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China’s new political model

We all once hoped that freedom was a necessary condition for economic success, says Ross Clark. But in fact Chinese prosperity seems linked to increasing authoritarianism

20 January 2010

12:00 AM

20 January 2010

12:00 AM

There has been one thing missing from the debate between Google and the People’s Republic of China. The decommunisation of the world was not supposed to happen this way. Countries which dismantled their systems of oppression and fear were supposed to prosper economically; while any who declined to do so would remain in economic permafrost. Instead, it is becoming increasingly clear that the former communist country which has prospered most in the past 20 years has been the one which crushed its revolution beneath the wheels of tanks. No matter that it continues to oppress its people, China is an economic powerhouse whose growth will dominate the global economy for the next decade. By contrast, who talks about the economic success of Hungary, the Czech Republic or East Germany, which continues to haemorrhage jobs and people?

It was very easy 20 years ago to equate personal liberty with economic success. Force your people to conform and you squeeze out of them the incentive to produce; the economy will stagnate and you will end up with bread queues and cars which look like something out of The Land that Time Forgot. Yet where does China fit in this theory? Since the non-overthrow of the communists the Chinese economy has not so much grown as exploded at an average annual rate of 9 per cent. Admittedly, this growth is coming off a base which in per capita terms remains very low by Western standards — the IMF put Chinese GDP per capita in 2008 at $5,970, less than a sixth of the UK ($36,358) and only a third that of Russia ($15,948). Nevertheless, this growth rate shows few signs of slowing — even at a time when much of the world is still recovering slowly from recession. Early in 2009 annual growth in China briefly dipped — shock horror — below 8 per cent before recovering. At current rates the Chinese economy will overtake the US to become the largest in the world by 2020.

Yet there are scant signs of the lasting and meaningful liberal reforms in China. The tanks have disappeared from Tiananmen Square — and gone online. The latest revelations about cyber-attacks on critics of the Chinese government should come as no surprise. The country has been suppressing internet-users with increasing force over the past few months. In one case a 15-year-old boy was beaten to death at a boot camp for teenagers considered to have been misusing the internet. In August a lawyer, Xu Zhiyong, was arrested and charged with trumped-up offences of tax evasion for daring to represent, among others, the parents of babies poisoned by tainted milk. Political protests, even on a minor scale, are suppressed. In one recent case a protestor, Huang Liuhong, has spent a year in an unofficial ‘black’ jail after travelling to the Beijing Olympics to complain about a property she claimed to have been taken from her by the state — a common outcome for those who dare to challenge the communists.

Growth in China has not been achieved by keeping people in orange jumpsuits. Economically, China is no longer a communist country. Big business has been warmly embraced, farms decollectivised, property rights created and private businesses encouraged. Property speculators have been encouraged to make fortunes, which they can then spend in Western-style shopping malls or on sports cars to buzz up and down the country’s growing motorways.

China has created a political model such as the world has not seen before, or certainly not on this scale: economic liberalism combined with social authoritarianism. It has had its perestroika without much in the way of glasnost. Economic success has not been achieved in spite of the lack of freedom. On the contrary, China has in some cases used authoritarianism to promote economic growth. There is a direct link between the revival of the Chinese economy this year and the presence of greater government control. It has been easier for China to lean on the banks and force them to lend money; something which has frustrated Alistair Darling for the past year. With little regard for the humans who lie within the path of great economic projects or suffer pollution from them it has been easier and quicker for the Chinese to embark upon Keynesian job-creation schemes.

Big business, while at odds with communist ideology, is a natural bedfellow of authoritarian government: both have an enemy in the little guy and in dissatisfied customers. How much some Western corporations might sometimes wish they could call on government to suppress consumer campaigns. There would be great rejoicing in British boardrooms if the likes of Esther Rantzen and the editor of Which? could be consigned to black jails. What the Chinese communists have done is to contract-out the bits of communism which did not work well — the management of production — but to retain the bit which worked all too well: the management of the people through fear. People have been turned from happy workers into happy consumers.

The question, given the economic success of the Chinese model, is what happens next. Does Chinese wealth and personal aspiration eventually erode authoritarianism, or do Western governments, worried about their economies being surpassed by China, start imitating Chinese social authoritarianism in order to promote economic growth?

My worry is that the latter is already happening. It must be tempting for a Western government minister, admiring the ease with which the Chinese have bulldozed their new motorways through Beijing, to wish for powers to suppress opposition to infrastructure projects. So was that the inspiration behind the creeping use of anti-terror laws in Britain to suppress climate protestors and the instigation of the new Infrastructure Planning Commission, which will do away with public inquiries for the likes of Heathrow’s proposed third runway? Labour has been astonishingly relaxed over the use of British libel laws by big business wanting to crush its critics. There is already growing reluctance of the media to investigate private businesses as its profits head in one direction and the cost of fighting libel suits heads in the other. If no effort is made to defend free speech, we will end up with a Chinese-style system, in which pesky opponents of industrial advance are rapidly put down.

I suspect that the Chinese model will prove unsustainable. Wealth is mobile, and it isn’t going to want to stay in a country which continues to oppress its people. There is only so much attraction to material goods; the novelty of a new car will fade, but the appeal of freedom will surely grow. And in spite of its boot camps, China is steadily losing its battle against the internet: information is certainly getting out even if what gets in is still heavily censored.

Moreover, there are growing warnings that the Chinese economy may be in the final stages of a bubble created by cheap money and low interest rates, possibly even bigger and more damaging than the one which brought Western economies low after it burst in 2007. Chinese cities are even fuller of empty apartment blocks than ours: the results of a mad speculative boom which is bound to end in tears sooner or later.

In the meantime, though, Westerners will have to find some way of defending their liberties other than by claiming that freedom is a necessary condition for economic success. As China has proved, it isn’t. We have to be wary of governments and big businesses who look at the Chinese model and use its success to justify a dash of oppression against what they see as the profit-sapping enemies of progress.

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