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BOOK REVIEW
The pessimist's
case
The Coming Collapse
of China by Gordon Chang
Reviewed
by Jean-Marc F Blanchard, PhD
 Much is at stake
in China's future: huge foreign investments, billions of
dollars of trade, the global energy equation, the lives
of more than a billion people, and the geopolitical
situation in the Asia-Pacific region. It is not
surprising, therefore, that policy makers, academics,
and writers devote so much attention to this topic. What
is surprising, however, is how individuals looking at
the same facts can arrive at such diametrically opposed
conclusions. On one hand, some envisage a bright future.
On the other, some see a looming disaster on the
horizon.
In The Coming Collapse of China,
Gordon Chang forcefully argues the pessimist's case. For
Chang, glitzy Shanghai, increasing foreign trade and
investment, and a developing high-tech sector do not
represent the real China. Instead, the real China is
characterized by increasing unemployment and
underemployment, massive banking problems, failing
state-owned enterprises (SOEs), corrupt and repressive
Chinese Communist Party (CCP) rule, dissident movements
such as Falungong, and separatists in Tibet and
Xinjiang. Indeed, the situation is so critical that
"Beijing has about five years to put things right".
Unfortunately, he believes, the shock of China's World
Trade Organization (WTO) obligations, the government's
lack of fiscal resources, the straitjacket of Communist
Party ideology, the Party's lack of ideological
authority, and the power of the Internet mean there is
no hope. China is a lake of gasoline and one individual
"will have only to throw a match".
Before taking
the money and running, however, business people and
policy makers need to consider the following. Chinese
leaders and bureaucrats are not hamstrung by ideology
and are well aware of the problems they are confronting.
Second, Chinese elites are moderating the effects the
WTO has on the country. Third, however gradually, China
truly is reforming its SOEs, establishing social safety
nets, and changing the political system (eg, by
incorporating private entrepreneurs into the CCP).
Fourth, the Party retains solid control over all the
instruments of coercion. Fifth, although the outside
world in the form of the WTO will pressure China, the
outside world in the form of international investors and
financial institutions, and neighboring countries, also
will help.
As for the merits of Chang's
analysis, it is important to remember that multiple and
potent domestic and international factors have to come
into alignment for states to collapse or regimes to
fall. In addition, unemployment, even massive
unemployment, or dissatisfaction with the CCP does not
necessarily translate into revolutionary political
action. Moreover, the existence of fiscal deficits does
not mean the Chinese government has run out of policy
options for reflating its economy. Finally, it is true
that Marxist-Leninism cannot provide any legitimacy for
the CCP, but there are other factors such as nationalism
and performance legitimacy that can.
The
Coming Collapse of China is repetitious and
contradictory at times. It does not offer much new
information, and contains some noteworthy factual
errors. Nevertheless, I still recommend its purchase for
three reasons. First, it is an entertaining book full of
colorful anecdotes and quotable statements. Second, it
highlights, in one place, all the major challenges that
now confront China's current leadership. Third, it
forces us to think about the effect that China's WTO
admission will have on the country. The Coming
Collapse of China may not be an apt title, but "A
Dramatically Changing China" would be a hard title to
dispute.
The Coming Collapse of China by
Gordon Chang, Random House (New York, 2002). Price
US$26.95, 368 pages.
(Posted with permission
from KWR International,
Inc, a consulting firm
specializing in the delivery of research, communications
and advisory services.)
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