MysteriousFaith

Political Liberty or Starbucks?

Few things are more important than an underlying policy of engagement with China that is not exploitive. If China’s importance to the world is, as I suspect, ultimately motivated much less by a desire for Western companies to benefit from development of Chinese consumers and much more by companies’ desire to benefit from very low cost labor and relaxed environmental and general regulatory standards, then I fear our policy of engagement, as is any relationship built on exploitation, ultimately destined for failure. China is one of the most profoundly moving civilizations history has ever produced, its own leaders, philosophers and scientists standing side by side with the best of the Greeks. A country that today stands as a low cost manufacturing source may stand tomorrow for the hope of a world grown dissatisfied with the excesses of capitalism and the vagaries of a republic. This hope will only be realized when the Chinese break away from the world’s expectations that they serve others with low cost production and begin the process of serious innovation and internal growth.

Political Liberty or Starbucks?

Early in the morning while looking down from the 50th floor of my hotel room in downtown Shanghai, the city is covered in thick smog. The smog will clear up a bit during the day, but it never leaves entirely, a harbinger of the environmental damage being done to China in the name of progress. A recent study showed that the average child living in Shanghai inhales the equivalent of two packs of cigarettes every day (Foreign Affairs, September-October 2004, page 181). Looking out the window at smog thicker than anything I have seen in Los Angeles or Mexico City, the statistic needs little explanation.

I could not help but pause to ask myself whether or not the much-heralded economic development is worth this kind of environmental damage? Is the damage to the environment the price to pay for rapid modernization like what Shanghai is going through? Are their other similar sacrifices being made within China in the name of economic gain? For too many businesses, this is a secondary question to what is to be gained by using Chinese labor, assets and capabilities. Perhaps a better question is what mankind is willing to give up if we can have the promise of unfettered materialism?

China has very limited personal freedom, specifically when it comes to questioning the government. Freedom of religion is sporadic, and in some areas of the country repression of Christianity and Islam is extreme. But to look at the modernity of Shanghai, Shenzhen and other major Chinese cities I have come to realize that if political freedom will be traded for access to materialism, we have a future of naked consumption ahead of us. Americans can both see their influence in this set of values and a potential warning to ourselves in our own culture: what will we be willing to give up in the interests of safety, security, and the maintenance of our materialism? The soul of man is more than the sum of his possessions. To see modern day China, wildly developing its own version of cowboy capitalism, this realization seems very far away.

Walking a Very Fine Line

To most business travelers to China, the reality of the average person’s life in China is not immediately obvious. While I am stunned at the modernity of Shanghai, I miss entirely what it must feel like to be an average Chinese person who just ten years ago had never seen a skyscraper, ridden in a car, or bought food at a grocery store. When one thinks of the massive changes the Chinese people have gone through in such a short amount of time, I wonder how displaced they feel. When the allure of modernity subsides, perhaps only to catch its breath as the people internalize all the changes, what types of disassociate malaise will creep into their minds? Will it be at this moment of historical pause that they push back against their government, asking for more freedom, more representation, and more of a voice in their country’s affairs? Chinese are struggling to walk a very fine line between the necessary controls of a centrally planned society and to a lesser-degree centrally planned economy against the free market motivations currently seen in Shanghai and Shenzhen. Few American businessmen probably care much about this fine line; lingering on such issues only long enough to appease the nagging doubt that the promise of China will not be fully met until it goes through some unsettling revolutions as people strain for greater personal liberty and freedom of expression and of representation within their government.

Richard Nisbett, in his The Geography of Thought: How Eastern & Westerners Think Differently and Why, illustrates the profound differences between how Eastern and Western people view reality. His point, seen profoundly in the dynamic balancing act that is the current Chinese system, is that Western minds do not enjoy and can not live with tension in ideas: the Western mind sees the world as being firmly either/or. For the Eastern mind, this is too constrictive of a way of painting reality. For them, the way of looking at things is much more along the lines of both/and. The Confucian way is to see that between two equally valid but opposing ideas that the truth lies in-between, in tension so to speak between either extreme. Taken at face value, this idea has shaped the Chinese culture to such a point that they may be able to perpetuate a capitalist economy with a centrally controlled means of government.

For most American political theorists, this idea is anathema to what is commonly held as the necessity of freedom of expression and representation in relation to sustainable capitalism. But for the Chinese government, the need to centrally control their country lies in both an ideological heritage with Mao’s Communist revolution, but more importantly, their belief that they must ease into the world of the 21st century if they are to avoid exploitive abuse of the many at the hands of the few. As cracks begin to appear in America’s infatuation with the free market as if it is a morality all its own, an innate human truth that is in the words of our Founding Fathers “self-evident”, it will be interesting to see how the Chinese experiment unfolds.

The Challenges to Further Development in China

Five issues will need to be dealt with if China is to continue developing economically: they must develop their own means of responding to and managing the fiscal crises all developing economies go through. Secondly, they must develop their own domestic market, hopefully through the meaningful introduction of a middle class. Third, the consolidation of their territories in Hong Kong and Taiwan must ultimately create a stronger national government that can bridge the gap between these two highly developed areas with the much less developed Chinese countryside. Fourth, China must make significant strides in its ability to feed its own people. Lastly, the Chinese government must put forward a political model that shows where the average citizen will begin to be able to more fully participate in his government. To think that China can develop economically to the point it already has without some additional modification to its means of representation is disingenuous.

Do We Realize What China Really Signifies to Us?

In his classic, The Collapse of Complex Civilizations, Joseph Tainter argues that societies are initially formed because they realize that with a certain level of societal complexity, hierarchy and centralized bureaucracy; they can realize an increasing marginal return. As societies advance and become more sophisticated they evolve increasingly complex systems. In order to realize an increasing marginal return, these complex systems in turn become increasingly hierarchal, centralized and bureaucratic. At some point this complexity becomes unproductive, creating a smaller and smaller marginal return. Unless some new energy source is identified (and by the use of the word energy he means anything that feeds the societal evolution of complexity whether it be new technology, manpower, capital or other asset), the society will begin to borrow on its accumulated wealth until such time as it can no longer perpetuate its high level of complexity. The symptoms of this point of collapse are increasingly complex solutions resulting in increasingly small marginal returns.

At first glance this archeologist’s thesis may not seem to be applicable to a discussion on American involvement in China. Two fundamental motivations exist for American businessmen focusing on China, neither of which is really access to the Chinese market. While for some markets such as telecommunication and finance, the short and mid term financial benefit that can be realized by targeting the Chinese consumer is a real motivation, for the majority of businesses this is not a primary motivation. The two motivations for Chinese investment are low cost labor and low cost vendors.

If we take seriously Tainter’s argument that a complex society will evolve increasingly complex solutions to the problem of diminishing marginal returns, we may begin to see China differently. Is China nothing more than an increasingly complex means of perpetuating a tired American economy? Does China’s historical significance have less to do with the opening of a market of 1.3 billion Chinese, and more the last gasps of a Western market based economy that has to pursue increasingly complicated means of producing limited gains?

An American Strategy of Engagement

When dealing with China, being an ideological purist is certain to cause problems beyond that of most sovereign nations who are being treated like children and reprimanded at every wrong. In developing a policy of how the United States should engage China, it should be emphasized that a policy of consistent engagement that takes into account the unique need of the Chinese to save face must be remembered. As much as we may wish less exploitive labor standards or increasingly stringent environmental controls should be implemented, we should remember that our own domestic standards were not always what they are now. Where we would like to see increasing political liberty and in many cases, increasing liberty for persecuted religions, we should first present our concerns to the Chinese, offering them an opportunity to solve the problems themselves, and then introduce the necessary global exposure of the problems that will create the necessary pressure to change.

Few things are more important than an underlying policy of engagement with China that is not exploitive. If China’s importance to the world is, as I suspect, ultimately motivated much less by a desire for Western companies to benefit from development of Chinese consumers and much more by companies’ desire to benefit from very low cost labor and relaxed environmental and general regulatory standards, then I fear our policy of engagement, as is any relationship built on exploitation, ultimately destined for failure. China is one of the most profoundly moving civilizations history has ever produced, its own leaders, philosophers and scientists standing side by side with the best of the Greeks. A country that today stands as a low cost manufacturing source may stand tomorrow for the hope of a world grown dissatisfied with the excesses of capitalism and the vagaries of a republic. This hope will only be realized when the Chinese break away from the world’s expectations that they serve others with low cost production and begin the process of serious innovation and internal growth.

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• November 17, 2004

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