Jan 8, 2007
So What Exactly Is Going On in China?
Will Hutton takes a stab here in a fascinating extract from his new book, The Writing on the Wall.
"The truth is that China is not the socialist market economy the party describes, nor moving towards capitalism as the western consensus believes. Rather it is frozen in a structure that I describe as Leninist corporatism - and which is unstable, monumentally inefficient, dependent upon the expropriation of peasant savings on a grand scale, colossally unequal and ultimately unsustainable. It is Leninist in that the party still follows Lenin's dictum of being the vanguard, monopoly political driver and controller of the economy and society. And it is corporatist because the framework for all economic activity in China is one of central management and coordination from which no economic actor, however humble, can opt out."
"The interest of the west is to help China avoid this fate and encourage a peaceful transition to a pluralist China within a legitimate system of accountability; a country that is comfortable with liberal globalisation and the international rule of law. To describe the goal of policy in this way is demanding enough; more demanding still is to execute it. The simple extrapolations of China's growth, predicting that it will eventually become a one-party, economic colossus, lead to an alarmist climate in which it is easier to justify trade protection or, in the United States, potential military activism. Such responses are naive. We have to play it long, encourage and help to co-manage the change that must come. Only thus will the world be a safer and still prosperous place."
For more about his new book, go here and here (New York: Free Press, 2006), and here and here (London: Little, Brown, 2007).
"The truth is that China is not the socialist market economy the party describes, nor moving towards capitalism as the western consensus believes. Rather it is frozen in a structure that I describe as Leninist corporatism - and which is unstable, monumentally inefficient, dependent upon the expropriation of peasant savings on a grand scale, colossally unequal and ultimately unsustainable. It is Leninist in that the party still follows Lenin's dictum of being the vanguard, monopoly political driver and controller of the economy and society. And it is corporatist because the framework for all economic activity in China is one of central management and coordination from which no economic actor, however humble, can opt out."
"The interest of the west is to help China avoid this fate and encourage a peaceful transition to a pluralist China within a legitimate system of accountability; a country that is comfortable with liberal globalisation and the international rule of law. To describe the goal of policy in this way is demanding enough; more demanding still is to execute it. The simple extrapolations of China's growth, predicting that it will eventually become a one-party, economic colossus, lead to an alarmist climate in which it is easier to justify trade protection or, in the United States, potential military activism. Such responses are naive. We have to play it long, encourage and help to co-manage the change that must come. Only thus will the world be a safer and still prosperous place."
For more about his new book, go here and here (New York: Free Press, 2006), and here and here (London: Little, Brown, 2007).