Monday, October 18, 2010

Here Comes China

by Richard Crews
In the 19th century Britannia ruled the waves. After the decimation of Europe during the Napoleonic Wars (Napoleon met his Waterloo in 1815), the United Kingdom was, in the words of one Prussian general, "mistress of the sea.... Neither in this dominion nor in world trade has she now a single rival to fear."

But a hundred years later, the United Kingdom "was too weakened by [the First World] war to remain an effective hegemon" (Charles Kindleberger). Thereafter the 20th century saw the ascension of the United States to become a world superpower--until finally, after the fall of the Berlin Wall in 1989, it was the ONLY world superpower.

In 2003, the historian Niall Ferguson noted that "the power of the United States today closely resembles that of the United Kingdom roughly a century ago--[is it] hegemony or empire?"

But at the close of the first decade of the 21st century, the U.S. finds itself weakened by two costly wars abroad and political gridlock at home.

Meanwhile China has been coming on strong having invented a new form of capitalism--non-democratic (dictatorial) capitalism. This is based on the historical experiences--the tribulations and successes--of the Western World but with one far-reaching caveat: it is run by the firm and uncompromising hand of the communist government. When, for example, the government decided to build the largest hydroelectric dam in the world (at Three Gorges), there was no delay--no considerations of "eminent domain"--because the project involved relocating 1.24 million people and inundating a world of cultural artifacts and ecological treasures. When, for another example, the government decided to take control of world production of rare earth minerals (which are essential for modern electronics and numerous engineering purposes), they pumped hundreds of billions of dollars into subsidizing Chinese mining and production facilities, thereby driving foreign sources into bankruptcy; the Chinese now have about 15% of the world's rare-earth ores but now control some 97% of the world's production. (Rebuilding rare-earth mining and production is a costly and time-consuming business--it takes hundreds of millions of dollars and a decade or more.)

From currency manipulation and trade protectionism to land speculation and pollution control, the Chinese Communist government has pried its way with a heavy hand into world economics--and therefore politics--and even, therefore, culture. (When the Chinese wanted to control the terrible atmospheric pollution in Beijing for the 2008 Olympic Games, for example, they simply decreed that even- and odd-numbered licensed vehicles would be banned from the city streets on alternate days--never mind the terrible disruption of commercial and civil life this caused. Also, by the way--since they wanted to make a good impression on visiting foreigners and press--it was made illegal for fat people to wear horizontal stripes, or anyone to wear white socks with black shoes, on the streets of Beijing.)

How far can this dictatorial, managed capitalism go? Can it propel China to world economic and political domination? An interesting question. We shall see. A few weeks ago China passed Japan to become the second largest national economy (in terms of GDP) in the world.

And can it progress--including with massive expansion of the consumer-driven middle class, of TV and Internet populism, and of multi-cultural foreign participation--without significant expansion of civil rights? We Western liberals hope not.