Throughout the Nineties, it has been said that the biggest Asian economic challenger against the US was China, not Japan. Japan had scared the Uncle Sam in the Eighties, but again, the slump it has been stuck into (financial and socio-economic crisis) for more than ten years couldn’t be compared to the thriving Chinese take-off. We’re indeed talking about a 1000 M US $ GDP gathered by about 1.3 billion people. The economic growth has reached an average of 8% over the past decade, which entails very good prospects. Or not. What I intend to do is to question the notion of miracle on two aspects: the explanation and the good side of it.
The conditions of the Chinese take-off were triggered with the death of Zhou En Lai and Mao Zedong, who had both kept the country’s economy under the inhibiting rules of Communism. It has taken decades before finally, in 1992, the market socialism was validated by the party. This long transition is remarkable -as opposed to the USSR- for it was economic oriented only. The Marxist infrastructure was indeed kept safe, with a unique party, the centralisation and control of information, the extent of red tape in everyday-life. Yet the modernisation of China is unquestionable, with for instance the development of cellular phones, Internet connections and as many shareholders as party members (70 million). This socio-economic modernisation was even crowned in 2001, during the Doha summit in Qatar, when China was ultimately accepted in WTO after years of harsh negotiations with the US and the UE.
However, the dark side of the Chinese model cannot be ignored. To begin with, we have to bear in mind the control of information as regards economic statistics. According to the American scholar T.G. Rawski, the Chinese have made great progress, but it is still risky to trust their figures. It takes the example of the 1998 growth, which was at first assessed at 9.6 %, but it really looked fake (it was a very bad year for Asian countries), so they decide to make it 7.8%. Meanwhile, they also reported a 1.6% squeeze on consumption and not so good exports, which is basically impossible. Bottom line is: China’s performance in terms of growth is surely higher that Developed Countries’ ones, but the difference cannot be regarded as overwhelming.
Moreover, we can boil down the Chinese economy to the coast, which accounts for less than 15% of the territory yet more than 50% of the GDP. Cities like Beijing, Tianjin, Shangai, Fujian, Hong-Kong and Canton benefit from special regulations, tax-free trade which make their roundabouts very endearing to international investments. The rest of the country is therefore a desert, in which people -farmers- live in oblivion of the Chinese development. In Sichuan, and even more in Xingjian and Tibet, the sanitary conditions are not very different from what they were back a hundred years ago. For instance, the mortality of the children is over 20%, as against 2% in the city. They are more taxed (tax ceiling is 28 against 111 ), they pay more for a lower education (70% of expenditure against 20%), and have to sale their goods at low-fixed prices. To summarize: the farmers finance the urban take-off, without having the right to move to the coast, which reminds us of Stalin. Besides, there is no doubt the switch to WTO will be a catastrophe for them, for they won’t benefit from the increasing investments, but they will have to face the increasing international competition -the joy of international openness.
I would tend therefore to describe China as a virtual power: a country which look powerful because it has all the factors for, but which is only a might-be giant. But to become one, there are two major obstacles to overcome. On the one hand, it has to avoid being torn apart by its growing problematic inequalities. On the other hand, it has to win the demographic challenge: 1.6 billion Chinese people in 2040 would represent a problem in terms of food (domestic production and imports), job (there is already unemployment), urban pollution and aging.
