China's Not Going to Rule the World    

Pepe Escobar, 06/22/13

Sun Tzu, the ancient author of The Art of War, must be throwing a rice wine party in his heavenly tomb in the wake of the shirtsleeves California love -- in between President Obama and President Xi Jinping. "Know your enemy" was, it seems, the theme of the meeting. Beijing was very much aware of -- and had furiously protested -- Washington's deep plunge into China's computer networks over the past 15 years via a secretive NSA unit, the Office of Tailored Access Operations (with the apt acronym TAO). Yet Xi merrily allowed Obama to pontificate on hacking and cyber-theft as if China were alone on such a stage.

Enter -- with perfect timing -- Edward Snowden, the spy who came in from Hawaii and who has been holed up in Hong Kong since May 20th. And cut to the wickedly straight-faced, no-commentary -- needed take on Obama's hacker army by Xinhua, the Chinese Communist Party's official press service. With America's dark-side-of-the-moon surveillance programs like Prism suddenly in the global spotlight, the Chinese, long blistered by Washington's charges about hacking American corporate and military websites, were polite enough. They didn't even bother to mention that Prism was just another node in the Pentagon's Joint Vision 2020 dream of "full spectrum dominance."

By revealing the existence of Prism (and other related surveillance programs), Snowden handed Beijing a roast duck banquet of a motive for sticking with cyber-surveillance. Especially after Snowden, a few days later, doubled down by unveiling what Xi, of course, already knew -- that the National Security Agency had for years been relentlessly hacking both Hong Kong and mainland Chinese computer networks.

But the ultimate shark fin's soup on China's recent banquet card was an editorial in the Communist Party-controlled Global Times. "Snowden," it acknowledged, "is a 'card' that China never expected," adding that "China is neither adept at nor used to playing it." Its recommendation: use the recent leaks "as evidence to negotiate with the US" It also offered a warning that "public opinion will turn against China's central government and the Hong Kong SAR [Special Administrative Region] government if they choose to send [Snowden] back."

With a set of cyber-campaigns -- from cyber-enabled economic theft and espionage to the possibility of future state-sanctioned cyber -attacks -- evolving in the shadows, it's hard to spin the sunny "new type of great power relationship" President Xi suggested for the US and China at the recent summit.

It's the (State) Economy, Stupid

The unfolding Snowden cyber-saga effectively drowned out the Obama administration's interest in learning more about Xi's immensely ambitious plans for reconfiguring the Chinese economy -- and how to capture a piece of that future economic pie for American business. Essential to those plans is an astonishing investment of $6.4 trillion by China's leadership in a drive to "urbanize" the economy yet further by 2020.

That will be the dragon's share of a reconfigured development model emphasizing heightened productivity, moving the country up the international manufacturing quality ladder and digital pecking order, and encouraging ever more domestic consumption by an ever -- expanding middle class. This will be joined to a massive ongoing investment in scientific and technological research. China has adopted the US model of public-private sector academic integration with the aim of producing dual-use technologies and so boosting not only the military but also the civilian economy.

Beijing may, in the end, spend up to 30% of its budget on defense-related research and development. This has certainly been a key vector in the country's recent breakneck expansion of information technology, microelectronics, telecommunications, nuclear energy, biotechnology, and the aerospace industry. Crucially, none of this has happened thanks to the good graces of the Goddess of the Market.

The pace in China remains frantic -- from the building of supercomputers and an explosion of innovation to massive urban development. This would include, for example, the development of the southwestern hinterland city of Chongqin into arguably the biggest urban conglomeration in the world, with an estimated population of more than 33 million and still growing. A typical savory side story in the China boom of recent years would be the way that energy-gobbling country "won" the war in Iraq. The New York Times recently reported that it is now buying nearly 50% of all the oil Iraq produces. (If that doesn't hit Dick Cheney right in the heart, what will?)

Dreaming of What?

As soon as he was confirmed as general secretary at the Chinese Communist Party's 18th Party Congress in November 2012, Xi Jinping started to weave a "China dream" (zhongguo meng) for public consumption. Think of his new game plan as a Roy Orbison song with Chinese characteristics. It boils down to what Xi has termed "fulfilling the great renaissance of the Chinese race." And the dreaming isn't supposed to stop until the 20th Party Congress convenes in 2022, if then.

The $6.4 trillion question is whether any dream competition involving the Chinese and American ruling elites could yield a "win-win" relationship between the planet's "sole superpower" and the emerging power in Asia. What's certain is that to increase the dream's appeal to distinctly standoffish, if not hostile neighbors, China's diplomats would have to embark on a blockbuster soft-power charm offensive.

Xi's two predecessors could not come up with anything better than the vague concept of a "harmonious society" (Hu Jintao) or an abstruse "theory of the Three Represents" (Jiang Zemin), as corruption ran wild among the Chinese elite, the country's economy began to slow, and environmental conditions went over a cliff.

Xi's dream comes with a roadmap for what a powerful future China would be like. In the shorthand language of the moment, it goes like this: strong China (economically, politically, diplomatically, scientifically, militarily), civilized China (equity and fairness, rich culture, high morals), harmonious China (among social classes), and finally beautiful China (healthy environment, low pollution).

The Holy Grail of the moment is the "Two 100s" -- the achievement of a "moderately prosperous society" by the Chinese Communist Party's 100th birthday in 2021, one year before Xi's retirement; and a "rich, strong, democratic, civilized, and harmonious socialist modern country" by 2049, the 100th birthday of the founding of the People's Republic.

Wang Yiming, senior economist at the National Development and Reform Commission, has asserted that China's gross domestic product (GDP) will reach 90 trillion yuan ($14.6 trillion) by 2020, when annual per capita GDP will, theoretically at least, hit the psychologically groundbreaking level of $10,000. By 2050, according to him, the country's GDP could reach 350 trillion yuan ($56.6 trillion), and annual per capita GDP could pass the 260,000 yuan ($42,000) mark.

Built into such projections is a powerful belief in the economic motor that a relentless urbanization drive will provide -- the goal being to put 70% of China's population, or a staggering one billion people, in its cities by 2030.

Chinese academics are already enthusing about Xi's dreamscape. For Xin Ming from the Central Party School (CPS) -- an establishment pillar -- what's being promised is "a sufficient level of democracy, well -- developed rule of law, sacrosanct human rights, and the free and full development of every citizen."

Don't confuse "democracy," however, with the Western multiparty system or imagine this having anything to do with political "westernization." Renmin University political scientist Wang Yiwei typically describes it as "the Sinocization of Marxism... opening up the path of socialism with Chinese characteristics."

Hail the Model Urban Citizen (aka Migrant Worker)

Of course, the real question isn't how sweet China's party supporters and rhapsodists can make Xi's dream sound, but how such plans will fare when facing an increasingly complex and anxiety-producing reality.

Just take a stroll through Hong Kong's mega -- malls like the IFC or Harbour City and you don't need to be Li Chunling, from the Chinese Academy of Social Sciences, to observe that China's middle class is definitely dreaming about achieving one kind of westernization -- living the full consumer life of their (now embattled) American middle-class counterparts.

The real question remains: On a planet at the edge and in a country with plenty of looming problems, how can such a dream possibly be sustainable?

A number of Chinese academics are, in fact, worrying about what an emphasis on building up the country's urban environment at a breakneck pace might actually mean. Peking University economist Li Yining, a mentor of Premier Li Keqiang, has, for instance, pointed out that when "everyone swarmed like bees" to invest in urban projects, the result was a near bubble-bursting financial crisis. "The biggest risk for China is in the financial sector. If growth comes without efficiency, how can debt be repaid after a boom in credit supply?" he asks.

Chen Xiwen, director of the Party's Central Rural Work Leading Group, prefers to stress the obvious ills of hardcore urbanization: the possible depletion of energy, resources, and water supplies, the occupation of striking amounts of land that previously produced crops, massive environmental pollution, and overwhelming traffic congestion.

Among the most pressing questions raised by Xi's dream is what it will take to turn yet more millions of rural workers into urban citizens, which often turns out to mean migrant workers living in shanty towns at the edge of a monster city. In 2011 alone, a staggering 253 million workers left the countryside for the big city. Rural per capita income is three times less than urban disposable income, which is still only an annual 21,800 yuan, or a little over $3,500 (a reminder that "middle class China" is still a somewhat limited reality).

A 2012 report by the National Population and Family Planning Commission revealed that 25.8% of the population is "self-employed," which is a fancy way of describing the degraded state of migrant workers in a booming informal economy. Three-quarters of them are employed by private or family-owned businesses in an off-the-books fashion. Fewer than 40% of business owners sign labor contracts. In turn, only 51% of all migrant workers sign fixed-term labor contracts, and only 24% have medical insurance.

As working citizens, they should -- in theory -- have access to local health care. But plenty of local governments deny them because their hukou-household registrations are from other cities. In this way, slums swell everywhere and urban "citizens" drown in debt and misery. In the meantime, top urban management in Beijing, Shanghai, Shenzhen, and Chongqin is working to eliminate such slums in order to clear the way for the wildest kinds of financial speculation and real estate madness. Something, of course, will have to give.

When former World Bank chief economist Justin Lin Yifu warned that China should avoid "over-urbanization," he nailed it. On the ground, President Xi's big dream looks suspiciously like a formula for meltdown. If too many migrants flood the big cities and the country fails to upgrade productivity, China will be stuck in the dreaded middle-income trap.

If, however, it succeeds in such a crash way, it can only do so by further devastating the national environment with lon-term consequences that are hard to calculate but potentially devastating.

(待續)

Party Like It’s the 1960s: China Resurrects Mao-Era Slogans and Autos

Hannah Beech, 06/ 21/13

Is the Chinese government feeling nostalgic for the 1960s, the glory days of Communist Party sloganeering and dominance? First, it emerged that Foreign Minister Wang Yi (and soon other top Chinese officials) was eschewing a foreign-made luxury car for a domestically produced Red Flag sedan, which used to be the ride of choice for Communist bigwigs. Then China’s leader Xi Jinping announced a new “party rectification” campaign against official corruption and abuse of power. The drive will be promoted by an online landing page called Mass Line Net (群眾路線網), a term popularized by Chairman Mao Zedong that refers to the Chinese Communist Party’s need to connect with those it governs.

Certainly the perceived impunity with which some government officials have acted has galvanized public anger in China, where the gap between haves and have-nots is growing wider. But as the New York Times noted in a strong June 20 story, officials are being prosecuted for supposed malfeasance using an internal -- and utterly unaccountable system -- called shuanggui (雙規) or “double regulations” that harks back to the bad days of the People’s Republic. In April, at least three Chinese state-linked individuals died under suspicious circumstances while under shuanggui detention, according to the Times.

(PHOTOS: Zhang Yaxin: Photographing Chairman Mao’s Model Operas)

Xi’s year-long party rectification drive, announced by teleconference on June 18 to clutches of serious-looking Communist Party cadres, is ambitious. He is ordering a “‘thorough cleanup’ of undesirable work styles such as formalism, bureaucratism, hedonism and extravagance,” according to state newswire Xinhua. These four –isms have been grouped together by China’s party thinkers as the “Four Forms of Decadence.” Xi was quoted saying that members of the Chinese Communist Party should instead be striving toward four goals: self-purification, self-perfection, self-renewal and self-progression.

To reach such lofty targets, Chinese officialdom is supposed to rely on “the mass line, or furthering ties with the people, [which] is the lifeline of the Party,” Xinhua noted. Ironically, the last major Chinese figure to have resurrected the “mass line” terminology was Bo Xilai, the controversial Communist Party big shot who was removed from power last year in one of modern China’s most electrifying political purges.

The rectification effort, which is set to begin on July 1, will surely mean more long meetings for Chinese cadres, who are being asked to attend “study sessions” devoted to the topic. In the metaphorically driven language of Party guidance, Xi told Chinese bureaucrats to “look in the mirror, straighten your attire, take a bath and seek remedies.” But the drive has with some skepticism on Weibo, a popular social-media service, where members of the Chinese public can express themselves. In comments that went viral (and that, surprisingly, have not yet been banished by government censors), novelist Yang Hengjun wrote:

We have high expectations of this new rectification movement but past history tells us such movements are merely black clouds thundering a great deal while raining little. According to Xi Jinping, the success of this rectification involves the masses and an efficient system. If we want to involve the masses, we should allow the masses to do their own monitoring. We cannot just let those cadres criticize themselves. We should establish a constitutional government, we should use the system of rule of law to limit officials’ power and we should establish a system to protect civil rights.

(MORE: How China Sees The World)

After coming to power last November, Xi announced another campaign against official excess, urging cadres to eschew lavish banquets for the relatively Spartan option of “four dishes and one soup.” Because of this austerity drive -- as well as an online vigilante movement to shame government officials found outfitted in luxury clothes or accessories that outstrip their state salaries -- sales of certain high-end products have dipped in China. Shaming of wayward officials has spiked. Xinhua reported that in the first five months of 2013, the southern province of Guangdong had punished 258 officials for violating Xi’s crusade to instill discipline in Party ranks.

Which brings us back to the Chinese Foreign Minister’s new ride. Chinese assembly lines began rolling out Red Flags for central-government leaders in the late 1950s. But in recent years, foreign cars like Audis, usually in telltale black, became the vehicles of choice for Chinese officialdom -- so much so that speeding, dark-hued Audis served as a byword for official arrogance on the roads. The return to the Red Flag serves a dual purpose: price and patriotism. Wang’s new vehicle, the boxy H7 model, is cheaper than a comparable Audi. And it’s a domestic company. “China is a big power, so we should use our own high-level, brand-name car [to transport officials],” says Zhao Yan, the Beijing sales manager of Yiqi, the manufacturer of Red Flag cars.

But not everyone is quite so eager to return to the old days. Earlier this week, a retiree named Liu Boqin took out an advertisement in a reformist Chinese magazine apologizing for his behavior as a young Red Guard during the Cultural Revolution, when he persecuted his teachers and other adults. Growing up in the comfortable confines of a local leadership compound in China’s eastern Shandong province, Liu, now 61, was just in middle school when his world turned topsy-turvy. Like many children of that era, particularly those with party connections, he participated in a frenzy of destruction and humiliation of anyone thought to have suspect political roots. Tens of millions suffered during the decade-long political movement, yet there has been relatively little introspection about the damage caused by what Mao and his cohorts unleashed. (Chinese leader Xi’s own family endured hardship during this time.) Liu, though, used his purchased space in Yanhuang Chunqiu (炎黃春秋) to try to redress past wrongs:

“I was so young, naïve and bewitched, and I could not distinguish between good and bad…Now as an old man, I have conducted introspection on what I did at that time. Although I was in a violent environment and was bewitched by external circumstances, I should shoulder responsibility for my past wrong behavior. I hereby apologize sincerely to those people. I hope you can forgive me.”

But after Liu’s ad became a hot topic on Weibo, the penitent former Red Guard retreated a little, publishing an open letter refusing to comment further on his apology:

“Although I have prepared for this, I still was astonished by the fallout of this event…Before I published the ad, my children did not agree with me on this matter. My family does not support me doing this. Now the whole thing has become a public issue, and I was forced to become a public figure, which is not really what I want to happen.”

Ironically, both the open letter and Liu’s original ad read like self-criticisms, the documents of contrition often written by force during the Cultural Revolution -- yet another way in which the 1960s have infringed on China’s present.

with reporting by Gu Yongqiang / Beijing

http://world.time.com/2013/06/21/party-like-its-the-1960s-china-resurrects-mao-era-slogans-and-autos/

Soft Power? China Has Plenty

China has little attractive power – in the West. But then not everyone is watching China through Western eyes.

Trefor Moss, 06/04/13

China is a failure when it comes to soft power – or so we’re told.  

A giant in the hard-power leagues of money and military strength, China is often portrayed as a minnow swimming against the global tide of ideas and perceptions. Unloved and misunderstood, the country can only get things done through the use of carrots and sticks, not by capitalizing on the warm sentiments of others. Foreigners, in the end, pay heed to China only because they have to, not because they want to.

No-one has been more skeptical about Chinese soft power than Joseph Nye, the man who first coined the phrase twenty years ago. In particular, Nye has criticized Beijing’s efforts to acquire soft power through centralized schemes, like the spread of Confucius Institutes or the establishment at the end of last year of the China Public Diplomacy Association. Despite “spending billions of dollars to increase its soft power … China has had a limited return on its investment,” he recently argued. This is because soft power mainly accrues when civil society actors – whom the Chinese government tends to squash – make or do things with global appeal, according to Nye, not through top-down schemes which foreigners are likely to interpret as propaganda.

Nye rightly doubts whether all of China’s soft-power investments are paying off. However, we should not be too quick to write off China as an attractive force in global affairs simply because Beijing has fired a few blanks. In fact, Chinese soft power does exist. You just have to look for it in the right places.

The basics of soft power

What Nye first hit upon in his seminal article “Soft Power” is the fact that there is more to international power than plain coercion – that hard power has a flipside, a passive form of power whereby others gladly do what you want, without your having to twist their arm. Tidy definitions of soft power like “cultural diplomacy” or “national marketing” don’t seem to capture it, and maybe no single phrase can. Instead, it may be better to consider soft power’s essential features:

1.     Soft power is the result of being liked, respected, trusted, or admired. It’s a kind of magnetism: countries are attractive when they have it, and repellent when they don’t.

2.     Soft power is all in the mind, unlike hard power, which is all about tangible assets. Country A possesses soft power if people in Country B have positive ideas about it – if they regard Country A as likeable, respectable, trustworthy or admirable. Since likeability is all in the eye of the beholder, no country can acquire soft power directly, or force people or states to like it. But a state can make itself more likeable and more comprehensible through its behavior.

3.     Context is king. Soft power only accrues when the conditions are right. Efforts to make yourself more likeable may succeed in one country and fail in another, as dictated by the many cultural, political and historical factors in play.

It’s also important to ask what soft power is to China. If we say that China has soft power, that means states and individuals do things China wants without any compulsion or inducement. So what is it that China wants them to do? We can safely assume that China’s soft-power aims including being given face on the international stage: being shown respect, and being treated like a great country. It wants its policies and actions to be viewed sympathetically, and to conduct its affairs without foreign interference. It wants to draw less criticism and suspicion than it tends to today, and to attract more friendly support on issues it cares about. It wants less bad press. And, of course, it wants to open up overseas markets for Chinese products and have freer access to commercial opportunities abroad.

Broadly speaking, it might be anything that feeds into the Chinese government’s own concept of Comprehensive National Power, according to Rogier Creemers, a research officer at the University of Oxford’s Centre for Socio-legal Studies, who notes that soft power has been an important buzzword in Beijing ever since Hu Jintao identified it as a policy priority in 2007 (one wonders if part of Hu’s soft-power strategy was to have himself replaced with the far more genial Xi Jinping). “Soft power is conceived as government PR,” Creemers argues, adding that Beijing thinks “it’s up to the government to decide what China is and then market it abroad.” This concerted marketing push was seen as necessary because of the international weakness of Chinese brands and cultural exports, which are the best soft-power assets of countries like the U.S., the UK, or South Korea.

Locating China’s soft power

The debate about Chinese soft power tends to focus on what China is doing, and on China’s motives for doing it.

These things matter. But if soft power is all in the eye of the beholder, we can only really understand whether China has it by seeing Chinese activities and motives through the eyes of the countries it interacts with. What is their idea of China? Is it something attractive, which they might wish to emulate or freely engage with? Or is something repellent, which they might choose to reject and oppose?

The obvious conclusion is that China looks very different depending on which part of the world you’re observing it from. And if you want to see China in an attractive light, Africa surely provides the best vantage point.

China’s involvement in Africa is often interpreted as a cynical resource-grab – but mainly by Westerners. In fact, Chinese involvement in Africa – which has mainly taken the form of co-operative development, rather than aid – is much older and more constructive than many people realize. It goes back to the 1950s, long before the advent of Confucius Institutes or the launch of Hu Jintao’s soft-power agenda.

China’s activities in Africa and local attitudes to them have been well documented by Deborah Brautigam in her 2009 book The Dragon’s Gift. Brautigam demonstrates that Africans are generally receptive to China’s developmental approach: they observe with approval one developing country helping another, “the poor helping the poor”; they value the longstanding connections built over decades with their Chinese partners; and they feel that China shows them far more respect than paternalistic Westerners.

The newly published China’s Aid and Soft Power in Africa by Kenneth King, an emeritus professor at the University of Edinburgh, focuses more narrowly on China’s educational programs in Africa and finds similar levels of approval among local beneficiaries. King not only documents the teaching of Chinese language in Africa on an increasingly grand scale, but also the thousands of scholarships which send Africans to study at Chinese universities, and the professional seminars which bring thousands of African businesspeople to China for sought-after learning experiences. Once again, these educational efforts are packaged respectfully – they are an attempt to show Africans how China does things, not a means of lecturing Africans about how they should do things.

Are these soft power initiatives on China’s part? “That is surely the intention,” says King in an interview with The Diplomat. But whether they are or not, soft power is what China appears to be accruing from these educational projects. “African students are very positive about their exposure to China and the Chinese culture of learning and hard work,” King says. “People are saying: ‘This has changed the way I think about work.’ And it’s the sheer number of Africans who are going to China.”

China inspiring Africans: Isn’t that soft power in a nutshell?

Education is not, of course, China’s only concern in Africa. According to Aid Data, China has committed $74 billion to African projects since 2000, and has delivered $49 billion so far. Fifty out of 54 African states have benefited. Grandiose gestures include the $200 million African Union headquarters in Addis Ababa (one of many African cities which China has helped modernize and reshape). China also pays Africa the kind of high-level diplomatic attention that it seldom attracts from elsewhere. “Chinese leaders are a bit like swallows,” observes King, “they set off for Africa at the start of every year.” Sure enough, Xi Jinping visited three African states in March right after becoming president. “He even went to Congo-Brazzaville,” notes King. “Who else goes to Congo-Brazzaville?”

China’s growing influence is inevitably causing some discomfort in Africa itself, with Lamido Sanusi, the governor of the Central Bank of Nigeria, recently arguing that China’s “win-win” approach now involves too much “win” for the Chinese, and too much “lose” for the Africans. However, even Sanusi’s critique acknowledged China’s enduring soft power. “A romantic view of China is quite common among African imaginations,” he observed, adding that “this African love of China is founded on a vision of the country as a saviour, a partner, a model.” Sanusi’s message was that Chinese soft power in Africa will evaporate if China pursues a hard-power path along which it simply buys influence and resources without benefitting the Africans themselves – but that for the time being it still has formidable soft-power reserves.

The patchiness of Chinese power

Africa is not the only place from which China looks appealing. Its soft power also draws people in Latin America, Eastern Europe and parts of Asia, where the popular impression of China might contrast favorably with the general perception of the West, or where Beijing might be seen as a welcome partner in tough financial times, or as a trusted long-time ally.

Western commentators tend to overlook this, noticing only China’s lack of soft power in North America, Western Europe and those parts of Asia that fear or dislike China. In these places, the bad news about China – everything from its smoggy air, to its venal politics, to its repression of dissidents, to its apparent strangeness – drowns out any soft-power messages that Beijing might be trying to send. But elsewhere the good news drowns out the bad.

So Nye’s criticisms are half-right. In many states, China probably is wasting its time and resources when it tries to get people to watch CCTV, piles newsstands with English versions of China Daily, or part-funds its Confucius Institutes. These initiatives are doomed to fail in certain contexts. But these same activities can work beautifully elsewhere.

Even in the China-bashing West, China’s marketing messages are finding an audience. The U.S., for example, hosts more Confucius Institutes than any other country (70 at the latest count). If they convince even a few Americans that China is somehow likeable, respectable, trustworthy or admirable, then Beijing’s efforts won’t have gone entirely to waste.

http://thediplomat.com/2013/06/04/soft-power-china-has-plenty/

China tightens grip on discourse, ideology

GILLIAN WONG and DIDI TANG, 05/14/13

BEIJING (AP) — Chinese authorities have shut down or frozen the microblog accounts of several prominent liberal intellectuals and harassed rights lawyers lobbying against unofficial "black jails," underlining the determination of the country's new leadership to control dissent even as it vows to root out corruption.

The moves over the last few days occurred around the time officials announced that a senior official was being investigated for graft, months after a prominent journalist accused him of wrongdoing. The probe against Liu Tienan, deputy chairman of China's economic planning agency, was heralded by the Chinese press as proof that the battle against corruption is best fought when authorities allow public participation.

"The authorities and the people combined their strengths in this case, and it is an encouragement to the public's power in fighting corruption," said a state-run daily, the Beijing News, in a commentary.

The government issued a defense of its human-rights policies in a report Tuesday, outlining progress made in improving health, welfare and other living standards — a key measure the government uses in its definition of rights. The report said China takes measures to ensure the "citizens' right to know and right to be heard."

But the authoritarian government also has shown an unwavering intent to clamp down on anyone who seeks to publicly pressure it into social or political change. The message appears to be that if any reform is on the agenda, the Communist Party will push it through on its own terms.

"The controls are tighter than ever," said Li Cheng, an expert on China's elite politics at the Washington-based Brookings Institution. "The challenges are greater, so the suppression is escalating."

Small groups of activists have been detained in Beijing and other cities for holding banners calling for officials to publicly declare their assets — a key anti-graft measure that the government has been reluctant to implement. One activist, Liu Ping, has been accused of inciting subversion, a vaguely worded charge frequently used to suppress dissidents.

Authorities are also maintaining a years-long effort to quash legal activism.

On Monday, several rights lawyers attempting to visit one of China's unofficial detention centers — also known as "black jails" — in the southwestern city of Ziyang were beaten by unidentified men, said Beijing attorney Li Heping, who was contacted by one of the lawyers.

The efforts to police discourse are also being ramped up in the Chinese blogosphere, where users often challenge the government's version of events and its control over information.

Over the weekend, authorities apparently removed all microblog accounts belonging to the writer Hao Qun, better known by his pen name Murong Xuecun, from four different sites. His subsequent efforts to set up new accounts have been blocked, he said.

No explanation was provided for the shutdown of his accounts on the popular Sina Corp. platform, Weibo, and three other microblogging sites, Hao said. He said his Weibo account had about 4 million followers.

"The ruling party is losing in the field of public opinion, which is threatening its legitimacy," Hao said. "Now, they must exert tighter control, and that's why they have gone on the offense in public opinion."

The blog closure could have been related to Hao's recent post of a two-line verse critical of the party's authoritarian rule, or his posts criticizing the freezing of a microblog belonging to He Bing, an outspoken, liberal professor at the China University of Political Science and Law.

In a rare move, the official China Internet Network Information Center explained in state media reports Friday that He's account had been suspended because he was "intentionally spreading rumors."

The professor has issued a statement protesting the suspension as being illegal. "It is every citizen's responsibility to unswervingly promote a government that rules by law," He said.

The ratcheting up of controls on Chinese microblog platforms — targeting verified accounts of well-known opinion leaders with hundreds of thousands of followers — appears designed to send warnings that China's leaders will not give ground to its political critics, no matter how popular they might be.

President Xi Jinping has made fighting official corruption a priority, and the investigation against Liu had suggested that the government was willing to allow the public to play a role.

The investigation was foreshadowed by public allegations against him five months ago by Luo Changping, deputy chief editor of Caijing magazine. The official probe against Liu was announced Sunday, and on Tuesday state media reported that Liu has been removed from his posts as part of investigations into "serious disciplinary violations."

At the same time, there are concerns that the government is cracking down on the kind of public discourse that could help expose official misdeeds.

Rumors have begun to circulate online that party authorities issued a directive to some college campuses that seven topics are now barred from class discussion, including press freedom, judicial independence, civil rights, civil society and the party's historic mistakes.

The rumor could not be verified. Several law and politics professors contacted by the AP said they had not directly seen or heard about such an instruction, nicknamed the "Seven Don't Mentions." Several academics said it would be impossible to enforce.

He Weifang, a legal scholar at Peking University, said no topic has been off-limits in his classroom.

"I can speak of everything. There is nothing that cannot be discussed," he said. "If the law does not talk about civil rights, there's no law, because the law is about protecting one's rights."

Veteran journalist Gao Yu said that an edict, or the rumors of one, could be related to a broader ideological strategy laid out by the party's new leadership in an unpublicized meeting earlier this year that identifies seven key "problems" propaganda officials should tackle. She said they include the concept of democracy and constitutionalism, civil society, neoliberalism and the Western concept of the press.

The strategy was laid out in a document issued by the general office of the party's central committee, the contents of which were briefly leaked online, Gao said. She said she verified details of the document with retired, high-ranking propaganda officials.

Measures recommended in the document include efforts to "better broadcast" the party's voice and "strengthen the party's leadership of the media," Gao said.

Gao expressed concern that the new leadership was veering toward the more authoritarian era of Mao Zedong that lasted into the 1970s.

"We can see that the party currently faces a lot of problems, from environment pollution to the income gap," Gao said. "But this marks a big step backwards. Who would have known that they are going back to Mao Zedong's era?"

Follow Gillian Wong on Twitter at twitter.com/gillianwong

http://news.yahoo.com/china-tightens-grip-discourse-ideology-095441403.html

要教授和大學生們真正做到「七不講」，大概是「春夢」一場。搞成「惡夢」，那就非國家之福了。習總可不慎哉？!

中共封口令 大學上課「七不講」

聯合報/特派記者程嘉文, 05/12/13

近日傳出中共對各大學推出「七個不要講」，要求教師不要與學生討論「普世價值、新聞自由、公民社會、公民權利、黨的歷史錯誤、權貴資產階級、司法獨立」話題。

香港明報報導，前天署名「新常識2016」的網友在微博披露：「各高校（大學）已向每位教師傳達了『七個不要講』的精神。發文者並宣稱，願意與官方對質，還批評：「如此直接地干預教師的教學自由，如此明確具體地限制教師的教學內容，近年來尚屬首次。但是，連新聞自由、公民權利都不能談，這還是大學嗎？」

不久之後，「新常識2016」帳號就遭封鎖，留言也全數被刪除。據網民指出，當事人是上海一名張姓大學教師。中國勞動關係學院教授王江松也在微博證實，該校也傳達了中央的七點指示精神。

教育界知情人士表示，曾聽到校內領導口頭傳達，「肯定不會發給每一個人，只會發到學校，通過開會的方式講」。華東政法大學憲法學教授童之偉批評，憲法規定「中華人民共和國實行依法治國」，就是依照法律規定治國，不依政策治國，不搞「依講話治國」，不靠「發文件治國」，尤其不靠發私密文件治國。

北京政治評論員章立凡也表示聽過該禁令，並批評這種思想控制手段太陳舊落後。他表示，當局推出七個不能觸及的禁區，反而在提醒大家，這是現今體制的關鍵弊端。有網民譏諷說，「七個不要講，統稱為一個不要臉」；「七不講」一詞，已遭到封鎖，無法檢索。

【2013/05/12 聯合報】

http://udn.com/NEWS/MAINLAND/MAI2/%E4%B8%AD%E5%85%B1%E5%B0%81%E5%8F%A3%E4%BB%A4%20%E5%A4%A7%E5%AD%B8%E4%B8%8A%E8%AA%B2%E3%80%8C%E4%B8%83%E4%B8%8D%E8%AC%9B%E3%80%8D-7891563.shtml

China’s Next Leap Forward: From Comrades to Consumers

Chinese leadership has hinted at greater economic reforms in store, with freewheeling Guangdong province as the model.

Steve Finch, 05/09/13

On June 20 of last year, two and a half months after disgraced former Chongqing Communist Party Chief Bo Xilai was dropped from the Politburo, another member of China’s elite 25-man decision-making body was all smiles in the southern city of Dongguan.

During a tour of the bustling factory city, one of the most overt symbols of China’s experiments with capitalism thus far, the then Guangdong province party chief Wang Yang waxed lyrical about his plans to tackle the province’s spiraling crime and economic malaise.

On the front page of the local newspaper the following day, Wang appeared opposite a table lined with bundles of 100-yuan bills, drugs, a handgun and carefully aligned machetes – the unsavory by-products of Guangdong’s recent rush towards prosperity. “Wang Yang strongly supports the ‘three crackdowns, two developments’,” read the headline in the Dongguan Times.

Despite a new campaign produced by the Discovery Channel in February, designed to rehabilitate the city’s unsavory image, Dongguan remains a by-word for crime, vice and everything bad associated with China’s manufacturing-led boom.

With little to offer except hordes of underpaid workers – the city’s population ballooned from 1.8 million in the 1980s to more than eight million today – Dongguan finds itself bankrupt, reflecting a wider troubling trend. China’s local government debt nationwide stood at 10.7 trillion yuan, about 27 percent of GDP. Meanwhile, many overseas investors are leaving for new, less expensive pastures.

Chen Sheng Fei, a mother of two who moved to Dongguan from southeastern Hunan province in 2007, left her job at a furniture factory in early March. She told The Diplomat that finding a new, decent employer is difficult.

“There are factories here that break the law, companies which never mention things like social welfare,” she said. “Too many companies here are bad.”

Despite its developmental woes, Wang remains the leading advocate of what has come to be known as the “Guangdong model” of economic liberalization, based on high growth and private enterprise. His recent career has been viewed as a litmus test of just how far the new generation of Chinese leaders is prepared to go with much-needed economic reforms.

Whereas Bo, a leading proponent of the neo-socialist “Chongqing model”, focused on social safety nets and state-owned enterprises, was disgraced and removed from office in the months leading up to the recent power transition, freewheeling Wang was made third vice-premier. His rise has only gone so far, however. Wang was not elevated to the all-powerful Politburo Standing Committee as many expected. According to some analysts, Wang’s limited rise was a sign that his radical agenda of major structural economic reforms remains in vogue in Beijing – though only to a degree.

As the latest generation of Chinese leaders begins its decade-long rule, speculation has focused on just how far Beijing may go in overhauling the country’s cautiously capitalist economic model. Despite initial grumblings that the leadership shake-up was not all that radical, there are growing signs that wholesale Wang-esque changes – including more focus on free markets, quality enterprises over quantity and greater worker wellbeing – will form the backbone of China’s blueprint for another economic leap forward.

“China will sustain relatively high economic growth but not super-high economic growth,” President Xi Jinping told delegates at the Boao business forum on the southern Chinese island of Hainan earlier this month. “It does not mean we cannot maintain economic growth at a very fast pace, but because we don’t want it anymore.”

Whether or not you believe GDP trends are entirely Beijing’s choice – growth was 7.8 percent in 2012, sluggish by its own high standards – China is clearly moving away from low-wage industrial output towards a more balanced economic model.

At the start of April, the National Development and Reform Commission unveiled plans to regenerate 25 municipalities and capital cities and 95 prefecture-level cities, which were once part of the industrial base but are now intended to form the foundation of the new Chinese economy. Expanded from a smaller plan announced 18 months ago, this mammoth undertaking will be funded by bond issues and huge capital investment until 2020 in places like Shanghai’s Minhang District, home to numerous manufacturers including U.S. firm Alcoa, the world’s third largest aluminum producer.

“The next 10 years is about consolidating and expanding the revitalization of northeastern China and other old industrial bases, an outcome of an important period [for the Chinese economy],” the NDRC said in a statement announcing the plan.

China hopes high-technology industries will account for 17.8 percent of production and service 45 percent of output in these cities by 2017. Further, it plans to cut water consumption by nearly one-third and energy by 18 percent in a nod to raising the quality of its industries and reducing pollution.

A week after the NDRC announced the radical overhaul of the country’s manufacturing base, trade official Song Heping told reporters at a news conference that China aims to boost imports amid a total recalibration of trade, in a bid to reduce the country’s reliance on exports.

In 2011, foreign countries filed 69 trade remedy probes against China, according to commerce ministry figures. In 2012, that number increased to 77 investigations and the first quarter of this year points to yet more cases in 2013 – 22 such probes were filed by the end of March.

Although China remains concerned over increased bad blood with its trading partners, the key motivation appears to be reducing the potential for external risk factors that could damage China’s economy. Towards this end, currency reforms will be vital.

Last Tuesday, central bank research official Wang Yu indicated further measures to unshackle the Chinese currency as the yuan reached a 19-year high of 6.1831 against the U.S. dollar.

“Market-oriented progress in interest rate and currency exchange rate reform will provide huge opportunities as well as challenges for the country’s payment and settlement system,” Wang was quoted as saying by the state-run China Daily.

With greater convertibility comes increased trade and fewer complaints from the U.S. Federal Reserve over currency manipulation, but also less control – always a fear in Beijing. Yet, further moves to slim down gargantuan state-owned enterprises suggest the government may be overcoming the impulse to micromanage. Perhaps even more significantly, Beijing may be increasingly ready to tackle vested interests.

The government announced a month ago that it would rip apart the Ministry of Railways, an inefficient hotbed of state waste and corruption that has racked up staggering debts of 2.53 trillion yuan (U.S. $405.8 billion).

Former Railways Minister Liu Zhijun was charged with corruption and abuse of power last month in a case that is being viewed as a key test of whether the new guard will take corruption more seriously, another pillar of economic reform.

As a result of changes to the Railway Ministry in the wake of the scandal, the state will oversee administrative matters while the new privately owned China Railway Corporation will manage commercial operations.

An article in the China Daily called the move the end of Communist China as we know it. “The dismantling of the Ministry of Railways is also a farewell to the planned economy,” it read.

If this does indeed mark the ultimate sign of capitalist aspirations from the government, on the public’s side the key test remains whether China’s 1.3 billion people can complete their evolution from pre-Deng Xiaoping comrades to fully fledged consumers under Xi.

In an outlook note at the end of last year, Deutsche Bank forecast that demographic and macro-economic shifts in China would result in a nearly 15 percent rise in real consumption between 2010 and 2020 amid a 20-percent plus drop in real exports. In other words, Chinese are expected to pick up the slack from decreased demand overseas.

To reach its target of doubling per capita income within this decade for both urban and rural Chinese, GDP growth would need to hit at least 7.2 percent for each of the coming eight years, according to analysts at HSBC, an achievable target given that growth estimates for this year and next are expected to be closer to 8 percent.

“Per-capita income could reach $12,000 by 2020, lifting the status of China to that of a developed country,” reads an HSBC research note on reforms from March.

How this scenario plays out – whether prosperity will trickle down in China without further widening the already chasm-like wealth gap – lies at the core of the current policy debate. Using the analogy of a cake, Wang and Bo have espoused very different views of how to bridge this gap.

In late 2011, just before the scandal engulfing Bo and his wife broke, Wang famously said that China “must bake a bigger cake first before dividing it.” Bo, in response, disagreed: “If the distribution of the cake is unfair, those who make the cake won’t feel motivated to bake it; therefore we can’t bake a bigger cake.”

While there is no doubting the size of the cake Wang helped to bake in Guangdong – among China’s most economically dynamic and wealthy provinces – the socialist dream is all but dead in places like Dongguan.

http://thediplomat.com/2013/05/09/chinas-next-leap-forward-from-comrades-to-consumers/

Pentagon Report Reveals Chinese Military Developments

Last year's annual report on Chinese military developments was widely criticized. What does the 2013 version offer?

Andrew S. Erickson, 05/08/13

After a year-long hiatus, the U.S. Department of Defense (DoD)’s annual report on Chinese military developments is back and better than ever. Its 43-page 2012 predecessor was widely criticized for arriving far later than Congress requested and containing little substance or new data. But this year’s expeditiously-issued 92-page document continues a tradition of detailed, sophisticated, publicly-available U.S. government analysis previously seen in the 2011 DoD report, the 2010 National Air and Space Intelligence Center (NASIC) report on China’s air force, and the 2009 and 2007 Office of Naval Intelligence (ONI) reports on China’s navy.

Like these other landmark reports, this year’s DoD iteration clearly and understandably comes from a U.S. military perspective, yet strives to provide a comprehensive picture of Chinese military developments and the strategic concerns that motivate them. This represents an admirable effort to offer a balanced assessment, as can be seen in remarks at the time of its release by David F. Helvey, deputy assistant secretary of defense for East Asia. Useful data are presented on everything from Chinese sea- and -land based energy access to apparent ambiguities in Beijing’s “no first use” nuclear doctrine to members of the Central Military Commission and their key professional relationships.

All this context matters deeply, and should be commended. But arguably the report’s greatest contribution lies in more specific areas: providing authoritative assessments of key People’s Liberation Army (PLA) developments that are difficult, if not impossible, to achieve or confirm via other publicly-available sources, such as Beijing’s own recently-released 2013 Defense White Paper -- which, like many Chinese public strategic documents, offers few specifics. Chinese government representatives are already out in force criticizing this year’s DoD report and claiming that its content is distorted or inaccurate, but as usual do not offer credible evidence to clarify or counter even the report’s most important assertions. Yet it is precisely in such areas -- which include hard-to-attribute cyber activities and other types of espionage -- that observers of China’s military development need the greatest governmental assistance. After all, as a recent Wall Street Journal op-ed argues cogently: “In the long run Beijing usually does what it says it is going to do, although the execution may be concealed with deception.”

With respect to obfuscation, the report documents that China has conducted multiple naval operations in the undisputed U.S. Exclusive Economic Zones (EEZs) of a nature that it would oppose a foreign military such as that of the U.S. conducting in its own claimed EEZ -- which it is projected to fill with increasing numbers of maritime law enforcement vessels. While the report states that China is conducting such activities in the EEZs of multiple states, a reference that almost certainly includes Japan, it is worth noting the report’s exact wording with respect to the United States: “the United States has observed over the past year several instances of Chinese naval activities in the EEZ around Guam and Hawaii. One of those instances was during the execution of the annual Rim of the Pacific (RIMPAC) exercise in July/August 2012. While the United States considers the PLA Navy activities in its EEZ to be lawful, the activity undercuts China’s decades-old position that similar foreign military activities in China’s EEZ are unlawful.” It will be particularly interesting to see how Beijing responds to such revelations, which further underscore the emerging contradictions between China’s promotion of restrictive approaches vis-à-vis foreign military and governmental activities in the Near Seas (Yellow, East, and South China Seas) even as it pursues increasing access to such other strategic seas as the Western Pacific and the Arctic. Given this complexity, perhaps Beijing’s approach for now will be to denounce the report generally while avoiding this specific issue.

Perhaps the report’s single greatest contribution to what is known publicly about the PLA concerns China’s nuclear submarine programs. It states that China’s three already-operational Type 094 Jin-class nuclear-powered ballistic missile submarines (SSBNs) may be joined by “as many as two more in various stages of construction.” The Type 094 “will give the PLA Navy its first credible sea-based nuclear deterrent” once its 7,400+ km-range JL-2 submarine-launched ballistic missile (SSBN) is deployed effectively. “After a round of successful testing in 2012, the JL-2 appears ready to reach initial operational capability in 2013,” DoD explains. “JIN-class SSBNs based at Hainan Island in the South China Sea would then be able to conduct nuclear deterrence patrols.” After as many as 5 Type 094 SSBNs are operational, China is slated to “[proceed] to its next generation SSBN (Type 096) over the next decade.” This improved variant may finally offer acoustic qualities suitable for long-range patrols.

Additionally, “China is building four improved variants” of the Type 093 Shang-class nuclear-powered attack submarine (SSN) to add to the two already deployed. Within “the next decade, China will likely construct the Type 095 guided-missile attack submarine (SSGN), which may enable a submarine-based land-attack capability,” the report adds. Not only will the Type 095 employ “better quieting technologies,” it will also “fulfill traditional anti-ship roles with the incorporation of torpedoes and anti-ship cruise missiles (ASCMs).” With respect to conventional attack submarines, DoD states that the Yuan-class (Type 039A), which may grow to twenty hulls in total, has air-independent power, hence its designation as an “SSP.” These developments will afford the People's Liberation Army (PLAN) new force deployment options and significantly enhance its undersea warfare and strike capabilities.

Another area of significance is the report’s coverage of China’s anti-ship ballistic missile (ASBM) program, which is part of a major Chinese emphasis on missile development, particularly of conventional ballistic and cruise missiles. While many details can and have been assembled from previous U.S. government announcements, this is the most definitive, comprehensive statement concerning the program’s current status and capability yet available. “China continues to field” the DF-21D ASBM with its 1,500+ km-range and maneuverable warhead, the report asserts, which “it began deploying in 2010.” The DF-21D “gives the PLA the capability to attack large ships, including aircraft carriers, in the western Pacific Ocean.” Also, “The PLA Navy is also improving its over-the-horizon (OTH) targeting capability with sky wave and surface wave OTH radars, which can be used in conjunction with reconnaissance satellites to locate targets at great distances from China (thereby supporting long-range precision strikes, including employment of ASBMs).” In a hint that Beijing may build longer-range ASBMs, DoDstates: “Beijing is investing in military programs and weapons designed to improve extended-range power projection… Key systems that have been either deployed or in development include ballistic missiles (including anti-ship variants)….”

On the nuclear side, Beijing is trying to achieve/consolidate secure second-strike capability. China has engaged in major efforts over the past decade to construct advanced, deeply-buried facilities to enable “all aspects of its military forces, including C2 [command and control], logistics, missile, and naval forces” to survive a nuclear first strike.

This is part of a larger array of “current and projected force structure improvements” that “will provide the PLA with systems that can engage adversary surface ships up to 1,000 nm from China’s coast.” The PLAN “will also develop a new capability for ship-based land-attack using cruise missiles.” The report judges China’s defense industry to enjoy significant resources.The report credits China with having deployed one of the world’s largest advanced long-range surface-to-air missile (SAM) forces. In a sea change from a decade ago, DoD assesses that PLA missile and other developments have already “largely negated” many of Taiwan’s traditional defensive advantages of technological superiority and geography even as Taipei’s military spending is a tenth that of the mainland’s official defense budget.

Areas of particular Chinese defense industrial capability include missiles, space, and shipbuilding. The report characterizes China as being “among the top ship-producing nations in the world” and China’s ballistic and cruise missile industries to be “comparable to other international top-tier producers” and well-positioned for further development. China’s missile and space industry has benefitted from “upgrades to primary final assembly and rocket motor production facilities.” A burgeoning space launch industry enabled 18 space launches in 2012 that lofted, among many other systems, 11 new remote sensing satellites. Meanwhile, Chinese shipyards have improved in capacity and sophistication, e.g., through improvement management and software, allowing them to develop increasing varieties of platforms and systems and reducing reliance on foreign assistance. Other Chinese research and development trends stand out. The report documents a significant focus on developing unmanned aerial vehicles (UAVs), both for PLA use and to market to foreign countries; as well as on development/acquisition of unmanned combat aerial vehicles (UCAVs).

China’s navy also “has the largest force of major combatants, submarines, and amphibious warfare ships in Asia.” Looking forward, DoD estimates that “China will probably build several aircraft carriers over the next 15 years.” It projects that Beijing “will likely establish several access points… in the next 10 years,” possibly in the Malacca, Lombok, and Sunda Straits, in “the form of agreements for refueling, replenishment, crew rest, and low-level maintenance” to address logistical limitations that currently restrict the level of PLAN distant operations. The report is careful to emphasize, however, that “the services provided will likely fall short of U.S.-style agreements permitting the full spectrum of support from repair to re-armament.”

Despite these areas of progress, the PLA faces areas of enduring weakness, and even new emerging challenges. Present limitations, albeit which the PLA is struggling to surmount, include lack of “a robust, deep water anti- submarine warfare capability….”A related uncertainty is “whether China has the capability to collect accurate targeting information and pass it to launch platforms in time for successful strikes in sea areas beyond the first island chain.” Other developments will themselves force difficult questions upon the PLA. Generally speaking, “to fully implement ‘informatized’ command and control, the PLA will need to overcome a shortage of trained personnel and its culture of centralized, micro-managed command.” More specifically, “Further increases in the number of mobile ICBMs and the beginning of SSBN deterrence patrols will force the PLA to implement more sophisticated command and control systems and processes that safeguard the integrity of nuclear release authority for a larger, more dispersed force.”

Finally, as part of a clear effort to address Chinese military development comprehensively, the report is not all doom and gloom in its coverage. It enumerates both PLA bilateral and multilateral military exercises and Sino-American military contacts and exchanges. One imagines that the report’s authors have been tempered by the reality that Beijing often limits or cancels such exchanges to express political differences, but remain duty bound to pursue a U.S. government policy that preserves the possibility of such exchanges building trust and habits of cooperation and in doing so avoids a still-worse alternative. Whatever uncertainties and concerns may underlie it, this is not a document that is all zero-sum in its approach.

While the U.S. intelligence community has access to a wide range of data on specific developments, other observers who lack access to such information because of nationality or societal station must depend in part on open government publications to raise and clarify specific issues. Given the dynamism and importance of the matters at stake, it is essential that a full range of individuals and foreign governments alike have access to substantive reports. U.S. taxpayers must be informed as to why they are being asked to fund the development and maintenance of military capabilities, and to exercise the civilian oversight on which a democracy depends. Allied and friendly governments and their citizens must keep abreast of relevant developments and maintain military relations with Washington on the basis of mutual understanding and interest. And China itself needs to know how its military progress is being perceived, even as it remains free to publish whatever reports of its own it might wish. Given these factors, DoD is to be commended for having released such a substantive and timely report on China’s military development. Its contents should be discussed and debated constructively with regard to specific substance, in lieu of political sloganeering or sweeping but unsubstantiated charges that fail to further understanding.

http://thediplomat.com/2013/05/08/back-on-track-pentagon-report-reveals-chinese-military-developments/?all=true

裴敏欣教授大作對中國經濟成長的分析相當務實。中國的「發展模式」以及政治制度和社會政策的確急需和亟需改弦易轍 -- 以人民福祉為本，以長治久安為綱領。

但裴教授的語氣和結論，如最後一段話：

 … At the moment, despite mounting evidence of China’s low-quality growth and lack of sustainability, few are asking the inevitable question: what happens to the Communist Party’s rule when the ill-effects of low-quality growth accumulate and produce a systemic crisis?

Now is the time to ask it.

則不免「漢人學得胡兒語，卻向城頭罵漢人。」之譏。

如果我有裴教授的學力和地位，我會說：

… At the moment, as mounting evidence of China’s low-quality growth, its lack of sustainability, and the resulting dire consequences, are undeniable, the question we should be asking is not:

what happens to the Communist Party’s rule when the ill-effects of low-quality growth accumulate and produce a systemic crisis?

but rather:

what action the Beijing government should be taking, and what advices the world-wide academic community should be offering?

Now is the time to address them.

Asia’s Real Challenge: China’s “Potemkin” Rise

"China’s rise is more likely a statistical fiction, cooked up by the Chinese ruling elites to aggrandize their power and glory."

Minxin Pei, 05/07/13

If one looks only at the explosive growth of China’s Gross Domestic Product (GDP) since the country began to embrace capitalism and global integration more than thirty years ago, it is impossible to deny that China’s rise is both real and breathtaking.  In 1978, China’s GDP was US$ 214 billion in purchasing power parity (PPP).  By 2012, it was, unadjusted for inflation, roughly 40 times bigger (US$ 8.3 trillion in PPP).  Of course, there are other measurements of China’s economic rise, such as its share of global steel production (it is now the largest producer, with an output of more than 700 million tons in 2012), energy consumption (it has surpassed the United States to become the world’s largest consumer of energy), and foreign trade (its total imports and exports in 2012 were $ 2.84 trillion, second only to the U.S.’s $ 3.85 trillion).

To be sure, given the Chinese officials’ fondness for fudging numbers, many people both inside and outside China (including Mr. Li Keqiang, the new prime minister) are justifiably skeptical about the credibility of China’s GDP data.  In some cases, such skepticism can become so extreme that it leads many to conclude that China’s rise is more likely a statistical fiction, cooked up by the Chinese ruling elites to aggrandize their power and glory.

Vigilant obsession with the accuracy of the Chinese growth data may expose, from time to time, minor acts of fraud. Chinese provincial officials habitually report growth numbers that, when added up, significantly exceeded the total calculated by the Chinese National Statistics Bureau.  But such fastidiousness comes at a great cost: we may overlook a problem far bigger than fake GDP data.  The real scandal in China’s rise is not its exaggerated speed, but the shockingly low quality of its growth.  Low-quality growth has undermined China’s social fabric and individual welfare.  It also makes China look far stronger on paper than in reality.

To understand why this is the case, we must ask a different question. Instead of harping on Chinese GDP numbers, we should instead scrutinize the quality of China’s rise.  Quibbling whether the Chinese economy has been growing at double-digit or not is uninteresting since one undeniable fact is that whatever measurements of speed we use, the Chinese economy has grown many times larger. 

The real issue today is not the size of the Chinese economy and the rate of its growth, but its inner strength and quality.

Without a deeper appreciation of the reality and consequences of China’s low-quality growth, gullible observers will likely be as impressed with China’s rise as Empress Catherine the Great was with Potemkin Village.

The most evident sign that China has sacrificed quality for speed in its economic growth is its catastrophic environmental degradation.  This year’s air pollution crisis is just one reminder that Beijing’s single-minded pursuit of GDP growth has been an unmitigated disaster.  It is not an exaggeration to argue that China’s long-term survival as a civilized nation is now at risk because of water pollution (two thirds of Chinese rivers are severely polluted) and contamination of soil by heavy metals (studies show at least 10 percent of the arable land was tainted with heavy metal in the late 1990s; a government-sponsored national survey of soil conditions conducted a few years ago yielded such alarming data that they are now classified as state secret).

Another measurement of China’s low-quality growth is the deterioration of social cohesion.  Instead of producing a “harmonious society,” low-quality growth has spawned high levels of inequality and official corruption.  Social mobility has declined. Trust has practically evaporated.  The government has lost its credibility.  The most worrisome evidence of deterioration of China’s social fabrics is the spread of corruption from the officialdom to the rest of society.  Today, ordinary citizens often have to bribe doctors and teachers if they want high-quality care and schooling.  Unscrupulous vendors peddle tainted or fake food (the latest scandal is the sale of rat meat as mutton in Shanghai).  Food safety has become a crisis.

A third piece of evidence that low-quality growth has undermined the wellbeing of average Chinese citizens is the lack of a social safety net.  The ultimate mark of a modern civilization and successful economic development is not measured in aggregate GDP data, but in the extent to which the state protects its citizens against unemployment, sickness, and old age.  Compared with the more developed parts of the world, China’s social safety net remains threadbare.  The majority of the Chinese population (mainly rural residents and migrants) has no pensions or meaningful healthcare insurance.  Even for those lucky enough to have such protections, the rapid ageing of the Chinese population as a whole means that their benefits are unlikely to be guaranteed since the Chinese state will not have the resources to finance them.

To further understand why China’s rise has been one-dimensional (in terms of GDP growth only), we need to examine whether economic development has also led to the rise of more sophisticated institutions and organizations that are essential to future economic dynamism.  On this measurement, China’s shortfall is astonishingly worrying.  Despite more than three decades of rapid GDP growth, China today still does not have a sophisticated market-driven financial system.  As a result, capital is misallocated and wasted.  Because of the ruling Communist Party’s fear of losing its political monopoly, China continues to lack the rule of law, another guarantee of prosperity and individual rights.  China may have some of the world’s largest companies and banks, such as China Mobile, PetroChina, Sinopec, China Construction Bank and others, but except for a handful of non-state companies (such as Lenovo, Huawei, and Haier), none is considered innovative or world-class.  For all the money Beijing has ploughed into “indigenous innovation,” the sad truth remains that, today, China continues to be an imitator, stuck in the lower half of the value chain.  Given the decay of China’s higher education system (another open secret), it is unlikely that the country can ascend the value chain as rapidly as its leaders have hoped, if at all.

Unfortunately, most outside observers are poorly informed of both the reality and the consequences of China’s low-quality growth.  As a result, two things happen.

First, they have become overly optimistic about China’s role in the global economy and governance.  They count on China to do more than it is capable of doing (regardless of Beijing’s willingness).  They simply do not realize that China is a giant who, to use a Chinese phrase, “looks strong from outside but is hollow inside.”

Second, they are poorly prepared if things in China start to unravel because of its low-quality growth.   Here we are not talking about the economic consequences of a Chinese slow-down (although they will be severe, particular to those countries and companies dependent on commodity prices, which are very sensitive to the marginal demand from China).   Intellectuals outside China should pay some attention to the effects of China’s worsening environmental degradation and food safety crisis on global food supplies.  Clearly, if the destruction of the environment and Beijing’s lack of institutional capacity to ensure food safety continue, China will have to import a lot of food from the rest of the world (Chinese tourists are already snatching up baby formulas wherever they visit).  China’s newly affluent, a demographic group most sensitive to quality, are voting with their feet in unprecedented numbers.  They are either emigrating themselves or sending their children or spouses abroad.

Of all the potential consequences of China’s Potemkin rise, one that has received the least amount of thought abroad is the durability of the political regime that is responsible for such low-quality growth.  At the moment, despite mounting evidence of China’s low-quality growth and lack of sustainability, few are asking the inevitable question:

what happens to the Communist Party’s rule when the ill-effects of low-quality growth accumulate and produce a systemic crisis?

Now is the time to ask it.

http://thediplomat.com/2013/05/07/asias-real-challenge-chinas-potemkin-rise/