Fix the budget and the burden of entitlements; implement an aggressive five-year debt-reduction plan, and start approving some winning plans. Wake up, America!

Mr. Herbold, a retired chief operating officer of Microsoft Corporation, is the managing director of The Herbold Group, LLC and author of "What's Holding You Back? Ten Bold Steps That Define Gutsy Leaders" (Wiley/Jossey-Bass, 2011).

Tuesday, July 12, 2011

Liu Xiaobo Empty Chair: a book from the New York Review of Books

A New York Review Books e-book original
July 12, 2011

In Liu Xiaobo's Empty Chair: Chronicling the Reform Movement Beijing Fears Most, Perry Link, China scholar and regular contributor to The New York Review of Books, chronicles Nobel Laureate Liu Xiaobo's story: from his arrest, show-trial, and harsh sentencing, to the suppression of Charter 08, an eloquent pro-democracy manifesto that he helped write. Liu is still serving out an eleven-year prison sentence while the government undertakes one of its worst crackdowns on dissent in decades.

Writing about Beijing's attacks on dissidents in the wake of the Arab Spring, Link draws on leaked government documents to reveal just how nervous the regime has become about prospects for a "Jasmine Revolution" in China. The e-book includes the full text of Charter 08 and other primary documents.

New York Review senior editor Hugh Eakin spoke with Perry Link about the book and the importance of the Charter 08 movement.

Although Nobel Peace Laureate Liu Xiaobo is little known in China and most of his writings have been read only by a small circle of intellectuals and activists, the Chinese government considers him an enemy of the state and has sentenced him to eleven years in prison. What makes him so threatening?

There is a tremendous amount of popular discontent in Chinese society today. People feel angry about corruption, special privilege, land grabs and forced relocations, air and water pollution, and repression of unapproved religions. Many people feel insecure about their future. The Chinese government is well aware of this discontent and spends much effort and huge sums of money to keep it atomized and disorganized. The authorities repress Liu Xiaobo's writings because they are afraid that his ideas would have broad appeal and could give shape to movements that they could not control.

Among the writings that have most concerned the Chinese government is the document called Charter 08, which Liu Xiaobo helped draft and which you have translated in full in your book. What ideas in it, in particular, make Beijing anxious?

I have no doubt that the idea in Charter 08 that most upsets Beijing is the call for an end to one-Party rule. The charter's other ideas—elections, a free press, separation of powers, an independent judiciary, an apolitical military, to name a few—might be argued as matters of degree, but an end to the Communist Party's monopoly on power stands out as the one idea that is an utter anathema to China's rulers. In addition to the Charter's ideas, its tone likely causes them some distress as well. The writing in the Charter is clear, rational, moderate, broad of vision, responsible, and well organized—in short, not easy to refute, and for that reason a headache for an autocrat.

Following the mass uprisings in the Middle East, many people are wondering whether something similar could happen in China. You suggest that is unlikely for now, despite the "pent up anger" many ordinary Chinese harbor toward their government. Why?

A Jasmine Revolution is unlikely in China because the repressive apparatus there is far more extensive and sophisticated than in many of the Middle Eastern countries. The relatively peaceful abdications by dictators that we saw in Tunisia and Egypt would never happen in China, where the rulers, in their determination to stay in power and their willingness to use violence to do so, are more like the rulers of Libya and Syria. But the Libyan and Syrian regimes are twenty years behind China's in their techniques. They are still using tanks and machine guns. China's rulers, who used those methods in 1989, have in the intervening years worked hard on ways to find and snuff out dissent before it goes anywhere. The budget for internal "stability maintenance" in China this year is about 550 billion yuan—more than the government spends on its military, and more than it spends on health, education, and social welfare combined.

China’s Other Revolution - A forum for debating the question

Following the precedent post -- China’s Other Revolution - Edward S. Steinfeld (Boston Review) -- here the Forum promoted by Boston Review on China's impressive performance in many other social and economic aspects, least the political side of its really astonishing progresses over the last decades.

China’s Other Revolution
Boston Review, JULY/AUGUST 2011

Edward S. Steinfeld
China’s recent crackdown on dissidents suggests that the country’s authoritarian regime is here to stay.
But missed in all the headlines are the radical political and social changes China has undergone over the past twenty years.

Andrew G. Walder
The fate of the former Soviet Union is paramount in the minds of China’s leaders. (July 11)

Helen H. Wang
One of the critical conditions of democracy is present in China: a large and stable middle class. (July 12)

Baogang He
Even the phrase ‘civil society’ has been banned by propaganda officials. (July 12)

Ying Ma
Many of the capitalist roaders co-opted by the Party echo the government’s refrain that China is not ready for democracy. (July 13)

Guobin Yang
So disempowering are Chinese markets that a term was invented for ‘powerless social groups.’ (July 13)

Edward S. Steinfeld
Far from prioritizing self-preservation, the Chinese government has gambled on radical and socially destabilizing reforms. (July 14)


Holding Strategy
Andrew G. Walder

This article is part of China’s Other Revolution, a forum on political and social change in China.

Edward Steinfeld’s account of revolutionary changes in China’s economy and society over the past 30 years is compelling and on the mark. He is correct to warn that we should not underestimate remarkable cumulative changes in Chinese society and the economy, which have important and largely irreversible political implications. But his argument avoids an elephant in the room: China still has a Soviet-style political system that has changed little over the past two decades.
This is not a garden-variety personal or military dictatorship. There are only four other regimes structured like China’s, in Vietnam, Laos, North Korea, and Cuba. China’s network of Communist Party organizations, its conservative leadership in a national politburo, the preeminence of Party organizations over all government institutions, its subservient legal system, and its massive and growing security apparatus are all familiar to those who recall communist systems of 30 years ago. The recent crackdown is a symptom of the survival, indeed the revitalization, of a Soviet model of governance. The continuing strength of that model is not altered by revolutionary changes in the economy or by the staffing of government institutions by younger, better educated, and more worldly administrators. China’s economy and society may remind us of South Korea’s and Taiwan’s in an earlier era, but the core political institutions, and in recent years the political attitudes of the leaders, are more reminiscent of the Soviet Union during the late Brezhnev era. This makes China a deeply paradoxical polity, presenting its leaders with a real dilemma.
China today is indeed unlike China 25 years ago, and it is far more open and dynamic than the Soviet Union ever was. But political change, when it does occur, may not turn China into Taiwan or South Korea writ large. Our discussions of Chinese political change often appear to adopt an unconscious default position: China’s leaders are holding back a tide of change that leads to liberal multiparty rule, better governance, the elimination of corruption, political stability, the rule of law, and greater economic prosperity. But other political futures are just as likely.
The fate of the former Soviet Union and similar regimes is more relevant to China’s political dilemma and is surely paramount in the minds of China’s leaders. Out of some 30 independent states that emerged from the collapse of communism in Eurasia, no more than a third are now prosperous and well-governed multiparty democracies. Almost all of these success stories are small, ethnically uniform states on the periphery of the European Union—a “democratic crescent” that stretches from Estonia to Slovenia. Many of the other post-Soviet countries experienced dismemberment, civil war, and long periods of instability. Russia and Ukraine have undergone severe and prolonged recessions; their political systems are illiberal and deeply corrupt, though surely more “pluralistic” than before.
China’s leaders understand and are haunted by this history. Even if they secretly believe that a multiparty political system is desirable, they know the perils of a botched attempt at political change. Stability is the overwhelming priority of China’s leaders. It is seen, justifiably, as the foundation for China’s economic rise and growing geopolitical importance. The trajectory of Russia—the comparison that really matters to China’s elite—has been in the opposite direction.
So the prescription is: don’t rock the boat. Soviet-style political structures have well-known problems, but they have held China together for the past 30 years of wrenching social and economic change. Experimenting with democracy within the Communist Party, limited electoral mechanisms at the provincial and national level, a freer press, designing effective anti-corruption measures that tie the Party’s hands, and a broader openness in intellectual and political life are unnecessary gambles that risk everything China has accomplished. The elite don’t want to repeat Gorbachev’s naïve mistakes.
The fate of the former Soviet Union is paramount in the minds of China’s leaders.
What are China’s leaders so afraid of? Long before the attempted Jasmine Revolution, they knew how quickly and unexpectedly political challenges can arise. They were just as surprised as everyone else by the collapse of their brethren Soviet-style political systems from 1989 to 1991. And they had their own major crisis in May–June 1989, which escalated out of their control, split their top leadership, and forced a draconian military response.
Continuing social changes, not just history, leave the regime skittish. Waves of local protest—by farmers concerned with taxation and land tenure, urban homeowners expelled with little compensation in corrupt urban redevelopment schemes, tens of millions of state-sector workers laid off in enterprise restructuring and privatization since the mid-1990s, unprotected workers in export industries and the transport sector opposing unfair pay and poor working conditions—do not amount to a unified political movement to challenge Party rule. But China’s leaders believe that they make any kind of political opening a hazardous venture.
What China’s leaders fear is large and prolonged protests in key cities. Precisely because of the changes sketched so clearly by Steinfeld, these would be much harder to control than the protests 22 years ago, and would force the leadership once again to confront a choice between compromise (and perhaps spiraling demands for liberalization and political change) and brute force. This is the choice that has loomed suddenly for dictators in Tunisia, Egypt, Libya, and elsewhere. The same choice openly split China’s Politburo Standing Committee in 1989, which led to even larger protests and surprisingly strong popular resistance to the initial attempt to impose martial law.
What to do? For the time being, postpone any tinkering with core political institutions, and double down on surveillance and repression. China’s leaders have been far more creative at finding ways to monitor the Internet, curb the mass media, and halt incipient protest than at creating credible institutions to deter corruption and abuse of power by their own officials at the local levels. The strategy is conservative and corporate, designed to preserve the rise of a new Chinese state capitalism on a global scale by deploying refurbished Soviet-style institutions as enforcers. This strategy avoids the risks of liberalization and reform and postpones the structural changes necessary to create a genuinely Chinese political system that overcomes the flaws of the Soviet import.
This is, in short, a holding strategy, one that betrays a lack of confidence and political imagination. One might ask, if not now, with China’s economy riding high and public support for the regime strong, when? Incremental political reform will be much harder when the economic juggernaut begins to falter, the population begins to age, and the educated urban middle classes take prosperity for granted. By that point China’s political system—and perhaps with it the economy—may be in for a hard landing.

Monday, July 11, 2011

China’s Other Revolution - Edward S. Steinfeld (Boston Review)

China’s Other Revolution
Edward S. Steinfeld
Boston Review, July-August 2011

This article is part of China’s Other Revolution, a forum on political and social change in China.

On April 3, 2011, Chinese artist Ai Weiwei was detained by police just prior to boarding a flight to Hong Kong. He has been held incommunicado since. [Ed. note: He was released on June 22, after this article went to press.] Ai—known internationally as much for his far-ranging artistic projects as his criticisms of the Chinese government—is but one of many, perhaps thousands, of “troublemakers” rounded up by the Chinese government in recent months. Ai may be the most recognizable name globally, but other detainees have included rights activists, lawyers, bloggers, journalists, and academics. Some have been formally charged with “creating a disturbance” or “inciting subversion”; others have been disappeared through extra-judicial procedures.
The exact motivations behind the government’s expanding crackdown are uncertain, but it is safe to assume that images of Egypt and Tunisia loom large. Indeed, back in February and March, China too appeared caught in the undertow, with hints of a homegrown “Jasmine Revolution.” But the Jasmine Revolution drew small crowds and little energy. The dominant story soon became one of unyielding political repression and conspicuous public silence.
In the West this situation has inspired renewed focus on repression in China, with extensive coverage in The New York Times, The Washington Post, The Times of London, Le Monde, and elsewhere. At one level is concern for the detainees themselves, individuals who appear to have done nothing wrong but have been swallowed up by a criminal justice system affording them neither due process nor mercy. At a deeper level are geopolitical or even existential worries about what the Chinese government’s behavior signifies for a nation that is now a leading global power. Seemingly out of nowhere, China has emerged as the world’s fastest-growing major economy, the largest overseas holder of U.S. government debt, the largest exporter, and the largest emitter of greenhouse gases. And along with jaw-dropping technological advancement in the domestic economy, China has invested in military modernization. Yet even as China becomes a nation of global caliber, it appears governed by individuals determined to play by their own rules and to respect no limits to their exercise of power.
But why should the recent detentions arouse particular anxiety? After all, it is hardly news that China is governed by an authoritarian system. Extrajudicial detentions and reflexive repression of dissent—whether real or imagined—have always been the method of authoritarian regimes. We see it today in Syria, Libya, Russia, Vietnam, and elsewhere. And we saw it just a few decades ago in Argentina, Chile, Guatemala, and even Mexico.
The variety of nations (and political outcomes) on this list suggests that abuse of dissenters—conspicuous in spite of overseas condemnation—is characteristic of not just sclerotic, immovable regimes, but also of authoritarian systems undergoing profound processes of change and liberalization. It would be wrong to read the current crackdown as a sign of stasis or regression. Though there has been no “Chinese Spring,” in fundamental institutional, organizational, and behavioral terms, it would be hard to describe what has transpired in China over the past twenty years as anything but a revolution.

Lessons From South Korea and Taiwan
Those who doubt that profound change and harsh repression can coexist in China should look to the history of South Korea and Taiwan. In January 1987, just seven years after a democratic uprising was crushed in the South Korean city of Gwangju and a few months before the military-backed regime would yield to popular demands for open elections, student protestors were being summarily rounded up by the police. At least one of the students died during interrogation. That same year Taiwan’s Kuomintang government announced the end of 38 years of martial law, a key step toward the establishment of democracy there. But in the months before the announcement, dissenters were still being shipped off, often by secretive military tribunals, to the notorious gulag on Green Island. Crackdowns on opponents, extrajudicial detentions, and violence are often the last-ditch efforts of authoritarian regimes.
Those who doubt that change and repression can coexist in China should look to the history of South Korea and Taiwan.
Perhaps because of their willingness to use force even in their final days, these regimes can appear impervious to change and determined to remain in power. Given the empirical evidence available in the mid-1980s, one could reasonably have described Taiwan’s single-party state as “flexibly” authoritarian: grudgingly willing to mollify the populace with marginal institutional changes, but prepared to employ the gun to defend its grip on power. No one could have been sure whether the Taiwanese government—or South Korean, for that matter—would hold onto power indefinitely, succumb to violent overthrow precisely because of its resistance to change, or yield peacefully and voluntarily to popular desires for liberalization. The same can be said of China today.
The cases of Taiwan and South Korea also suggest that we should be cautious about the frequent observation that politics in China has lagged economics. Both Taiwan and South Korea, right up until the end of the democratization process, were successful and creative on the economic front but politically retrograde. At minimum the lesson here is that the absence of overt regime change doesn’t tell us much.
That leads to a final point about the Taiwanese and South Korean experiences, one equally applicable to the contemporary Chinese scene. Even as authoritarian regimes and their supporting institutions remain in place, subtle political shifts may be under way. Such shifts can include recomposition of the ruling establishment (i.e., the ruling party stays in place, but it ends up populated by new kinds of members), societal pluralization, depoliticization of daily life, and evolving efforts at regime legitimization—efforts that often lead to major changes in political discourse and participation. Ruling elites may push such changes with the most conservative intentions. The goal may be nothing more than regime survival. However, as the cases of Taiwan and South Korea show, such processes can take on a life of their own with members of the state and ruling establishment swept up in the wave of new attitudes, aspirations, and values. And that wave may crest suddenly or over the course of years.

The Economy Reaches Out
There are undoubtedly numerous differences between the China of today and the South Korea and Taiwan of yesterday. But in terms of sociopolitical change, China is increasingly looking like its previously authoritarian East Asian neighbors.
Since the early 1980s China has experienced no political revolution, no definitive ideological break from the past, and nothing even resembling a nationwide political movement. Since Deng Xiaoping’s death in 1997, the country’s leaders have been conspicuous for their lack of charisma and vision. The sprawling Communist Party-state—inheritor of a 1400-year-old tradition of technocratic and highly interventionist bureaucratic rule—grinds on. On the surface, nothing has changed.
But under the surface, virtually everything has. The transformations are particularly striking in the urban industrial economy. At one time China exported almost no manufactured goods; now Chinese industry is deeply immersed in global supply chains. At the dawn of reform in 1978, virtually all Chinese industry was owned by the state. By 2008, in an industrial economy that had grown more than 25-fold, private firms were the dominant players, with foreign firms not far behind. That which was once allocated hierarchically by the state—basic commodities, industrial inputs, manufactured goods, labor (both high-skilled and low), housing, and health care—is now purchased in commercial markets. All manner of new rules have been developed to manage these markets: enterprise law, contract law, labor law, environmental regulations, and so on. And new actors populate core industrial and bureaucratic structures: private entrepreneurs, elite returnees from overseas, domestically trained technocrats, multinational commercial and financial elites, legal professionals, media professionals, and even self-described policy activists and social entrepreneurs. Once-taboo business entities are now vital to the national economy. In 2001, private entrepreneurs—capitalist roaders par excellence—were officially welcomed into the Chinese Communist Party.
Economic changes strike at the heart of the relationship between citizen and state.
And China’s new professionals are not just in business. Of the 1.6 million citizens China has sent abroad for a year or more of study over the past 30 years, approximately 500,000 have returned, and a portion of these returnees now accounts for about a fifth of government ministers and vice-ministers. As Huiyao Wang of the Center for China and Globalization has documented, 78 percent of university presidents and 72 percent of directors of key state-run research labs are returnees. The Party has publicly declared a goal of recruiting 20,000 returnee scholars, entrepreneurs, researchers, and corporate executives to serve in positions of public administration.
With these changes in economic organization and labor, everyday habits have been radically transformed. Finding a job on one’s own, living in a dwelling of one’s own, communicating routinely with acquaintances extending beyond the workplace, working closely with global counterparts, expecting that the wealth and social circumstances enjoyed abroad are China’s destiny as well—all were unimaginable 30 years ago but today are routine. Hardly relegated just to the economic realm, these changes strike at the heart of the relationship between citizen and state.

New Ways of Life
The hierarchical structures of the command economy bound citizen and commercial producer alike directly to the state. In the “old” days, from the 1950s through the early 1990s, if you were an urban citizen, you were most likely assigned to your employer—for life—by the state, housed by the state, and provided health care by the state. As Andrew Walder has described, these were mechanisms of political control that enforced citizen dependency upon the state. If you misbehaved politically, you could be squeezed out of your job, your home, etc.
Under this regime your social interactions were mostly limited to the physical confines of your workplace: not only did you work there, you lived there, and your future was determined there. In all likelihood, you would have had no telephone, no form of transport save a bicycle, and few social ties that would have encouraged you to travel. If you did want to travel, you probably would have needed your employer’s permission to buy the train ticket.
Today, for better or worse, virtually all of those control mechanisms are gone, replaced with freewheeling markets. As a Chinese citizen you now live where you can afford; work where you can find a job, often in a highly competitive labor market; and secure life necessities—everything from education to health care—primarily by shelling out cash. Whether rich or poor, you will almost certainly have a cell phone, and you will likely have a wide variety of social contacts.
In this new system state authority and the nature of state-society relations are radically different, a reality confirmed by the state’s frenetic effort to develop new rules to maintain control and influence. As a response to changing expectations of the role of the state, a new discourse of law-based governance has emerged. In addition to new tax, contract, property, and environmental laws, the state has promulgated national regulations on open government information—China’s Freedom of Information Act, in a sense. Some provinces, such as booming Fujian, have new labor rules that emphasize collective bargaining.
This does not mean that the system is fair or that the state has abandoned coercive and arbitrary intervention. Nor is every element of the state apparatus fully committed to implementing and enforcing these rules. But they would not exist at all if the state were still the main producer, wage payer, housing provider, and on-the-job enforcer in the industrial economy. And, by expressing rules in the language of law, the state, whether intentionally or not, has legitimized a broad discourse about the appropriate bounds of political authority and the responsibilities of an effective government.
This novelty and diversity—in organizations, actors, laws, discourses, and life choices—has created space for the reconfiguration of informal norms and deep-seated values. For instance, in the 1980s to label oneself a private entrepreneur, let alone entrepreneurial tycoon, was to invite arrest. Today that label invites admiration and elevated status.

New-Look State
China’s institutional transformation is hard to see in part because it has diverged from standard theoretical accounts of how change is supposed to take place. In China institutional change has been incremental and evolutionary, radical in its ultimate effect, but hardly in its origin and unfolding. Change has not come in response to exogenous shocks or what Ira Katznelson has called “unsettled times.”
It is also difficult to identify who is responsible for change. For at least fifteen years, there has been no charismatic leader or coherent group of reformers of the type associated with post-Soviet Russia. There are no visionary policy elites negotiating the complex terrain of domestic politics. None of the recent “administrations” have had a discernible institutional mission, whether to end socialism, build capitalism, privatize industry, or seek any of the other systemic transformations articulated by post-socialist reformers elsewhere.
More than a third of Communist Party members hold a college degree or higher, a far cry from the party’s peasant roots.
But—despite the persistence of an authoritarian, single-party state—the composition of elites drawn into the policy process has evolved. Whereas in the early 1990s, for example, overseas-trained returnees were held suspect, barred from positions of influence, today such individuals routinely populate the high echelons of the state economics bureaucracy. The minister of science and technology earned a PhD in Germany, where he subsequently worked for a decade at Audi. The number-two official at the central bank—and the head of the State Administration of Foreign Exchange—earned a PhD in the United States, where he was a tenured professor of economics. The head of the government’s banking regulatory commission has an MBA from the University of London; the head of the Shanghai government’s Office for Financial Services is a Stanford-trained economist; and the list goes on. Twenty years ago, these people would not have returned to China, let alone been appointed to positions at the core of the state.
The absorption of trained professionals into the state bureaucracy does not alone make for political transformation, but this pattern is consistent with a broader shift within the Communist Party to a more urbanized, professionalized, and educated membership. By 2010 the Party had grown to a record 78 million members, nearly a quarter of whom—at least by official accounts—are under the age of 35. More than a third of all Party members hold a college degree or higher and by 2007 just under 3 million Party members were working in private companies and an additional 800,000 or so Party members were self-employed, all of which suggests that the Party’s ideological roots in the rural peasantry and military are withering. And demand for Party membership is up. In 2009 only 10 percent of the applicant pool was admitted. We can, and probably should, argue about the quality of the data, but the overall trends seem fairly clear: the kinds of people who were running away from the Party—and China more broadly—following the Tiananmen crackdown are now the kinds of people competing to enter it.
Some might interpret this as Party-state co-optation. In the 1970s and ’80s, one could have said the same about the efforts of the Kuomintang to recruit technocratic elites, particularly native Taiwanese who had previously been shut out. Co-optation may well have been the intention, but the ruling establishment ended up populated by professionals who, while not revolutionaries, harbored no personal loyalty to the existing system and had little to gain by fighting for it. For many of these technocrats, the Kuomintang was just a vehicle for effecting change in the present. Once its utility in that role had been exhausted, it could be abandoned.

Driving Evolution
While there have been changes within the Party, and there is potential in that change, it is clear that the political establishment is responding to day-to-day institutional evolution elsewhere, not leading it. The example of Delta Electronics illustrates the point and brings together the disparate strands of economic, social, and political change in China.
The assembly of power supplies (the transformer “bricks” and accompanying cords) for laptops is typical of the kind of electronics manufacturing that takes place in China today. Most of these power supplies are produced by a single Taiwanese-owned conglomerate, Delta, which does much of its manufacturing assembly on the Chinese mainland. Fifteen years ago “manufacturing assembly” in China meant screwing together finished, imported parts. The institutional demands of accommodating these low-skill activities were relatively unobtrusive: sweatshop manufacturing did not challenge the establishment’s social and political comfort zone.
Today manufacturing assembly means something else, in part because manufacturers have sought to redefine it, and also because institutional changes have enabled and even forced that redefinition. In order to stay competitive and hold on to key customers such as Apple, HP, and Dell, Delta has to be able to design new power supplies, often on very short notice. This is because customers—the brand-name firms that conceptualize products—are increasingly pushing design tasks downward to their suppliers. The suppliers respond by enhancing their design capabilities in order to bind the customer more closely to them and increase the burden of switching to another supplier.
In Delta’s case customers have been demanding smaller and smaller power bricks. In a matter of weeks, Delta must be able to make a product to-spec, at low-cost, and in enormous quantity. In order to meet the engineering challenges these demands present, Delta has established research-and-development centers within easy driving distance of its manufacturing operations. Those R&D centers are run not by Taiwanese citizens, but by returnees from the United States: Chinese citizens who, after receiving advanced engineering degrees and working in Silicon Valley or other high-tech regions, have elected to return home. But if they are to come back, Chinese society has to accommodate the salary structures and housing they want, as well as the information access—and therefore high-tech infrastructure—they need in order to do their work. (Accommodation of this societal group overlaps with that of purely domestic entrepreneurs and researchers who are diving into global business operations.)
China has not surged forward economically while remaining frozen in place politically.
Returnees alone, though, do not make R&D centers function. They lead a staff, which today is composed of young graduates from China’s top science and technology universities: Tsinghua, Zhejiang, and Shanghai Jiao Tong. In order to take on the advanced design challenges Chinese companies now face, these young engineers needed an education decidedly different from the kind Chinese universities provided even fifteen years ago. The curricula of China’s top universities had to be revamped. More important, the criteria for selecting faculty were transformed as well.
Chinese universities—all state-controlled—were once closed-off communities shaped by rigid systems of seniority and internal promotion. Curricular reform—not to mention the hiring of outside experts—was aggressively resisted. In recent years, that resistance has been effectively quashed. The state has made overt efforts to break down barriers: the Chinese ministry of education requires—through the use of quotas—that universities have both overseas-trained faculty and domestic PhD recipients on their staffs. More subtly, many of these highly trained individuals—whether through their roles as policy advisors, public intellectuals, or commercial consultants—have become increasingly influential in shaping public attitudes and expectations.
All of these activities have been possible only because so much of the old system—economic, social, and political—has been tossed into the dustbin of history. For China to maintain its position as a center for high-tech manufacturing, commercial producers and the institutional environment both needed, and continue to need, upgrades. The aggressive and purposeful fostering of this dynamic has in turn led to surprising reconfigurations of societal power and unexpected openings for previously shunned individuals.
None of these changes, substantial though they may be, prove that China is on a path of democratization exactly like that traveled earlier by Taiwan and South Korea. What the changes do suggest, however, is that we should be cautious about reading too much into immediate political circumstances, such as the recent crackdown. In normative terms, we are right to condemn the crackdown. We are right to be concerned and to voice those concerns publicly. At the same time, we end up on shaky ground if we treat the events of the day as prima facie evidence of political stasis or institutional rollback. China has not surged forward economically while remaining frozen in place politically, and it is hard to argue that the Chinese government will tolerate only those changes that do not threaten its fundamental hold on power, the implication being that China has yet to experience anything approaching real political change. It would certainly be unwise to base public policy upon such premises.
Nobody can say for sure where China is headed. The real issue, though, involves interpreting where China is today and how it has arrived at this point. Whether with regard to China’s growth story or its current stifling of dissent—and especially with regard to the relationship between them—this is not about connecting the obvious dots. Rather, it is about correctly identifying, with plenty of room for debate, what the dots are and how they relate to one another causally. To make sense of what is unfolding right now, and to fully appreciate the range of possible outcomes, we have to acknowledge that profound change, both economic and political, has taken place in China in recent years. In places such as Taiwan and South Korea, brutal crackdowns on dissent were among the last vestiges of authoritarian rule. In contemporary China that could also be true. Indeed, given the last twenty years of change, it seems not just possible but likely.

Sunday, July 10, 2011

90 years of Chinese Communist Party and the role of Mao Zedong

Zee Exclusive
'Mao a terrific personality in Chinese history'
ZEE News (Noida, India), Sunday, July 10, 2011, 11:01

Founded with just 50 members in 1921, the Communist Party of China is now the largest political party in the world with 80.269 million members. On July 01, the flourishing party celebrated its 90th anniversary. China has come a long way under the CCP, which seized power in 1949. China was then led by Mao Zedong. It took the country years to get onto the path of reform after 30 years of famine and Cultural Revolution. The Dragon finally opened up after the death of Mao in 1976. China is today the world's second-largest economy.

At a time when Arab Spring is shaking the Middle East, the CCP tried hard to woo China's 1.4 billion citizens by kicking off a campaign ahead of its anniversary. It organised concerts, TV shows, a propaganda film, commemorative coins, and even a red games sporting competition. However, in the end, Chinese President Hu Jintao had to acknowledge the need to fight state corruption to keep hold of public support.

In an exclusive interview with Kamna Arora of, Dr Jagannath Panda, an expert on China, discusses the complexity in today’s China about Mao’s legacy, and successes and failures of the CCP.

Dr Jagannath Panda is Research Fellow at the Institute for Defence Studies and Analyses (IDSA), New Delhi. He is also the author of the book titled 'China’s Path to Power: Party, Military and the Politics of State Transition' (Pentagon Security International, 2010).

Kamna: What is the status of China's Communist Party in its 90th anniversary? Has it lost its charisma or still enjoys people’s support?

Dr Panda: The Chinese Communist Party has reached an important juncture with its 90th anniversary celebration. Though the Party has gone through many changes since its inception, the core elements of the Party still remain intact. Building a “socialist structure” or an official slogan for “socialist harmonious society” is still regarded an important task. There is a widespread concern to establish “socialist harmonious society” among the top leaders including the current President Hu Jintao and the future leaders like Xi Jinping and Le Keqiang. The Party’s attempt here is to engage the interests from all quarters, particularly of the socio-political actors, legal communities, labour and the military. That speaks about the moderate nature of the Communist Party in today’s context.

Though it is difficult to argue outrightly that the Party has lost its charisma, it is definitely safe to argue that the Party is no more the same charismatic party that it used to be during the revolutionary period of China. Many political ideologies and institutions still hold their fundamental values for China since the revolutionary period; and these are still found clearly in the Chinese constitution and various governing institutions and associations under the Communist Party.

However, what is interesting to note here is the Chinese idea of establishing “socialist harmonious society or world” is linked with China’s global affairs and foreign policy strategy. To revive its charisma in the 21st century, top leadership in the Communist Party has tried to leave some landmark imprints on China’s global strategy through implementing thoughts like “peaceful rise” (heping hueqi) and “harmonious world” (hexie shijie). These thoughts are interesting Chinese formulations, as these are mainly instrumental thoughts in conveying to the people of China and the world the message that the reference point of the idea of “peaceful rise” is that China would like to grow within the status quo and international norms rather than pushing hard for any alternative world order. Similarly, the idea of “harmonious world” represents an extension of China’s domestic efforts at building a “harmonious society”. Though it is impossible to settle on what could be the final character of the Chinese Communist Party, the democratic elements within the Communist party offers stimulating ideas at many policy levels for debate in the light of the significant consequences they imply for world politics. The impact of the Chinese Communist Party is huge, both internally and externally.

Kamna: Do you think the current leaders in the party have managed to live up to the original ideals of the founders of the party?

Dr Panda: Current leadership in China are trying to maintain a right balance between the original ideas and the contemporary realities. The sense of establishing a “socialist democracy” in which the “government must act in accordance with law” has been pushed systematically by the Party since the days of Deng Xiaoping. The concept has in fact become a major segment of the Chinese political process.

Leaders like Jiang Zemin propounded the “three represents” to uphold the legitimacy of the Communist Party which supposed to represent the “most advanced mode of productive force, the most advanced culture and the interests of the majority of the population”. Similarly, establishing a society based on the “rule of law” is an interesting attempt among the contemporary leaders. However, it seems that instituting the rule of law in an authoritarian system like China leads to paradoxical outcomes, like the formation of “socialist democracy”. Despite the absence of full-fledged rule of law, perhaps the most striking feature among the current leadership in China is the realisation of the significance of law, legalisation of the process and the institution, and a necessity to form a legal order. This is clearly observed at different scales and in different forms.

At the moment, the Chinese case presents a cautious approach to its institutional politics, because both the surface of the politics and problems are structural in nature. Therefore, while the Chinese Communist Party may abstract sufficient time to institute an interest-based political order and transition, all these trends seems to uphold Party’s legitimacy, promote economic growth, strengthen military and maintain a balance between domestic and global security challenges.

Kamna: How do you read this when the party says Mao's ways led to chaos in entire society?

Dr Panda: This has been a debate in China always. Some Chinese call Mao as a ‘good leader’ and some call him as a ‘bad leader’. But the consensus remains in China that Mao is a terrific personality in Chinese history and restored most of the Communist path. However, what is important to note here is that Mao’s legacy remains debatable in China today and China’s effort of building a “socialist democracy” seems paradoxical given the nature of Party control over its monolithic social and political system in a post-Leninist state. To put it in other words, Stanley Lubman’s allegory of the “bird in a cage” is a reminder of this limit. The complexity in today’s China about Mao’s legacy and its political discourse is broadly divided into three mainstream categories; the official formulations, neo-conservative intellectuals; and liberals. That speaks about China’s confusing state of affairs today.

Kamna: What are the successes and failures of the largest political party in the world?

Dr Panda: The most impressive achievement of the Communist Party today is China’s steady and quick economic growth over the past three decades. In fact, the grand success of the Chinese economy- fostering growth in many aspects- seems to defy conventional wisdom. Further, a wide-ranging programme of institutional and political reforms is currently underway, with the strengthening of citizen’s rights, building legal structure, preparing a modern and advanced military, and citizen participation in governmental and political processes. The Chinese Communist Party’s leading role in the Chinese political discourse is abhorrent to the liberals, who view the system of multiparty competitive elections as best suited to complex societies comprising different groups with often contradictory interests. However, this is not easy to bring systemic changes to China so easily where the problem is structural, and when the Communist Party is at helm.

The Communist Party is open to the democratic ideas; but not open to the democratic system. That has been the problematic part of the Chinese Communist Party in China. Issues like human rights, media censorship and one-Party structure brings the Communist regime to the bad lime-light. It often highlights the Chinese Communist Party’s failure to rise to the contemporary social realities. Problems like unemployment, corruption, lack of social freedom often highlights the failure of the Communist regime in China. These not only discloses several deficiencies in the political system but also highlight why China’s global posture still remains suspect even today

Tuesday, July 5, 2011

W.T.O. Says Chinese Restrictions on Raw Materials Break Rules

W.T.O. Says Chinese Restrictions on Raw Materials Break Rules
The New York Times, July 5, 2011

BRUSSELS — The World Trade Organization said Tuesday that Beijing violated global rules by restricting exports of nine raw materials used in high-technology products, in a case that has stoked tension between China and its Western trading partners.

The ruling is in response to a complaint lodged by the United States, the European Union and Mexico in 2009, which underscored the growing concern among Western governments about Chinese trading policies. It also strengthens European arguments against Chinese restrictions on the metals.

The decision Tuesday concluded that Chinese quotas, export duties and license requirements put in place a discriminatory regime for the export of industrial raw materials, including coke, zinc, magnesium, bauxite and silicon metal.

“This is a clear verdict for open trade and fair access to raw material,” said Karel De Gucht, the European trade commissioner. “It sends a strong signal to refrain from imposing unfair restrictions to trade and takes us one step closer to a level playing field for raw materials.

“I expect that China will now bring its export regime in line with international rules,” he continued. “Furthermore, in the light of this result, China should ensure free and fair access to rare earth supplies.”

In its decision, a W.T.O panel rejected China’s argument that its restrictions were motivated by a desire to protect the environment and prevent a critical shortage of the materials.

Europeans had challenged China’s environmental protection argument by pointing out that the consumption of the raw materials was not being controlled domestically.

China must now either appeal the ruling or comply with it by removing the restrictions. If it fails to do either, the United States, the Union and Mexico could eventually be allowed to respond with equivalent trade sanctions, according to W.T.O. rules.

The nine raw materials covered by the ruling are used in medicines, compact discs, electronics, the automotive industry, ceramics, refrigerators and batteries, among other products.

European officials said the export restrictions increased the global price for the raw materials, giving Chinese companies a clear commercial advantage.

They also made it harder for non-Chinese companies to procure the raw materials by making them less readily available on the global market.

A version of this article appeared in print on July 6, 2011, in The International Herald Tribune with the headline: W.T.O. Says Chinese Restrictions on Raw Materials Break Rules.

A Russian view of China’s development - Andrey Denisov

A Russian view of China’s development: An interview with the country’s first deputy foreign
minister Andrey Denisov

Yermolai Solzhenitsyn
McKinsey Quarterly, July 2011

Andrey Denisov has spent much of his career studying China. The economist and diplomat discusses the keys to China’s social and economic success.

The last three decades have brought visible changes in every aspect of Chinese life. Andrey Denisov, Russia’s first deputy foreign minister, former minister-counselor of the Embassy of the Russian Federation in the People’s Republic of China, and Russian ambassador to the United Nations, has spent years inside and outside China studying the country’s astonishing ascent. “I entered the economics department of university and began to learn Chinese in 1969. It was the worst year in the whole history of relations between the two countries,” Denisov recalled in a recent interview. “Thus, if anyone told me at that moment what China would become 40 years later, and that I would experience it with my own eyes, I would have refused to believe them.”
In this excerpt from an interview conducted by McKinsey’s Yermolai Solzhenitsyn, Denisov discusses China’s socioeconomic reforms and potential lessons for Russia. The complete interview was published this year in the 22nd edition of Vestnik McKinsey.1

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McKinsey: What is the secret of China’s successful economic reforms?
Andrey Denisov: In China, they have carefully studied various models of economic growth, various economic theories and doctrines, and examples of successful industrialization and modernization. But most important is that they have adapted the approaches they select to their own realities. It is safe to say that China’s reforms owe their success to the combination of the best international practices and the national Chinese specificity, with due consideration of local conditions.
McKinsey: Can you give us an example of something that China borrowed from other countries and adapted for its own use?
Andrey Denisov: China began to establish special economic zones along its coastal belt, making good use of a big, hardworking, disciplined, and unpretentious population—in terms of wages and salaries—and a convenient location at the crossroads of global trade routes. Special economic zones were not invented in China; it is an international practice. But in China, they have become a driver of reforms, while in other countries, including Russia, they actually stagnate.
McKinsey: What are some other reasons why economic reform has succeeded in China, whereas others have failed?
Andrey Denisov: I have already mentioned the labor force and the beneficial geographic location with regard to the global markets. The third factor is the existence of the immense internal market. The fourth aspect is the Chinese expatriate community, which is committed, as they say, to “the rejuvenation of their motherland.” Chinese populations abroad remain Chinese. They are citizens of their country—if not in their passports, then in their souls. They possess vast financial resources, and these resources have been funneled to China. The country retains strong governmental power and efficient management, which helped to build a mighty, open economy literally from scratch.
Take another feature of China’s way. Amid revolutionary enthusiasm, the Chinese did not slacken managerial discipline and did not throw the baby out with the bathwater. We can argue about correctness or faultiness of this or that ideological course or political model, but it is absolutely obvious that in China the ideology was totally subordinated to the objectives of economic performance. And this ideology has become a framework of the management model rather than a set of dogmas never to be questioned by anyone.
Generally speaking, the Chinese mentality presumes consistent and gradual actions, the lack of haste, or, to put it simpler, no hustle and bustle when it comes to transformations. Therefore, in any aspect of China’s reform, the most important constituent is common sense. It is the ability to take a practical view of your needs and opportunities, to act not with haste but step by step, and to pursue the decision once it is already made.
McKinsey: What is unique about China’s experience?
Andrey Denisov: I would point out a rather interesting aspect, which is sometimes overlooked when studying China’s reforms. The leaders of China, Deng Xiaoping in the first place, made good use of the purely political factors related to the world alignment of forces. Those were the days of the Cold War, which was rather violent, for that matter. But China managed to position itself in such a way that it became of interest to the American leadership that Chinese–American tensions relax, and the relations between the two countries then began to normalize. The United States offered China vast opportunities, in terms of both technological resources and trade prospects. China got access to the immense American market. And I think you will agree that in the shortest possible time, China managed to oust everybody from this market, including the American manufacturers themselves. Anything you buy in a supermarket in the United States—be it clothes, household appliances, or domestic articles—bears a label “Made in China.”
Hence, the West, and the United States in the first place, helped China’s integration into the global economy. Not only did they open their markets and provide technologies, but they really helped China become a part of the world’s economy. It is quite obvious that such factors come together very seldom, if ever at all.
That is why the Chinese experience is so unique. But most important has been China’s ability to sustain national specificity: their nonadmittance of a purely mechanical application of any foreign practices; their common sense; their consistent and gradual approach to transformations; their patience; and, maybe, the fact that at all stages of the reforms, all layers of China’s society benefited from these reforms in their everyday life. Some of the Chinese—for example, residents of the maritime cities—benefited more, some less, but nobody, or almost nobody, lost. There are no socially important groups in the country that would have been driven by the reforms to the sidelines of social progress.
McKinsey: What are the weaknesses in the Chinese development model?
Andrey Denisov: The country’s political leaders clearly understand that, along with unquestionable successes and achievements, China still has weak points, and many of them. Despite all its merits, China’s development model involves taking over existing processes. China is very capable of copying, adjusting, adapting, and borrowing the experiences of others. But it has not yet delivered its own breakthrough technologies. Chinese exports, including high-tech products, are the result of utilizing imported modern technologies rather than proprietary solutions. One way or another, China will definitely face the necessity to upgrade to a new scientific and technological level.
McKinsey: Does modernization of the Chinese economy have a downside?
Andrey Denisov: Yes, certainly. Sometimes it results in increased social tensions; indeed, the urban territories differ greatly from the rural ones, and coastal regions are absolutely distinct from the inland. The country suffers from acute environmental problems, from the lack of arable land and water. Social problems also exist, such as high levels of corruption. The authorities realize it perfectly. And it is not by mere chance that they punish corruption so severely in China: even high-ranking officials have no guarantee against lengthy terms of imprisonment or even the death penalty.
McKinsey: More than a few people in eastern Russia are afraid that millions of Chinese will cross the border. How real is this notion? And how will relations with China develop in the border regions of Siberia and the Far East?
Andrey Denisov: Naturally, I am not a supporter of apocalyptic scenarios, which are based on superficial perceptions of some external indicators rather than on a thorough analysis of the situation. If China had designs on these lands, we would have known of this for centuries already. But the Chinese state has always existed within the same borders it currently holds. Siberia and the Far East are not quite fit for China’s economic and social model. Until recently, it was rather hard to develop agriculture in these regions due to harsh natural and climatic conditions. And agriculture was the foundation of the Chinese economy for ages. So it pays to look first at history.
Now let’s shift to modern times. In 2004, China and Russia displayed sufficient political wisdom to finally settle the border issue which, like a thorn, still remained in the flesh of our relations. To secure its interests, China has found it much more advantageous to have a prosperous, reliable, and useful neighbor nearby than a target for expansion. Russia’s situation is completely different, with its boundless spaces and scarce population—not growing, at best, or even reducing—of Siberia and the Far East. But these regions are attractive in terms of mineral reserves and transportation opportunities. In Russia, we must make all possible efforts to speed up the development of these areas. The summit of the Asia–Pacific Economic Cooperation countries, which is scheduled to take place in 2012 in Vladivostok, is being viewed primarily as an opportunity to discuss the development of these regions.
In this respect, China is an extremely valuable partner. China mainly purchases raw materials, lumber, and mineral products from Russia, while selling us finished goods and food. But it is up to Russia to change this equation. The Chinese partners are ready to build mutually beneficial relations, not unilateral ones. Not so long ago, the program of Russian–Chinese economic cooperation in Siberia and the Far East was adopted. Now that the framework is in place, everything depends on what we will do to fulfill this program. So, apocalyptic scenarios might be best kept for the movies, not for objective political analysis.
McKinsey: Since Russia’s population is declining, should it encourage immigration from China, to help these regions’ development?
Andrey Denisov: We already have enough Chinese labor force there. But it is just a labor force. The Chinese are indisposed to take roots and settle down in these territories. They still view the bilateral economic cooperation as seasonal work. I mean, people arrive, work, earn money, and go back to China. These are mainly construction and agricultural workers. Of course, many Chinese are doing some commerce as well. The Chinese are good at that, really.
McKinsey: But Russia also buys what they sell.
Andrey Denisov: Exactly. I do remember those times when they were buying from us. For instance, they were buying buckets and woolen coats. They were buying, ridiculous as it may seem, felt hats in large quantities. It was not so long ago, just in the late 1980s. At that time, we were buying less from them than they from us. In the 1950s, the Soviet Union was an economic sponsor. We assisted China in restoring its economy at that period. And they remember it.
But today the situation has changed. Yet, until recently, in some areas such as equipment and technology, we were selling more to China than China was selling to us. The share of machinery and equipment in our imports from China already exceeds the same share in our exports to China. In this category of goods, we are now approximately on par, but the balance is gradually shifting to the Chinese side.
McKinsey: In the decades to come, will Russia abandon its generally Europe-oriented political and economic model and turn to Asia, and China, in particular?
Andrey Denisov: I am deeply convinced that Russia’s civilization as such is Europe-oriented. And this is a natural aspect of our development. But our turning to Asia is nonetheless natural. Why so? Because we are physically present there. I remember the time—the 1970s and the 1980s—when the sole sign of Russia’s presence in Asia was its Pacific fleet. It was very powerful and was sailing with its firepower for all to see.
Today the situation has changed. We need an economic presence in this region in the first place; we need to become necessary for this region. Russia is still not recognized as an Asian country, despite all its Asian associations. We even became an ASEM2 member, which gathers the leaders of European and Asian countries. For a long time, we held off from ASEM, because we ourselves do not always know who we are.
We should look at Australia, and especially New Zealand, and how these Anglo-Saxon countries searched out their Asian-Pacific identities. I believe that these conscious spiritual efforts deserve deep respect and attention, and we should follow this example. Turning our face to Asia must not be a political move, but an inherent natural act.
People who live in Siberia, in Eastern Siberia, in the Far East, perceive themselves as residents of Russia, but of this part of Russia. They are not temporary dwellers, they do not think, “OK, we will live here for some time, work here, and then we’ll leave for Saint Petersburg, and our children will study there.” We must cultivate the sentiments of permanence, of better conditions for a better life in the Far East. And much depends on ourselves here. But I do not believe that artificial models can be implemented. It must be a natural process.
For historical reasons, since the 16th century, Russians have found their way to the far-distant Pacific coast, to Kamchatka, to Chukotka. This migration grew from some inner flame, some impulse. And only afterwards, the purposeful actions followed. One of the outstanding Russian economic projects of the 19th century, of course, was the Trans-Siberian Railway, which was laid in the territory of both Russia and China. The Chinese Eastern Railway is also part of this story. We have really good examples, and we should remember them.
McKinsey: Still, Russia and the Asian countries would seem to have limited knowledge of one another. What do you think?
Andrey Denisov: I agree. In the field of economic cooperation, we are looking to achieve more but must put up with what we’ve got, since our ambitions are out of sync with our capabilities. This is also true for cultural cooperation. This is a point of mutual interest, mutual attraction.
I am very pleased that interest in China—Chinese culture, language, medicine, philosophy—is rising around the world. For example, we have discussed that the Chinese might lack creative potential when it comes to technology, but when it comes to filmmaking, for example, creativity abounds. Chinese film directors gather awards at many international film festivals as their motion pictures reflect a unique outlook on the world around them.
It is crucial that the governments of China and Russia have a good understanding of this. Hence the focused effort, the “Year of Russia” in China, followed by the “Year of China” in Russia. This is a program including more than 300 important events—exhibitions, tours, concerts, festivals, public meetings—that funds are allocated for. This is not manna falling from the sky.
I see, with great pleasure, interest in the Chinese language awakening in Russia. The very process of learning Chinese is fascinating. And it is quite distinctive, by the way, that universities in the Russian Far East and Eastern Siberia teach Chinese. Young people choose this language and go to China with pleasure. There are many people already who live in China who are like expats, like Englishmen who live in Hong Kong, because they connect their future with this country. They get married, have children, work—and very often work for Russia, thus helping it to implement various cooperation projects. And nobody in China is afraid of it. Our fellow countrymen like to live and work there, and this is good. The Chinese culture is extremely deep. And I believe that this interest will only grow.
We know that the culture and spirit of a people is transferred through their language. There are many translators of Russian literature in China, Chinese people who connected their lives with Russia. And this is also very good!

About the Author
Yermolai Solzhenitsyn is a director in McKinsey’s Moscow office.