China: Large service industry, dynamic knowledge industry but no democracy

26 October 2014 07:51 pm - 0     - {{hitsCtrl.values.hits}}

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A Western commentator recently made a bleak forecast of international human rights in the 21st century. His forecast was based on the assumption that China was going to be the world’s most powerful country in the world over the coming decades, overtaking the US economically to be No. 1.


This is something which most people take for granted nowadays. With its annual growth rates of 6% or more, China is unstoppable and will be the world’s No.1 economic superpower in the future. With that great economic clout, Beijing will have a say in how the world is governed, usurping Washington. With the chances of China becoming a democracy looking remote, the worst nightmare is that the US will be ruled by a mad, war mongering president backed by a hawkish congress. With the European Union showing signs of internal dissent (in any case, its clout matters only if there is a consensus with the US) you can say goodbye to any kind of human rights worldwide.


But I doubt if this worst-case scenario will become a reality – unless the US becomes a semi-dictatorship all by itself. Jonathan Power’s recent column titled ‘China is not going to be a miracle,’ confirms my own belief that the Chinese have already reached the acme of their economic growth. What they should try now is to capitalise on that economic well being and grow intellectually, and become a benevolent nation which can use its clout to mitigate the excesses of those developing countries which are dependent on Chinese aid, helping to develop indigenous arts, culture and education.


Power says that ‘China remains a classic case of hope over experience, reminiscent of de Gaulle’s famous comment about Brazil: “It has a great potential and always will.”


He cites the examples of Brazil and Japan, the wunderkinds of the 1980s who got into serious economic trouble in the 1990s. In the case of China, he cites three ‘bonuses’ which paved the way for its spectacular growth. The first is its one child policy, which curbed runaway population growth and kept education and health care and agricultural investment costs down. The second is the liberation of millions of housewives into more productive work. The third is urbanisation, as villagers migrated to cities in search of jobs and a better life.


But all three bonuses are now coming to an end. A more prosperous and savvy population can put pressure on the government to re-think its draconian one-child policy. Chinese women as a workforce are already working to maximum capacity, and the migration movement has slowed down, creating labour shortages and a demand for higher wages in cities, not forgetting the important factor of industrial pollution.


According to Power, China’s service industries are growing now while industrial growth and agriculture are slowing down, and the cost of curbing industrial pollution will run into billions of dollars. If not, there will be crippling health costs. I can agree with the above scenario. It’s far more plausible
In addition, if China decides to engage in an arms race with the US and an arrogant, newly belligerent Japan, that could wipe out all the gains of the past several decades of hard work. Beijing should learn a lesson from the former Soviet Union in this regard (and from the US, where the real cost of an overblown military machine and profligate military spending will only be felt in the future. One visible cost is that the richest country in the world cannot afford healthcare for its citizens).


Finally, as Power correctly points out, “there is no country in the world that has a large service industry, a dynamic knowledge industry and no democracy.” The Communist Party refuses to acknowledge any kind of dissenting opinion within China, ignoring the vital lessons that can be learned from the Soviet experience. Not only that, it has a policy of supporting developing countries with repressive governments with the necessary hi-tech tools of surveillance and repression.


A few economic analysts saw through the grim realities of the Chinese juggernaut some time back. Back in 2008, Jim Walker the then head of the research firm Asianomics, warned that the global recession would put the brakes on China’s boom, which is based on exports. The Chinese economy was too resilient to crash as some predicted, but the underlying problems became rather obvious.


In China, total household consumption is only 5% of what it is in the US by value. Chinese industry depends on exports as well in increasing domestic consumption. China is in a growth trap, which is why Beijing introduced a $590 billion stimulus plan in 2008. But, even as the Chinese economy surges on with industrial overproduction to feed already glutted international markets, the social safety net at home is very thin.


Though a communist country, China makes its citizens pay for medical care. To get admitted into hospitals, patients must deposit money upfront, and many are told to leave when the money runs out. According to the World Health Organisation, China spends less than one per cent GDP on healthcare, less than most developing countries, ranking 156 out of 196 in the WHO index. Nor is education free for poor children, and migrants are not insured against accidents during working-hours. This is far from the ‘harmonious society’ President Hu Jintao spoke of in 2006.


For the Chinese leadership, technology is supreme, so much so that nothing else seems to matter. The arts, especially music and dance and the plastic arts have made impressive strides but literature remains poor because freedom of expression is stifled. As impressive as the invention of paper and gunpowder might be, I have valued ancient Chinese civilisation on the strength of its art and culture – the delicate watercolours, the astoundingly nuanced calligraphy, the porcelain and the pottery, the sublime figurines and carvings made of jade or wood, and the literature, including fiction like ‘A dream of red mansions,’ the poetry of Li Po and the philosophical commentaries of Lao Tse.


Modern China is not projecting this culture internationally. The Soviets, however repressive they may have been at home, promoted classical Russian literature and books on subjects ranging from science to medicine and astronomy, available in English and many Third World languages. Moscow provided scholarships to Third World students and invited writers and artists to visit the former USSR.  


China isn’t doing this. In Sri Lanka, all we get to see are Chinese technicians. Technicians all over the world are not the most voluble, expressive people you can find. We don’t meet Chinese writers, artists, musicians, intellectuals, people with new and dissenting ideas who can show us that there is another, nicer side to modern China.


But this is not happening. All we get to see is a hulking technology-obsessed juggernaut who won’t help when we get into trouble in the most sensitive areas of human communications and interactions – the vital sphere of personal rights and freedoms. No wonder that China is little loved in the developing world.

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