Watching Tim Geithner, the US treasury secretary, in Beijing last month, it was easy to be struck by how times have changed. Most visiting American dignitaries not long ago seized the opportunity to harangue the Chinese over human rights, or over their undervalued currency that was unfairly helping export sales at the expense of competitors. Geithner instead beseeched the Chinese to keep buying US government bonds, as they have done by the hundreds of billions, or else sink the US by impairing its ability to raise money. He went out of his way to reassure the Chinese that the steps taken by the Obama administration were going to work to restore growth.
The collapsed global economy stands as a damning criticism of unfettered capitalism and the light regulation that would seem to separate the West from countries such as China. As if that were not a big enough blow, the West has also taken to asking China for far greater assistance with a host of other problems, from North Korea to the environment. China isn’t on the ascent any more; it has risen.
Goldman Sachs has predicted that China will overtake the US as the world’s largest economy in 2027. Its growth from 100 years ago, when it was a peasant economy being comprehensively exploited by foreigners, has been extraordinary. But China’s insignificance on the world stage was but a blip between hundreds of years of influence until about 1850 and hundreds more years of influence to come.
How will the newly restored China look, and how will other countries interact with it? Will the West be undermined fatally, or will the astonishingly successful Western models for the economy, state and society be adopted by China? No one knows the answers to these questions, so that makes it an alluring subject for writers. We have had, among the most lauded of recent books, The Writing on the Wall by Will Hutton, the Left-leaning journalist and economist, and China Shakes the World by James Kynge, a former Beijing correspondent of the Financial Times.
Those titles were scary enough. Now comes Martin Jacques with When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World. Jacques is the former editor of Marxism Today, co-founder of the think tank Demos, Guardian columnist and visiting academic at numerous institutions.
Jacques’s thesis stands as a rejoinder to US triumphalism at the collapse of Communism in Europe. It is an implicit attack on Hutton’s views that Enlightenment values and institutions – competition, elected government, balance of powers, promotion of inquiry, openness, an independent judiciary and press – are a requirement for China to continue its current success. Where Hutton sees huge contradictions in China and troubles ahead, Jacques says “Western hegemony… will come to an end” and sees China continuing to prosper. Moreover, Jacques imagines that many other countries in China’s orbit will be pulled into China’s way of doing things, turning away from the methods advocated by a dying West.
Jacques agrees with Hutton that something has to give. He understands that China cannot grow at its current rate without consuming all the world’s resources. It cannot continue to grow on exports alone and it must improve its productivity and capital efficiency. It must tackle social inequality and foster consumption at home, and to do that, it must build a welfare system that enables poor Chinese to take money out from under the mattress.
Why don’t the Chinese consume? The only statistic you need to understand this is that the Chinese state currently accounts for just 16 per cent of the country’s health care expenditure. In the US, the state accounts for 44 per cent and in western Europe the figure is greater than 70 per cent. China has reined back in an incredible manner from the days of Mao, when all health care spending came from the state.
Jacques is right that there is nothing inevitable about China prospering only by becoming like the West. On giving its people the vote, for example, he points out that almost all developing nations – India is the exception – had something far less than universal suffrage. Britain was already developed before most people had the right to vote.
But his book would carry considerably more weight if it were not so sloppy and selective in its presentation. There are frequent errors and apparent inconsistencies. Some are minor, though they detract from credibility – Jacques says that Zambia’s last presidential election was in 2006 instead of 2008 – but most are important since he is building a case by cherry-picking the evidence.
To explain how East Asia can be faster and more innovative than the West, he says the Western fashion industry is happy to turn out two collections a year while Japanese designers seem to bring out new clothes all the time. But it was the Western companies Inditex – which owns Zara – and H?&?M that pioneered “fast fashion” and often change their offerings weekly. Meanwhile “high” fashion all over the world, including Tokyo, remains on a twice-yearly cycle.
Jacques says of the East that the only constant is change, marvelling at how the new parts of cities can spring up with no reference to the past. Four pages later, he is talking about how China’s deep sense of identity, derived from its long, rich history, stands in contrast to some Western attitudes. He spends too long confusing cultural differences with state and economic structures.
He is disingenuous at times. He says the Chinese have helped to pressure the Sudanese into accepting international peacekeeping in Darfur without mentioning, as James Kynge does, that China is the biggest supplier of arms to the murderous Sudanese regime. Jacques just says separately that the West has done worse things in Africa. He says there hasn’t been an arms race in East Asia, yet China announced a 14.9 per cent increase in military spending this year, Australia wants new warships, India and South Korea are building up their navies, Japan has signalled it may follow and North Korea is testing nuclear weapons and firing off missiles.
Some of these and other problems could no doubt have been solved with more rigour and explanation. But their presence is a pity, because the book’s general thrust is undoubtably correct, even if it would seem profound only to the most diehard neoconservatives.
When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World
by Martin Jacques
550pp, Allen Lane, £25
Buy now for £23 (plus £1.25 p&p) from Telegraph Books
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Originally Posted by celtabria
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