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Home / Business

<i>Eye on China:</i> China desperate to make 'weird' capitalism work

By Dan Slater
16 Apr, 2007 05:00 PM5 mins to read

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Opinion by

KEY POINTS:

America's global dominance is just as much helped by the ineptness of its rivals as its own prowess.

Or you could say that the Western system of democratic institutions and respect for reason has led to a sharper perception of how to conduct international business.

Take Japan and
China. Here are two of potentially the most powerful countries in the world unable to set up a real or lasting partnership.

"The animosity that China feels for Japan (and vice versa) is regrettable. The net result is to split Asia in two and allow the US to flourish in the vacuum," a Chinese academic told me recently.

Too true. But it's no coincidence. Both countries are economic powerhouses with stunted political and market democratic institutions.

The level of debate in both countries is surprisingly low - part of what I would generalise, in a most un-politically correct way, as an Asian reluctance to carry out thorough analysis.

I say reluctance rather than inability because it's clearly not a problem of brains. Both countries produce superb businessmen and engineers. But they are less good at producing great diplomats or thinkers comfortable on the international stage.

China's problem is that nationalism (and hence hostility to Japan on account of Japan's behaviour in China during World War II) is a way of propping up the regime. It's certainly effective in the short run - witness the anti-Japanese riots in 2005. But in the long run it perpetuates what the Chinese are clearly anxious to end, namely "US hegemony" in Asia.

Japan's problem is more tricky. As a genuinely pacifist country in many ways, Japan is not comfortable with xenophobia or sabre rattling against its neighbours. But my Japanese friends seem to find it hard to understand the depth of the trauma they inflicted on China during the course of the war. Even long-standing China residents will tell me that the figures of Japanese atrocities are the figment of Chinese Government propaganda.

I point out that the treatment of British and Empire prisoners of war tends to back up the Chinese version, rather than the Japanese one. Indeed, Hong Kong, where I have spent some time, was the scene of several notorious atrocities by the Japanese in 1941.

I am confident this will ultimately change. But surprisingly, I am more optimistic about China's capacity for change than Japan's.

I have been increasingly struck by how China's national character is changing - in a way that I believe will support China's bid as a superpower.

A friend quoted an aphorism recently: "The West has always fought against authority, while Asia has always striven to adapt to authority."

This struck me as both strikingly true and untrue. Older accounts written about China often describe the Chinese reluctance to think outside the norms of thought handed down over thousands of years. The insularity and xenophobia reported by the genteel Victorian explorer Isabella Hilton as she travelled along the Yangtze River in the late nineteenth century are no aberration. So was American scholar John Fairbank's subtle comment that not living in poverty and misery was somehow "un-Chinese" - resulting in a bizarre reluctance to challenge the status quo in the year before the new Chinese state of 1949.

But my goodness, how all that is changing. Modern Chinese have lost this deference, or are losing it at a rapid rate. One of my pet peeves about China is the exaggerated deference paid by underlings to their superiors. That still happens when a person clearly has economic superiority. But the Chinese, at least the urban middle classes, are getting better and better at sticking up for themselves. And instead of being treated as freaks by timid neighbours, they are now being cheered on.

The classic example recently is the widely reported case of Yang Wu and his wife Wu Ping, who have been challenging redevelopment plans for their little hotpot restaurant in Chongqing. Sure, this kind of resistance has been going on for a long time - but they haven't created the same kind of groundswell of support among the rest of China's middle class. In the past, Chinese would tend to cross the road if they saw anybody involved in a fight with an authority as powerful as a property developer, or representatives of the state. Or, more accurately, they would stop and gleefully watch the challenger being cut down to size. It's encouraging that this is changing.

I think this development is very important because it fills me with hope about the sustainability of China's progress to a genuine major power status. Too often, journalists and academics look at China and throw up their hands (I have done so more often than I can count). Like them, I have warned against investing in China. Rightly so, in some ways. On paper, Chinese institutions are a complete shambles.

But in real life, the people of China are desperate to make a success of the weird version of capitalism they have adopted. And it's that wonderfully middle-class aspiration of making enough money to buy your own house, send your kids to a good school and enjoy a comfortable retirement that will serve China best in the long run. Not nasty outbreaks of xenophobia.

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