eastasia.at
Vol. 2, No. 1, July 2003
ISSN 1684-629X
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eastasia.at |
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There
have been numerous discussions in Chinese and US American academic circles
about the future of China’s economic and political development. Among
other publications, two books have been in the center of heated debates.
The first was published by Random House in July 2001. The Coming
Collapse of China was written by Gordon Chang, who had lived in China
for over two decades and had been a partner in the international law firm
of Baker & McKenzie and counsel to New York law firm Paul,
Weiss, Rifkind, Wharton & Garrison. Gordon
Chang, who is a practical man not an academic, expresses his pessimism
about China’s future in his book. His main prediction is that China's
political and economic systems are headed for collapse. A collapse sparked
by Beijing's failure to address three hidden problems—a deteriorating
banking sector, rising unemployment and an underdeveloped agricultural
sector. Chang warns the West about a complete breakdown of the banking
system caused by some US$720 billion in non-performing loan obligations
and claims that foreign investors would make little profit because of an
industrial over-capacity in world markets. In an opening statement before
the US-China Security Review Commission the author said that the
“Communist Party of China [would] fall from power within a decade,”
and continued his speech with the assessment that: “China is not
prepared for accession to the WTO. Its state-owned enterprises and
banks are not ready for increased competition. The economy, in
reality, is stalling, not growing fast enough. The result is worker
and peasant unrest. The central government's finances are in bad
shape, and one day the People's Republic could run out of money. But
before that happens, the rulers of China will run out of something even
more precious: time.” In his book, Chang has much more to say about
China, but most is negative. The
second popular book on China’s future was written by Kenichi Ohmae and
first published in Japanese in November last year. Ohmae
is a well-known author. He has published over 140 books, many of which are
devoted to business and socio-political analyses. He has also contributed
numerous articles to major publications (e.g., Wall Street Journal,
Harvard Business Review, Foreign Affairs, New York Times). For
twenty-three years, Ohmae was a partner in McKinsey. He is the founder of
the “Reform of Heisei,” a citizen’s socio-political movement
established in 1992, to promote and catalyze the fundamental reform of
Japan's political and administrative systems. Kenichi Ohmae is an
academic. He studied at Waseda University (BS), the Tokyo Institute of
Technology (MS), and the Massachusetts Institute of Technology (Ph.D. in
nuclear engineering). In
his controversial book, The Emergence of the United States of Chunghua,
Ohmae makes two major predictions about China. According to him, China
will disintegrate into six
economic blocs - Liaoning, Jilin and Heilongjiang in the north-east, the
Beijing-Tianjin corridor, the Yangtze River delta area, the Shandong
peninsula, the Pearl River delta area, and Fujian in the south. Ohmae
stresses in his book that China has already started to split up into these
six pieces and that China is no longer a centralized nation.
Decentralization and economic prosperity is reality in China says Ohmae
and compares the current situation in China with federalism in the US. His
prediction is that there will be a Chinese federation within this decade
and here starts his second—even more controversial—prediction, namely,
that Taiwan would be part of this federation. According to him, the most
likely year of unification will be 2005, or 2008 the latest. Economic
factors are cited in his book as the main reasons for such a development.
Ohmae foresees severe economic crisis in the tiny nation-state, if Taiwan
failed to reach consensus with Beijing on the issue of unification by
2005. Who
is right? Ohmae
criticized Gordon Chang by saying that his book was based on outdated data
. He pointed out that several years ago he would have made the same
conclusions but economic realities had changed. The 1998 reforms
initiated by former premier Zhu Rongji would have made a collapse such as
the one described by Gordon Chang impossible. Chang responded to Ohmae’s
remarks at a speech held in Taipei earlier this year by referring to him
as “Mr. Everything-is-ok-in-China.” He once again spoke of a collapse
of China and urged the Taiwanese not to overlook the social and political
risks involved of doing business with China. Taiwanese business tycoons
share the view that both authors’ predictions are off the mark. Given
the fact that Ohmae’s book deals with the sensitive issue of unification
with China, his book faced far more criticism than Gordon Chang’s book
claiming that arch enemy China would collapse. In academic and political
circles, Ohmae’s claim that more and more people in Taiwan have positive
feelings towards China and his prediction of an early unification sparked
heated debates and was considered nonsense. Taiwan’s president Chen
Shui-bian, for instance, rejected Ohmae’s ideas by saying that Taiwan
would be Taiwan in 2005 and would never be another Hong Kong. Yin
Chang-yi, professor of Chinese history at Furen Catholic University,
looked deeper into Ohmae’s claim and emerged as one of the most
outspoken critics. In one of his recent publications in a local academic
journal, he strongly objected to Ohmae’s claim that China would
disintegrate into several autonomous entities and to his statement that
China had already decentralized. Prof. Yin acknowledges that Ohmae is good
at analyzing economic trends but doubts his ability to understand Chinese
politics and history. Yin is certainly right when he says that Ohmae’s
prediction is based on economic issues only and does not take political
and historic factors into account. His predictions, therefore, fail to
reflect the real world situation. Moreover, Yin argues that the Chinese
political ideal is to have one big nation: In Chinese history, there has
not been any political issue more important than unification under a
centralized government. Recent developments in Hong Kong seem to support
Prof. Yin’s view. When Hong Kong returned to Chinese sovereignty in
1997, Beijing was quick at emphasizing that the former British colony
would be ruled under the principle of “one country, two systems.” As a
matter of fact, however, the people of Hong Kong soon found out that such
a formula would never mean real autonomy. Things turned worse when Beijing
recently instructed the Hong Kong administration to amend article 23 of
the Basic Law, Hong Kong’s constitution, allowing state agencies to take
repressive action against anybody voicing concern about social, political
and religious issues. About half a million people took to the streets on 1
July this year in protest and their message was clear: As to politics,
there is no such thing as autonomy or decentralization in China. In other
words: “One country, two systems” has already been transformed to
“one country, one system.” In
a recent speech, former Taiwan president Lee Teng-hui warned the audience
of Beijing’s “one country, two systems” concept by citing Abraham
Lincoln’s view that a nation could not be both “half slave and half
free.” Lee is one of the most outspoken critics of unification in the
tiny nation-state’s political arena. He believes that closer economic
and political integration would only benefit business people but would
harm Taiwan’s middle class that tends to defend values of democracy and
freedom. There seems to be some truth in his assessment that further
integration with China could cause an equalization of factors of
production and prices between the two states that would eventually lead to
falling real-estate prices, interest rates and salary levels, and apart
from that drastically increase unemployment among local Taiwanese since
Chinese university graduates and workers would influx Taiwan. Lee’s
opinion thus contradicts Ohmae’s assessment. Although both books may not necessarily reflect “the real world situation,” they are worth reading and discussing, especially prior to next year’s presidential election—a period of time full of pros and cons surrounding a possible unification between one of Asia’s most democratic countries and one of the region’s most anti-democratic states.
Christian
Schafferer is an assistant professor in the Department of International
Trade at the Overseas Chinese Institute of Technology.
© 2003 by Austrian Association of East Asian Studies |