SHANGHAI
I have seen the past and, once again, it's working.
What's happening in China today resembles nothing so much as the explosion of economic vitality that created the industrial Midwest in the 19th and 20th centuries. It's all here -- the energy and drive, the fierce determination to succeed, the bad jobs and big money, the pollution and corruption, the industrial titans and robber barons, the ambition and coarseness, the raw commercial power, the new cities and changed lives, the huge movement of people all seeking an economic toehold.
Will it work? Who knows? It worked in the Midwest 150 years ago and created an industrial economy that literally dominated the world for a century. Now, in the global era, this economy has moved east, to a new and thrusting Asia, centered on the immense productive machine called China.
There are many reasons why China's drive to global economic dominance could be derailed, and we'll get to those in a moment. But for now -- so far, so good.
This posting and the next will try to sum up my impressions from two weeks in China, traveling with students and professors from Illinois Central College in Peoria. The students themselves will stay in Shenzhen for three months, studying Mandarin and learning about business in China. ICC is a two-year community college and most of the students are the first in their families to make it past high school. But their lives will be spent in the global economy. If China does indeed dominate that economy, they are getting a global education of the most practical sort.
This comparison of the 19th century Midwest to 21st century China isn't exactly original. Chongqing, perhaps the fastest growing city in the world, deliberately compares itself to Chicago, which may have held that title a hundred years ago. James Kynge, the British journalist and author of China Shakes The World, writes that Chicago in the 19th century "was to the explosive growth of the American West what Chongqing, in many ways, is to the renaissance of China in the 21st century."
Both Chicago and Chongqing (and by extension the Midwest and China) were "centers for commerce where ambition eviscerated risk," Kynge writes. "The drive behind both places was and is the vitality of a population that migrated to live and work there.....
"New technologies -- in the U.S. a century and half ago it was railways, in today's China it is the Internet and other digital media -- are creating quantum leaps in productivity. International flows of capital and expertise -- from Great Britain to the U.S. in the 19th century, in modern times from the industrialized nations to China -- are lubricating the process of change."
The parallels don't end there. The American steel industry was based partially on the copying of the Bessemer process from Britain. In steel and other products, America became a low-cost producer that drove much of its European competition out of business. If we complain today about Chinese patent theft and rock-bottom wages, we're only beefing about them doing now what we did then.
Most Americans have heard about all this or read about it. But it's something else to see it up close -- the sheer size and profligacy of China, its vitality and ambition, the sight of the world's biggest nation becoming the world's strongest nation.
China simply has more people, 1.3 billion of them. It has more schools, more students, more new airports, more of almost everything. It has more big cities, 160 of them over 1 million people, with more being built now: that is, new cities of more than 1 million are literally rising from rice paddies. Shanghai, the biggest city, turned some farmland along the Huangpu River into a new financial district called Pudong that is nearly as big as Chicago, and did it all in about 18 years. For the Olympics, Beijing built not only its Olympic Park but a new airport and six new subway lines. The main highway between Beijing (17 million people) and the nearby industrial city of Tianjin (12 million people) is getting a little rutted, so China is building another parallel main highway between the two cities. Chicago has skyscrapers, but China has more: Shenzhen, the lusty and graceless city where the Peoria students will study, is 30 years old and has 13 million people: from the 69th-floor observation tower of a skyscraper, a visitor sees whole forests of 25-story buildings marching off in four directions, eventually disappearing into the pollution.
China has great wealth and great poverty, side by side. I drove from a highly automated nylon factory near Fuzhou through a primitive village to the sparkling Fuzhou airport: basically, we traveled from 2011 to 1950 and back to 2011 in about 10 minutes. Highways are jammed with cars, buses, trucks, pedicabs, motorcycles, bicycles and pedestrians -- anything that moves: I saw a man riding his bicycle the wrong way down an expressway in Beijing while talking on his cell phone. Global names like Caterpillar, Abbott, John Deere, BMW, Sony, you name it -- they're all here: so are millions of mom-and-pop shops selling everything from noodles to knock-off clothing to fire extinguishers to pineapple slices on a stick.
All this is overwhelming, so it's easy to be overwhelmed. Ever since Mao conned an American author named Edgar Snow, China has been misleading foreign visitors. A visitor who spends two weeks in five cities needs to deploy his generalities and conclusions with a certain modesty. But coming from a country that has lost its way, and especially from a Midwest that so far is losing the global race, it's hard to regard the winners with anything but awe.
So some caveats are in order. China has just passed Japan to become the world's second biggest economy and, if it keeps growing, could pass the United States in 20 or 30 years. But will it get there? And if it does, will it dominate the world economy, as America dominated in the last century?
My bet is that, yes, the 21st century is the Chinese century, that we've living now through one of those civilizational changes that happens only every other century. But Chinese officials and scholars themselves are candid on the potholes on the road to the Chinese century. Here are some of them:
China has four times as many people as America, which means that when its economy is as big as ours, its average standard of living will still be only one-fourth as high. One Chinese scholar told me that this standard of living will never reach American levels. The reason, he said: "The planet." What he meant is that there just aren't enough resources in the world -- starting but not ending with oil -- to permit the Chinese to live like Americans.
This resource shortage could stop China in its economic tracks. The country doesn't produce enough of most of what it needs -- food, oil, natural gas, metals and much else. Already it is investing huge sums in Africa and Latin America to secure access to raw materials. This appetite can only grow, shoving up global prices and, as as a result, raising the bill China must pay for its own development.
The environmental damage done by the Mao regime and by the breakneck development since then is nothing short of catastrophic -- not just a little pollution, but destruction of forests, poisoning of the land, even the virtual drying up of the Yellow River. Much of northern China, which includes Beijing, lacks enough water. In our development days, America gobbled up land, water and raw materials -- but at that time, we had those resources to waste. China doesn't.
China has been growing at an average annual rate of some 10 or 11 percent for 20 years. It seems impossible to maintain this rate into the indefinite future. In its new five-year plan, the Communist Party proposes to slow this growth to about 8 percent and to concentrate more on the domestic market, raising living standards, instead of flooding the world with exports.
But can it maintain even this 8 percent growth? The Communist Party bases its legitimacy, indeed its right to rule, on economic development. Even "normal" growth of, say, 3 or 4 percent is virtual stagnation in a county with a growing population, moderate inflation and rising expectations. Many experts feel the Party is terrified of a popular revolt unless it keeps delivering the economic goods.
Corruption is rampant, mostly at the provincial and local levels, and the rule of law is weak. Many experts feel corruption lops some 3 or 4 percent off China's annual growth. China today, like Chicago in its boom years, is a wild west where anything goes. But at some point, this corruption has to be tamed, for economic, political and social reasons.
Americans assume that a modern capitalist economy and a Communist political dictatorship cannot coexist -- that either a new middle class will demand that the Party cede power or that the Party will choke off economic growth to keep its power. This may happen but, again, so far so good. What's happening in China now -- a vibrant market within a Communist political system -- is unprecedented, but it seems to be working.
It's seldom mentioned, but I couldn't help noticing that China may be sacrificing quality to speed. Shenzhen is both new and spectacular, but already it looks older than its 30 years. In the Olympic Park in Beijing, the Water Cube built for aquatic sports is already stained and leaking. A recent scandal in the railway ministry has raised doubts about the sturdiness of the roadbeds of some of China's famous high-speed trains. If the new China is jerrybuilt, it faces breakdown sooner rather than later.
Perhaps China's biggest future problem is psychological -- almost religious. What are China's values? What does it believe? Does it have a long-range goal other than to get rich? And is this enough? The United States has always been a place where people came to make a dollar, but its values -- of freedom and democracy -- transcended money-grubbing. Even the Soviet Union wanted to create "the new Soviet man." But what does China want?
This is no idle question. No one, not even the Party, claims that the Chinese today believe in Communism. But nor is there any sign of a religious revival. Some dissidents want democracy, but most people seem to be satisfied, at least for now, with a higher standard of living or the promise of a better life.
This is not the same as the kind of lazy hedonism that disfigures so much of American life. If the Chinese are fixated on money, they're willing to work hard for it, sometimes in Dickensian conditions. But it's a mystery if they're fixated on anything else except money. Having lived through the horrors of the Mao era, and especially the Cultural Revolution, the freedom to make a decent income and live in stability seems to be enough.
"Living standards have risen remarkably," a Beijing scholar named Liu Liping wrote, "but without parallel enhancement of values and social morals. If anything, there is degeneration. Money worship prevails, fuelled by insufficient education. Rule by man is rampant, with a weak sense of legality among the populace. Social security is weakening......Can a country with an impressive GDP that is completely devoid of soft power be called a superpower?"
Liu's point is that great powers impose their values on the world, as did the Europeans and Americans in their day. If China is to impose its values, just what might those values be?
To sum up, China is big and rich and is getting bigger and richer every day. If current trends continue, it will replace the United States as the world's dominant nation. All this raises more questions than answers, especially: will these trends continue? Right now, it seems unstoppable: certainly, I've never seen anything remotely like it.
Are China's rise and America's decline inevitable? Can the United States do anything about this? More to the point, does the United States have the will to do anything about it, or is it simply betting that China, like Japan and other would-be powers before, will blow its big chance?
The next posting will wrestle with these issues.
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