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Book Review

China: from socialism to market economy and the quest for world status

Zafar Bangash

CHINA REVIEW: 1997. Edited by Maurice Brosseau, Kuan Hsin-Chi & Y Y Kueh. The Chinese University of Hong Kong, Hong Kong. 1997. pp.xxxi, 398. Hbk: US$55.

The collapse of the Soviet Union in 1991 led to much drum-beating in western capitals about the victory of capitalism over communism. Western commentators, intoxicated by their belief in the 'effortless superiority' of the west, made dire predictions about the imminent collapse of the People's Republic of China as well. Where caution should have prevailed, the imagination was allowed to run wild.

These euphoric projections reflected in such 'celebrated' works as Francis Fukuyama's The End of History have fallen hard against the reality insofar as China is concerned. This may have chastened but clearly not sufficiently wisened western pundits of doom and gloom who continue to live in their ivory tower of self-delusion.

If the Soviet Union, where communism was born, disintegrated, could China be far behind with its much bigger population (1.2 billion), far fewer resources and a rudimentary industrial base, these pundits argued? Besides, China had already been through several upheavals during the life of Mao Zedong, the father of modern-day China. Further grist to this speculative mill was provided by the example of Eastern Europe which collapsed like a pack of cards once the Soviet Union was shaken.

The domino theory in reverse, in which China, too, would go the way of the Soviet Union, was the perceived wisdom in western capitals (in the sixties, the US entered the Vietnam War in order to prevent its fall to communism, arguing that this would lead to a domino effect in Indo-China). As the contributors to this informative China Review: 1997 series show, such predictions have been based more on wishful thinking than on a clear analysis of facts.

True, China is a society in transition: at the political, social and economic levels. Such fast-paced changes are bound to lead to dislocations but as the contributors to this book show with meticulous detail, the Chinese practitioners of Statecraft have deftly manoeuvred the ship of State through stormy waters. The death on February 19, 1997 of Deng Xiaoping, the aging and already retired patriarch, who did so much to steer China away from hardcore marxist policies of Mao and put the country on the road to market economy, has had little negative effect.

In fact, Jiang Zemin, anointed general secretary of the Chinese Communist Party (CCP) in 1992 by Deng, has since consolidated his position, especially in the military as was evident at the 15th Party Congress, held from September 12 onward. In his opening article in the book on 'Chinese politics on the eve of the 15th Party Congress', Joseph Fewsmith says that Jiang (the Chinese use first name to identify a person as opposed to the western convention of the last name!) has deftly moved away from the path prescribed by Deng while publicly claiming to follow it, in much the same way as Deng did with Mao.

Fewsmith calls the transition to Jiang and his generation 'historical'. Mao and Deng belonged to the revolutionary age; Jiang is a product of the new age. Besides, there are no clear cut rules of succession. This makes the transition rather tricky, especially if it is also accompanied by major changes - nay reversal of direction - in important sectors.

The contributors to this volume, however, suffer from no illusions. They have correctly identified areas where things could go wrong. At a time of change in a country's political and economic orientation, unpredictable forces are unleashed. They must be carefully harnessed or they could upset all calculations.

Anti-Chinese writers speculate that the forces unleashed would not be easily controlled. With unprecedented economic growth over the last 15 years, the loosening of centralised control and economic changes towards a 'socialist market economy', creates a tricky situation. Under such circumstances, turbulence becomes unavoidable.

Concurrently, the Chinese leadership has had to grapple with three other major concerns: to produce enough grain to feed its 1.2 billion people; resolve the Taiwanese issue which China claims as part of its own, and grapple with the US which insists on playing the role of the sole superpower - 'single hegemon' in Chinese lexicon.

Dire predictions about China's future as a result of rapid economic growth and the forces of instability that it might unleash, have been addressed by Andrew G Walder in 'Does China face an unstable future? On the political impact of rapid growth' (pp 327-348). This and the first chapter are essentially the central pieces of this highly readable book. If Fewsmith analyzes the internal dynamics of party politics and how Jiang has consolidated his position, Walder takes a broader sweep at changes that have occurred as a result of political and economic reforms.

He examines such issues as: The potential for instability, The rise of autonomous social forces; The perils of 'partial reforms'; The weakening of the centralized Party-State; Looming instability or evolution towards 'normality'?; A society spinning out of control, how perilous is 'partial reform'?, Political disintegration or gradual evolution?; Political matters: forecasts based on contingency and chance; and, What were the lessons of 1989?

With this wide-ranging analysis, Walder systematically debunks the myths and misconceptions surrounding China's future. He illustrates that the rise of autonomous social forces outside centralized party control need not necessarily be negative. In fact, he argues that most of the 'floating population' of 60 to 70 million people, noticed by the authorities, poses no threat to the establishment. These people, whose numbers may appear daunting in other countries, are small in the Chinese context. Besides, they are not landless peasants who have swarmed into the urban centres, as is the case in so many other countries. These people can always return to their small landholdings in the rural areas.

Walder draws a comparison with such other cities as Mexico City, Rio de Jeneiro and Calcutta and finds China in a far better position. Similarly, he draws a parallel between the 'rapid reforms' initiated by the former Soviet Union and Poland on the one hand and the 'partial reforms' of China. He points out that the Chinese experience has yielded much better results.

This is further supported by K C Fung and Lawrence J Lau in their article on China's 'Foreign economic relations' (pp 210-234). They show that Chinese exports have registered a steady increase, doubling from US$71.91 billion to $151.07 billion, between 1991 and 1996. Imports, too, increased from $63.79 billion to $138.84 billion in the same period. China's economic growth rate has been about 10 percent per annum. This is remarkable by any standards given its large population and inadequate infrastructure.

The Chinese experience of rapid economic growth has also attracted massive foreign investment, averaging $30 billion annually. India's by comparison has been only $2 billion. Also, Chinese foreign exchange reserves stand at a healthy $100 billion.

An enduring dilemma for many regimes is the question of feeding their people. China's is particularly acute because of its huge numbers. And even though it has held the population growth in check by imposing severe restrictions on the number of children per couple, feeding nearly a quarter of the world's population with only 7 percent arable land is quite a feat.

Robert F Ash deals with this in the 'Grain issue in China' (pp 136-160) giving both domestic and international perspectives. Using statistical data he shows that while China's grain production between 1978 and 1996 has been uneven, he dismisses predictions of massive grain shortages by such writers as Lester Brown (Who will feed China? Wake-up call for a small planet, New York & London, 1995).

Ash admits, however, that China cannot be complacent. He points to the great emphasis they have historically placed on agriculture quoting the old saying: 'without agriculture, there can be no stability; without grain, there is chaos' (p 138). This has been further reinforced by 'the great famine of 1959-61, when some 30 million people - overwhelmingly peasants - died as a direct or indirect result of starvation. The extent to which this tragedy has penetrated the consciousness of the Chinese people should not be underestimated...' (p 137), he writes.

Other contributors have dealt with such issues as fiscal and banking reforms, the full convertibility of the renminbi (the Chinese currency), the fight against inflation, and reform of large and medium State industrial enterprises. These are viewed as a drain on the country's exchequer as well as a source of corruption. Along the way, that debilitating problem of all societies - corruption - has also been discussed.

It is on the international front, however, that China faces its greatest challenge. Dealings with the two Koreas as well as Taiwan and their impact on relations with the United States are the three major arenas that have pre-occupied Chinese rulers, according to Wu Guoguang in his interesting article on 'Conduction dialogue under strategic conflict: Sino-American relations in flux' (pp 57-85). With the US, the Chinese have had a love-hate relationship which was severely tested during the Tiananmen Square fiasco in June 1989 and then in the spring of 1996 when the Chinese held war games off the coast of Taiwan.

While on the question of Taiwan, China adopts a doctrinaire stance, its position vis-a-vis the two Koreas is informed by economic pragmatism rather than ideological dogmatism. Despite its affinity with North Korea in whose defence China shed its own blood, Beijing does brisk business with the South, amounting to $20 billion in 1996.

Other points of friction in the China-US relations have been the question of copyright laws relating to American produced software and CDs, transfer of nuclear technology to countries like Pakistan, the massive Chinese trade surplus with America, concerns over human rights violations and of course, China's challenge to US hegemony in the world. In 1996, all these factors came into play, as Wu Guoguang shows.

Ultimately, both sides gave in on some points in order to avoid a major rupture in relations. The Americans dropped the question of human rights violations as well as nuclear technology transfer - this latter threatening to turn into a major bone of contention - while the Chinese mounted a vigorous campaign to check pirated software and CDs.

Both Wu Guoguang and Walder concur. Each side needs the other: the Americans want Chinese help in balancing off a resurgent Japan; the Chinese need American technology and do not want to lose a lucrative market with whom they have a $30 billion annual trade surplus (in 1996, it was $40 billion). The Americans are also driven by economic considerations: they can hardly bypass cheap Chinese goods. To return Robert Horan's compliment, the Americans will sell their mothers for a few dollars.

While this book is part of an annual series that began in 1991, one finds the absence of any mention of Hong Kong's reversion to Chinese control in June 1997 strange. After all, this was a major event of 1997 with political and economic ramifications. True, this topic can be addressed in the forthcoming volume (for 1998), but it would have added to the value of this one had the editors addressed the topic and highlighted its significance.

Aside from this, the book offers useful insights into the way the Chinese society works. It also provides pointers towards the future. China is emerging as a major player on the world scene. Those who ignore it, do so at their own peril. This book and the earlier series are a useful tool in understanding the enigma of China, the giant that lays claims to being the next superpower.

Muslimedia: October 1-15, 1997

Article from

Crescent International Vol. 26, No. 15

Jumada' al-Ula' 29, 14181997-10-01

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