China: Asia’s Emerging Superpower

William J. Hempel

William J. Hempel is a retired lawyer living in Marine on St. Croix, MN.

Six hundred years ago China enjoyed supremacy at sea with a large feet of sailing vessels, far larger in numbers and size than those of Columbus and his European patrons. Chinese ships traded with India and the east coast of Africa. Then, with the fears of leaders influenced by Confucius, the fleet was mothballed. China began its long history of looking inward. An edict forbade ships of more than two masts. One of many Chinese inventions, the magnetic compass, was hardly needed after that turning point. Even so, as late as 1820 China produced almost one-third of the world’s GDP. But the industrial revolution passed it by, and foreign powers demanded and received, with force of arms, substantial trading and other concessions along China’s southeast coast. The Chinese fairly call these unequal treaties.

Hong Kong was ceded in 1842 to Great Britain, and not returned until July 1, 1997, when it became a Special Administrative Region of China. China promised that for 50 years its socialist economic system will not be practiced in Hong Kong. The small state is supposed to retain a high degree of autonomy in all matters except foreign and defense affairs for the next 45 years.

Last summer my wife, Kay, and I struggled through 19 pages of instructions to apply by mail for visas from the Chicago consulate of the People’s Republic of China. Our passports with 30 day, one-entry visas pasted in were promptly returned in the self-addressed stamped envelope we were required to furnish. We were required to send copies of all our tickets.

By contrast, Hong Kong requires no advance visa application. Our passports were simply stamped on entry with permission to remain for 90 days. Our bags, so far as we knew, were never opened for inspection throughout our trip.

November 2002 found us in China during the 16th Congress of the Chinese Communist Party. They have been held every five years for eight decades. The five-year period is copied from the Soviet Union’s five-year plans.

China claims a population of 1.3 billion. Approximately five percent are now members of the party. Of 2,154 delegates to the 16th Congress, 2,134 attended the opening event. One of our taxi drivers in Shanghai tuned his radio to the proceedings and seemed to be paying close attention to the long speech by Jiang Zemin, General Party Secretary, with rounds of applause coming at regular intervals. The official title of the report was “Build a Well-off Society in an All Around Way and Create a New Situation in Building Socialism with Chinese Characteristics.” It ran 70 pages and was drafted in October 2001. Some 900 people held meetings in 16 provinces making suggestions for the speech. Jiang presented a draft as the product of “democratic centralism” to top leaders in February, and then showed it to party cadres and congressional delegates. In September 2002 a team of writers worked for eight days and nights to polish it. By the week after the speech, 1.1 million copies had been sold in Beijing. The director of the State Development Planning Commission said in an interview that economic growth, the inflation rate, employment and the balance of payments are four crucial variables closely linked in a macro economy. This was called the “mystical four angles.”

When Chairman Mao launched his cultural revolution in 1966, his attacks were known as struggles against the “Four Olds”: ideas, custom, culture and habits of mind.

In 1979 Deng Xiaoping announced his plans, called the “Four Modernizations,” to modernize four sectors of the economy: agriculture, industry, science and technology, and defense. The party constitution was amended to include his plans, but his first aim, agriculture, has been given short shrift so far. The Chinese are fond of using numbers, going back to the Song Dynasty’s “Three Bonds” of the 12th century A.D. The emperor was the master of his subjects, the father the master of his sons, and the husband the master of his wife. The Chinese Communist Party has succeeded many emperors as the master of its subjects. Sun Yat-Sen had his “Three Principles of the People”: nationalism, democracy and livelihoods (involving regulation of private capital and equalizing of land rights). The Chinese Communist Party maintains two of those principles. The party promotes the Confucian ideal that economic prosperity provides an environment essential for moral well-being. Deng said to get rich is glorious.

The party constitution now incorporates Jiang’s “Three Represents.” The party is said to “represent” the growth of China’s productive forces, the orientation of China’s modern culture, and the fundamental interests of the overwhelming majority of the Chinese people. The productive forces now include “Red” capitalists. One was quoted saying he never could have imagined sitting in the Great Hall as a delegate to the august congress. Another said that it was a “glorious thing to be allowed to join the party” but the membership fee was “very high.” Registered private businesses increased from 90,000 in 1998 to 2.3 million in 2001. State owned, industrial businesses decreased from 102,300 in 1989 to 42,900 in July 2002. My guess is that the main motivation for the leaders’ recent welcome into the party of entrepreneurs is to provide more jobs for China’s huge number of unemployed workers.

Jiang made clear that the state businesses will remain dominant while private enterprise is to play an important “component” part. His speech also disclosed plans to allow farmers to sell land-use rights that have not been transferable, as all land is owned by the state. I could not tell where newly privatized state enterprises fit into this scheme. The Organization for Economic Co-operation and Development, which has fifty nations as members, now forecasts China’s 2002 GDP growth at 7.9 percent, slowing to 7.5 percent for 2003, and 6.9 percent in 2004. U.S. based Moody’s, (a rating firm) recently upgraded its ratings for the Chinese government and its big banks to the same level as that of Hong Kong and South Korea. Moody’s competitor, Standard and Poors, has not, citing its grave doubts over the ability of China’s banks to recover financial health. Standard and Poors said mainland banks need $518 billion to bring bad loans to an acceptable level. Loans ordered by government planners have left huge amounts of unrecoverable debt, and credit availability is severely restricted, especially in rural areas.

Crucial questions for China’s future are whether its rapid economic growth continues; whether protection of private property, along with state property is delivered as promised; and whether official encouragement of some private enterprises will eventually bring more freedom to the people.

In land area China is the world’s fourth largest, after Russia, Canada and the U.S. Its GDP has quadrupled since 1978. In 2000 it was the world’s second largest economy, as measured on a purchasing power parity basis. Its labor force (as measured by sector) is still 50 percent agricultural, 24 percent industrial, and 26 percent service-sector. China disputes most of its border with India, and portions of the border with Russia and Tajikistan. A short section of the border with North Korea is indefinite, and China is involved in a complex dispute over the Sprately islands with Malaysia, the Philippines, Taiwan and Vietnam.

China’s claim to Taiwan has continued since 1949, and remains the issue with the most potential for serious conflict. Nixon and Kissinger in 1972 negotiated the replacement of the Republic of China (the Taiwanese government) with the People’s Republic (the mainland government) in the United Nations. Seven years later President Carter withdrew U.S. recognition of Taiwan to establish diplomatic relations with the People’s Republic. Hopefully, with ever increasing investment in the mainland by Taiwanese businesses, peaceful trade may eventually bring the two governments closer together.

In 1997 the head of a 1,300-year-old stone Buddha was sawn off and stolen from a monastery in Shandong province in northern China. Four years later it turned up in Taiwan. Taiwanese experts and scholars invited two experts from the mainland to examine the head. They confirmed that it came from the monastery. The head is being returned to its original place, which is an encouraging sign.

In Shanghai we had a chance to visit a manufacturing plant of 3M China Limited, a pioneer in doing business in modern China. This factory employs about 500 people. Most are graduates of high school, and some have more advanced, technical educations. After a briefing by manager Steve Genzer, a Texan with engineering and MBA degrees, we were furnished safety glasses and escorted to various parts of the facility. Some were quiet as it was lunch hour. Products range from dust masks to video and tape equipment. Teams of uniformed workers were busy operating complex equipment, much of which was made in China. One product was so successful that its Shanghai design was adopted by the plant producing it in the U.S. Sales from the Shanghai plants are generally made to Chinese buyers. The wages of the plant workers are far lower than wages in the U.S. but are competitive enough in the local market to retain skilled workers. Employees are expected to sign and observe confidentiality agreements similar to those in the U.S. companies. Except for its gate and security guard, this plant reminded us of less high-tech plants owned by my wife’s brothers in Willmar, Minnesota.

We have no way of knowing how typical 3M’s factory is, but this clean, spacious, well-lighted and ventilated place in China’s largest city is one to be proud of.

We had a fine lunch at the Peace Hotel but did not make it back for its evening jazz session. We crossed the river and I took elevators to nearly the top of the Oriental Pearl Radio-TV tower, about 1,000 feet up, for a wonderful view of the area. At least some Chinese are too impatient to wait in lines as a few simply pushed their way past to the ticket window. Kay, my wife, stayed on terra firma and had fun having her picture taken with various Chinese tourists who asked to be photographed with her. We also went into the Shanghai Museum, designed to resemble some of the early bronze pots displayed inside. The architecture of many buildings is most unusual and gives the impression that constant contests go on to make each new tower striking and unique.

The Communist party’s goal is to quadruple GNP by the year 2020. Can a system of production in which the distribution and pricing of goods is centrally planned ever approach the efficiency of a free market? History teaches that government planners simply lack enough information about what consumers need and demand. The Communists apparently plan to force private businesses into niches and regulate them closely. There are three types of economic activity in China: those controlled by government planning, those in which central planning is indirect; and those subject to market forces.

One “Red” capitalist is Tao Xinkang who joined one of the eight subservient political parties authorized by the Communists to “serve the state.” He started business by swapping watches and sewing machines for hardwood. Twenty years ago he was in the furniture business, offering free delivery and more choices than state manufacturers. Ten years ago he began making wood paneling, and is now buying land to grow trees for construction material. Four years ago he set up a party committee, the first at a private firm, and hired a former government official to head it. His companies now employ 20,000. Tao divides his time these days between China and Canada. He pays high taxes and allows the party a voice in his affairs. Forbes magazine says he is the fifteenth richest person in China.

Steve Forbes was in China while we were. He was quoted as both praising its economic progress and calling for reforms, especially in the banking system. Henry Kissinger also visited in November, on what he said was his 38th trip to China. He too praised the rapid growth of China’s economy but mentioned no need for any reforms.

On our last day in China, the 2003 Index of Economic Freedom was released in Hong Kong. This is a study annually co-sponsored by the U.S. Heritage Foundation and the Wall Street Journal. Hong Kong was still ranked first by the Index. Since 2001 the rank of the U.S. has slipped from a tie with Luxembourg at fifth to sixth. The rank of the People’s Republic fell from 114th in 2001, to 127th for 2003. The Index report said that China’s growth figures have been overstated, and that Beijing’s leaders face the threat of social instability from rising unemployment and a foundering banking system. The study points out that state-owned enterprises employ over two-thirds of the 170 million urban workers, but the production of state companies is less than one-third of total production.

Even the official organ of the party, The People’s Daily, reported in November that present opportunities for reform had slipped away, but reform appears possible within the next twenty years. With typical vagueness, eight factors necessary for improvement, quoted in the Beijing Weekly Outlook, were listed:

• Long and tranquil period of time for economic build-up.
• Enough time to cut out a niche in a changing world.
• Enough time for “sci-tech” “frog leap.”
• An opportunity to upgrade industrial infrastructure.
• China’s embrace of the World Trade Organization.
• A chance to break the bottlenecks blocking economic reform.
• Jobs, education, and training for the population of 1.3 billion.
• A period of time to revive Chinese culture worldwide.

In Shanghai we met two students on the riverfront across from the Peace Hotel. Both were fluent in English, and very candid in their comments on political issues. She was an artist with a watercolor painting on exhibit nearby. They asked us to see it, and seemed eager to sell her painting. We had other plans and passed on the offer. In Guangzhou we were offered help on the street while we were trying to find a museum on a map. That young man also spoke English well. On parting, he wished us “a good chi.”

While we walked those back streets we passed small stalls on the sidewalk where everything imaginable was for sale in small quantities. Goods were spread out on tables or mats on the sidewalks. The aroma of food mixed with what seemed to be untreated sewage, flowing right under the street, made an overwhelming impression. There were many people playing various games outdoors. Some apparently lived and slept anywhere they could find space. Few police officers were seen in that poor part of the city, but I did see one pretending to push around a boy not much younger than he was.

In the same city, on Shamian Island, where trading concessions once existed along the Pearl River, Kay was stopped from taking a photo of a wedding couple by a police officer across from the Polish consulate. This was the only such occasion. We were left to guess whether it was because the officer would have been in the picture, or because it was near the consulate. Recently in China North Koreans have been seeking asylum by rushing into the embassies and consulates of foreign countries. There were many officers of various kinds standing guard and simply watching in the streets.

In a park on the island we saw a sign in Chinese and English telling people not to spit or litter, with a penalty of up to two dollars. Women were cleaning the gutters with twig brooms. Very aggressive vendors were selling furs, including leopard skins, from push carts, with police standing and watching nearby.

All the museums and the Buddhist temples, and some of the parks, charge a small admission fee. In one park no one was paying attention to a large statue of Marx and Engels. Men who seemed to be of working age were sleeping on park benches in the middle of the day. Lessons in ballroom dancing were popular, with lines of men and women well separated, and with the leader doing steps to Western music from loudspeakers.

We passed by an apparently well-maintained church in Shanghai on a weekday. On Sunday we visited two churches in Guangzhou, also on Shamian Island. The Catholic Church seemed to have mass underway with about eight people seated in the front row. A Protestant church held two services, both packed to overflow, mostly with young people. We stayed longer for the second service because there was some English translation. A large screen projected words for hymns in both languages, and all sang loudly. We observed no open surveillance of the proceedings, although officers were posted outside, perhaps guarding a nearby consulate.

It was no surprise to see English used in Hong Kong because of its long period of British rule. But also in Shanghai and Guangzhou many signs and road markers carry short English translations. Few taxi drivers spoke more than a word or two of English so we made our way about by pointing to our destinations on a map. That generally worked well. Drivers of cars with manual transmission persisted in staying in the wrong gear, abusing their engines. Bikes and scooters carried all manner of goods, some very large and heavy.

We were impressed with the beautiful museum in a park in Shanghai for Lu Xun, a noted writer with Marxist sympathies but one who refused to join the Communist party in the 1920s. We also visited a small Sun Yat-Sen museum in Shanghai established at his former home and set in a landscaped garden. The Communists believe him a pioneer of the revolution, as he was president of the Republic of China from 1911 to 1912. The house had an early gas appliance in its kitchen and a round dining table surrounded by backless stools fixed in place that looked very uncomfortable. Outside the house was a large statue of the hero seated in a chair.

One museum we visited in Guangzhou was on the site of the grave of Nan Yue, Emperor of the Western-Han dynasty of the second century B.C. It was uncovered during construction in 1983. The Emperor was buried with his wife and concubines. Among the treasures displayed are two hundred ceramic pillows of exquisite workmanship. The beautiful building constructed in 1988 had in its ladies restroom China’s infamous holes in the floor, except in the handicapped stall, according to Kay. A guard there pointed out to me that I had forgotten to button my cash pocket after paying for our tickets.

Watching coverage of the 16th Congress on CNN was educational. Several times when reports started about dissidents or religion in China the screen went blank momentarily. We were told by an American attorney in Hong Kong that this is done by using a time delay in transmission. One wonders if household computers and TVs have the same access as the hotels that cater to foreigners. In 2001 China had 300 radio stations and 360 TV stations, with 100 million cable TV subscribers. A few foreign media companies have made inroads in south China. Hong Kong based Phoenix TV, a joint venture of Chinese investors and News Corporation was given rights to broadcast via satellite. AOL Time-Warner was permitted to broadcast in south China by satellite and over cable in parts of Guangdong, the province on the coast near Hong Kong.

Corruption is widespread in China. In his 16th Congress speech Jiang Zemin said “all corruptionists must be thoroughly investigated and punished without leniency.” A senior banker was expelled from the party on charges of taking bribes, leading a “decadent life,” and breaking financial rules.

A member of the standing committee of the political bureau announced recently that party committees and government at all levels should intensify the campaign against corruption and be more conscious of obligations and responsibilities. A delegate who retired after this Congress and who fought graft was quoted in the People’s Daily. She said that many cases were not investigated because local party secretaries often enjoy unchallenged powers. She said “corruption is prevalent.” The National Audit Office report for 1998 put the loss of state property for the year at $10 billion, or 2 percent of GNP. A total of 98 leaders at the ministerial level were punished by the party for corruption and other violations from October 1997 to September 2002, according to an official report, with more than 840,000 disciplined at various levels in the past five years. The story in The People’s Daily claimed that in 1989 Jiang, on becoming general party secretary, regarded corruption as a matter of life and death for the party and state. The news report said that the political bureau made a decision to dissolve companies disrupting “market economic order.”

Jiang announced, following the Tiananmen Square massacre, that children of party leaders (called princelings) should stay out of business, but his eldest son Jiang Mianheng is prominent in several Shanghai enterprises. There is a word in China called “guanxi” meaning powerful connections or relationships. Perhaps the princelings’ “guanxi” accounts for their immunity from discipline.

Amnesty International reports that in 2000 there were 1,939 death sentences and 1,356 confirmed executions-though it believes that these figures are far below the actual numbers. Still, using only the confirmed numbers, China executes more prisoners than the rest of the world combined.

A September 2002 report by Amnesty International concludes that China’s human rights record deteriorated over the prior eighteen months as a consequence of the “strike hard” campaign. This report details increased use of the death penalty, often after unfair or summary trials; crackdowns on human rights of mainly Muslim communities; ongoing repression of freedom of expression, association and religion in Tibet, and continued imprisonment of scores of prisoners of conscience, mainly Buddhist monks and nuns; crackdowns on the Falun Gong spiritual movement, and other so called “heretical organizations,” especially on those who refuse to renounce their beliefs; serious restrictions on the freedom of expression of political activists, human rights defenders, advocates of reform and internet users; ongoing restrictions on workers’ rights of expression and association; and finally an intensification of the crackdown on North Korean asylum seekers, with widespread deportation back to their homeland where they face serious human rights violations including death.

There is no longer an annual review by the U.S. of human rights since China’s recent acceptance into the WTO. The most recent report by the Bureau of East Asian and Pacific Affairs of the U.S. State Department disclosed that, while the Chinese constitution affirms religious toleration, the government restricts religious practice outside officially recognized organizations. Only two Christian organizations are sanctioned: the Catholic Church, and a Protestant church. Most Catholic bishops in China are recognized by the Pope, and Chinese priests sanctioned by the government have Vatican approval to administer all sacraments. Unauthorized churches have sprung up in many parts of the country where unofficial religious practice is flourishing.

The same State Department report goes on to say that China has acknowledged in principle the importance of protecting human rights and has taken steps to bring its practices into conformity with international norms, including signature in 1997 of the International Covenant on Economic, Social and Cultural Rights, ratified in 2001. It says that most average Chinese go about their daily lives with significantly less interference from the government than in years past, but that authorities are quick to suppress any person or group perceived to be a threat to government power. The example given is the 1999 ban on the Falun Gong spiritual movement. Thousands of its members were forced into re-education labor camps, and hundreds more were put into prisons or psychiatric facilities. More than 200 Falun Gong members have died in prison of mistreatment and torture.

A recent study just released reports a high rate of suicide, one of the highest in the world, especially among women. Rural suicides outnumber urban. Most were accomplished by use of pesticides or rat poison. An estimated 287,000 kill themselves annually, making this the fifth largest cause of death. A suicide clinic is being opened in Beijing, funded by the city government.

The recent and orderly transition to the “fourth generation,” has begun, with Jiang remaining as the most powerful leader as head of the People’s Liberation Army. The party and government power is shared among better-educated, younger leaders with more progressive tendencies than in the past, which augers well for China’s advancement as an economic power. The prospects for more individual freedom in the Middle Kingdom are much less promising, given the history and character of China’s government.

The Chinese people are hard working and many are talented. They may eventually realize their goal to become the foremost power in Asia and the world. Free elections, as Taiwan has allowed, would be a giant step in the right direction.

Other world leaders have also used numbers to symbolize their ideals. President Franklin D. Roosevelt, in his State of the Union Address of January 6, 1941, laid out his idealistic “Four Freedoms.” He said the essential human freedoms were: freedom of speech and expression; freedom of every person to worship God in his own way; freedom from want, and freedom to enjoy good health and peace; and freedom from fear, achieved by means of a reduction of armaments, so that no nation can commit physical aggression against its neighbors. Eight months later F.D.R. and Winston Churchill, after meeting on warships in the North Atlantic for five days, wrote the same freedoms into their Atlantic Charter. The following New Years Day that charter was incorporated by reference in the Declaration of the United Nations.

Measured by those high standards of not so long ago, China falls far short of the fundamentals of justice, regardless of the stunning economic progress made by many of its citizens and the nation itself. Can a totalitarian state ever be good for its own people, as well as for its elite, self-appointed leaders?

Readers with access to the internet may log onto english.peopledaily.com.cn for the official Chinese government version of news, along with many doses of propaganda. If you wish references to other periodicals and books consulted, you may ask the author at billhempel@usa.com.