March 2nd, 2012
in Op Ed
by Frank Li
This is the seventh article of the series: “Towards An Ideal Form of Government”.
The 20th century was clearly America’s. The 21st century will likely be either China’s or America’s, but which one? The Chinese seem unconcerned, but we Americans should be deeply worried, because we are the “defending champion”. Most importantly, if we relinquish our #1 position without knowing exactly why and how, there may be no end to our downhill slide, as China has proved in the past!
In order for America to have any chance in her head-on competition with China, we must understand both China and ourselves a lot better. In my 2/10/2012 post (What is America, Anyway?), I “thoroughly” explained what America is, followed by a longer post on 2/24/2012 (American Democracy: What Went Wrong and When?). Now, it’s time for me to “thoroughly” explain to my fellow Americans what China is.
1. China is a country with tremendous history (0001-1820)
America did very well for more than 200 years in her history. But that is “nothing” when compared with China, who mostly led the world for the first 1,800 years of its 2,012-year calendar!
One prominent symbol of China is the Great Wall. Most Americans can easily imagine the incredible feat of building it 2,000 years ago. (Need a wall between the U.S. and Mexico?) But did you also know that China invented many things that fundamentally changed the lives of us all? Four examples: papermaking, printing, gunpowder, and the compass. Can you imagine your life today without these great inventions?
Among all human civilizations of the past 5,000 years, China led more time than any other nation. However, as the calendar turned to the 14th century, Europe started ascending (again) via the Renaissance and the Industrial Revolution, while China basically stood still. In spite of that, by 1820, China’s world share of GDP was still, according to Dambisa Moyo (“How the west was lost”), at an impressive 32.2%, while America’s was a paltry 1.8% and Europe’s was 26.6%.
2. China descended from heaven to hell (1821-1976)
According to Moyo,
(1) By 1890, China’s world share of GDP was down to 13.8%, while America’s was up to 13.8% and Europe’s was up to 40%.
(2) By 1952, China fell to 5.2%, while America and Europe were both 30%.
If that wasn’t hell for China, tell me what is! Now, why did China’s world share of GDP degrade so precipitously? Foreign competition and failure of domestic policies!
2.1 Foreign competition
The West developed, both economically and militarily, while China languished. As a result, China ran huge trade deficits with the West. Worse yet, the West waged wars against China and China lost them all, from the Opium Wars with the British, to the various territorial wars with Russia, and to the First Sino-Japanese War.
2.2 Domestic failure
From 1821 to 1976, China had several revolutions, but none of them changed anything in essence: China remained poor, and became more impoverished after each and every revolution.
The worst damage was done in the communist era (1949-1976), during which Mao made three huge mistakes:
(1) He totally destroyed capitalism in China. As a result, China became dirt poor, so poor that a young man like me (born in 1959) thought of nothing but “getting the hell out of here”. I did, in 1982. Many who could did, too!
(2) He blindly embraced the Mother Heroine campaign by the Soviets and encouraged the Chinese women to have as many children as possible. As a result, the population ballooned, growing from 540M in 1949 to 953M in 1976 (China’s population), on the way to explode to 2B by 2000, which would be similar to being a poor family in Africa today with 20 kids – you will never see the light of the day!
(3) He destroyed China with several campaigns such as the Great Leap Forward, which led to the Great Chinese Famine, and the Cultural Revolution, which led to the greatest destruction of a nation’s culture and morality in human history!
3. China’s comeback (1977-2012)
Mao died in 1976. China changed by embracing capitalism, thanks to one individual: Deng Xiaoping (pictured right).
Deng was a dictator; not all dictators are bad for their countries! Deng used his power wisely for the good of the country: He laid the monumental groundwork for China, not only economically (i.e. capitalism), but also politically (i.e. a dictatorship without a dictator), which led to China’s overwhelming success today. Furthermore, China is poised to become the largest economy on earth by 2030.
What is the secret behind China’s success? Aside from embracing capitalism, China did two extraordinary things:
(1) Focused on the economy, without blindly embracing democracy like Russia did. Yes, this included the put-down of the pro-democracy demonstration in Tiananmen Square in 1989. Any doubt about the benefits of not rushing to democracy blindly? Compare Russia with China today - They are decades apart in the standards of living!
(2) Adopted a one-child policy. Otherwise, China’s population today would likely be double her present 1.4B. Any doubt about the benefits of population control? Compare India with China today - They are decades apart in the standards of living!
Both were highly controversial, not only at home, but also in the West. However, they proved to be the right things to do for China at the time for one simple reason: survival! Any doubt? Recall this: All 33 Chilean miners rescued after 69 days. The miners were ready to eat the dead for their own survival right before the rescue team reached them! It’s human nature to survive by any means, idealistic human rights notwithstanding!
Two photos below tell you a lot about China: 1975 vs. 2010.
Photo 1: Traffic jam in China in 1975 Photo 2: Traffic jam in China in 2010
Modernization has its drawbacks. But it’s a lot more comfortable to cry in a Buick (the most popular American car in China) than on a bicycle!
4. China faces huge challenges ahead
Every success comes with a price! Here are two prices the Chinese are paying for their success:
(1) Environmental pollution: China has become the world’s factory, with bad air and bad waters.
(2) Aging population: Although the one-child policy has been eased in recent years, the “damage” has already been done: China’s population will decline soon, with a severely aging population.
Another huge problem in China is government corruption: It comes from two sources, largely because of its communist past and newfound wealth:
(1) It’s inherent in a one-party political system. The challenge is to keep it under control, while improving the political system “towards an ideal form of government”.
(2) Despite the enormous growth of the private sector over the past three decades, the public sector still holds the bulk of the economy, from the natural resources (e.g. oil and coal), to the heavy industries (e.g. steel and telecommunication), to most of the land. If, when, and how to privatize them? One thing is known for sure: do not follow the path Russia took, which was to privatize everything overnight.
Given what China went through over the past 200 years, especially from 1949 to 1976, these problems are relatively minor. I am optimistic that the Chinese will solve them over time.
5. America and China
The Chinese are fascinated about America. They love American capitalism. They love American movies. They love America’s values of freedom and justice, although the Iraq War has severely damaged America’s image in the minds of many Chinese (and elsewhere in the world). They like English as a foreign language. They love NBA, and they are now crazy about Jeremy Lin!
Today, an educated Chinese (e.g. college graduate) knows a lot more about America than the other way around. Why? Because the Chinese media is very open to international news! Very importantly, the Chinese media-political complex does not lie about America! (Note: Chinese politicians lie about many things, but America is not one of them.)
Unfortunately, the American media-political complex in general has not been forthright about China, thanks to “brainwashing in America”! Moreover, many China “experts” in the West focus too much on the technical details (e.g. China and the Global Crisis and A Call for Beijing to Loosen Its Grip on the Economic Reins), without adequately understanding China (e.g. the essence of its political system and the culture). As a result, it’s not surprising that a recent poll shows that most Americans see China unfavorably. For the top-10 American misconceptions about China, wait for my article next week. Meanwhile, you may find these three articles enlightening:
China had her time in the sun for the first 1,800 years of our 2,012-year calendar. Then she sunk all the way to hell, with an incredible amount of human suffering and humiliation along the way. Now, China seems to have finally found her own path to success. Let’s welcome her, wholeheartedly with neither prejudice nor ideology, to the modern world!
Long lives capitalism!
About the Author
Frank Li is the Founder and President of W.E.I. (West-East International), a Chicago-based import & export company. Frank received his B.E. from Zhejiang University (China) in 1982, M.E. from the University of Tokyo in 1985, and Ph.D. from Vanderbilt University in 1988, all in Electrical Engineering. He worked for several companies until 2004, when he founded his own company W.E.I. Today, W.E.I. is a leader in the weighing industry not only in products & services, but also in thought and action.