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China's next hurdle

You think the United States has problems? Take a closer look at China.

November 08, 2012|By Timothy Garton Ash
  • Members of the People's Liberation Army lower the flag on Tiananmen Square during a ceremony at the Gate of Heavenly Peace on the eve of the 18th Communist Party of China Congress in Beijing, China.
Members of the People's Liberation Army lower the flag on Tiananmen… (Diego Azubel / EPA )

In the same week it is revealed to us who will be the next leaders of both superpowers: Barack Obama and Xi Jinping. The only difference is that we didn't know it would be Obama until after Tuesday's vote. By contrast, we knew it would be Xi long before the process that begins in the Great Hall of the People in Beijing on Nov. 8, from which he will emerge as Communist Party leader, becoming president next spring.

The coincidence prompts two questions: Which superpower is getting stronger? And which faces the deeper crisis of its economic and political system? Though this may sound contradictory, the answers are: China and China.

Through its sheer size, developmental "advantages of backwardness," entrepreneurial people, history of imperial statehood and manifest individual and collective hunger for wealth and power, China will become relatively stronger. Therefore, since all power is relative, the United States will become relatively weaker.

But China also has the more profound systemic problems that, if not addressed, may both slow its rise and make it an unstable, unpredictable and even aggressive state. Over the last five years, the United States has gone through a great time of troubles. I predict that China will face its own time of troubles over the next five.

We all know about America's problems: deficit and debt, gridlocked Congress, a tax code longer than the Bible, neglected infrastructure and schools, dependence on foreign oil, the stranglehold of money over politics. I don't underestimate the difficulty of tackling them.

But we all know about them — and that's the point. We don't know the full extent of China's problems because Chinese media are not allowed to report them properly. In official party-state deliberations, the issues are hidden behind ideological code phrases.

Some of China's developmental challenges would exist even if it had the best political system in the world. It has gone through the biggest, fastest industrial revolution in human history. Its urban population has grown by 480 million in 30 years, so that more than half its people now live in cities. Its supply of cheap labor from the countryside may be close to drying up. It must attend to its own domestic demand, for it cannot rely on the U.S. being forever the consumer of last resort.

But many of its problems do result from its very peculiar system, which may be called Leninist capitalism. Since the mechanics of America's electoral college have been explained to the point of exhaustion, let me just remind me you of the Chinese version: 2,270 delegates to the 18th Party Congress of the Chinese Communist Party, which starts Nov. 8, "elect" some 370 members of the Central Committee, who in turn "elect" two dozen members of the Politburo, who in turn "elect" a nine — or perhaps now only seven — member Standing Committee, which stands at the pinnacle of the party-state. All the key appointments will in fact have been decided in advance, in horse-trading and intrigue behind closed doors. Vladimir Ilyich Lenin would thoroughly approve.

Yet at the same time, the vast Chinese state has a staggering degree of barely controlled decentralization and a no-holds-barred hybrid kind of capitalism, both of which would have the wax melting on Lenin's mummified brow. The result is dynamic but deformed economic development in which, for example, cities have run up mountains of bad debt with financial institutions ultimately controlled by the party-state. To call the allocation of capital in China "sub-optimal" would be beneath understatement.

The nexus of money and politics may be at the heart of America's systemic blockage, but so it is of China's. In the former Soviet Union and Eastern Europe, you see former Communist Party leaders who have become mega-rich practitioners of capitalism-in-one-family. In China, their counterparts have become mega-rich practitioners of capitalism-in-one-family, but remained Communist Party leaders. A Bloomberg investigation estimated the total private wealth of incoming President Xi's family at close to $1 billion; a New York Times inquiry put that of outgoing Premier Wen Jiabao's family at $2.7 billion.

In China, as anywhere else, a crisis can catalyze reform or revolution. Pray that it is reform. This increasingly urgent reform, if it happens, will not result in a Western-style liberal democracy any time soon, if ever. But even some Communist Party analysts acknowledge that, in China's own long-term national interest, the changes will need to go in the direction of more rule of law, accountability, social security and ecologically sustainable development.

Now here's the rub. We, in the rest of the world, have an existential interest in the success of both America's and China's reforms. The bellicose edge to confrontations in the Asia-Pacific region between China and American allies such as Japan is deeply worrying. A recent Pew poll shows mutual distrust between the Chinese and American publics growing rapidly. Unhappy countries, unable to solve their structural problems at home, are more likely to vent their anger abroad. We must want them both to succeed.

Timothy Garton Ash, a contributing writer to Opinion, is a senior fellow at the Hoover Institution at Stanford University and professor of European studies at Oxford University. He is the author, most recently, of "Facts are Subversive: Political Writing from a Decade Without a Name."

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