Few people visit China today without being awed by the changes being made in the world's most populated country. Typically, one recent visitor described his visit with the observation that China “blows your mind.” If China can change as much as it has in the little more than 40 years since President Richard Nixon first visited the country, one has to wonder what will it be like in 10, 20 or 30 years from now?
National Fellow Herbert G. Klein
While the skyscrapers now dominate the city, the old foreign section “Bund” and the French Quarter also are regaining popularity. Across the Yangtze River, farms have been converted into a new city, Pudong, complete with great office buildings, more towering condominiums, and five-star resorts.
Americans worry rightfully about their balance of trade with China, a nation whose economy has grown at a rate of nearly 10 percent annually for years. But China, too, has serious financial problems with a government banking system that is too often dominated by politics and dubious loans. Most recently the giant Agricultural Bank of China was accused of a $1.8 billion fraud in handling deposits and $3.5 billion in illegal loans in 2004.
China has added 30 million manufacturing jobs in recent years, double all manufacturing jobs in the United States today. A major change in economic mission obviously is under way as China builds its trade and strength in manufacturing. Few visitors arrive without hearing about traffic jams caused by bicycles prior to Nixon's “breakthrough” in China in 1972, and bicycles still are a major source of transportation, though they are outnumbered by automobiles in large cities.
Chairman Mao Zedong has lost much of his former near-divinity status among Chinese and one can only wonder what he would think of a modern China whose major cities are clogged with automobiles.
Today, Shanghai has fast freeways and slow freeways that are jammed with traffic from early morning to late night. The narrow, old streets of Beijing and Shanghai are crowded with vehicles, which provide an international auto show. One city, Chongqing, has banned bicycles for its 31 million residents. Chongqing, incidentally, was the headquarters of World War II hero Gen. Joseph W. Stillwell and has a museum in his name. Nearby is a museum for the old “Flying Tigers,” American fighter pilots who flew for China before the United States entered the war.
The capable United States ambassador to China, Clark T. Randt Jr., says there are more Chinese earning $200,000 per year than there are Americans, but, of course, China has 1.3 billion people, and the U.S. population is estimated at close to 300 million.
That contrasts with a national average annual income of $2,000 per person in China. Workers on the Beijing Olympic facilities earn $1 per day, room and board, and they live in crowded bunkhouses a block from freeways crowded with expensive cars. How long can that last? Perhaps more important than the new-found wealth is China's income disparity.
China, a country that centuries ago was famed for it science and business acumen, still displays awesome business skills, but its new patents are dominated more by stolen intellectual property than new 21st century discoveries. Movie houses in Shanghai do little business because the latest American films are quickly for sale as DVDs at $1 a copy.
Chinese President Hu Jintao recently challenged his nation to become innovative in science and technology and has plans to invest $8.5 billion annually in science and technology, but there is a question whether Chinese engineers and scientists are being trained to be innovative.
Creativity is more difficult in a country with limited freedoms and too few recognized human rights.
It is estimated that 47 percent of the Chinese have savings accounts, and in Shanghai where per capita income is much higher than China's national average, ordinary Shanghai residents have a disposable income of $2,300 and a per capita income of $8,000. The difference in national per capita income is a reflection of the number of Shanghai businesses that require technical and sophisticated business skills.
In a country governed by about 80,000 Communist Party members, protests involving 50 people or more numbered a startling 84,000 in 2005. Although the number has decreased slightly in the first half of 2006, widespread protests and discontent still pose a major internal problem.
Income disparity and corruption, which provoke most of the demonstrations, are problems more apparent in the countryside outside the major cities that most tourists visit.
Sparse news reports reveal that protest after protest involves corruption in which urban officials confiscate land from farmers and sell it to developers at questionable prices. China's aggrieved farmers often fight their battles with clubs and stones and even bottles of acid.
While the Chinese government pays close attention to most internal problems, it seemingly ignores air pollution, which will be apparent to the world when the Olympics arrive in 2008. China is an oil-importing nation. Its consumption of oil has risen 40 percent during the last four years and new sources of supply are constantly being sought. All that has had an impact on petroleum scarcity and is reflected on gas pump prices in the United States.
While China has become a manufacturing powerhouse and has improved the quality of its products, the global economy is changing again. A new world economy is being driven by technology and technological skills, preeminently by advanced countries such as the United States but also by rising economic powers such as India. New York Times columnist Thomas Friedman appropriately describes the evolving world economy as a “flattened” globe.
Shanghai is home for many young American businessmen working for U.S. companies. Few expect to make Shanghai their permanent residence, but most feel overseas duty will help their careers in a global economy.
A nation once cursed by Mao's massively destructive “cultural revolution,” China is putting more emphasis on education. China's universities graduated 4 million students last year. More universities are being built, and old ones are being upgraded. English is taught starting in the second grade. Like the United States, however, China has disputes over teaching methods.
Recently, the University of Southern California's board of trustees traveled to China to hold a formal board meeting in Asia and to establish a U.S.-China Policy Institute. The institute's mission is to bring together professors, students and journalists to participate in important joint policy studies in an academic atmosphere.
The Trojan board, headed by USC President Steve Sample, includes top business, financial and education leaders from both Asia and the United States. USC enrolls 1,500 Chinese students on its campus and is active with students from Asia. There are 1,000 Indians enrolled at USC. Another USC, the University of South Carolina, also has a large contingent of Chinese students. Most Chinese students at American universities now return home to pursue their careers, though that was not the case before China became more prosperous.
The contrasts China displays are illustrated by Tiananmen Square where the communist government once used tanks to suppress the student-led democracy movement of 1989.
On one side of the square is the magnificent Great Hall of the People, where lavish official meetings and banquets are held. On another side of the square is the beautiful “Forbidden City” with scores of buildings dating back thousands of years, and most of those gold-laden structures are open daily to visitors.
Chairman Mao's tomb overlooks the whole scene in Tiananmen Square, but his book, “The Sayings of Chairman Mao,” is no longer a best seller.
Most studies of the downfall of communism in Europe and the former Soviet Union attribute it, at least in part, to gradual liberalizations that led to demands for more freedom.
China today is prospering because of a strong free-market economy and it is experiencing a growing number of limited freedoms. American tourists find China to be warm and friendly. Some of the hotels are among the best in the world, a far cry from the old Peace Hotel, which once housed prominent visitors. Still, there is no freedom of the press, human rights violations are pervasive and censorship is the rule. Yet, ordinary Chinese now criticize the government more openly than a decade ago; an act that would have been unthinkable in Mao's era.
In the major cities especially, people have long since discarded the drab “Mao jackets” that nearly every Chinese once wore for colorful and contemporary Western-style clothes.
China is destined to continue its growth as a world power. But it faces momentous political questions:
Will personal freedoms and democratic politics replace China's one-party dictatorship? Can China's brand of liberalized economy but authoritarian political system survive in a “flattened” world? How will China use its growing military power? Will China's quest to incorporate Taiwan end peacefully, as with Hong Kong, or violently by a resort to military force?
All these factors make China the most interesting, rapidly growing country in today's world.
Herbert G. Klein is a national fellow at AEI.