A Dream of China

Some have fantasies of China. Siva Yam and Paul Nash, after soberly and reasonably outlining the challenges that China faces have this prescription for China’s addressing them:

China needs to grow to remain stable. To maintain growth, it will have to adapt to changing conditions. Like America over the course of the past few decades, China too must experience the pains of globalization if it is to change structurally to compete and prosper. The government has to push forward the reform process with renewed urgency – to deepen transparency and foster a stable, consistent legal system. It can’t allow this process to peter out, leaving only a system of changeable laws and arbitrary enforcement. It must also encourage the separation of “guanxi” (personal relationships) from business and demand that decisions be made based on sound economic rationale.

It’s unrealistic, of course, to expect Chinese culture to change overnight. But by taking confident strides towards greater transparency and the rule of law, China will instill confidence, both in its own citizens and in foreign investors. As this happens, it will become easier for China to acquire the skills and non-strategic technologies it needs to carry it to the next stage of development, as well as for U.S. companies to reinvigorate their operations in China. In the end, both countries can only benefit.

That is a dream worth having but it’s a dream. China doesn’t have the institutions or the will to act as they suppose. Its leaders’ objectives are not for China to grow to become prosperous. Those are only means to the end. The objective is maintaining power and keeping the system pretty much the way it is.