China’s rumble with globalisation - part II

In the 30 years since Deng Xiaoping launched China on the path to the market, no country has benefited more from globalisation. While the United States and the European Union have profited from the breaking down of trade barriers and the spread of investment, people and knowledge, it’s been the People’s Republic that has made the greatest strides.

Now, as their country enters the second generation of economic reform, Deng’s heirs face the challenges that come with globalisation. How the Chinese handle the challenges will be crucial not only for China but, given its role in the global economy, for the rest of the world.

China’s growth has been so spectacular, its self-confidence so great, that it’s easy to forget just how enormous a change the last 30 years represent. For much of the 25 years before Deng changed course in 1978, the country’s history had been one of mounting political and economic weakness accompanied by social fragmentation.

The fall of the Qing Empire in 1912 was followed by warlordism on a massive scale and then the weak Nationalist government in Nanjing. Japanese intrusion stretched from the takeover of Manchuria in 1931 through full-scale warfare from 1937 to 1945, and then the often brutal and increasingly erratic rule of Mao Zedong, ending with the 10 years of the Cultural Revolution.

Against that background, the process launched by Deng after he won the power struggle that followed Mao’s 1976 death could only be a welcome change for hundreds of millions of Chinese. Economic progress has not, of course, been accompanied by political liberalisation. Nor does China enjoy the rule of law or effective accountability - both of which would require the Communist Party to be subject to external review.

The party talks of encouraging internal democracy, and Prime Minister Wen Jiabao busily displayed the regime’s human face when visiting the scene of the earthquake in Sichuan, and Hu Jintao unbent last week to the extent of answering a couple of chat-room questions during a visit to a newspaper website. Think tanks debate between “new left” and “new right” prescriptions for the country; spinning theories that seek to reconcile greater democracy with continuing communist rule.

For the reality is that no questioning of the fundamentals of the party’s continuing control is permitted. Internal democracy is designed to strengthen the party, not to bring its monopoly into question. The strange combination of Marxism, Leninism, Mao and Deng thought, capitalism within a state framework, has assumed the status of the imperial Mandate of Heaven. Dissidence is taken to equate with subversion.

The common western assumption of the 1990s that economic progress would usher in democracy - one of the underlying political arguments employed by proponents of globalisation - has been resoundingly disproved in the world’s most heavily populated nation.

The clampdown in advance of the Olympics, ranging from the arrest of human rights activists and eviction from the city of ethnic minority workers, to a curfew on bars and closure of music venues, bears further evidence of the micro-managing control the regime seeks to achieve.

That has been no obstacle to trade and foreign economic involvement in the People’s Republic; indeed, it’s none too difficult to draw a graph which shows that, with some lags, foreign investment in the mainland rose after each act of political repression following the 1989 Beijing massacre. Under the post-Tiananmen Square party chief, Jiang Zemin, the equation worked robustly, particularly once inflation had been dampened in the mid-1990s. Hu took over in 2002, intent on continuing growth but also including pursuit of a “harmonious society” to lessen disparities spawned by headlong expansion which threatens social stability.

Though Hu was duly confirmed for a second term last October, he faces a wider and deep array of challenges than his predecessor had known. The stakes are heightened by the globalisation process behind China’s emergence, which, at the same time, makes the evolution of the mainland of central and direct concern to the world.

China’s ecological disaster threatens neighbours. The Netherlands Environmental Assessment Agency, which reported last year that the People’s Republic had become the biggest source of carbon-dioxide emissions, now says the nation accounts for a quarter of the global total and two-thirds of the 3 per cent international increase in 2007.