China – 2: Making Sense of China

I had thought my imagination was unlimited but the first visit to China disabused me of the notion. Despite all the years of reading, talking about, and studying the country, I was surprised. My imagination, free and limitless in theory, was hostage to the reality I knew in South Asia. The phrase ‘poverty of the imagination’ took on a new meaning.

Getting past the physical surprise, I was intrigued by the amazing adaptability of human beings. Here were individuals cut off from the world, living in company compounds and bicycling around in blue Mao suits within my memory. Today, taxi drivers navigated intricate webs of ring roads, commuters rode magnetic levitation trains, shoppers peered at designer goods in exquisite malls – all as if these had always been a part of their lives.

Two conclusions seemed hard to avoid: things can change very, very rapidly; and, if you are part of the change, you can adapt to it because it occurs in front of you one day at a time.

For me, the more intriguing puzzle was to understand how exactly things had changed with such rapidity. There are, of course, a whole host of explanations but I didn’t find one that yielded the satisfaction I was after.

So I turned again to my imagination and discovered that while it had been quite limited looking ahead, it was a lot freer looking back. And it was from the very distant past that I extracted an image that helped me make sense of China.

Think of a Roman galley but one that is manned by a million slaves. Now think of a very few captains in charge of the galley who decide amongst themselves, without needing to ask anyone else, the direction in which the galley is to proceed. You can imagine that when they gave the order to go, the galley would do so at very near the speed of light, relatively speaking.

Add to it the fact that the captains like to take big gambles. What do you get? If they guessed wrong, there would be an almighty crash against the rocks; if they guessed right, they would get to the other end of the world in a hurry.

Now for some examples:

The Great Leap Forward (1958-1962): Wrong – 30 to 40 million people dead.

Cultural Revolution (1966-1976): Wrong – a generation and more of intellectuals lost.

Open Door Policy (1979 on): Jackpot – two trillion dollars in reserves; a global power.

You can get the picture – a few people decide to take a huge gamble, the whole nation falls in line, and the outcome, either way, is something that is not easy to ignore.

There is no way something like that could happen in India. Read Amartya Sen’s The Argumentative Indian if you want to figure out why. The galley with a million slaves and a few gambling captains giving the order to go – that image is so incongruous when you think of India. Getting two Indians to agree on something takes a while; getting them to work together on that agreement, that’s a whole new task; making sure they don’t undermine each other calls for quite a few more Indians; more Indians means more arguments. These are caricatures, for sure, but the broad generalizations hold.

Things have changed in China since the Open Door policy. China is not isolated anymore and global knowledge and experience are readily accessible. There is a remarkable openness to benefit from this global resource and the Chinese have perfected the art of trying new ideas at the level of the city or the province before they are evaluated and rolled out across the nation. So the dangers of huge crashes like the Great Leap Forward and the Cultural Revolution are significantly reduced.

But it does not mean that all gambles have been done away with. Rolled inside the Open Door Policy, for example, is the One-Child Policy. Nobody really knows what the outcome of this gamble would be twenty years from now. And nowhere else in the world would anyone have been able to get away with something half as restrictive – Sanjay Gandhi and sterilization immediately come to mind.

And it is easy to forget that the glamour of China is all in the cities. China has bottled up its poverty in its villages because only China could have instituted an internal passport system. So when people praise the absence of slums in Chinese cities, they disregard the fact that people are not free to move there. It’s not India where anyone can pick up their bags and move to Kolkatta or Mumbai to sleep under the bridge if they felt like it. Shanghai issues blue cards much like America issues green cards.

One feature that goes along with operation of the galley with the million slaves is that commands are communicated very, very clearly to the entire crew. These are encapsulated in slogans that are crisp and unambiguous. In a modern world such communication between the rulers and the ruled can only be admired. An example relates to a past policy initiating rural industrialization; the intention was to move people out of farming but not to have them migrate to the cities. The slogan communicating this policy was: “Leave the farm but not the village; enter the factory but not the city.” There are many other examples.

One can think of few parallels in South Asia where the majority of citizens remain uninformed about the nature or intent of national policies and programs. Take something like the Millennium Development Goals that all governments have signed on to. There is not even a comprehensible translation of the words in the local languages and if you asked a person in Islamabad, let alone in a village in Sindh, what it signified he or she would be at a complete loss.

China is a fascinating place. You cannot take a model or theory from anywhere else and apply it to the country. Everything has to be thought through from first principles which can keep you excited and busy if you enjoy that kind of challenge.

Readers might wish to refer back to the series of posts beginning with On Cooperation and Competition in order to pursue possible explanations for the differences between China and India mentioned in this post.

 

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11 Responses to “China – 2: Making Sense of China”

  1. Vinod Says:

    Hasn’t China been a rice growing population for centuries?

    • SouthAsian Says:

      Vinod, Yes. This article doesn’t talk about rice but it is interesting speculation, nevertheless: Asian Food for Thought. “How can two neighboring Asian countries have such divergent approaches to what they consider food?”

  2. Vikram Says:

    I wonder how the last twenty years in India will be evaluated. Certainly, no economic miracle on the scale of China’s.

    I often grapple with this question. Is India even a better place than twenty years ago ? Certainly there are more television sets, highways and cell phones. More importantly perhaps is the fact there is more flow of information, more ways to challenge an often corrupt government (RTI for example) and more scrutiny by a rightly cynical world. But there also seems to be more violence, more aggressive materialism and more unsustainable consumerism by a fraction of the population.

    I wonder how China has done when it comes to information flow and handling corruption, I often get conflicting, confused reports.

    Btw, I would highly recommend Pallavi Aiyar’s Smoke and Mirrors for an Indian’s inside perspective on China.

    • SouthAsian Says:

      Vikram, I am not clear what the conflicting reports are. The Chinese government keeps a very tight control on information that it thinks would hurt its image. One could go back to Tiananmen, Tibet, SARS, the blocking of internet sites, etc. This policy is quite different from the US where, when national interest demands, misinformation is spread – think of the Gulf of Tonkin, the Red scare, bombing of Cambodia, Chile, Nicaragua, WMDs in Iraq, etc.

      On corruption, China and India had the same Transparency International rankings in 2007 (see here). There is a lot of corruption in China – from time to time a high ranking official is given draconian punishment but that has little impact at the lower levels. With the amount of money flowing around, this is not a surprise. The evidence seems clear that corruption cannot be used as an explanation for slow growth or lack of development.

      • Vikram Says:

        The conflicting reports stemmed from the many reports of execution of Party officials due to corruption charges, but I guess you are saying that those measures do little to actually stifle corruption.

  3. Vinod Says:

    I wonder how China has done when it comes to information flow and handling corruption, I often get conflicting, confused reports.

    Vikram, I recommend Philip Pan’s ‘Out of Mao’s Shadow’.

  4. Vikram Says:

    I found this comment on a blog by a Telegraph correspondent interesting,

    “If you are stopped in China for a traffic offence, I’m told you wouldn’t dream of offering a policeman a bribe. But in India the process is so routine it’s a national joke – especially round Diwali when the cops were out for present money.”

    I think this tells us something quite penetrating about the way corruption affects the common man in India and China. In India it seems that corruption affects the common man very directly and on a day-to-day basis, stemming from negligence. In China it seems to be more discreet and probably is less visible.

  5. Vikram Says:

    Some more insightful commentary on China,

    http://www.danwei.org/china_books/charles_horners_rising_china_a.php

    I will quote one of the comments, which is really interesting,

    “In so many words, I think what Horner is saying is that China needs new myths about itself because the old ones fail to resonate in such as way as to motivate collective action that may be beneficial in some ways to society as a whole, but in which individual parties may have to sacrifice their self-interest to go along to either support or at least not oppose. There is an enormous cultural shift that must go along with this reinterpretation of national myths.

    I’ve been thinking about economic change and its impact on national cultures, particularly the views expressed by Korean economist Ha-Joon Chang’s book Bad Samaritans (2007), in which he questions certain widely accepted myths about globalization. Regarding linkages between national culture and economic development, he points out in a chapter titled “Lazy Japanese and Thieving Germans”, that these two national cultures which are seen today as epitomes of sober, efficient productive economies with cultures that seem almost predisposed for such activities, were once regarded in the 19th century as being unlikely cultures for economic industrialization and development. Chang’s point is that economic change impacts on culture in significant ways, much more so than vice versa.

    Many Chinese today look back with nostalgia to the “good old days” of Maoist China (simpler times of less material wealth but greater idealism) when the collective direction seemed clearer – there were few competing voices and opportunities to act in ways departing from the collective – and that with individual hard work and sacrifice, the collective might benefit – even if the individual was destroyed in the process.

    People could see immediate “benefits”: hated landlords were put on trial and punished for their past crimes with their property distributed to the village, the “high and mighty” (which in many cases were what we would think of as ordinary middle-class people like businessmen, teachers and managers) were knocked off their perches and “taught a lesson” in respecting the downtrodden, and the country seemed to be united and growing, unlike during those awful years of civil war, government neglect, and Japanese invasion. “China stood up” and people could take pride that this was achieved by the individual efforts of selfless little people. Lei Feng, the young soldier who died helping others, is a prime example of such a figure.

    However, most people find they can be motivated to work hard and sacrifice for only so many years before they get tired of it.

    Collective wealth of a kind was being generated, but this was re-invested in collective infrastructure like roads, bridges, dams and power plants as well as military use. So individuals could not generally enjoy the material benefits of their work. If one is suffering economic deprivation, one can only bask in the collective joy of national achievement for so long before wondering when some of that benefit will trickle down to improved standard of living.

    Seeing their overseas relatives “making it” and becoming materially secure presented a further picture – how come these cousins in Hong Kong, Taiwan and Southeast Asia could be doing so well? Seeing their leaders enjoying privileged existences (even if this was only having a larger food ration or living unit) was also demotivating. The government could only do so much in keeping this information from reaching people. Even without a free press, people could see this for themselves.

    In the factory, workers figured out long ago that there was no additional benefit to working harder or more efficiently, so they did the minimum to avoid getting punished. For many factory workers, China was a “workers’ paradise” in which no one could got fired and made homeless, but there was also very little surplus for society to enjoy – certainly not to the extent that their “rich” overseas cousins appeared to be getting.

    People who visited mainland China in the early to mid-80′s (shortly after opening but before the economic reforms kicked in in full force) would have found a slow-moving pace of life, where people did not seem in much of a hurry to do anything, where people were not all that motivated to much or to achieve much as there wasn’t much to do or achieve. I recall my first visit to Beijing – buildings were old and delapidated; bicycles were the fastest thing going, and most people you saw were just squatting around doing nothing. A Hong Kong businessman said to me, “these mainland Chinese are useless – you can’t get them to do anything, they are so lazy, and communism has turned them into workers that are impossible to employ because they just don’t like to work hard. Look at them just squatting around all day!”

    Leaving aside his prejudicial attitude toward his country cousins, he did have a point – when no one works hard, each person might have less stress, but who was going to do the heavy lifting to provide more material benefits everyone? Is a workers’ paradise ever going to produce an iphone? Or more importantly for China’s leadership, could it produce enough surplus to fund an adequate military defense system, to keep up with Reagan’s military spending to bankrupt the Soviets?

    But as Chang points out, the prevalent image of the Lazy Japanese in the 19th century gave way to a very different image of Japanese people after their industrialization process. Here 30 years into the reforms, it would be hard to find many people who think that the problem of the Chinese worker is laziness.

    Looking at Horner, my favorite sentence in this excerpt is his observation that today’s “emerging High Culture is wholly unlike the high culture of previous rising nations in great ages of imperialism; it seeks not to buttress great national projects but to undermine them.”

    I want to reflect on that a bit more.

    Even prior to the Four Modernizations campaign, to many observers the system of communism in China was reaching the end of its rope. People were already having a hard time being motivated to do their best for the collective, as they had learned well to be cynical of such entreaties. But while the pre-Reform China populace may not have enthusiastically supported that national building effort, they did not actively oppose it. The nature of economic life at that time (under communist state ownership and central planning control) gave them few opportunities or incentives to do so.

    Then came reform. The economic modernizations sought to increase efficiency of production by giving economic actors a bigger piece of the action – giving people the opportunity to get something for themselves so as to motivate them towards the collective goal of efficient productivity. This is the “socialism with Chinese characteristics” – motivating people partly with self-interest rather than entirely with entreaties to self-sacrifice for the good of socialism.

    The reforms gave greater emphasis to profitability of enterprises, rather than production for its own sake, while permitting enterprises and individuals to keep a larger share of the surplus of their work efforts.

    However, a key part of economic modernization was decentralization of economic decisionmaking – allowing individual economic actors (government ministry to corporated state-owned-enterprise to partially privatized and publicly-listed entities) to make their own decisions to maximize their own self-interest, which may depart from the needs of the collective community.

    A factory manager, listed on the stock exchange, may say to himself, if I pay my workers less or make do with fewer workers, I get to keep more for my shareholders and get a pay raise or promotion, rather than in the pre-reform days, where state owned factories were like small cities and the factory manager was like a government official seeking to meet productivity targets while taking care of his charges, being responsible for their housing, feeding, health and overall well-being.

    Thus, I think that it is not only modern High Culture that undermines grand national projects; it is economic liberalization (i.e., less regulation) that drives a individuals’ and institutions’ preoccupation with pursuit of self-interest, and these will always make it harder for the national leaders to achieve collective goals. These same forces are at play as much outside China as within; what is “new” and difficult for China is the speed with which economic change has occurred (unprecedented in comparison to other nations in world history), making the adaptation by culture especially difficult to absorb.

    “Undermining forces” succinctly expresses the dilemma that national leaders everywhere face; it is a similar dynamic at work in modern corporate organizations and institutions, especially those whose productivity depend on a lot of highly educated, high-maintenance and highly demanding workforce: think management of a large investment bank, law firm, advertising agency or university campus.

    In order to achieve the high-value-adding potential of such organizations, it is necessary to give such people the freedom to operate and make decisions (including a bigger say in what happens to them), and then reward them for their success; however, managed incorrectly, individuals will seek to maximize their own self-benefit at the expense of the collective organization.

    For example, in the U.S. we have a president who believes that the well-off who have benefited from American society’s profit-seeking freedoms have a responsibility to “share the wealth”. While many Americans (including myself) agree, when you get down to who will do the sharing and who receives the benefits of that sharing, there is no easy agreement. All else being equal, I would prefer my taxes to be lower; however, Obama’s singular achievement for many voters is that they trust in his administration to use tax dollars in a way more productively than his predecessor. Thus, there is a basic trust in the leadership to handle the collective wealth in such a way as to benefit all.

    However, there is a sizeable minority of Americans (and perhaps increasing number) who are ideologically opposed to such sharing. Whether the U.S. polity will put aside their individual differences and achieve a collective health care plan (a great national project) is a big question mark. It’s clear there are forces in the GOP that actively seek to undermine this project.

    At least the U.S. has an electoral process that enables Americans to re-articulate the national myths and priorities in light of present conditions. It permits leaders to float ideas and themes that resonate with the populace, and then to govern them by incorporating those themes into a platform. Thus Obama can be elected with the sense (having been out there campaigning and talking to people and developing a platform) there is sufficient popular support for a national health plan at this time.

    As the CCP currently lacks such a political process, it needs to seek to tap into the pulse of the population in other ways to figure out what collective projects are achievable.

    For example, in recent years, it has sought to moderate the message of growth by stressing the creation of a “xiao kang she hui” (a moderately well-off society). This may not light up fires of inspiration for many people, but for the greater majority of the population that has not reached middle-class status, this is not bad as a goal; it certainly is more equitable than having a small group rich stock and property investors with a large mass of impoverished rural peasantry and migrants.

    Under its current system of governance, since it does not have a similar electoral process to articulate the popular will, the CCP will need to continually recruit a more representative and culturally leading membership into the CCP. Like global marketing and advertising organizations that are always trying to figure out what teenagers think (as their spending seems to drive consumer trends), the current leadership, under the existing system of government, needs to recruit the best “opinion leaders” (businesspeople, artists, intellectuals, religious leaders – even pop stars) who can articulate a vision of why shared goals are worthwhile and mindless pursuit of individual benefit is not in-and-of-itself a worthy objective (e.g., economic liberalization does not mean “greed is good”; a superior value is a better shared existence for everyone, so while “it is okay if some people get rich first” – it is necessary to support ways to “spread the wealth”.).

    With that, China’s leadership can co-opt those selfish Gordon-Gekko-like-individualistic-energies at work in China (forces that elsewhere like in the U.S. has precipitated the near collapse of the global financial system!) to work towards more communal goals. This means working out the system of regulation, enforcement, communication and reform within a political system where even the most committed government leader has difficulty knowing what is most in peoples’ best interest.

    There is a huge reservoir of self-sacrificing collective-oriented passion that was displayed in the wake of the Sichuan earthquakes. This is true of all human cultures, but within China there are powerful traditional confucian emphases on thinking of others, traditional buddhist beliefs of compassion, and even powerful Christian and Muslim beliefs about helping other people.

    I think the pre-occupation by outside observers on promoting “freedom” in China misses this aspect of the Chinese polity – with the 30 years of reform, many Chinese seem to think that the problem is “too much freedom” (i.e., they mean too much selfishness and looking after number one to the detriment of the common good – as a culture they have not yet fully adapted to the new economic conditions, so there are frictions and resentment, some of it justified, but some of it also of the nature of class envy.) They actually want a government that will tame individual excesses and mediate the multifarious wants of individuals in a way that the whole society benefits. They are looking for better enforcement of laws and regulations to stop the so-called “cheaters” from benefiting.

    The problem is that they don’t really know how to get it. For now, the CCP is the only game in town, although the leadership sometimes looks like a volleyball team trying to keep the ball up in the air long enough to keep the volley going, so it is not an easy game for them to play. Other the other hand, this is a game that the CCP has been playing for a long time and it knows how to play it well, so my assessment is that they will adapt and succeed at it. In any event, it is certainly exciting to watch.”

  6. SouthAsian Says:

    Another incredible (crazy?) experiment in China to urbanize the country by 2025:

    http://www.nytimes.com/2013/06/16/world/asia/chinas-great-uprooting-moving-250-million-into-cities.html?hp&_r=0

    See related articles on urbanization on this blog:

    http://thesouthasianidea.wordpress.com/2013/05/07/the-economics-of-urbanization/
    http://thesouthasianidea.wordpress.com/2013/05/20/the-politics-of-urbanization/

    And on the relationship of growth to the happiness of citizens:

    http://thesouthasianidea.wordpress.com/2009/01/08/is-singapore-a-successful-city/
    http://thesouthasianidea.wordpress.com/2009/01/12/singapore-the-voice-of-citizens/

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