Interesting times in China 2009

Nothing in their recent history has prepared them for this. At least we westerners know what to expect from a recession. We understand that recessions are part of the capitalist cycle. As far as they are aware, a capitalist cycle could be a bicycle made in the USA.

The Chinese middle-class however, had presumed that the 9-11 per cent per annum growth rates of the last 30 years would continue forever. However, middle-class folk here are on a rapid learning curve, and they appreciate the fact that China is in a better economic position than the West.

They also understand that this crisis was precipitated by Wall Street, and not by anything their own government did or did not do. In fact they are feeling some pride in China's current economic position relative to the West.

Key point: there is no blame being directed towards the central government. This means social stability for now.

Understanding Beijing

The central government's legitimacy is dependent on what it can deliver to its people. Communist ideology is dead, money is the new God, and if the central government can't maintain the living standards of the new middle-class, it will have trouble on its hands.

And that is not considering the needs of 800 million poor people in China who have not shared in the new wealth, who are effectively disenfranchised, and who may one day express their discontent in the only way known to them: via widespread social disorder.

This is why President Hu Jin Tao and Prime Minister Wen Jia Bao have talked so much about a Harmonious Society. They fear this possibility and the threat it would represent to the ruling elite.

At the geopolitical level, their nightmare scenario is national disintegration. This is why Taiwan and Tibet remain non-negotiable issues.

There are many issues such as these which influence policy in China. Issues which are often misunderstood by the West, and which provoke the “knee-jerk” self-righteous reactions of some segments of western society. These reactions are counter-productive. There are better ways to encourage change.

If we hope to engage productively with this rising power, we westerners need to understand this ancient and complex society. Believe me, China is different.

Earthquake, superstition, and politics

My more superstitious friends have an interesting spin on the recent earthquake which occurred nearby on May 12 (2008) and its relationship to modern politics.

In the old days, natural disasters on this scale were believed to signal dynastic change. The last time this happened (in the mid 1970s), Chairman Mao died, the Gang of Four were toppled, and regime change was the result. Deng Xiao Ping became paramount leader, and he changed China forever.