Absolute power of the state There is no power that challenges the supremacy of the Chinese central communist party.
Rule by a dictator President Hu Jintao holds the position of General Secretary of the Communist Party of China. The regime, however, is not run by a "indispensable" charismatic leader, a Mao or a Stalin. Hu Jintao does not encourage a cult of personality and develops the image of being an efficient, if somewhat faceless bureaucrat. The Chinese Communist party rules as a police state and does not allow the people to vote for candidates outside their control.
Corporatism (state control of labor and capital) The state encourages a docile workforce but allows plenty of entrepreneurial talent to express itself, especially in manufacturing. The country creates incredible amounts of wealth, perhaps more than has ever been created in such a short time. On the other hand, the Party's command economy orders the construction of dams, ghost cities and assorted monstrous boondoggles to the detriment of the people. These project the economic prowess of its rule and raise reported GDP.
Extreme nationalism Jingoism is encouraged whenever Taiwan makes noises for independence or Japan fails to atone for various WWII atrocities.
Superiority of the nation's people Do Chinese think they are better than everyone else? Yes. But so do the French and Americans. The Chinese are not Nazis.
Militarism and imperialism China's military buildup is quite alarming. It seems that its purpose is to intimidate Taiwan and impress the United States and not to take over India and Russia.
China is an authoritarian, one-party dictatorship. The people have no rights outside of the demands of the Communist party. However, I do not think its government fits the description of fascism.
Is China an economic model worth emulating? China's long-term growth rate of 9.5 percent is unparalleled as underemployed farmers rush to the cities. China has become the workshop of the world. However, the Chinese government is doing the reporting, and the Shanghai stock market has recently dropped 30 percent. (See Richard C Young's Intelligence Report, February, 2012 here.) Chinese theft of American company trade secrets and manipulation of its currency have contributed to the country's success, though few would consider those ethical ways of competing in the global marketplace.
Ted Fishman's book, China Inc. reports on how female workers are exploited in the ubiquitous Chinese textile and electronics factories. "Young women, manufacturers seem to always claim, are better suited to factory jobs that require patience and small motor skills, traits men are said to lack. This enduring piece of nonsense reshapes the workforce wherever it is allowed to take hold" (P.90).
No, this is not 19th-century Manchester. It is 21st-century Shenzhen. The real reason that young women are preferred on the work floor is because they cause less trouble and are more docile than their male or older counterparts.
A communist government looking the other way as masses of workers slave long hard hours for $2 per day is not the only irony of China. While China's 300 million indigent and transient workforce is still looking for factory labor, the wage gap has shrunk. Investment professional Chris Mayer writes:
Wages in China and other overseas markets have gone up a bunch while U.S. wages have stagnated. Cheap fuel has long since expired as a reality. Oil is the big factor and crude oil averaged north of $100 a barrel last year for the first time ever. But natural gas is another lure to come back to the U.S. In China, for example, natural gas prices are twice what they are here.
There is more: The U.S. dollar has lost a quarter of its purchasing power since 2002 against a basket of 20 major currencies. That makes U.S. assets and talent cheaper compared with similar assets and talent overseas.So China, an increasingly powerful economic juggernaut, is not as attractive a lure for overseas manufacturing as it once was. China is neither a good political nor economic model for the United States. Instead, we should take lessons from successful free countries--the Swiss, Germans and Japanese--great exporters with labor and energy costs equal to or greater than our own.
The raw costs are only part of the equation. There is the soft stuff to consider as well, things like intellectual property risks and the fragility of supply chains. The Japanese tsunami and floods in Thailand caused major disruptions for manufacturers. And the U.S. itself is still the world's largest market. Therefore, the thinking goes, it could be better to make things closer to the customers that buy them.
Researchers at Gartner predict that 20% of the goods made in Asia for the U.S. will shift back to the U.S. by 2014. Surveys of manufacturers show many are considering moving operations back to the U.S. (Capital and Crisis Email, Comeback, USA -- Notes from the Road, Feb10, 2012)
Postscript, July, 2012: Will China's communist rulers be able to maintain their hold on power as their economy descends into a sharp slowdown?
Oh, and I wouldn't be quite so quick on the trigger with those comments about the Chinese building dams and the like that are "just boondoggles." Methinks that the Chinese leadership, by training engineers all, don't indulge in boondoggles. They're building dams frantically and ignoring the short-term social cost and for more than one reason: not only do dams end up generating clean, cheap electrical power, they also offer the possibility of clean water supplies in a part of the world which, from everything I've read in The Economist, will have a serious clean water shortage not that many years from now (northwestern India is already using up its groundwater base at a prodigious rate in order not to lose agricultural productivity). Parenthetically, when was the last time you saw ANY state in the U.S., let alone the federal government, propose to build a major new dam here?
ReplyDeleteAnd don't discount this dam building for another reason. The Chinese, like Al Gore and company, are SERIOUS about the problem of global warming/climate change--they've seen it up close and personal in recent years with the increased incidence and ferocity of typhoons in East Asia. OK, don't call it global warming; adopt the newer phrase that is becoming more current: "global weirding," which describes the substantial increase in anomalous weather events. You know, like springtime tornados in the South and Southeast U.S. in JANUARY (!). Additionally, the Chinese are investing heavily in solar and wind power. They are now the world's premier producer of solar power technology and will soon overtake the Germans in the production of wind power turbines. They're not dummies--when the world eventually comes around to the realization that clean energy is not a luxury but a necessity, guess who will have the technology, supply, and the loans that other countries might just need? ;-) And they won't even need to manipulate their currency to control the market--they'll OWN the market!
The Chinese leaders may be in love with power, but they ARE technocrats, and what they do is worth watching--and most likely emulating--even if their governmental system sucks...