Two weeks in a country of 1.3 billion people, the fastest growing economy and worse still a communist conservative country is not sufficient time to make any serious case for “understanding” the Peoples Republic of China (PRC).
Beijing the seat of government is a massive city of 19 million residents,it has excellent infrastructure commensurate to its status, the subway outpaces that of western European countries. Increased pollution levels makes visibility impossible at a distance of more than 500metres perhaps the biggest challenge unique to Beijing.
A chat with top policy experts among them leading university professors, corporate executives, envoys and policy practitioners leaves one with an impression that the top Chinese leadership is in a dilemma as to the future of China especially owing to the sudden uprising in North Africa and Middle East.
The past 25 years have been dominated by the debate of to what extent can the regime modernize politics to go hand in hand with the successful economic growth without triggering a revolution?
The academics in China point out to the fact that there exists competition or internal democracy in Communist Party of China (CPC). It is difficulty to analyze the inside story of Chinese Communist Party however the move to ban sensitive internet searches like Tiananmen, ganging of the media and closure of western social media like Facebook, twitter and YouTube is pointer to a regime that is worried sick of possible uprising.
The highly published economic success story has presented new challenges for the regime, a rising middle class may press for more freedom especially freedom of speech and internet access, the brewing housing bubble in major cities like Beijing is also a challenge that needs to be fixed soon. Though many millions have been uplifted from extreme poverty still more others especially in rural areas cannot access basic social services like healthcare, housing and electricity. All these challenges are indicative of a country that is brewing unrealized expectation among the rural majority and the emerging middle class.
It takes a genius to rule China even just for a day, Premier Wen Jiabao and President Hu Jintao seem to be surrounded by strong committed technocrats and bureaucrats whose main role is to refine and monitor the government policy by the minute.
The leadership is turning off any influence geared towards reform and openness by focusing on internal control and consolidation thus the ambitious current policy aimed at turning the 1.3 billion population to a mass market by encouraging spending (domestic consumption)
The past 30 years of economic growth was based on the producer model, the strategy now is to boast the population to a flourishing consumer society a way from the saving culture that has propelled China to a major holder of USA treasury bills (a frontier for economic negotiations between the two major economic powers with counter accusations of adverse macro economic policies both in Washington and Beijing)
The economic policy as articulated in the12th five year plan is an indicator of lost opportunity by liberals within the communist party to the conservatives. The conservatives seem to be of the school of thought that think the current economic run should stop, they see no need of following the American model, the economic crisis of 2007/08 provides a basis for a total Chinese way that focuses on encouraging internal consumption /spending and support of Chinese companies at the expense of openness and reform.
The quasi nationalized Chinese companies enjoy massive government support in terms of favorable policies locally, the Chinese Multinational like Sinopham International are used by the PRC government to propel its foreign policy especially in Africa.
The Chinese multinational corporations do not operate as purely commercial enterprises keen on profit making, they do not compete on equal footing with other MNC’s from an open market background that do not have government subsidies.
The focus is on empowering local companies and also consolidating new markets in Africa where the PRC has set base not only as a market place but also a frontier for investment and source of resources to feed the manufacturing sector back home.
China has given the dark regimes in Africa a lifeline through its bilateral support that is not pegged on any conditions unlike the IMF, World Bank, USA and EU member states who call for stringent conditions ranging from macro and micro economic policies to human rights commitment and rule of law.
The massive infrastructure in the cities and the expansion of upcoming cities is an ambitious plan to accommodate a billion residents by 2030, the major cities are located along the Yangtze River an expansion to other regions is part of the ambitious plan.The challenge is the rise of pollution levels, congestion and other negative environmental impact.
The city registration process (hukou) is viewed as flawed. The rural-urban migration and the rise of the middle income has propelled a near housing bubble, as this touches on the middle class, perhaps it may be the trigger of an uprising, a careful implementation of the urban billion plan is a necessity to the regime in Beijing.
Bo Xilai the current CPC Chongqing Committee Secretary is seen as one of the emerging extreme conservatives who are pushing to maintain control and outdo the liberals within the party, his push for a position at the politburo is an indication that the leadership in China is not ready for reform and openness in any near future unless the worst happens.
With or without reform, one thing is for sure China will continue to steam forward economically. A cautious relationship with the USA and EU is the practice, do not expect any radical shift in the short run.
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For immediate circulation
Dated 11th June 2011.