Thursday, March 4, 2010

Will China Rule the World?

In my last blog, I talked about my reactions to the recent book When China Rules the World by Martin Jacques.  At the end, I raised the more important and immediate question of WILL China Rule the World (and how could China get there) since the future is far from being obvious.   The expectation that China will become dominant in the world has largely based on the numerical extrapolation of its economic development for the last two decades.  However such a naive extrapolation is flawed; for one, the high rate of growth cannot be sustained indefinitely.  One must look deeper to better understand the likelihood with the key contributing forces and obstacles.

The recent success of China has a lot to do with its massive population.  At 1.3+ billion, China is the most populated country on earth.  In fact, China had been one of the largest unified country and economy in much of its history since having significant manpower and arable land is crucial for economy in agricultural societies.  Industrial Revolution of the 18th century changed the equation significantly with automation and inventions of new technologies.  The subsequent restructuring of the production and service processes resulting from the forever cost reductions and competitions brought eventually the globalization of resources and supply chain today.  With its reform beginning in 1978 under Deng XiaoPing away from Maoism, China has managed to attract significant foreign investments and stands now as the biggest world factory with its huge and eager workforce.  What had happened thus far was not too different from other “Asian miracles” other than scale, starting with Japan after WWII that was followed by the Asian Tigers including South Korea, Taiwan, Singapore, and Malaysia.   To give you some idea, in this process, China’s agricultural workforce has decreased from around 80% to 50% of the population (that translates to approximately 200 million people!) as urban centers and factories expand at amazing rates.  And in recent years, China’s mobile phone subscription was growing annually by about 60 million which is almost the total population of France.

To achieve the goal of drastically improving standards of living with such a massive population, China adopted draconian measures in population control (One Child per Family) for the urban area in this same period.  30 years later, one begins to see the resulting shift of demographics and looming challenges.  Cheaper and younger factory labors are no longer easily available and wage has been rising rapidly in recent years.  Beneficiaries are the neighboring countries such as Vietnam who is climbing the same economic ladder. According to UN projections, The percentage of older (60+) people of the country is expected to reach close to 30% in another 30 years (by year 2040) with a 50% working population (20-59 years old).   Comparable statistics for U.S. are more like 20% and 50% respectively who has already been experiencing increasing fiscal stress in Social Security and Medicare programs.  As China embarked on developing its health care and welfare programs for elderly, will China be able to become sufficiently rich before its population ages much further?  Keeping in mind that although China’s total GDP is catching up with U.S.’ (behind by only 40%), China’s per capita GDP today is still at less than 10% of U.S.’.

As I mentioned in my last blog, by looking at those well-understood statistics, clean energy will be the most severe roadblock that challenges China’s quest for a standards of living comparable to developed nations.   It is not a secret that China has been working very hard for quite some time to aggressively secure energy and natural resources from abroad.  It is also not surprising that “go green” is in its vision of the future.   The next dominant power will be decided by the success or failure of the pursuits in this domain; whoever innovates and dominates the clean energy technology and develop alternate quality life style will shape the economic order of the world of the future.  To be the one, China will need stronger Science and Technology bases and will have to improve dramatically its fundamental research capability.  Only then, it will be in the position to break through the energy barrier and elevate itself from being merely a follower and cheaper supplier to leading economic powers.  That is, the 64 trillion dollar question is will China hit the clean energy barrier before its total and per capita GDP reach a much higher level?

Let us assume that China will overcome this challenge and be on its way to becoming the largest economic power with a wealthy society.  What history and human nature have shown us repeatedly is stability and prosperity cannot be sustained without an effective and cohesive social and political system where the parity of rich and poor is modest and majority of the people has a sense of participation and ownership of their own destiny.   The progression is certain and there is no exception: economic successes will inevitably encourage and lead to a greater desire for political empowerment.  There are plenty of evidences that the process has already begun in China some time ago.  It is a matter of time before further reform and evolution of its social and current political system becomes a central issue that would ultimately determine IF China will dominate the world.   In addition, China will need to have a set of universal values that aspires its citizens and others, just like what America did.

The challenge is not totally new for China.   Last time the debate took place under a different circumstance; it happened after the humiliating of the 1839-42 and 1856-60 Opium Wars that served wakeup calls to the isolated and ignorant Imperial China.  A number of different ideas were proposed, debated, and some attempted for the subsequent 100+ years through the invasions and partial occupations of China by foreign powers, the destruction of monarchy, and a bloody civil war.  One leading school of thoughts, led by Zhang Zhidong張之洞 (1837-1909), championed “Chinese learning for the essential principles, Western learning for the practical application” [中學為體,西學為用] that would preserve the traditional Chinese culture and social political system while adopting western industrialization and technologies.  The idea was similar to “Japanese spirit, Western learning” 和魂洋才, albeit more limited, of the Meiji Restoration in Japan of 1868 whose “success” was clearly demonstrated in its military dominance and impressive industrial-military complex that terrorized East and Southeast Asia in following decades.  Such an approach was more compatible with Japan that has many similar geopolitical attributes to those of the Western colonial sea powers.  It would not be viable for China then, nor today or tomorrow.  Note Japan has never been able to go beyond its initial military triumphs and economic successes.  It chose to retain its own unique essential values.  Without forming a set of universal values, Japan has not and will not likely to become a dominant country.

Another school of thought was led by Liang Qichao 梁啟(1873-1929) who went much further in incorporating learnings from the West and advocated Constitutional Monarchy form of democracy.  Although supported by Emperor Guangxu (1871-1908), the ill-fated attempt to overhaul the political system was crushed quickly in the so-called Hundred Days' Reform in 1898.   A decade later, Republic of China was established after the armed revolution of 1911 that brought down the monarchy and ended the 2000+ years of Imperial China.

The issue and debate did not end there, nor a century later today.   May Fourth Movement of 1919 brought it to the next level.  It suggested the root problem is much deeper - it is a cultural one and as such, the problem cannot be addressed by transplanting Western values, teachings, and systems.  As the well-known contemporary Chinese writer and thinker Liu ZaiFu劉再復 noted in his 1988/2002 book Tradition and the Chinese, the Movement was nothing short of a cultural revolution during which some had called for critical self-inspection and the denouncement of the traditional culture and values, as exemplified by the work of Lu Xun魯迅.   Unfortunately, Japanese invasions and civil wars swept the nation before any viable ideas was fully developed and experimented.   Like some psychotherapy, destroying one’s values without rebuilding a better one effectively could do more harms than good; the decade long Cultural Revolution of 1966-1976 in China demonstrated that clearly.  Interestingly, Confucianism, the symbol of the traditional system, was the target in both times but is currently the hottest civil topics in China.  Further, China has co-sponsored the establishment of hundreds of non-profit Confucius Institutes worldwide to promote Chinese language and culture.  Is it a signal China plans to build its future social and political system on top of the Confucianism?  Or is it a conspiracy like some suggested that China sees Confucianism like the Imperial China did as a justification of the single party rule forever?

What are the alternatives?  One can find easily two relevant reference examples.  Taiwan (Republic of China) began to move in 80’s from single-party rule (by the Nationalist Party founded by Dr. Sun Yat-Sen) to one modeled after Western multi-party democracy after two decades of phenomenal economic growth.  Although it is too early to judge given its unique sovereignty issues, Taiwan has been struggling for some time to maintain its forward movement with many of the flaws and deficiency stemming from the combination of the traditional social system and an ineffective democratic political system.  Another example is Singapore, another prosperous Confucian state where 70% of the population are of Chinese ancestry.  It was a British colony between 1819-1940) and has been under a de facto single party rule (by People’s Action Party) since its self-governing in 1959.   It has a limited freedom as stated in its constitution.   It holds regular elections with a parliament.  It is questionable however that the Singapore model can be scaled up by orders of magnitudes in size and diversity from a city state of 4+ million skewed population which excels in few niches.

Of course, there is always the prime model of U.S., the current super power of the world.  Its political system and declared universal values are familiar to many in the world: liberty, equality, rule of law, electoral democracy, human rights such as freedom of speech, just to name a few.  In recent years however, the system has begun to show signs of decline.  Its ability to handle stressed and declining economy and diverging ideologies is being questioned seriously.  Politically empowered mass are either lost and resigned, or reacted with flawed instincts and logic.  In his insightful recent Feb 9th interview with Charlie Rose, Dave Brooks, a prominent conservative journalist and writer expressed his pessimism about the American governing system that is so gridlocked.  He pointed out that “Corruption of Process” in American Democracy – inability to think long term, to face reality, to push cost onto others, is largely responsible for the deterioration of the country.  I might add that the decline of independent press – the fourth pillar (in addition to the executive, legislative, judiciary branches) of the country – has a lot to do with it as well.   Can one fix the government system without addressing the social system as David Brooks believes?   President Obama seems to think otherwise.  It is not a coincident that responsibility and respect, two important virtues that Obama keeps emphasizing are high on traditional Chinese values.  The reason for such an emphasis is, I believe, Obama’s recognition of the need for a better balance of individual and social goods in U.S. which has been tilted too to the individuals and special interests under the names of individualism and free market economy which work well only when there are plenty resources to go around.

Indeed, the core issue is an old one: it is simply about the delicate balance of conflicting individual and social goods.  To achieve and to sustain its dominance, China, opposite of U.S., will necessarily need to move further away from collectivism to unleash the individual creativity and drive for success.  There is nothing wrong per se with the core values of Confucianism but it does need to be expanded and adapted.  Filial Piety is not a unique Confucian value.  It is universal, as evident that it is one of the commandments of Judeo-Christian as well as Islamic religions.  Ren or benevolence (or as Peter Boodberg suggested, "co-humanity"), loving and fulfilling one's responsibilities toward others”, is based on empathy that is universal as well and goes to the heart of humanity.  Having said that, what Imperial China had done was to perfect an autocratic hierarchy, with the helps from smart Confucian scholars, where the Imperial House sits on top in a patriarchy role, completed with supporting interlocked systems.  The obvious self interest and flaw is the assumption that the top of the hierarchy would be benevolent and competent.  When it is not (which is often the case), there is unfortunately no effective way to correct and/or replace the top.  For that reason alone, autocratic system will never be as robust as a democratic one although it can be much more effective at times.  It is not a viable option but it does not invalidate all the ideals of Confucianism.

In short, in addition to the economic challenge mentioned earlier, the next critical challenge for China is to develop a new cohesive social and political system which I would call a modern Confucianism - one that recognizes applicable core values of Confucianism but enlarged and advanced with modern Western philosophies and experiences.   It must come necessarily with companion structures and mechanisms both in hard (government) and soft (social) powers that can effectively govern and resolving conflicting priorities of individuals and the society.  While Chinese democracy does not have to be the same as the American’s, it must empower all but in favor of none while balancing the elitism and populism which American democracy had failed to do.  The only obstacle stands in the way is the threat of "Spirit of Ah Q" (Q精神) as depicted in Lu Xun’s famed 90 year old novel The True Story of Ah QQ “that Chinese could choose not to face up to reality and deceive themselves into believing they are successful and superior to others”.  There are encouraging signs though; recently in China, the Chinese biopic movie Confucius was beaten in box office by the high tech futuristic adventure movie Avatar, despite active intervention and promotion of the Chinese government!

Talk to you soon!

1 comment:

CrisisMaven said...

China will not only NOT rule the world, it will proably even disintegrate: There will be much more hardship soon with a looming Chinese collapse bigger than the Soviet Union's.