Global Policy Forum

By R. Nolan

This week, FPA speaks with Great Decisions author Bates Gill. Mr. Gill holds the Freeman Chair in China Studies at the Center for Strategic and International Studies in Washington D.C. His forthcoming book is entitled Contrasting Visions: United States, China and World Order.

TRANSCRIPT:

There is an interesting quote in your article from a top party official who says of corruption in China, "We must deal with it to save the nation. But if we deal with it we lose the party." How true is this in relation to some of the other challenges facing China?

It does cut across the whole range of challenges. The Chinese leadership is facing a kind of double-edged sword. On one hand, meeting the socio-economic and even political challenges that they face will demand a greater degree of openness, a greater degree of transparency, accountability and acceptance of responsibility, in order to gain the confidence of the citizenry, and also to implement the kinds of reforms and adequate responses to these changes in the first place. But in doing all that, it is going to have in some cases an undermining effect on the party itself, because it is going to call into question mistakes they have made in the past, and those they will certainly make in the future. It will force them to make tough decisions in terms of staffing and in terms of leadership. It is going to force them to take on a kind of meritocracy at the top, rather than leadership that is determined by other factors such as ideological purity and relationships, or what is known is China as guanxi. So they have to walk this tightrope between these two goods. It is a difficult choice between two good things, which makes it difficult. So far, I think the Chinese leadership has done a pretty good job, but I think these challenges are only going to increase. It is going to become a larger and larger set of tough decisions for the future.

The so-called 4th generation of leaders in China face the challenge of integrating capitalism and western style models of governance with communist ideology -- has reform gone smoother than expected?

It is still rather early to make a final judgment on that. One thing we can say is that the political transition itself to the 4th generation offers us some early hope that the Chinese Communist party has done what no other Communist party has been able to do since the early part of the 20th century, and that is to institutionalize a smooth transition of power. People knew for years that Hu Jintao was going to be the new leader in China, a sort of first among equals, as his predecessor Jiang Zemin was, and that has unfolded. Every indication points to the fact that this is going to remain the leadership structure for the foreseeable future. That is not democratization in action, but it at least a sort of political institutionalization in action, which holds out some hope over the long-term that the Chinese system will introduce a more formalized and predictable political process, and that is an important first step towards democratization going forward.

Obviously, China has one of the fastest growing economies in the world. What economic adjustments will China have to make to take advantage of its WTO status over the next decade?

One of the interesting aspects of this new leadership is the continuation of a kind of bureaucratic, technocratic elite at the uppermost reaches of the Chinese leadership system. We can have some confidence that the persons at the very, very top are people who are experienced in the sort of practical aspects of governing, many of them having been provincial leaders, for example, with many years of experience at upper reaches of government. As they face the economic challenges, they are in a good position to try to grapple with problems and come up with pragmatic results. All that said, they are facing number of interesting and difficult challenges, and I think in some ways of a magnitude that is greater than say, the first 20 years of reform. One of the major ones will be WTO accession, and some of the major economic issues that they will have to reckon with will be helping to assure that those "losers" in the WTO session process are adequately retooled, retrained and reintegrated into a more competitive domestic economic market. This change needs to be made particularly in the agricultural sector, which employs a very large majority of the Chinese people, and also the smokestack, state-owned enterprises, which will either be set afloat, or will go bankrupt. They may also, however, find ways to employ their redundant work force. Those are two big challenges. A third challenge that they will need to recognize as a looming problem and eventually grapple with is the growing income gap, not only across social strata between rich and poor individuals, but also across regions – between the very dynamic and steadily growing urban region on the Eastern coast of China, and its far Western region.

Some interesting statistics: According to the so-called Gini quotient, which measures income distribution and disparity in countries, the World Bank now indicates that China and the United States have reached about the same level, which is about 40. On the scale, a 1 is about where everyone in a country is economically equal, and 100 is where one person has all the money. Other countries, like Brazil, Guatemala, and South Africa are up at around 60. Most European countries are down in the 20-30 range. That is an interesting indicator of the growing income disparity in China. There is also data that urban disposable income grew in 2002 at about 14 percent, where as rural disposable income only grew in 2002 at about four percent. The Chinese leadership understands that they are going to have to work on this income distribution problem in a way that avoids social instability.

The outbreak of SARS and the handling of the situation by the Chinese government has brought about suspicion in the international community over health care in China. Of course, a similar and probably more devastating route was taken in regards to AIDS/HIV as well. What challenges does China face in dealing with these kinds of health issues, both in rural areas and urban centers? Is it equipped to handle such potentially devastating health threats?

This is not the great beginning that they had all hoped for. The leadership in China spoke very proudly about how these new folks were going to be creating a China that benefits all the people, and of course they have sort of positioned themselves politically as being men of the people – leaders who understand the needs of the common man – who are comfortable with the lao bai xing, or man on the street. Now, only one month into their tenure, we are seeing much of the old style management of problems in China, in which bad news is suppressed to the detriment of the common man, in the interest of political survival. This is not a great start. We can possibly argue that once the leadership was seized of the problem, and once international outcry reached a higher level, that we did see under the new leadership a rapid, though reactive, response, and we hope that this momentum will carry forward, and that these new leaders will once again burnish their hope for credentials as being more open and transparent to the people. We'll have to wait and see.

What about similar comparisons to the way China has handled its HIV problem?

There are a lot of parallels between the AIDS crisis and the SARS outbreak in China. Just to name a few, we saw early on a kind of denial and suppression of information, followed by often deliberate miscommunication and opacity, in terms of information, and then finally, because of international outcry and pressure, we saw some responsiveness on the part of the Chinese leadership. All of that is very similar to what has unfolded, and I would say is still unfolding in regards to the HIV/AIDS problem in China.

Another interesting similarity is a kind of continued reticence to fully engage the international community, the international donor and assistance community, especially at the local and provincial levels, to adequately and effectively deal with the spread of these infectious diseases. One contrast though, that I think is interesting to think about, is how quickly and readily the nation mobilized once spurred to do so – to react to the SARS outbreak. That's the kind of mobilization we've yet to see, really, with the case of HIV/AIDS.

You mentioned information suppression in terms of AIDS/HIV and SARS. As Internet usage and the popularity of mobile technology increases in China, how will the government be able to maintain the kinds of control over communications that it traditionally has?

Well, they have adapted. China already is rather effective in terms of Internet content access, by limiting the number of officially approved Internet service providers in China, and imposing very strict regulations upon them in the kinds of access subscribers are allowed to certain sites, but there will always be leaks. However, it has been a relatively effective approach. Other types of modern telecommunications technologies, such as cell phone usage, is another matter. China is the country with the largest amount of cell phone users, and that number seems to be expanding at a 10 or 20 percent pace per year. That is going to be one area where I think the government will have an enormous amount of problems if they are trying to control the kinds of communications over those lines. What I think has been true even in imperial times and up to the very present in China, the most effective tool the government has in China to prevent what they would deem illicit, illegal, or troubling communications is self-censorship – that is to say that individuals are well aware of potential punishments and are cautious and self-censor themselves.

U.S.-China relations today are largely focused on cooperation in the American-led war on terror, which President Bush has suggested includes the battle against weapons of mass destruction. Obviously, the U.S. is seeking as much help as it can get on the Korean Peninsula dealing with North Korea. How far will China go on this, as its focus remains on domestic growth and transition?

China is really in a difficult position in regard to the current crisis with North Korea. On the one hand, they really want to do everything they can to avoid instability in the region. I think that is priority number one for them. They want to see North Korea stay relatively stable, avoid a refugee crisis coming into China, convince the North Koreans of the evolution of its political and economic system to a model more like China's, and eventually, a peaceful integration of North and South Korea – and finally over the long-term, a Korean Peninsula in what China sees as a natural sphere of influence. None of that is going to happen if war breaks out on the Korean Peninsula, or if a conflict unfolds in a way that reestablishes and reasserts a stronger American presence on the Peninsula that could dictate or shape outcomes there – politically, economically, and militarily. So China has to approach this cautiously. On the other hand, its number one bilateral trade partner is the United States, and China needs to do everything it can to assure a continued smooth and productive and constructive relationship with America. What is its answer, given this conundrum? It's urging continued quiet diplomacy. Behind the scenes pressure on North Korea to be more compliant and more willing to back away from its nuclear weapons program, at the same time urging caution upon the United States, encouraging that this be a diplomatically solved problem, and that we move ahead as much as we can in a peaceful manner. The problem for China is that North Korea doesn't seem to want to play this game, and China is not able to exercise its influence as strongly as it would like, and it is becoming increasingly frustrated with its neighbor. Should North Korea sort of instigate a crisis, and the United States is compelled to respond in some military way, whether it is sanctions or even overt military action, this would be a devastating set of circumstances for China. However, at the end of the day, while China may not support American coercion or military action in North Korea, it will not actively oppose, and in the end will sort of be on the American side of things.

What about some of what you call the "perennially difficult issues" that once consumed U.S.-China relations, such as human rights, Taiwan, and missile defense? Will these stay on the backburner for now?

I think we can expect some of these issues to become a bit more pressing, but largely on the backburner for the time being. Proliferation is likely to be a problem that is going to keep popping up, especially in cases that are still ongoing, that China can be identified with to countries like Iran or North Korea, or others who have been termed within the axis of evil. Taiwan is going to become a more pressing issue as their elections approach in March of 2004. I think we will be hearing a little bit more language coming from Taiwanese politicians regarding the cross-Strait relationship, about the need for Taiwan to have a more independent international stature. That interest has the potential to stir up the pot in U.S.-China-Taiwan relations. The United States decided last month not to pursue an annual resolution in the UN Human Rights Commission condemning China for its human rights record. That attempt has perennially failed on the part of the U.S., nevertheless, it has always been a kind of thorn in the side of the relationship, and this year, the United States decided not to pursue it. So that is an indicator that even the human rights set of issues is again being pushed a little bit to the back in order to pursue areas of common interest.

You write in your Great Decisions article that despite all of the complexities of the U.S.-China relationship, there is cause for a "cautious optimism". Do you still think this is true?

Yes. I think we can be optimistic about the future. We are beginning to see, particularly internally on issues like SARS, where our two countries really do have mutual interests in trying to ensure that China's socio-economic transformation goes relatively smoothly, and in a way, we can hope in the United States in a way that fosters positive social, economic and political change there.

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