China: Better Rich Than Red

Leashing the Economic Dragon

Shanghai skyline
Blue skies over Shanghai's Pudong financial district, Aug. 3, 2002 (Photo: Mark Ralston/South China Morning Post).  

The headline: “To get rich is still glorious.” Top of page 2. Bold letters. Nov. 11, 2002, edition. Not the Wall Street Journal. Not Forbes magazine. Rather, the China Daily, Beijing’s largest English-language newspaper. The story: Delegates to the 16th National Congress of the Communist Party of China in Beijing had approved outgoing President Jiang Zemin’s call for a “well-off society” that embraces the private sector, entrepreneurs, and their wealth.

To see this milieu of Marxism and capitalism already at work is to stroll through Shanghai, a port city of 14 million people—half of Canada’s population—squeezed into 6,200 square kilometers on the eastern seaboard.

Locals say Shanghai is a window to the future of China, the so-called head of the country’s economic dragon. It’s a future of unprecedented growth, an explosion of urban development riding the rocket of free-market reform, foreign investment, and the  aspirations of young workers who flock here from  the countryside.

Like the rest of the People’s Republic of China, Shanghai is a study in contradictions. Neon-topped skyscrapers cast shadows on tenement houses and slum alleys next door. Luxury cars jostle with bicycles and rickshaws at congested intersections. Sophisticates race to high-level business meetings; others spit phlegm and blow their noses on the sidewalk, despite a government crackdown on the practice.

Communist Party slogans compete for space with ads for Coke, Pepsi, Pizza Hut, and McDonalds. (Pizza Hut at first struggled to find a market for its pies because cheese and bread are so foreign to the Chinese palate. But the Hut, like the other darlings of the Western fast-food industry, has found its niche with the young, prompting new concerns among the Chinese about child obesity.)
And on every Shanghai street corner is a crane hovering over a new building. In fact, 17 percent of the world’s  high-rise building cranes are found here thanks to the  city’s CAD$61 billion [US$39 billion] investment in construction over the last decade. At the Shanghai Urban Planning Exhibition Center, visitors can gaze upon a massive 200:1 scale model of the city as it will appear in 2020. The vision is an endless sea of skyscrapers: a builder’s dream, an environmentalist’s nightmare.

And guiding this monster growth is the government’s economic mantra of “One Country, Two Systems,” perhaps the greatest contradiction of them all. For although its grip has loosened, communist rule is still very much a part of daily Chinese life, even in the ultramodern city of Shanghai.

Newspapers here read like bland government press releases and criticism is leveled only at foreign states. CNN is available only to tourists in hotels and Internet use is closely monitored.

Two Canadian friends of mine teaching in Shanghai were surprised to learn that a gay plot line in HBO’s popular TV series “Six Feet Under” had been cut from the version they watched in China.

Population growth is still controlled by the one-child policy. Abortion is a legal, popular, and sometimes forced means of birth control. In a bid to curb the Chinese inclination to abort females,  the government has banned the use of ultrasound scans  during pregnancy.

Can such intrusive government policies work when applied to the economy?
A man I spoke to, one of the 150,000 students to sit in protest at Tiananmen Square before the bloody crackdown in 1989, said China will collapse if a strong hand doesn’t guide its market reforms. “In 1989, we wanted change immediately. We wanted the market to open up,” he said of the protesters. “But China has a very long history....I realize now that change must be slow, must be controlled, or we will end up like Russia.”

Indeed, when other Asian countries focused on boosting exports, China built up its domestic industries and escaped unscathed from the 1997 economic collapse in the East.

But there are dangers to China’s explosive growth. If the government neglects the growing gap between rich and poor, or the displacement of its massive rural population—still in the Stone Age of agricultural production—serious social unrest will ensue. And if China’s 1.2 billion people get a taste for SUVs, air conditioning, and other trappings of its affluent neighbors in the West, the environmental costs alone will be staggering.

Slow, steady, patient, controlled: The Chinese government must keep a leash on its economy to avoid self-implosion. If done well, the new century will easily belong to the dragon. Too much, too fast, too open, and we’re all in trouble.