The changing face of China

I always smile whenever I hear folk in Jamaica speak of the inherent discipline of the Chinese. In reality, China has historically been a riven and fissiparous land, its port cities once famous for their lawlessness. The country's contemporary discipline was a hard-fought achievement, as communism established its hold over the land and destroyed opposition. The price in human lives was high. But at least, stability was restored.

Still, no government can maintain itself indefinitely on the basis of force alone. This challenge became especially acute for the Chinese communists in the 1970s when their mortal rival, Taiwan's nationalist government - which still claims to be the true government of China - was racing ahead economically and militarily. A new generation of communists recognised that they had to reform the economy, or risk losing the battle for China. So when Mao Zedong died in 1976, the hard-left in the Communist Party was itself crushed. Led by Deng Xiaoping, the reformers in the party then began slowly changing the country's economic underpinnings.

Chinese reform was always driven by pragmatism, therefore. Its goal was not to bring about Soviet-style glasnost, but to re-energise the economy so as to solidify communist rule. There was an implicit quid pro quo: "Let us rule," the communists effectively said, "and we will deliver the goods."

So far, they have. Buoyed by three decades of reform, China has done in a generation what it took Western countries much longer to do. Meanwhile, a Chinese democracy movement has yet to gain much traction, with serious opposition snuffed out at its every hint. Nonetheless, the model is entering a transition.

If Maoism developed equality into a religion - during the Cultural Revolution, university lecturers were sent into the fields and peasants took their classes - Chinese reform has allowed for the emergence of a class of nouveau riche (many of them Chinese returning from abroad). As is typical in any fast-growing economy, inequality is widening, and official corruption is enabling some to enrich themselves at the expense of others.

Resentment has been rising, and the number of public protests has been increasing in recent years. Nonetheless, some of the pressure has been released by a vast wave of migration to the cities, where average earnings are much higher than in the countryside.

But this will soon run its course. Moreover, Chinese growth was driven by exports to the Western economies, particularly the US. With the western world now sputtering - and, moreover, pressing the Chinese to buy its goods - the high-saving, export-based Chinese model is due for a makeover.

Even though the Chinese authorities resist western pressure to open up their economy to foreign goods too fast, they agree that the future driver of Chinese growth will increasingly have to be local consumption. That means raising incomes, and also building more of a welfare state: one of the things which depresses consumption in China is that ordinary people put aside a huge chunk of their earnings to pay such things as school fees, medical bills and pensions (especially since the country's one-child policy has deprived the Chinese of their traditional rainy-day funds of large families).

It will be a difficult task. Inflation is already rising in China. Should wages rise too fast, driving demand up, prices could spin out of control. Meanwhile, as China's wages rise, the country will become less competitive in the production of all those cheap goods we see on the world's shop shelves. The country will have to move from being the world's workshop, to producing higher-value goods, based on innovation and consumer choice. That, in turn, will require heavy investments in education to raise the quality of Chinese labour.

In addition, innovation and consumer choice require more tolerance of individuality. That means lifting some of the reins on daily life which still limit freedom in China. Creating a better-educated labour force, and giving it more freedom, could disrupt the balance that now exists between market-led prosperity and communist-controlled politics.

Can China's leaders pull it off? The lessons of history suggest that they will. But it will not be easy, and there is no inevitability of success.

John Rapley is president of the Caribbean Policy Research Institute (CaPRI), an independent research think tank affiliated with the University of the West Indies, Mona. Feedback may be sent to columns@gleanerjm.com.