China's insecurities laid
bare By Benjamin A Shobert
In the United States, it has become common
to view China's rise, and thereby America's
descent, as inevitable. Yet many structural
challenges remain that could still prevent China
from becoming the global economic powerhouse many
assume is certain.
Many of these
challenges are ones the average Chinese is wholly
aware of, a realization the recently released
Global Attitudes Project (GAP) by the Pew Research
Center lays bare. Specifically, Chinese citizens
are increasingly troubled by inequality and
corruption they view as endemic in their country.
Pew notes, "... the side effects of rapid
economic growth, including the gap between rich
and poor, rising prices, pollution, and the loss
of traditional culture are major concerns, and there
are also increasing
worries about political corruption."
Given
the events of the past month, concerns over
corruption seem entirely reasonable - allegations
that Chinese Premier Wen Jiaboa and family have
squirreled away almost US$2.7 billion in assets
became public came hard on a Bloomberg account of
vast wealth linked to the family of
president-to-be Xi Jinping.
Lower down the
pecking order was the so-called "Cousin Watch"
(also known to some as "Brother Wristwatch")
scandal, which took down Yang Dacai, chief of the
Xi'an Work Safety Supervision Bureau. Yang was
sacked after being photographed in late August
smiling at the scene of a traffic accident.
Rubbing salt in the wound, the day after the
accident photograph was posted on the Internet,
several others of him were posted with him wearing
on different public occasions a variety of
expensive watches - one said to be worth
US$30,000. [1]
The economic transformation
that has swept across China since the early 1990s
has made it difficult to argue against the
so-called "Beijing Model". Whatever internal
contradictions may exist between capitalism and
state-controlled enterprises, China has pushed its
way through.
The problems that beguiled
Russia in the aftermath of the Soviet Union's
collapse have not been issues for China; the
country has found a way to live with the
inconsistencies and inefficiencies, even if the
price has been looking past the much lauded, if
rarely attained, goal of the noble Confucian
leader. While the problem of corruption presented
itself much more clearly and much faster in Russia
than in China, the problem in the latter is no
less severe; in fact, by many measures China's
problem with corruption is much, much worse.
Corruption is not something the average
Chinese discounts. The Pew GAP shows that among
the average Chinese, it remains the issue they are
most concerned with. Specifically, while 39% of
Chinese in 2008 rated it a "very big problem," by
2012 that had increased to 50%. In 2008, corrupt
officials came in second to fears over the "gap
between rich and poor;" by 2012, corruption had
become the most pressing concern.
The
Communist Party knows its history: one of the many
compelling reasons it originally came to power
over the Kuomintang was the latter's wide spread
corruption, a burden born by rural Chinese in
particular. Today's leaders in China know that
they can ill afford to turn a blind eye forever on
corruption; it took down their predecessors, and
it could also curtail their leadership. Income
inequality remains a major source of insecurity.
The Pew report notes "... there is a general
consensus in China that the economic gains of
recent years have not benefited everyone equally."
In what is coming to be a common refrain not only
in China, but in the United States as well, Pew
found "81% [of Chinese] agree with the statement
the 'rich just get richer while the poor get
poorer,' and 45% completely agree."
(emphasis original) This has obvious implications
to the future of economic reform in China.
If the next group of China's leadership is
not able to illustrate how additional capitalist
reforms empower the individual and set in motion
greater economic equality, it will be difficult
for the trajectory of China's anticipated reform
to match what the West has long hoped to see.
Among the many insecurities touched on by the
Chongqing Model and its emphasis on revisiting
older tried and true Socialist policies and
mantras was the nostalgia Chinese feel for a day
when they felt more secure and, while still poor,
felt more equal with one another. Pew found that
"While 45% agree with the statement 'most people
can succeed if they are willing to work hard,'
one-in-three disagrees."
The Pew GAP
suggests a China deeply unmoored from its culture
and tradition, an issue Chinese are very aware of,
and troubled by. Pew writes "Most (57%) think
their way of life is getting lost and 71% want to
see their way of life protected from foreign
influence." Trends, as Pew suggests, on this
point are not promising. They add, "While 59%
still say they like the pace of modern life, this
is down from 71% four years ago." China's embrace
of modernity has been breathtaking, so much so
that even Western ex-pats who live in China
struggle to feel connected; the sense of
dislocation and anxiety fostered by those with
less of a buffer is even more acute, a reality the
Pew GAP illustrates.
These insecurities
have profound implications to how China views
itself and those around it. A country secure on
its own, that believes its leaders are looking out
for the citizens' best interests, is one that can
engage the world more broadly, being more open to
collaborations.
If this is accurate, then
China's attitude towards the rest of the world and
America specifically, is cause for concern. For
all the friction President Barack Obama has faced
domestically for how he has handled foreign
policy, with many Republicans accusing him of
going on a global "apology tour", this more humble
American foreign policy has done nothing to
address Chinese misgivings about America.
The Pew GAP finds that from 2010 to 2012,
favorable Chinese views of America had decreased
from 58% to 43%. The report also discovered that
while in 2010 68% of Chinese believed their
relationship with the US was "one of cooperation",
by 2012 that had decreased to only 39%. Views of
President Obama are hardly good: in 2010 52% of
Chinese said they had "confidence in Obama". In
2012, that number had decreased to 38%. What
explains these numbers?
Some of this
decrease undoubtedly has to do with 2012 being a
presidential election year in the United States, a
time when anti-China rhetoric traditionally
becomes problematic. This year has been especially
disconcerting for Chinese because the
traditionally pro-business Republican party has
also felt obligated to attack China, a
disconcerting realignment of American electoral
politics that leaves China unsure what the next
four years will bring.
In addition, that
the 2012 presidential election aligns with China's
own leadership transition has made for both
countries encountering one another during a time
of political transition, which makes demagoguing
that much easier.
China remains sensitive
to the idea that American power increasingly has
come to believe China is its closest ideological
and military competitor. The Pew report shows
Chinese resent being viewed this way, when many
believe it is American unilateralism and military
adventurism that has made the world a less safe
place. Similar to criticisms of the Obama
administration from the Middle East, Chinese do
not approve of America's prolific drone strikes. A
Pew report from earlier this summer showed 55% of
Chinese disapprove of America's drone strikes,
while only 25% approve.
Right now, the
United States and China are both deeply insecure
countries. China harbors fears about where it is
going, a drive to avoid slipping back from where
it came. America harbors anxieties about never
again having what it once did, and is growing
angry at the economic dislocation and
multilateralism globalization has made necessary.
The potential for enormous strategic
miscalculations on both parties for trivial
matters is going to remain troubling for many
years to come.
In both countries, worrying
about what those outside are doing or saying about
their respective agendas is going to be easily
distracting and in some cases, politically toxic.
The best course of action for both country is to
pay attention to what each needs to do to ensure
income inequality is addressed, that access to key
social services is expanded, and that dislocated
workers find productive outlets. If the
governments of either the United States or China
are unsuccessful doing this, the likelihood of
conflict becomes not only more likely, it may be
all but certain.
Benjamin A Shobert is the
Managing Director of Rubicon Strategy Group, a
consulting firm specialized in strategy analysis
for companies looking to enter emerging economies.
He is the author of the upcoming book Blame
China and can be followed
atwww.CrossTheRubiconBlog.com.
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