Whither China?

24.05.2010

Fr Seán McNulty asks does the world’s future depend on China?

The Success Story
I live in Kunming, in China's southwest. This part of China is home to nearly half of China's ethnic minorities or "nationalities." All around me multi-cultural, multi-lingual, multi-ethnic, multi-religious China is alive and moving and bustling, beginning to take ownership of a can-do confidence. The traffic, however, is getting slower with several hundred new cars hitting the streets each day in this city. Nothing is perfect. However, one enormous, unprecedented achievement stands out: China has raised 900 million people out of poverty, according to Joseph Stiglitz (josephstiglitz.com), 2001 Nobel laureate in economics. In the current financial crisis, China's response, in the face of falling demand from the rich world for its exports, is to increase its already substantial spending on infrastructure with even more stimulus (RMB 4 trillion or USD 586 billion) to keep the economy moving, increase internal consumer spending and keep people in employment. People of China have massive savings against the rainy day when they will have to pay for hospitalization; part of the stimulus is earmarked to set up a national health insurance system so that these savings can then be used rather than hoarded. This will stimulate the economy further. China is well on its way to becoming the largest economy in the world.

The Bad News
The bad news is that in becoming economically successful, China is following the path pursued by rich countries of the world, such as those of North America, Europe, Japan, Australia and the Asian "Tigers." Bad news, because it has been and is ecologically disastrous and radically unjust. This economic path is destroying many eco-systems, warming the planet irreversibly, and impoverishing the majority of the people in the world. Industrial smog covers much of China; in recent years the huge Yangtze river basin has been breaking records for sustained summer heat. For perhaps 40 years now the UNDP (United Nations Development Program) has documented a constant 20% of the people of the world, the "rich world," consuming 80% of the resources of the world. This means that it is impossible for China, which itself has 21% of the people of the world, to become rich in the same way. Impossible also for India, Africa and Latin America. This means that the distribution of the riches of the world is radically unjust, since the majority of people are necessarily excluded. It also means that the development of the developed world is an unsustainable and irresponsible folly.

What Can China Do?
What is China, and indeed, all of the poor world, to do? What is clearly needed is a drastic re-organizing of economic life and a condition for this is equally clear: a drastic re-visioning of the human good. China currently shows little vision of its own and imitates rich countries such as the US. Its much-vaunted "reform and opening" beginning under Deng Xiaoping (d.1997) owes much to "Chicago School" economics. The existing rich countries, as the beneficiaries of the plunder of the world, show little evidence of any vision; they believe in unending economic growth and show no signs of making any serious change: they are prepared to tinker, to make cosmetic changes, but not to do anything to upset "business as usual." The powerlessness of many western governments, stemming from their control by the unelected and unaccountable leaders of global financial institutions and global corporations, is becoming more and more clear. An illustration of this is their failure to regulate the financial sector, despite the evidence of incompetence, if not criminality, on the part of those financiers who caused the recent crisis.

Two Freedoms
If freedom is the principle of authentic progress (progress as described by Paul VI in Populorum Progressio and going far beyond economics), then China may yet lead the world, because China has two freedoms that are in short supply. The first is a freedom from the false religion that grips much of the world: the worship of the gods of the market. In China, true believers in any ideology are scarce on the ground, there is a tradition of pragmatism, of doing what works, and so China is relatively free of the dogmatism that characterizes the practice of global trade and the thinking of global banks and financial institutions such as the IMF and the World Bank. The second freedom is that virtually alone among the governments of big countries, China is free for creative action. It is not yet controlled by the unholy alliance of global finance and global corporations, although it is heading in this deadly direction.

This double freedom, to believe differently and to act outside the orthodoxy which makes global banks and corporations rich at the expense of the peoples and economies of the world, provides an opportunity for China to take a leadership role in finding the creative responses that are needed. China has been creative in minor ways. It is alleged to listen to what the World Bank recommends and then do the opposite! It is investing in green energy projects. Wind turbines, solar panels and electric cars are all likely to be made in quantity soon in China. But it is now challenged to be creative in major ways, to take on board, as a minimum, the insights of Jane Jacobs in The Nature of Economies, to redefine what economics means and how economies may work so that there will be a future. It is challenged to leave behind the nonsense of the recent Copenhagen conference that cries "I won't stop destroying the world until you do" and start leading the world towards a sustainable future.

Fr Seán McNulty has spent the past twenty years in China.