Two of the most consistently asked questions regarding China in recent news:
1. Is growth in China reaching its natural limits?
2. Will increased democratization spurred by more open access to electronic information and the more open economic environment erode the political monopoly of the CCP?
Critics predicting a slowdown as the Chinese economy normalizes are quick to cite the country's savings rate above 40% of GDP, production capacity limits on export volume, the continual influx of foreign exchange reserves to maintain the Yuan's value and the fact that over half of Chinese exports are made by foreign companies. Compounding these issues are major concerns with civil unrest, inflationary pressures and energy. Throw all this into the mix, and you still may not have China's greatest problem, which is clean water, as author Will Hutton argues:
One-fifth of China's 660 cities face extreme water shortages and as many as 90 per cent have problems of water pollution; 500 million rural Chinese still do not have access to safe drinking water. Illegal and rampant polluting, a severe shortage of sewage treatment facilities, and chemical pollutants together continue to degrade China's waterways. In autumn 2005, two major cities - Harbin and Guangzhou - had their water supplies cut off for days because their river sources had suffered acute chemical spills from state-owned factories.
In spite of these factors, there are many experts who contend that China can maintain its current growth. Regarding the savings rate, the typical economic ascent of Asian economic powers like Japan and South Korea has consisted of an economy with high growth and high savings. Although China's savings rate is still unusually high, India is experiencing a similar growth pattern, with a 25% savings rate and 8% GDP growth.
(More after the jump)
Throughout the debate, perhaps the most widely agreed upon determinating factor in China's future growth is the stability of the CCP. In other words, China may very well be able to continue its rapid growth under stable CCP control. This stability hinges on the continual permeation of democracy in China's institutions and society. Democracy in China is seen as a Pyrrhic victory by most - a rapid collapse of the CCP would probably result in severe economic instability, if not a complete crash.
How imminent is this? About as imminent as the spread of democracy in Iraq, according to many (even many who initially thought democracy would spread in Iraq, so you know the prospects are dim). Ying Ma's essay in the latest issue of Policy Review published by the Hoover Institution primarily addresses the need for America to reassess its foreign policy based on the failure of democratization in China. Ma argues that authoritarianism has persisted in China in large part due to fact that its 10% average annual GDP growth over the past four years has disguised many social problems, creating greater civil complacency than might otherwise exist. Thus the democratic gains in China have been mostly limited to the realms of local elections, internet usage and administrative and commercial law.
The effectiveness of the CCP as an organization has also limited the spread of democracy. The current CCP is relatively unified and has subsumed opposition through effective coalition building with domestic and international intellectuals, entrepreneurs, reformers and even formerly dissident groups. This strategy of co-option is public as well, reflected in the CCP's statements as a member of the WTO and as an active member of the U.N. Security Council. In terms of elections, the CCP has countered opponents of its non-democratically selected officials by perpetuating a more emphatic façade of meritocratic promotion (which, in truth it is adhering to, to a certain extent).
Of course, these CCP tactics have coincided with old fashioned brutal suppression of free speech, censorship, intimidation and bribery to maintain one-party rule. A healthy dose of anti-Americanism, nationalist propaganda and Russia's example of a democratized nation gone awry do not help matters much.
Ma's policy recommendations, accompanying more realistic U.S. attitudes concerning China's current direction:
1. Encourage the free flow of information on the internet in China with a focus on anti-jamming technology
2. More vigorously support the political right to organize in China and promote the work of existing groups like the National Endowment for Democracy
3. Publicly support Chinese dissidents and freedom fighters exiled or fighting for democratic ideals through executive branch statements
4. Engage in more proactive public diplomacy
Does the Future Really Belong to China? - [Prospect]
China's Stubborn Anti-Democracy - [Policy Review]
New China. New crisis - [The Guardian]