Martin Jacques - When China Rules the World

The fact that China, ever since 1949, but more significantly since 1978 and the beginning of the reform period, has been single-mindedly focused on the task of modernization — and, with remarkable self-discipline, allowed itself no distractions — has served to emphasize the extent to which China’s modernization is convergent with the West rather than divergent. Here, China ’s experience closely resembles that of its more developed East Asian neighbours. But as China progresses further down the road of modernization, it will find itself less constrained by the imperatives of development, increasingly at ease with the present, and anxious to find inspiration from its past for the present.

In August 1993, I visited Guangdong province, north of Hong Kong, for the first time. The experience is engraved on my memory. The road from Shenzhen to Guangzhou (the provincial capital, known as Canton in colonial times) was sometimes made up, occasionally little more than a mud track. Although we were in the middle of the countryside, the road was overflowing with pedestrians and vehicles of every conceivable kind. Played out before my eyes was the most extraordinary juxtaposition of eras: women walking with their animals and carrying their produce, farmers riding bicycles and driving pedicabs, the new urban rich speeding by in black Mercedes and Lexuses, anonymous behind darkened windows, a constant stream of vans, pick-ups, lorries and minibuses, and in the fields by the side of the road peasants working their small paddy fields with water buffalo. It was as if two hundred of years of history had been condensed into one place in this single moment of time. It was a country in motion, its people living for the present, looking for and seizing the opportunity, as if it might never be offered again. I was engulfed by an enormous torrent of energy, creativity and willpower. The British Industrial Revolution must have been a bit like this: speculative, chaotic, dynamic — and a complete bloody mess. Guangdong was certainly a mess. Everywhere you looked there was construction — seemingly everything was in the process of being changed: the half-made road along which we were travelling, the countless half-finished buildings, the land being cleared as far as the eye could see. Guangdong was like a huge construction site.

Just over two years later I tried to retrace my steps with a television crew. There was not a single familiar sight I could find. The dynamic chaos had given way to order. There were brand-new motorways, bridges, factories, warehouses, and a lot more cars; and little sign of the juxtaposition of eras that had so fascinated me two years earlier. I enlisted the help of a couple of officials, but as I described the scenes I wanted to recapture on film they shrugged as if to suggest that they lay in the distant past. For me it was just two years ago; for them it could have been a different century. Guangdong, the brainchild of Deng Xiaoping, was well on the way to becoming the industrial centre of China, full of factories, many Hong Kong-owned, making cheap, mass-produced goods for the global market. This is how and where China ’s economic transformation started.

Now Guangdong, just fifteen years after that first volcanic eruption, is turning over a new page in its history. It can no longer sustain its old comparative advantage. Labour has become too expensive, too demanding, the expectations of its people transformed. Its factories are no longer able to compete with those in Vietnam or Indonesia. In 2007 alone, no less than 1,000 shoe factories closed in Guangdong, one-sixth of the total. [421] [421] ‘ Guangdong Factories Drop Cheap for Chic’, South China Morning Post , 17 March 2008. Their owners are moving production to the interior provinces, where living standards are as low as they once were in Guangdong, if not lower. And in their place, Guangdong is seeking to move up the value ladder, develop its service industries and shift into new areas of production that rely on design and technology rather than the perspiration of its people and the migrant workers from faraway provinces. Shenzhen and Guangzhou, like many cities in Guangdong, now look prosperous and well maintained, a far cry from former days when they resembled China ’s Wild West. Shenzhen may not yet enjoy Hong Kong ’s Western-style living standards, but it has significantly closed the gap. In little more than two decades, Guangdong has gone from the early days of the Industrial Revolution to something not too far short of the less developed parts of Western Europe.

At the time of Mao’s death in 1976, who would have predicted that China stood on the eve of a most remarkable period of economic growth that would entirely transform the face and fortunes of the country? Virtually nobody. It was as unpredictable and unpredicted as another enormously significant event — 1989 and the collapse of European Communism. China had been torn apart by the Cultural Revolution, in which the cadre that had largely steered the party through the 1950s and early 1960s had been vilified and banished by a ‘popular’ coup d’état staged at Mao’s behest, involving the mobilization of tens of millions of young people in the Red Guard. The movement was opposed to privilege — whether by virtue of family history or Party position — and super-egalitarian in its philosophy: a very Chinese phenomenon with echoes of the Taiping Uprising in the mid nineteenth century. By the time of Mao’s death, the Cultural Revolution had subsided and stood largely discredited, but the country’s future direction remained deeply uncertain. The vacuum created by Mao’s death was soon filled by the return of those same old leaders who had been persecuted during the Cultural Revolution, with Deng Xiaoping at the helm. They were confronted by the economic ravages and political dislocation that were the legacy of the Cultural Revolution, but free at last to pursue their instincts and inclinations, unimpeded by the wild extremes and excesses of Mao, albeit in a situation where the party faced a severe crisis of legitimacy.

There was one favourable omen. By the end of the seventies China ’s relatively modest growth rate constituted something of an exception in East Asia. Many countries in the region were on the economic move: Japan was booming; South Korea, Taiwan, Singapore and Hong Kong had already experienced take-off; Malaysia, Thailand and others were in its early stages. The Chinese diaspora — centred on Hong Kong and Taiwan, but also in Singapore and Malaysia — were key players in this economic transformation. There were, in other words, examples around China ’s borders of the possibilities that now beckoned. The country’s East Asian hinterland was being transformed by a region-wide economic revolution based on catch-up. Of course China faced unique problems, in particular its vastness and diversity, together with the legacy of civil war, turmoil and occupation. In addition it had been isolated, a condition partly self-imposed and partly a result of an American embargo (involving a total ban on all transactions with China until 1971), plus the withdrawal of all Soviet aid and personnel in 1959. The challenges facing the new Chinese leadership, therefore, were far more formidable than those that had confronted Taiwan or South Korea, especially as these had enjoyed considerable American patronage and munificence during the Cold War.

The process of reform began in 1978 with the creation of a handful of special economic zones along the south-eastern seaboard, including Guangdong province, in which the rural communes were dismantled and the peasants were given control of the land on long-term leases and encouraged to market their own produce. It was based on a step-by-step, piecemeal and experimental approach. If a reform worked it was extended to new areas; if it failed then it was abandoned. Such down-to-earth pragmatism stood in sharp contrast to the grand ideological flourishes that informed the Cultural Revolution era and the Maoist period more generally. As Deng put it, in the time-honoured tradition of pithy and popular quotes by Chinese leaders from Confucius onwards: ‘Seek truth from the facts’; ‘Truth is to be found in practice’; and ‘Cross the river by feeling for the stones’. The new economic approach involved a new kind of mindset and way of thinking in the Party and government, which necessitated a massive change of personnel, starting at the top and working rapidly downwards. In 1978 Deng declared: ‘To make revolution and build socialism we need large numbers of path-breakers who dare to think, explore new ways and generate new ideas.’ [422] [422] John Gittings, The Changing Face of China (Oxford: Oxford University Press, 2005), p. 186. The People’s Daily later commented that political reform was: