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Writing in The Age on the last day of 2010 Peter Foster reports an observation by Hilary Clinton that China was effectively the USA’s banker. China has achieved its enviable balance of payments position by NOT selling off the farm. Every resource, farm product or manufactured goods sale returns a substantial dividend to home coffers and labour costs are low.   Interestingly Peter Christoff writing in the same publication yesterday pointed out that Norway does similarly. Resources are exploited by state-owned companies and the proceeds mostly stay local. One does wonder if there is a point here we might be taking! But back to China.
China is becoming a first-world economic power but one groping for political credibility. It is primitively ham-handed in its treatment of citizens and slow to realise the importance of the national development of domestic infrastructure. 
Let us digress slightly to say that Communism has failed. The only communist regimes left, China, North Korea and Cuba all rely on state-controlled force to continue. This is unsustainable as was shown by the prompt collapse of the USSR when the state put down the sword. Whether these three countries like it or not they will have to adopt more accommodating ways if they are fully to realise the potential of their populations. Without the willing and untrammelled support of the population an economy will not translate into a viable, stable country. Marks and Engels would have said that was exactly what they were espousing, unfortunately the practice has been less fortunate.
China is an autocracy where the supreme leader holds absolute power as long as he (so far always a he, we can discount Mme Mao) keeps other powerful apparatchiks on side. Clearly the leader takes advice on economic and development matters and probably on foreign affairs too but all who advise and co-habit with the leader must exercise caution not to antagonise. Absolute power all too easily translates into absolute behaviour.
Herein lays a fundamental weakness given the ease of communication in the 21st century. Face book, Twitter and the mobile ‘phone enable instant communication with the rest of the planet. Evil deeds can now be photographed or described or both and uploaded instantly. Transparency is being forced upon the Chinese leadership. How long they resist what they see as an incursion rather than the forward progress of civilisation will determine how long China remains a political and social backwater. China must see that the sort of repression which puts Liu Xiaobo (Nobel Peace Prize winner) behind bars for offences which in the West might earn him a jay-walking ticket makes the country an international laughing stock. We know about Liu because his brave friends keep us informed electronically. Jailing opponents is not a sign of strength, merely smallness of national and international nous.
Somewhere in the political distance lies a solution to what China sees as its ‘Taiwan’ problem. The answer surely lies in a Hong Kong style enclave where the former irritation becomes a trading and commercial conduit. Of course this will entail some serious bargaining rather than the bombastic denunciations which characterise present Chinese foreign policy towards Taiwan. Taiwan and the USA will also need to accept Taiwan as part of China and not some western outpost just off the coast of its obvious ethnic and cultural home. 
Military might is a much-loved metaphor for stability in absolutist regimes. America is almost guilty of the same sin but usually leavens the approach of the aircraft carrier with at least some attempt at diplomacy. China is building its military arsenal but is years away from threatening the capability of the west. Why continue? It will be a measure of China’s sagacity, and the rate of evolution of less autocratic government, as to how long it takes China to reign in its military spending to a defence only capability. Diverting military spending towards strengthening domestic infrastructure and trade will see the irresistible rise of a new world power, especially if the manufacturers begin concentrating on quality rather than volume.
Isolation is a standard defence tactic of those who do not want to be found out. China is very isolationist- try getting a visa for a private visit. There is no need for China to hide away. It trades with the west after all and whatever it has to hide we probably know about anyway. Of course there are large parts of China which are still quite primitive and perhaps embarrassing to a body politic which sees itself as modern. So fix the poverty at home, share more equitably, reduce social status differentials and the artificial importance which is attached to having better possessions and higher living standards. Make a good life for all the objective
Also fix the corruption. It certainly is not a good look when most commercial negotiations need oiling with complicated payola schemes. Corruption indicates commercial tardiness and greed for power and wealth to the exclusion of the Common Good. 
So what am I saying about China? Simply this, there is much to do at home before China can take its place in the real world as distinct from a world where military might and economic capacity are seen to be the yardsticks. In the real world a country needs a stable, contributive population which functions apart from fear and China has a bit to do to achieve this. Yes China may be America’s banker but the banking chamber is a bit tatty.
12 Jan 2011