Questions about China?

As the song goes, it used to be so easy. China was liberalising, we could buy cheap stuff, the world was becoming a better place.  Now we’ve got more to think about, and it’s much harder.

Consider the following.

The lack of response to the Hong Kong freedom protests

US blogger Tyler Cowen writes on Bloomberg: “Since the protests in Hong Kong started two months ago, I have been struck by the coolness of the American response”.

He asks: “Why the relative lack of interest? The Hong Kong protesters certainly seem to have a worthy cause. They have varied goals, but many of them favor independence and democratization. In the meantime, they would like to keep relative autonomy, for instance by holding off the originally proposed Chinese extradition law. They also have been remarkably peaceful and orderly, with few reports of them initiating violence. Some of the younger protesters have even been photographed doing their homework in their moments of downtime. As political causes go, this one seems pretty close to ideal.”

It’s hard to know how the Hong Kong actions are affecting popular opinion in China. But they remind us that even non-democratic governments need a sufficient measure of popular consent to survive.  And that lots of people in Hong Kong draw the line at any erosion of the limited freedoms they possess under the ‘One country, two systems’ policy.

Coercion of China’s Uigher minority

New York Times Op-Ed says: “The [Chinese] government is estimated to have detained over one million people. The goal: to force China’s Uighur ethnic minority to assimilate. China’s decades-long campaign against the Uighur minority has surged in recent years through the construction of hundreds of detention camps. Even outside of detention centers, millions of Uighurs in China’s Xinjiang region live in a virtual prison. The surveillance state deploys sophisticated technology, including facial recognition tracking, compulsory apps that monitor mobile phones, and even DNA collection.”

China’s retreat from the extreme policies of Mao Zedong towards economic liberalism under Deng Xiaoping in the 1980s and 1990s was a compelling narrative of greater openness and pluralism.  Is the Uigher campaign an equally clear signal that the limits of this trend have been reached? China’s government is prepared to use extraordinary levels of coercion to contain what it sees as threatening social phenomena.

Sure the Uigher issue is complicated by being a majority:minority one.  But it still leads us to a variant of the Hong Kong question: can the government change the people, or will the people end up changing the government?

The relationship between China’s government and private enterprise

Meanwhile Channel News Asia reports: “China’s top technology hub Hangzhou plans to assign government officials to work with 100 private companies including e-commerce giant Alibaba, according to state media reports, in a move likely to raise concerns over the growing role of the state. The step underscores how Chinese government and party authorities are growing more deeply integrated into the private sector, as its economy sputters amid an intensifying trade war with the United States.”

Yes – we know that China’s private companies have closer links to the state than companies in the West.  And that all businesses operate in an environment shaped by state policy and needs.

But what if this marks a turning of the trend in growing independence of private business (which coincided with China’s rapid growth).  If the government is uncomfortable with the autonomy and power of private business leaders, where does it see the balance being struck?   Can China sustain its unprecedented growth and build geopolitical dominance with the state playing a greater role in the direction of resources and the choices of innovation?

Donald Trump’s China policy: lucky or prescient?

So far, Trump’s China trade policy looks like it will be economically damaging. But politically, his questioning of the regime’s claim to equal global status – and indirectely its legitimacy – looks better founded.  And so far he seems to be benefitting from each failure of the Chinese regime to continue along its earlier path.

Perhaps the Chinese government has a good deal of popular support – for now – and the force of Chinese nationalism should certainly never be underrated. But the enduring weakness of China’s political system is the absence of formal consent of the governed.

Political pluralism is a tricky concept. Established democracies often get things wrong. But the best examples have had a few hundred years of protecting property rights and economic liberty to generate prosperity, and have shown resilience under stress and in responding to errors.

China has been getting it right for a long time.  But now it might be getting some important stuff not right at all.   And this matters for us in the long-term.

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