China’s flawed as­cent

The Denver Post - - OP-ED - GE­ORGE F. WILL Wash­ing­ton PostWrit­ers Group

China pro­duces an as­ton­ish­ing num­ber of as­ton­ish­ing num­bers, in­clud­ing this: In the 20th cen­tury, Amer­ica made au­to­mo­biles mass-con­sump­tion items, re­quir­ing prodi­gious road build­ing. China, how­ever, poured more con­crete for roads and other con­struc­tion be­tween 2011 and 2013 than Amer­ica did in the 20th cen­tury. This fact is em­blem­atic of China’s re­mark­able suc­cess. And is re­lated to its cur­rent dif­fi­cul­ties, in­clud­ing its 2015 growth rate (6.9 per­cent), its slow­est in 25 years.

The regime’s con­tract with its 1.4 bil­lion sub­jects is that it will de­liver pros­per­ity and they will be obe­di­ent. Now the bill is com­ing due for the mea­sures taken to pro­duce pros­per­ity.

In 1978, when Deng Xiaoping be­gan the regime’s at­tempt to leaven Lenin­ism with mar­ket re­forms, half of the Chi­nese lived on less than $1 a day. In just six years, col­lec­tive agri­cul­ture al­most dis­ap­peared and grain pro­duc­tion in­creased 34 per­cent, free­ing peo­ple to move from the coun­try­side to more pro­duc­tive ur­ban em­ploy­ment.

NoWesterner knows more about China’s regime and political econ­omy thanHenry Paulson who, as CEO of Gold­man Sachs, thenU.S. Trea­sury sec­re­tary and sub­se­quently, has made more than 100 trips to China. In his book “Deal­ing­With China,” hewrites:

“China con­sumes al­most half the world’s ce­ment, coal, iron ore and steel, and 40 per­cent of the alu­minum and cop­per. Bei­jing has six ring roads and the sev­enth, un­der con­struc­tion, will be al­most 600 miles long, en­com­pass­ing an area as large as In­di­ana. (Wash­ing­ton, D.C.’s belt­way is 64 miles long.) De­mand for roads so ex­ceeds sup­ply that a 2010 traf­fic jam ex­tended 62 miles and lasted 12 days. China has six of the world’s 15 tallest build­ings (Amer­ica has three) and eight of the 10 tallest un­der con­struc­tion. In four years, be­gin­ning in 2011, the govern­ment built enough hous­ing to shel­ter the pop­u­la­tion of the 12th most pop­u­lous na­tion, the Philip­pines. Twom­onths af­ter the Septem­ber 2014 $25 bil­lion IPO for the Chi­nese In­ter­net com­pany Alibaba, the world’s big­gest IPO, the com­pany had a $280 bil­lion mar­ket cap­i­tal­iza­tion, big­ger than Ama­zon and eBay com­bined.”

China’s pros­per­ity has been fu­eled by the tra­di­tional mod­ern­iza­tion trek of peo­ple from the coun­try­side to cities— 300 mil­lion so far, with an­other 300 mil­lion by 2030. But China has also re­lied per­ilously on ex­ports and ex­ces­sive, grossly in­ef­fi­cient in­fra­struc­ture spend­ing to em­ploy the for­mer peas­ants and make bur­geon­ing me­trop­o­lises hab­it­able.

What the regime calls “so­cial­ism with Chi­nese char­ac­ter­is­tics” is, like sauerkraut ice cream, a com­bi­na­tion of in­com­pat­i­ble in­gre­di­ents. A se­nior Chi­nese re­former pro­pounded the “bird-cage” the­ory of the “so­cial­ist mar­ket econ­omy”: The mar­ket sec­tor should be as free to fly as a bird in a cage — the cage of a state-com­manded econ­omy. Pri­vate en­ter­prise, how­ever, creates 90 per­cent of new jobs. By it­self, the pri­vate sec­tor, which ac­counts for per­haps 60 per­cent of China’s $10 tril­lion GDP, would be the world’s se­cond big­gest econ­omy, trail­ing only Amer­ica’s.

Af­ter the U.S. open­ing to China, Daniel Pa­trick­Moyni­han acer­bically said that many trav­el­ers to China re­turned more im­pressed by the ab­sence of flies than by the ab­sence of free­dom. The con­tin­u­ing ab­sence of the lat­ter, il­lus­trated by the ap­par­ent kid­nap­ping of five Hong Kong book­sell­ers, are not no­ticed by for­eign­ers mes­mer­ized by bul­let trains. The next stage of China’s as­cent will test the con­tin­u­ing com­pat­i­bil­ity of Lenin­ism and dy­namism.

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