Daily Archives: 9 February 2007

Graffiti on China’s Wall?


The Observer’s former editor, Will Hutton, continues his global marketing campaign for his latest writing feat, The Writing on the Wall (yes, yet another book about China), with a series of articles for the Globalist, including the End of the American Ideal? and China’s Corruption Challenge. His insights on the subject of China are not new. Back in 2003 he made the following, extraordinary prediction: Mao might be turning in his grave, but his country stands on the brink of a market-driven economic miracle. That’s probably about 10 years after the actual economic miracle had started (Lawrence Summers, while still at the World Bank, was already talking about the rise of China in these terms back in 1992 – for a good overview of China’s growth, I think Yingyi Qian’s How Reform Worked in China [PDF] is a good place to start, although suggestions are more than welcome).

In the article, Will takes inspiration from a recent WTO dispute between the US and China to address the issue of the country’s firm grip on the private sector, which has – amongst other ills – allegedly stymied creativity, reduced accountability and caused a first-order environmental crisis:

China’s problems all stem from this incapacity to let the puppet enterprises off the puppeteers’ strings and provide them with the institutional network that would permit more creative pluralism and endogenous accountability. The lack of such a network is the chief cause of China’s first-order environmental crisis. The pace of desertification has doubled over 20 years, in a country where 25% of the land area is already desert. Air pollution kills 400,000 people a year prematurely. Energy is habitually wasted.

Incidentally, the Worldwatch Institute has recently set up an entire area of research on China, aptly-named ChinaWatch, the only country to receive this treatment (although we all know that the real culprits of environmental challenges like global warming are others), and the one which the Western press seems to increasingly single out when it comes to naming and shaming the bad guys who are not doing enough for the world’s sustainability – possibly because of its growing economical and geopolitical power? Surely not…

But Will’s argument – contained in the book – goes beyond the environment, embracing China’s entire development strategy. His main points are summarized in an Observer Review:

Chinese growth is built on an unsustainable model – impossibly high levels of export growth largely driven by assembling half-completed imported goods, plus state-driven capital accumulation and cheap labour, with very low productivity, little technical innovation and the absence of an appropriate business culture or legal structure

While recognizing the economic, social and environmental challenges that China is facing today, and admitting straight away that I did not read Hutton’s book, I think he lets himself go to some easy generalizations, based on recurrent projections of Western norms onto China’s own path to development. Accusations of corruption, dirty business culture, or rogue relations – apart from hypocritical – are also significantly laden with social constructs about what is and what isn’t appropriate, socially, politically and – more to the point – economically. These are not constructs that China has contributed to shape, so why should it be abiding by the rules they dictate, especially when so many argue that they are there to ensure no one else climbs the development ladder?

On one area, however, comparison with the West is possible: that of scientific innovation and technology. Here, Demos’ recent review of China as the new science superpower takes a rather different perspective from Hutton’s doom and gloom:

The country is at an early stage in the most ambitious programme of research investment since John F Kennedy embarked on the race to the moon… Since 1999, for example, China’s spending on R&D has increased by more than 20 % each year. In 2005, it reached 1.3 % of GDP, up from 0.7 % in 1998. In December 2006, the OECD surprised policy-makers by announcing that China had moved ahead of Japan for the first time, to become the world’s second highest R&D investor after the US.

Judging by this alone, China does not look to me like the decaying industrial bubble about to burst Will Hutton is describing, but rather a country taking cautious steps in a well-managed plan of technological and industrial upgrading, not too dissimilar from the story of the early Asian tigers. Could it be that his – like many others’ – pessimist view of China’s rise to power hides a deeper concern of a Western (especially Anglo-American) world, disturbed by those aspect of globalization it cannot control, and perhaps concerned its grip on the world’s command levers might be slipping in favour of other countries?

Perhaps, instead of being so concerned about China’s rise to power, we should be concerned about the United States’ possible loss of power, since – as history teaches – kings never leave a throne without putting up a bloody fight first.