It is a great honor to be asked to give this lecture. I’d like to join Chris in acknowledging the generous support of the Bradley Foundation, and I would also like to say what a privilege it is to be part of AEI. It is hard to imagine a more congenial environment or a more stimulating set of colleagues.

This afternoon’s lecture is called "China after Communism," so let us begin by recognizing that perhaps communism will not end in China. Last year saw celebrations in China of its fiftieth anniversary, and there was no obvious sign that it was on the way out. Cities like Shanghai are as clean and prosperous as I can remember. The blood of Tiananmen has been forgotten, and Chinese leaders are now sought-after guests in the United States and elsewhere. They speak about many things, but one thing they make absolutely clear: they have no intention or plan to alter the communist system of authority.

A strong U.S. constituency supports this approach. These Americans do not exactly endorse the Chinese dictatorship, but they fear chaos, and they argue that China is fundamentally on the right track. It is in better shape than Russia and is getting freer and freer with each passing day. They furthermore assess the current situation as sustainable. This in turn makes it possible for us to bring China back to its traditional place at the center of U.S. Asian policy. Fifty years ago when a much weaker Chinese state was tottering before Japanese invasion, we nevertheless reserved a place on the UN Security Council for China on the assumption that it would very soon achieve great-power status. In a similar fashion, we have reserved an important role in the world for China today.

Such has been the longstanding American approach to China, one that appeals to many strands in our national character, not least optimism. But China will not be able to play those roles well or constructively unless its domestic situation is in order. The USSR, for which we entertained similar hopes, ended in a surprise with a terrible thud. Many Americans today believe that the USSR could have been handled better. In fact, much of our current China policy can be understood as applying to that country the approach that would have been applied to the USSR had someone other than Ronald Reagan been in power.

This afternoon I will argue that in the fairly near future China cannot escape some sort of fundamental political reconstruction, as significant in scale and scope as what happened in the USSR beginning a dozen years ago, though not necessarily following the same pathways. This could well come during the next one or two U.S. presidential terms. I will suggest that this possibility has important implications for our own policy. Not least, uncritical eagerness to bring China to the center of the Asian international system and failure to hedge against shocks emanating from China could have very serious consequences.

How will this change occur? I well remember the farmers’ markets, utterly spontaneous and miles long, that suddenly appeared in the Chinese countryside the instant trade was permitted again, in the 1980s. They seemed to have everything: not only chickens and pigs and produce, but also fortunetellers, barbers, dentists, matchmakers, you name it, all arrayed and working without anyone having given instructions.

Political reform, China’s crying need today, is different. Unlike markets, constitutional structures are not self-actualizing. They do not grow spontaneously to meet needs. Economists have spent centuries elucidating the many marvelous things that markets do by themselves. By contrast, statesmen and jurists are still wrestling with the mysteries of how to create and impose a political and constitutional order appropriate to human needs and rights. Some people imagine that as economic change progresses, political change must follow smoothly and inevitably. But history shows no such phenomenon. Economic change alters society, to be sure. No seamless transition to democracy takes place unless it has been painstakingly planned, years ahead, as it was in Spain. But what I call the "asymptotic transition from dictatorship to democracy," with the political system slowly closing in on freedom until at the limit it reaches it—the implicit model in the minds of many commentators—that does not exist. Rather discontinuity is inescapable, with thuds and bumps and shocks and worse, and this may last a few days, or a few months, or a few decades.

Few countries, furthermore, confirm this fact of bumpy political transition better than does China. The past hundred years have witnessed perhaps half a dozen big or small civil wars, and a series of massive attempts at political reconstruction—none of which, even today, have proved conclusive or enduring.

In spite of this fact, however, many people fail to grasp just how disorderly China can be, I think for the following reason. Most are aware that human effort created such states as the Roman empire, or the United States, or a unified India. Historians today pay much attention to these processes of "construction" not only of institutions but of identities. We recall d’Azeglio’s remark, "We have made Italy, now we must make Italians."

China, however, is thought of as being different. A lot of people seem to believe that China and the Chinese have somehow just always been there. Unlike anything anywhere else in the world they are what might be called a "natural" nation. Since the nineteenth century, nationalist rhetoric has called Chinese people tongbao (same womb) as it has attempted to found political unity on putative kinship. The Western approach is rather similar. To the unaccustomed European eye, China seems homogenous, an inscrutable racial and cultural mass, united by its unintelligibility. This misperception leads to a belief that racial and cultural homogeneity somehow provides a special kind of Chinese cohesion, something that Europeans do not have, and thus that in China, but not in Europe, ethnicity in effect equals politics. This stereotype is fundamental to misunderstanding of China both in the West and in China itself. How often have we heard it said, "Well, they will find a very Chinese solution," or words to that effect, meaning, "They will do the impossible in a way that we cannot possibly understand."

But in fact China is not different. Its populace is every bit as diverse, both ethnically and in beliefs and interests, as any in Europe. Like Rome’s or Italy’s or India’s, China’s unity is a human creation, with its long history perhaps the most remarkable of all. How has it been achieved? The historical answer is, always through radical simplification, through standardization, and construction from modular units—farming families in traditional times, putative members of the same race during the period of twentieth century nationalism, and then homogenous members of "the masses" under the communists. But in and among themselves, these units have no cohesion. They are a sheet of loose sand, as Sun Yat-sen said, a wall of pebbles, as an ancient source puts it, a "pyramid of ball bearings," in a recent analysis. Historically these pieces have been bound together by a few simple rules and central institutions and by the moral community fostered in traditional times by universal study of the Confucian classics.

Under communism, provinces, autonomous regions, and municipalities have been the administrative subunits into which nearly everything fits. With very rare exceptions, institutions are organized, careers are made, and lives are lived at that level. Only two institutions, the Party and the military, are national, and even then only for people at the very top.

The basic building block of society below that level was the danwei, or unit. This could be a factory or a farm or a cruise ship or a university department. This was where each person received his pay, made his friends, got his education, received his medical care, obtained his housing—in effect, where he spent his life. The danwei was also the fundamental moral unit, the building block of the moral community. The unit made no sense economically, but it was the basic administrative unit, and also the moral community, suffused with communist mythology and slogans.

In the decade since the Tiananmen massacre, the economy has developed a lot. Once order was restored, the leadership concentrated on getting more money to people, part of an implicit bargain: if you let us stay in power, we will see to it that your standard of living rises. Anyone who visits China cannot but agree that both sides have kept that bargain rather well. This development has been based in part on liberating China’s own potential, and even more so on foreign connections, trade, and investment. Over twenty years China has received more than $300 billion in foreign direct investment, much of it from Hong Kong and Taiwan. Imagine how the history of the USSR might have been different if such funds had been available.

This has meant an impressive rise in the standard of living for Chinese urban populations, particularly those along the coast. But economic development is also leading to regional differentiation and inequality. Of China’s GDP almost 50 percent is accounted for by a few major urban areas and their hinterlands: greater Guangzhou, greater Shanghai, and Beijing-Tianjin. More than half of China’s current balance-of-payments surplus is accounted for by a single province, Guangdong, alone.

Rich areas don’t need the center, but poor ones desperately need redistribution. New wealth, however, is mostly staying at the provincial level and not reaching the center. The result is that the national government in Beijing runs a deficit. Economic growth is good for lots of people, but politically it is weakening the center in comparison with the provinces. Debt is growing rapidly, and recentralization is being attempted.

And what is happening to the danwei? Economically it makes no sense at all, so with all the new competition it is being hollowed out. People who were forced to join danweis fifty years ago when Chinese communism was confidently constructing a new order are now being told that they must find their own jobs, buy their own housing, pay for their own medical care, and finance their own retirements. In place of the nicely fitted mosaic of delineated units, economic development is creating new differentiation and complexity, masses of new and often conflicting interests, and tens of millions of people suddenly uprooted and cast out of the only community they had ever been allowed to know.

This human tragedy is a nice illustration of one of the most fundamental errors of the Marxist theory and its approach to society. For the moral community and shared institutions as a basis for social cohesion, communism substitutes economic homogeneity and a consequent sharing of interests. According to the Marxist scheme, social complexity is something that diminishes over time. Societies are initially full of contradictions, originating in the economy, but with each sweep of the dialectic these are reduced, until at the penultimate stage society consists of a handful of capitalists having one set of interests and a mass of proletarians having another. Communist rule is therefore easy, in theory. Once you flick away the handful of remaining capitalists, you have a society having a single set of interests, millions of homogenous proletarians, which should be easy to rule since all you need is to do what everybody wants.

The problem, however, was that Marx got the direction arrow wrong in his dialectical scheme. It turned out that societies do not become more homogenous and uniform as they advance economically. They become increasingly complex. Differences of interest do not disappear; they multiply. The march of history does not make governance easier; it makes it ever more difficult.

The current Chinese governmental system is, unfortunately, based on the Marxist misunderstanding. The communists created millions of basic units—danwei—but they assumed that all would share common interests. No provision was made for a genuine moral or administrative or social structure to hold things together. The result is that economic growth is taking place today in an institutional vacuum. Personal power, cloaked by party legitimation, dominated communist China until economic growth began; now it has been joined by corruption, in which that power, still personal, is put up for sale. If an entrepreneur needs a license, he must pay a bribe to get it, which corrupts both the official and the entrepreneur. Having paid or received the bribes, both are in violation of the law, and thus subject to blackmail by others. This is a demoralizing environment in which healthy economic development is difficult.

It furthermore raises a basic question about the future role of the Party. Given all the new (or newly manifest) differences in interests, the question of dispute resolution becomes pressing. How do you arbitrate between the claims of individuals, or enterprises, or even cities (Beijing and Tianjin are now locked in a struggle for water resources)?

Right now the answer is that the Party decides, but how? In fact decisions depend upon personal ambitions or inclinations, on influence, or on bribes or threats. An obviously better approach might be to create objective and clear rules and independent mechanisms to decide, say laws and courts. That would make sense, but under such a scheme there is no role for the Party. Its function, according to the theory, is to guide you. The basic problem is that if you have a free economy, the Communist Party has no role. It is a fifth wheel. You need government and laws, but legitimate and objective ones. Communism, intervening all the time in arbitrary ways, is just what you don’t need.

This creates problems also for the entrepreneur, who is the key to employment in the future. Entrepreneurs have a more difficult time in China than you might think. Some people have the impression that the Chinese economy is being privatized. That is not correct, although it is true that private enterprise is by far its most vigorous and positively performing component. The Party, however, still hopes to keep economic control in its own hands. Thus, roughly 90 percent of all public traded stocks in China are in fact of entities controlled by the government. When foreigners or Chinese invest, they are, most of the time, buying bureaucrats—pieces of state enterprises, packaged for sale. That is how the government likes it. Private companies have little access to credit, there are no solid laws governing their status and rights, and so forth. For these reasons, there are no world-beating private Chinese corporations, in spite of the abundance of entrepreneurial, technical, and managerial skill in China. There is no Chinese Sony, no Acer, at least not yet. Instead, the government continues to waste capital through nonmarket allocations and by interventions distort new enterprises, thus potentially harming, say, the newly emerging information industry just as it harmed the smokestack industries a generation ago.

Nor does the problem end there. Entrepreneurs are an aspect of private or civil society, and the Party is not yet reconciled to its development. It stifles entrepreneurship for the same reason it stifles religion, controls the press, and so forth. Both economic and social development require moral space that communism simply does not provide.

How, then, should the system be changed? Although rarely addressed directly, either in China or abroad, this is in fact the single most important question facing China today. The Party wants to maintain its own rule. Some Chinese leaders seem to think that can be done by importing political legitimacy from abroad.

Thus, Jiang Zemin recently spent an hour being interviewed on U.S. TV by Mike Wallace. Americans commented on nearly every aspect of what he said, but no one I heard asked the really important question. When did Jiang Zemin ever spend an hour answering genuine questions on Chinese television? Candidates in the Hong Kong election went from door to door in housing blocks ringing bells. When was the last time any Chinese leader did that? In Taiwan, presidential candidate James Soong reportedly visited every one of Taiwan’s roughly three thousand villages in pursuit of votes (he came a close second). Can anyone imagine that in China? I can, in fact, but not under communism. Indian politicians, after all, regularly travel to remote rural areas in their parliamentary constituencies, not simply to observe or inspect, but to seek votes by talking to the people there, in whose hands the decision lies, and addressing their concerns. Nothing remotely comparable takes place in China, and the result is that government has no firm domestic base. One of China’s fundamental structural problems is that it has no autonomous local politics. There is no rubber chicken circuit.

The result, of course, is the unhealthy tendency of China’s leaders to seek outside buttresses for their rule: meetings and photo opportunities with foreign heads of state, participation in the United Nations, WTO, and other international organizations, the Olympics, and so forth. Economically it may be true up to a point that you can import foreign investment and Hong Kong and Taiwan entrepreneurs and managers rather than foster your own indigenous banking and private enterprise. But you cannot import legitimacy and social and political order from abroad.

Gorbachev in the USSR lacked that option in any case. So he placed his hopes in reviving and reforming the Communist Party by means of glasnost, or openness. The current Chinese regime seems to have a similar idea. But glasnost creates grievances without responsibility or remedies.

There is a good deal of glasnost in China—"publicity." The Beijing Youth Daily looks a lot like the courageous and muckraking Apple Daily in Hong Kong, and not only in its peppy typography with lots of blue. It has story after story documenting abuse and malfeasance, good sound investigative journalism, well-researched and vividly presented. Only one thing is missing: namely, useful generalization and systemic analysis. Each story has the same moral: This is a terrible lapse; someone is not doing his job; we must do better. As to why those lapses are occurring, whether it has anything to do with the general structure of government and society—on that they must remain silent, in classic glasnost style.

Gorbachev unleashed glasnost hoping that it would lead the Communist Party to scrape away the scales of corruption with which it was encrusted to reveal the good Leninist metal below—only to discover that there was no good metal; corruption was the system, and scraping was weakening its key structural elements.

Currently, an anticorruption campaign is underway in China, and it has exactly the same problem. Corruption is everywhere. The press recently had a story about the new bombshell anticorruption film that Party members everywhere are being mobilized to see. Recently in Nanjing a cadre went to the theater box office to buy a large number of tickets to this anticorruption film—and demanded a kickback. But although corruption is pervasive, prosecution is highly selective. Some people are singled out; others mysteriously avoid trouble. In an authoritarian system, such decisions are political, and today’s anticorruption campaign is rather like the cultural revolution in that respect. It is turning out to have more to do with settling political scores than any of its ostensible purposes. Even so, given that corruption is now, in effect, not a blemish but rather itself the system, attacks on it have the effect of destroying the Party’s own structure and chain of command. Cadres at every level are fearful and if anything will turn even more completely to their own interests and self-preservation. No one in his right mind is going to behave loyally or altruistically.

So glasnost and anticorruption campaigns are destabilizing in the absence of complete structural reconstitution. They reach their crisis when the stream of opposing private interests with their need for objective adjudication in society merges with the stream of dissatisfaction over official malfeasance and corruption and abuse (which are at an all-time high in China). Gorbachev turned to pleas for support to preserve stability for its own sake. "Stop asking for change," he said. We rallied round—remember the "chicken Kiev" speech? I am sure we would rally to a similar cry from China—but the people of the USSR did not, and I doubt the Chinese would either.

This is exactly the problem that is developing now in Hong Kong. There the foundations are in place for democracy: free press, education, affluence, long-established voting. But the voting system is rigged through constituencies. Even those elected in this manner have almost no authority. Real power comes from Beijing and is transmitted to Mr. Tung, who is nominated and who operates with an establishment. Meanwhile Mr. Tung’s popularity is sinking ever lower. Currently it is 62 percent negative.

Many in Hong Kong recognize this problem and understand the only solution. Donald Tsang, the financial secretary, recently stated that Hong Kong should begin planning its next move toward democratic reform, as the present political system is not viable in the longer term. [Financial Times, September 16-17, 2000.] His words have truth beyond the Special Administrative Region.

The basic unit of a democracy is the citizen: self-sufficient, responsible, informed, and so forth. You already have that in Hong Kong and in China too. Education, economic development, urbanization, communication, increased knowledge of the world—all of these forces help to create citizens. China has been manufacturing them in large numbers, particularly in the coastal cities, ever since economic change began. But what happens if you have citizens but no democracy for them to participate in? The answer is chronic and irresolvable tension for which there is only one cure: namely, full democracy and responsible government.

The Hong Kong situation is mirrored more broadly all over China. The current approach combining repression with economic benefits is reaching its limits: limits of debt, limits of growth, limits of administrative ability. What will happen? I see three possibilities: military rule, disorder, and genuine political reform.

Actually we are not far from military rule right now. Communism has already taken second place, in propaganda, to nationalism. The official nationalism now promoted by China’s government is not a healthy self-esteem or patriotism; rather it is a resentful and somewhat xenophobic blend that draws on many of the most unattractive streams of twentieth century politics. As for the military, Jiang Zemin reportedly will give up the presidency (his governmental post) and the general secretaryship (his party post) in 2003, but will stay on the central military commission. (The new headquarters of the central military commission, by the way, is one of the most solidly constructed and impressive new buildings in Beijing, and rumor has it a large suite of rooms is reserved for Jiang.) By this choice Jiang makes clear that even today neither the government nor the party is the ultimate locus of power.

A dictatorial and highly nationalistic China is perhaps the most worrying prospect for China’s neighbors and for the United States. Much of it is already in place, as a result of the massive military spending program that continues despite weak government finances and pressing needs in areas such as education, agriculture, social security, and so forth.

A formal imposition of military rule may come when the Party itself begins to split. I mentioned the problem about resolving disputes. In business, blackmail, bribes, hostage takings, et cetera, are how disputes are resolved, as we have seen. What happens when the Party itself cannot agree about what to do, as has happened numerous times in the past? No mechanism exists to resolve such problems except to call in the military. But what if several different officials call in the military?

We tend to think of society as being horizontally ordered, so that the thing to watch is, say, workers protesting against owners and managers. Today, what with farmers in Jiangxi rioting against oppressive taxes and industrial workers in the northeast protesting unemployment and misappropriation of state property, there is no shortage of things to watch in that connection.

But in China’s system, the most dangerous splits have regularly been vertical, not between classes but between rivals at the top. Two men at the top square off and begin mobilizing constituencies, assets, regions, and so forth, in their support. In 1924 and 1925, as I have written, this process plunged the country into war. It could easily happen again. The same is true of the Communist Party. It splits from the top, and only the military can decide who wins. How was the cultural revolution ended in 1967? By the army. How were Mao’s chosen successors ousted from office? By the army in 1976. How was the crisis of 1989 resolved? By military force against the people and against members of the Party on the liberal side. Zhao Ziyang, the then–prime minister, is still extralegally detained at home, and his colleagues are in prison or on blacklists. So even within the Party there is no order.

The crisis may come if the army is ever called upon to do Tiananmen again. Soldiers see their mission as defending the country against foreign enemies, not shooting their unarmed fellow citizens in order to keep the Party in power. So one can imagine a day when, instead of doing as instructed, a Chinese general will take over and go on television, saying in the first breath, "Communism is nonsense and the Party are all criminals and we have arrested them," or words to that effect, but then adds, "We are all Chinese, strong and proud of our homeland. We need order and discipline."

This may bring unity for a while, but it suffers from exactly the same defects as communist authoritarianism: no mechanism except force for resolving disputes. Even more than the current regime, a military regime is likely to recentralize, and that classically triggers civil war. Such a China would be a menace to its own people and to Asia. Furthermore, it would not be stable. We might see international incidents triggered to build support at home. Eventually we would see rivals at home split the new dictatorship just as the first military rulers had split the communist dictatorship.

This brings us to the possibility of disorder. It could be almost benign, a kind of entropy: if present trends are projected, a steady rise in social unrest, crime, corruption, and so forth and steady weakening of the party’s grip, occasional attempts to lash out. This will be a problem for us and will undermine economic development. Or it could be chronic. It could turn into a partial or an all-out struggle for political power such as we have seen repeatedly in Chinese history.

What do we in the United States do when central Party control begins to break down in China and diverging voices are heard—all, incidentally, clamoring for our support and many promising us advantages? What do we do if the struggle becomes violent? We are not ready for this question because of our belief in a natural Chinese order.

Stable political order will come in China only through constitutional democracy. Democracy was in fact promised by the Qing in 1908, in nine years’ time, in the form of a constitutional monarchy with a bicameral elected legislature and responsible cabinet. And that was attempted in form until 1924, though the reality was military rule. But the ideal survived.

Mussolini had of course just established the fascist state in Italy two years earlier in 1922, and across Europe parliaments were beginning to fold their tents, as the severity of social problems and the new intellectual fascination with authoritarian solutions led to impatience with debate and disunity. Perhaps that is why so many observers, Chinese and foreign, dismissed China’s failed attempt at popular sovereignty as no more than bad comedy, a farce, an embarrassment, and welcomed the dictators. Still, it should be noted that the ideal did not die. Popular pressure forced Chiang Kai-shek to convene a National Assembly in 1936, and in 1948 national elections were held.

By then, however, Mao Zedong had seized the democratic mantle—it is important to remember that many Chinese expected him to allow more freedom than Chiang had—and he acknowledged as much by the painstaking care with which he maintained communist dominance while creating the appearance of democracy in his first administration. Here is the tribute paid by vice to virtue. In the communist provisional government of 1949, the Standing Committee of the People’s Political Consultative Conference had a non-Communist majority: fifty-one members, of which eighteen were Communists. The Central People’s Government Council (run by Mao) had a Communist majority of only one: sixty-three members of which thirty-two were Communists, twenty-two were members of non-Communist United Front parties, and nine were nonparty personalities. The Government Affairs Council (run by Zhou En-lai) had a non-Communist majority of one: twenty-one members, ten are CCP, eleven are United Front parties and non-Communist personalities. The cabinet had a Communist majority of one: sixteen ministries under Communists, fifteen under members of the other United Front parties. But when it came to the People’s Revolutionary Military Council—it was entirely in the hands of Communists. [Jurgen Domes, The Internal Politics of China, 1949–1972 (New York: Praeger, 1971), 23–24.]

Despite the arguments in its favor, however, a lot of people treat advocacy of democracy in China as hopelessly naive. In 1989 during the weeks before the Tiananmen massacre, I was quizzed regularly by one of America’s great journalists, Claudia Rosett of the Wall Street Journal. One day she asked me, "Well, so what should they do? Have an election?"

I remember my response vividly. Without thinking, I began, "No, no, that would be destabilizing. The need is to . . ." and then I caught myself. What was I saying? I thought of myself as a democrat, a believer in human rights and liberty, and here I was yammering on in the best intellectual fashion about why a lot of Chinese should be denied a basic civic right. This was a most painful moment of self-revelation, and I thank Claudia for forcing it on me.

How can China create a viable political community under the conditions of growth, modernization, and complexity that she now faces? I believe the only answer is by becoming a parliamentary democracy.

I’ve tried this out in front of a number of audiences in the U.S., in Hong Kong, in Singapore, and elsewhere. The response is fascinating.

"Who is going be in charge under democracy?" one eminent American scholar asked me. "It will not be those educated coastal Chinese you know, Arthur. It will be those millions of peasants." Horror! The name of Hitler usually comes up round about the third question. "Wasn’t Hitler elected democratically, and wasn’t he awful? Wouldn’t the same thing happen in China? Wouldn’t a democratic China be extremely nationalistic and warlike?" As Ambassador Chas Freeman argued when he and I debated at the Council of Foreign Relations a few months ago, "A democratic China would already have attacked Taiwan."

Clearly a lot of people who profess sympathy for "China" distrust the actual Chinese people. What are we to make of this seeming contradiction? I interpret this as the flip side of the stereotype of ethnic homogeneity I mentioned above, which discovers menace and irrationality lurking beneath the surface. This is the old "yellow peril" stereotype, which portrays the Chinese using the language traditionally applied to "primitive peoples": irrational, excitable, dangerously likely to run amok unless controlled by some strong authority. This a false view and an enormously condescending one.

Taiwan has been having real elections for more than a dozen years now, but the most recent one was a watershed because what had been the opposition party won the presidency. But isn’t Taiwan unstable? Zhu Rongji recently expressed concern over Chen’s ability to govern. This took some cheek, given China’s creaky system. But the fact is that Taiwan’s system is based on legitimate and popularly approved constitutional structures, including checks and balances. Democratic government often appears weaker than autocratic, but in fact it is stronger. In Taiwan, an opposition that had been excluded for half a century, most of the time by force, has now taken power. Under such conditions no transition can be completely smooth. But democracy has in fact made Taiwan much more stable and much stronger than it was. After all, we don’t know what the political future of China is, but who will deny that the institution of elected president in Taiwan is here to stay?

The effects of genuine democracy on China would be similar, I think. A democratically governed China would be very different from what we have now. The non-Chinese areas such as Tibet and Xinjiang would probably want genuine autonomy or even independence, just as the non-Russian components of the USSR did when communism ended there. Some see this as a disaster. But my own view is that by letting Ukraine and Estonia and Kazakhstan go, Russia has freed itself of the impossible task of suppressing them and at the same time created the conditions for genuine friendship now and in the future.

But among the provinces that have always been Chinese, you could have stable parliamentary rule. They may want a lot of autonomy and a federalist constitution, but make no mistake: these peoples do consider themselves as parts of a historic nation, under one sky, as it were.

India has a national coalition that sits atop a whole series of local parties. National parties there are losing their clout, but national government still works. Furthermore, the exigencies of coalition disciplines extremists. Farmers get listened to. They are the majority, and their needs get a lot of attention. This means, among other things, that military expenditures are restricted. India’s leaders travel less than China’s do, because Indian national politics has a local focus, because legitimacy comes from the grassroots. But there is absolutely no reason China could not be as free and democratic and stable as India. It would be in China’s every interest.

Sun Yat-sen had the idea of tutelary government, a transitional period during which the new institutions are installed and people prepared, and that makes sense. The Kuomintang has always advocated that in words, and now they have carried it out completely in deed. Unfortunately, communist ideology does not assert parliamentary democracy even as a long term goal.

What Beijing needs now is some sort of consultative mechanism to bring their ablest and most respected people together to plan the transition to democracy. Instead of purging the reformers from the Academy of Social Sciences, they should be made advisers to the government, charged with drawing up a plan, like the plan the Qing dynasty made almost a century ago, for a deliberate transition to full democracy, beginning at the local and provincial levels and then, without delay, the national. At the same time, restrictions on press freedom should be lifted and the formation of civic groups and political parties allowed.

Then, maybe next year at the Beidaihe meeting, discussions and decisions should be made, comparable to those made in Taiwan at the crucially important National Affairs Conference (Guoshi huiyi in July 1990) convened by Lee Teng-hui to retire respectfully the remaining members of the legislature elected on the mainland in 1948 and prepare for new elections. This would mean providing honorable exit trajectories for the millions of unelected cadres currently holding power, and in particular for the unelected members of the various local, provincial, and national "People’s Congresses."

This may sound risky. In Taiwan plenty of people in the Kuomintang were afraid of such liberalization. But would you prefer to gamble that the next time the game of succession is played, and force is invoked as it is so regularly, that all will remain stable? Today it is clear in Taiwan that those timely decisions made the island more rather than less stable. The real danger would have been excluding the people any longer.

I see no sign that the Chinese regime is preparing anything remotely like what I have outlined. Does that mean I look at my Sinological shadow and predict another decade or two of political winter, communist dictatorship? No. I don’t think dictatorship can last that long. Furthermore, we could still have a democratic outcome from an unexpected crisis of the regime.

The most likely scenario, as I have mentioned, is a tear that begins, as it were, at the collar, near the top. This need not lead to complete chaos and breakdown even if the central governmental mechanism became paralyzed by struggle. Some pieces will survive: those that have strong local institutions. In the first part of the last centuries, the havens from disorder in China were the treaty ports. Shanghai’s population growth began with the Taiping rebellion. In the autonomous city ports, many under partial foreign protection, Chinese were able to go about their business and sit things out, until finally they too were engulfed.

It cannot be denied that a China that was spontaneously loosening and fracturing would be a big problem for the region and for us. But as was true in the first half of the twentieth century, much of it will remain functional or develop, even as the process continues. If China deconstructs, then some parts will become autonomous communist states, with their own dictators, like the current central Asian states. Some will be devastated by disorder. But some that have strong societies will survive. Taiwan obviously and, I would add, Hong Kong—both have enough autonomous structures to be able to ride out a storm in China. Greater Hong Kong needs nothing from the center. Perhaps Shanghai would survive as well.

This is where the figures I gave you earlier for wealth distribution become politically interesting. Greater Hong Kong and Guangdong is the single strongest and richest unit in China, and it is entirely self-sufficient. It requires nothing from the center. If you add the GDP of Guangdong province to that of Hong Kong and then add the GDP of Taiwan, you end up with a figure roughly equal to the GDP of the rest of China, minus Guangdong. But one is for about eighty million people, the other one for over a billion.

These eighty million are in effect citizens of three subsets of China that I like to call "city-states" because they have a vigor and political manageability that is comparable to what the European city-states had compared to the complex and stultifying agricultural empires of early modern times. But to be fair, they are in size comparable not to European city-states, but to European nations. They could serve as the nuclei for a reorganized China. One of their strengths is political. Taiwan is already democratic; Hong Kong is moving in that direction and could certainly function as a democracy, as could Guangdong, which suggests a parallel is with the way China changed economically over the past twenty years. Originally there was no intention to have more than a handful of special economic zones. Shenzhen, Zhuhai, and Shekou were to be small enclaves, surrounded by fences and barbed wire, where the magic of economic enterprise would generate wealth to be transmitted, like electrical power, out of them to the hinterland. But big cities resented the fact that small villages were profiting inordinately. So Shanghai and others acquired the same privileges, and economic liberalization spread laterally, far faster than had been intended. This is not a new phenomenon. In the nineteenth century, some localities declared themselves treaty ports unilaterally, without any foreign pressure, just to reap the economic benefits. A story current in China tells how Li Peng, the former prime minister, was once asked to inscribe the characters for a special economic zone, which he did with great pleasure, as being asked for one’s calligraphy is a tribute to one’s education and culture. The problem was that no such zone existed. But with the name already inscribed, it had to be created or face would be lost disastrously, and so, according to this story, it was. Can democracy spread as economic freedom did, at the local level? Some Chinese are now talking about "special political zones" where democratic rule would be established.

Certainly the democratization in Taiwan has created pressure in this respect, much as the economic success of Taiwan and Hong Kong created pressure for change in that realm. The pressure is certainly strong in the Special Administrative Region, where the current "one country, two systems" structure simply does not work. After Taiwan’s elections it is difficult to avoid asking the following question: Suppose that in 1997, when the British left, full elections had been held in Hong Kong and that a democratically chosen parliament and chief executive had been in place? Would not everything have been different? Morale and pride would have been high, and a functional government would have been ready to act. One can ask the same question for Shanghai or Beijing or any Chinese province.

The road will be bumpy, however, even with the best will and the greatest skill in the world, and this is a fact that American policymakers must grasp.

As John Van Antwerp MacMurray put it in 1935, "The essence of our traditional Far Eastern policy was that China, with its vast potentialities for economic development, was the crux of the whole matter." [How the Peace Was Lost: The 1935 Memorandum "Developments Affecting American Policy in the Far East" Prepared for the State Department by John Van Antwerp MacMurray (Stanford University: Hoover Archival Documentaries, 1992) 61–62.]

This rested on the assumption that China was either in order or about to be so—actually always about to be. The looming change created an urgency for the United States to act now lest it be left behind when China moved forward. The process by which China got itself in order, however, was opaque: it was "Chinese" in the sense I used the word at the beginning of the lecture. This in turn permitted us to recuse ourselves from most difficult issues concerning China. We have seen this same attitude in recent years with the Clinton proclamation of a "strategic partnership," with efforts to bring China into international bodies such as the WTO and arms control regimes, and so forth. In the early twentieth century we saw it above all with the Washington Conference of 1921 to 1922. The problem has always been that China is not as far along as we hope and pretend, and this leads to the making of exceptions for China in all of these regimes, which undermines and distorts them.

Today we are well on the way to incorporating China as a structural component of our economic, political, and military security, based more on assumptions about the future than on facts. Not only do we make constant exceptions for China, most notably in nonproliferation and human rights, we pressure our allies to do the same. We overestimate the stability of the Chinese regime and underestimate the difficulties of the challenges ahead and tend to discount the ripple effects they could have. We forget that our future in Asia will depend less on China than it will on how we get along with our allies, the democratic states with free economies that share both values and interests with us. We need to strengthen those alliance ties, not least to provide a framework for stability in case of trouble from China. The USSR was rather isolated when it collapsed, yet even so that had a huge impact. In the case of China, the connections we are creating now will transmit troubles unless we consider how to prevent that.

Obviously we should do all we can to foster positive developments in China, but this will not be easy, nor will it bring about a certain positive outcome. As China changes we must hope and work for the best while preparing for the worst. The hard part of China’s transition from communism is only just beginning, and I hope we are prepared for it.