Month: January 2016

CHINA – THE NEW ROME

The Chinese system of government looks orderly and rational: The leaders are elected meritocratically so that the best qualified get selected. They cannot be too old and cannot be in office beyond a limited time. They govern collectively.

But is that the reality? I’m reading Tom Holland’s DYNASTY, about Rome after Caesar. I see many similarities between Rome then and Beijing now.

Rome was ruled, indeed owned, by a tiny aristocracy of sons of notables. China is ruled, indeed owned, by a tiny aristocracy of princelings. In both systems, the members of the aristocracy enrich themselves on the back of the state. In both systems, it is made to look as if the leaders are elected by their fellow aristocrats, while in reality they emerge through ruthless power games in which some pretenders perish and others float to the top.

If Mao was Caesar, Xi is Augustus. Like Augustus, he has brought order to the empire. Augustus was the master showman, a ruthless dictator who disguised himself as the benevolent father of the nation. As now in China, he purchased legitimacy by distributing rewards to followers and the populous. He pretended that Rome was still a republic and that he was only the first among citizens, and he played what he called “the game of life” so well that he was believed.

And Xi? He pretends to have been elected, while in reality it was his alliance with the military that clinched it for him. He pretends to be the first among equals in a collective leadership, while in reality he has gathered all the reins of power in his own hands. He pretends to be a humble man while having a person-cult whipped up around himself.

Under Augustus’s leadership, the world, and the Romans, thought Rome had found the secret of orderly rule. Now, much of the world thinks the same about China under Xi.

To which the reply must be: learn for history and be sceptical.

In Rome, Augustus’s order disintegrated catastrophically with his followers, including Caligula and Nero. Where China is heading we cannot know, but we should at least know that we do not know. Perhaps they have found the secret, at least for a while, but history tells us to be sceptical.

The party-state is a dictatorship in which, as in all dictatorships, the battle over and for power is constant, endemic and never-ending. The anti-corruption campaign is in part a war against enemies inside the regime. There are ever stronger rumors of plots against the clique that happens to hold power. It’s Rome all over again. As in any dictatorship, the ugly reality can burst through the pretty pretense at any time.

CHINA – PRETENSE, MYTH AND REALITY

I’m reading proofs of my forthcoming book on the Chinese state, The Perfect Dictatorship. A theme running through it, I now see, is the tug-of-war between myth and fact. There has been too much hype about China, too much wishful thinking, too much boasting by the leaders, too much believing what is wanted to be believed.

Here are a couple of extracts:

“There is much we do not know and much of false information and propaganda swirling around. The observer’s guide must be skepticism, always skepticism.”

“This particular putting of China in perspective has been of consequence. It opened my eyes early on to two observations that have stayed at the back of my mind while working my way through this project. First, China’s achievements are big in quantity but small in quality. The numbers may be impressive, but much of the substance is shabby. Second, even in quantitative terms, what bedazzles is not growth as such, although observers often think it is, but bigness. China weighs more in the world than, for example, South Korea, not because it has outperformed South Korea, which it has not, but because it is so big.”

“Here is the basic truth about the Chinese model in all its glory, economically, politically and administratively: it is effective but not efficient. There has been growth, but only thanks to massive debt and excessive investment. There has been governance, but only thanks to massive and extractive bureaucracy. The machine delivers but is exceedingly expensive to run. It get results but only with monumental inputs that do not translate efficiently into outcomes.”

ELECTIONS IN TAIWAN – CHINA IN RELIEF

Taiwan has elected a woman president in direct, democratic elections. Unthinkable in China, both direct elections and a woman at the helm.

Both Taiwan and South Korea now have women presidents. That’s symptomatic. These are genuinely modern countries and cultures. They have modernized not only as economic tigers, but also followed through politically and socially. That puts China’s modernization in perspective. China has modernized, to some degree, economically, but politically it stubbornly holds on to dictatorship and socially it remains immature. On the standing of women in society, for example, when young women demonstrate for protection against sexual harassment in public transport, they get rounded up and detained.

China’s foreign minister, Wang Yi, has described China as ‘the greatest success story of our time’ (at the World Economic Forum in 2014). How wrong he was. China is big and looms large, but for genuine success in the region we must look to the smaller neighbors, to Taiwan and South Korea.

 

CHINA – THE MAKE-BELIEVE ECONOMY

It is reassuring that the world is coming to a more sober view on the Chinese economy. The truth about the downturn in the second half of 2015, and confirmed by market and currency events at the beginning of 2016, is that these are the result of long-term structural weaknesses in the economy and should not be seen as sudden inevitable shocks.

China is a big and important economy and will so remain, but it is not. and has not been, as big and dynamic as the Chinese leadership has boasted and the world, headed by the World bank and the IMF, has mostly believed. Too much of it has been in the nature of digging hols in the ground and filling them up again: economic activity with no value being produced. Too much of it has been unproductive over-investment, funded by a merry-go-round of state-induced debt.

Well into the middle of last year, it was good gospel among economic experts that the Chinese economy was overtaking or had overtaken the American one in size. But this was just smoke and mirrors and inflated GDP statistics, believed uncritically by gullible and starry-eyed lookers-on inside the bubble of China watching.

There are two lesson to be learnt:

  • Never take Chinese official boasts on face value.
  • Always look to China through a lens of skepticism and try to see beneath the surface.