Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Friday, December 10, 2010

China as Enfant Terrible

Hi Everyone,

According to the Mirriam Webster online dictionary there are multiple definitions of "enfant terrible" and both apply to China: "a person known for shocking or outrageous behavior" or "a usually young and successful person who is strikingly unorthodox, innovative, or avante garde." So much is true of all great powers in history.

China has fit the second, more flattering definition when it managed a difficult transition away from totalitarian, Maoist communism towards a significantly less oppressive market oriented authoritarian dictatorship. In doing this China has established itself as a major world economic power while dramatically improving the standards of living for millions of its citizens. China's management of this transition has been far more successful and innovative than the Russian transition. China has also shown its innovative side when it devotes large resources to researching renewable energy (a farsighted policy for a country with rapid growth and not enough domestic fossil fuel reserves to meet future needs).

But China has also fit the less flattering definition. When China hypocritically claims to be the champion of non-interference in domestic affairs by major powers all while bullying aid recipients into buying Chinese or while supporting the horribly dysfunctional North Korean regime against the interests of the North Korean people and the entire region. China also fits this less flattering definition when it reacts so childishly to the Nobel Committee's award of the Peace Prize to the Chinese dissident, Liu Xiaobo.

China is on the verge of becoming a major global power. But they are still often stuck in the mind set of a petty dictatorship. Two recent events; one in North Korea and now this Nobel Peace Prize award highlight the ways in which China's leaders are not ready for prime time.


The Law Talking Guy said...

We forget sometimes that the Chinese leaders are old communists, and by that I mean that they are party apparatchiks whose training is in surviving intraparty strife, but with no training in law, economics, business, and little international seasoning to boot. Not ready for prime time is exactly right. Such leaders will fail China as a whole if they do not get better ones in the next few decades.

USwest said...

I've been reading a book by a RAND analyst called "Interpreting China's Grand Strategy" by Michael Swaine and Ashley Tellis. I don’t know much about Chinese history, to I am finding the book interesting.

The writers point out that there are three primary motivators behind many of China's actions.
1) Preserve domestic order and well-being
2) defense against persistent/perceived external threats to its territory and sovereignty
3) maintenance of geopolitical influence as a major, or at least noted state.

Now on the surface, those don't seem that much different from the motivators of any other state. But what the authors point out is that these motivators have not drastically waivered in China's very long history. This explains to a degree why China has absorbed or sought to influence border states [i.e. Mongolia(absorbed) North Korean (influenced)). This absorption has led to a diverse population prone to internal conflict and thus a “need” to maintain strong internal controls. The writers’ main point seems to be that China is not predatory in nature, it doesn’t wish to threaten or build empires, but it does seek to have a strong enough presence in the international order to be taken seriously. To do this, the Chinese tend toward a pragmatic, independent approach to foreign and domestic policy. There is a strong nationalist attitude that only grows as more Chinese benefit from the market reforms that have been put into place. Therefore, China isn’t as interested in cooperative arrangements as the West resulting in numerous disagreements over issues such as currency values, treatment of North Korea, and Taiwan to name a few.

China’s power will grow, but it will do so over a couple of decades and that the result will be a more economically assertive China, not necessarily a more militarily aggressive one. That doesn’t mean that China is ignoring its military; it is building its maritime capabilities. But this change would be for defensive purposes. The writers indicate that as China carves a place for itself in the international system, it will change the current order and perhaps weaken U.S.’ presently favored position in East Asia.

Raised By Republicans said...

The interesting question is how will the Chinese leadership transform itself? So far they have given no indication of any other path to leadership other than moving up through the party ranks.

Dr. Strangelove said...

China was not ravaged by the current global financial crisis. But by the time the next one hits, perhaps in a decade or so, China will be so well integrated into the global economy that it will surely be affected. My pet theory is that when that happens--when the burgeoning middle class and wealthy elites in the new China are hit with an economic recession for the first time--the resulting turmoil will kick China down the path toward a multi-party system.

My guess is that the communist party won't be formally divided at that point, but the equivalent of "primary" elections within the party will become much more open to political debate. When the pie is no longer growing, and people start to scramble over resources in tough economic times, we will see the same types of factions develop over there as develop everywhere.

(However I haven't read the book USWest mentions, and I should!)

Raised By Republicans said...

Dr. S.

Yes, China has managed to weather this storm better than the wealthy countries. But I heard that it wasn't just China that avoided the worst of it. It was all developing countries that focus on export oriented industrialization (not exactly sure why but I could look into it). So China gets some credit but it's not something China is doing uniquely.

I've also heard that China is doing a number of things that are effectively "kicking the can down the road" as far their economy goes. They keep their currency valued artificially low to encourage exports. As the US Dollar and the Euro decline in value (because of their deficit spending for stimulus and bail outs financed by printing more money), the Chinese currency is going to rise in value. That will make Chinese made products more expensive. I've also heard from a friend of mine who is an expert on the economics of logistics that as fuel prices increase the cost of transporting products from China to North America and Europe is getting to the point where the savings on labor costs companies get from outsourcing to China won't be worth the additional transportation expenses.

All this may be leading to a "perfect storm" of economic troubles for China. They could face declining demand for their products at the same time foreign investment begins to dry up. When that happens, the party could be over in China. The current regime bases all of its legitimacy now on continually rising living standards for the growing urban middle class. When they can no longer provide that, the Communists could face a serious challenge to their leadership. Thus far they have not responded very constructively to such challenges.

USwest said...

the logistics costs are an interesting part of all this. One thing that Japanese automakers figured out quickly is that it was better to build cars for North America in North America rather than transporting them.

Turkey is benefiting from this type of movement as well because US and Japanese makers are locating plants there. The new joke in Turkey is that the EU is going to want to join Turkey pretty soon.

This trend may be the new "localization". Fuel costs will rise as will labor costs in China and India. This is already happening. That is why you see increased labor protests in China now. Once people figure out that they are being exploited, they will revolt.

It is also why China is so interested in finding new sources for oil- building relations with countries like Iran, increasing investment in Africa, etc. I also remember hearing not too long ago that the Chinese were buying up large amounts of materials needed to make batteries for Hybrid cars. So they are getting ready.