Which path will China take?

Korea JoongAng Daily - - Views - Nam Jeong-ho

China re­cently faced two sig­nif­i­cant events simultaneo­usly. One was a de­moc­ra­ti­za­tion move­ment known as the Um­brella Revo­lu­tion in Hong Kong, and the other was a Chi­nese company’s pur­chase of the lux­u­ri­ous Wal­dorf-As­to­ria ho­tel in New York.

If the Um­brella Revo­lu­tion would spread to Ma­cau and then to main­land China, what would hap­pen? Western me­dia pre­sented wish­ful pre­dic­tions that China would be split. The right­ist Wall Street Jour­nal ac­tu­ally re­ported that China was fear­ful that the Hong Kong sit­u­a­tion would bring about a chain re­ac­tion in other parts of the coun­try. It ap­peared to be­lieve that the democ­racy move­ment would fuel na­tion­al­ism in Ti­bet and court Uighur vi­o­lence. But it seems that the Western world is miss­ing the joy­ful mem­ory of the rapid weak­en­ing of the Soviet Union be­fore it dis­solved in the 1990s.

By con­trast, China’s pur­chase of the Wal­dorf-As­to­ria in New York was sym­bolic that eco­nomic hege­mony is be­ing trans­ferred from the United States to China. The first was per­haps an omen of a po­lit­i­cal cri­sis for China; the sec­ond was the rise of the Chi­nese econ­omy.

Is China fac­ing a cri­sis or is it sail­ing peace­fully to­ward Pax Sinica?

If such a pes­simistic in­ter­pre­ta­tion is right, the Um­brella Revo­lu­tion of China is not some­thing that can be over­looked. Last year, the Chi­nese mar­ket com­prised 26.1 per­cent of Korea’s ex­ports of $559 bil­lion. The United States, Ja­pan, Hong Kong and Sin­ga­pore fol­lowed with 11.1 per­cent, 6.1 per­cent, 4.8 per­cent and 3.9 per­cent, re­spec­tively. But the sum of the four is still short of China’s share. It is easy to imag­ine what will hap­pen to the Korean econ­omy when China col­lapses.

So, how should we in­ter­pret the two con­tra­dic­tory sig­nals? In or­der to ac­cu­rately un­der­stand them, we must take into ac­count China’s unique sit­u­a­tion. A sim­ple ex­am­ple is the re­la­tion­ship be­tween po­lit­i­cal democ­racy and eco­nomic de­vel­op­ment.

The Fuqua School of Business at Duke Univer­sity has in its di­ver­sity state­ment: “The Fuqua School of Business ap­pre­ci­ates and val­ues dif­fer­ences in­her­ent within our com­mu­nity. As an or­ga­ni­za­tion, we are com­mit­ted to build­ing and sus­tain­ing an en­vi­ron­ment con­ducive to cap­i­tal­iz­ing on the di­ver­sity within our com­mu­nity as a source of in­tel­lec­tual, per­sonal and pro- fes­sional growth, and in­no­va­tion.”

As pro­moted by Aus­trian economist Joseph Alois Schum­peter, the power be­hind eco­nomic growth is in­no­va­tion through cre­ative de­struc­tion.

Where can we find in­no­va­tion? Schol­ars from Europe and Amer­ica strongly be­lieve that it comes from di­ver­sity. And there is var­i­ous re­search that proves it.

But what about China, which does not even give its peo­ple the free­dom to move res­i­dences? With such a suf­fo­cat­ing grip on so­ci­ety, there is no pos­si­bil­ity for cre­ative in­no­va­tion, based on Western belief. One of the strong­est ar­gu­ments that pre­dicted China’s fall was the lack of di­ver­sity. And yet, re­al­ity pro­gressed in the op­po­site di­rec­tion. Since 2011, China filed the most patents for three con­sec­u­tive years. Last year alone, China regis­tered 400,000 patents, far more than Ja­pan at 250,000 and the 180,000 for the United States.

Xiaomi, which in­tro­duced the low­priced mo­bile phone, was ranked third on the 2014 list of most cre­ative com­pa­nies by Fast Company mag­a­zine. China’s In­ter­net search en­gine Baidu and on­line shop­ping mall Alibaba are also known as world-class, in­no­va­tive com­pa­nies. How did this hap­pen? It’s be­cause the Chi­nese sys­tem, where almost per­fect free­dom was guar­an­teed in the eco­nomic and in­dus­trial fields with­out a po­lit­i­cal democ­racy, worked suc­cess­fully. For the Western world, which is used to Soviet-style Com­mu­nism, a sys­tem in which pol­i­tics is blocked but the econ­omy is open is prob­a­bly hard to imag­ine or un­der­stand.

Be­cause of the lack of cul­tural un­der­stand­ing and the sub­se­quent op­ti­cal il­lu­sion, the ar­gu­ment for China’s fall has spread like a ghost over the past 30 years ago. It reached its peak when Amer­i­can his­to­rian Fran­cis Fukuyama pub­lished “The End of His­tory and the Last Man” in 1992 in the af­ter­math of the fall of the Soviet Union.

Declar­ing a com­plete vic­tory for democ­racy, he pre­dicted that all coun­tries, in­clud­ing China, would have to follow suit. Since then, how­ever, China has man­aged to main­tain its sin­gle-party state sys­tem while keep­ing high-speed an­nual growth at an av­er­age of 8 to 10 per­cent.

As China man­aged to stay suc­cess­ful de­spite its in­ter­nal con­tra­dic­tions, ar­gu­ments were pre­sented that it would even­tu­ally be di­vided. An­a­lysts said mi­nor­ity groups, in­clud­ing Ti­betans and the Uighur pop­u­la­tion, would rise and that China would be di­vided. Schol­ars with in­trin­sic ap­proaches, how­ever, say that di­vi­sion is also an un­re­al­is­tic pre­dic­tion. Even if the Com­mu­nist Party is over­thrown by a democ­racy move­ment, there is almost no pos­si­bil­ity that China will be split, they say.

The big­gest driv­ing force be­hind the democ­racy move­ment is the Han Chi­nese, and they don’t want the coun­try to be di­vided. Although 60 per­cent of China’s ter­ri­tory is oc­cu­pied by mi­nori­ties, they only com­prise 8 per­cent of China’s pop­u­la­tion. After the Com­mu­nist regime fell in the Soviet Union, Rus­sians only com­prised 70 per­cent.

Even if Hong Kong’s Um­brella Revo­lu­tion spreads to the main­land, there is lit­tle chance that China will di­vide.

When the Western world looks at China, they of­ten over­look its cul­tural back­ground and in­sist on their frame­work of anal­y­sis. In Korea, many do­mes­tic ex­perts and schol­ars stud­ied in the West. If they can­not es­cape the rigid frame­work of West­ern­ized think­ing, they could make a crit­i­cal mis­judg­ment, and they must re­mem­ber that at all times.

JoongAng Ilbo, Oct. 17, Page 32 The au­thor is a se­nior writer on in­ter­na­tional af­fairs at the JoongAng Ilbo.

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