Fine China

Kicking butt?

I've heard this phrase used my whole life: "The proof is in the pudding". Where conflicting theories are being argued, you can say finally, "You do it your way and I'll do it my way -- we'll see who comes out on top". Now, looking at the Peoples' Republic of China (PRC hereon), I have to wonder about various pudding recipes. You see, PRC is a communist country with a mixed economy. The anticommunist lore of the last half century would tell us that socialism is opposite to freedom, self-actualization and above all, prosperity. There is no arguing that PRC has a repressive record with regards to human rights; political parties are only beginning to show their faces, and only at local levels.

But something else is afoot. PRC's GDP has increased 6-fold since 1978. Joining the World trade Organization in 2001, PRC became the 4th largest economy in the world by exchange rate and 2nd largest after the US in purchasing power. China has recently been an avid consumer of Euro-American goods and services. Stores like IKEA and Wal-Mart have sprung up in its east coast cities; young professionals are purchasing apartment homes, state-of-the-art electronics and cell phones at a fairly rapid pace. The number of cars in China has been going up 15% per year, and thousands of miles of highway have recently been laid as part of PRC's National "Trunk" system. PRC alone is helping to bid up the price of oil -- they need it as much as we do, and have the ability to pay for it. How can such a "primitive" country carry such a big stick?

The trade imbalance between PRC and the US is considerable. If they are the tail and we are the dog, the tail appears to be wagging the dog. Low wages and tax incentives make PRC a highly attractive manufacturing center. Western governments are wrangling to fix the discrepancy. Western and mainland China still have a high rate of poverty -- these remote areas have not experienced the Western influence (and affluence) of Eastern cities. But compare China to other western 'powers': Bureaucratic France has a stagnated economy. In Russia, communism fell only to be replaced by a stagnant economy, a dictatorial president and a Russian mafia. How did such an 'inferior' Chinese culture spawn such economic and political prowess? When China moved to a mixed economy in 1978, the changes weren't that monumental -- they did away with collectives and they introduced small-scale private enterprises. They relaxed price controls and promoted foreign investment.

We know by looking at PRC's human rights record what they are doing wrong. Now perish the thought -- looking at their economic record, what might they be doing right? If they are engaging in free market practices, without any obvious transgressions that amount to theft of property or services, they have a trick up their sleeve, one that we need to know sideways and backwards. France needs to know, Russia needs to know --- and the United States certainly needs to know.