There are certainly ways to address these problems. The United States gradually developed tools to manage the negative effects of its own Gilded Age, by eventually allowing the rise of labor unions, laws to protect investment, efforts to stamp out official corruption, and eventually implementation of welfare and social security programs. Yet in each case, implementing these tools in China would require a fundamental change in how business is done. Labor unions are (naturally) controlled by the Chinese Communist Party, the rule of law in China is unreliable at best, and official corruption is a persistent problem on a scale that would even make Jack Abramoff blanch.
Most fundamentally, China’s ability to manage future problems will be hampered by its political system. The United States was able to (very gradually) adjust to the problems it faced because its leaders were accountable to a voting public that demanded reform. China’s leaders, however, aren’t directly held accountable by their people. While Chinese politicians routinely (and often genuinely) cite popular opinion as a driver in their decision-making, tying one’s position and job to regular elections has the effect of sharpening one’s need to represent the interests of the public.
The implications of these phenomena for China, and for the world, are staggering. Unlike with the democratic world, the Chinese people don’t have the ability to vent their frustration with free and fair elections. This has the effect of putting a lid on a political pressure cooker, forcing people to express their discontent through riots and difficult-to-censor microblogging. If something goes wrong, this pressure could explode.
Domestic problems in China, either caused by political discontent or structural economic difficulties, would have disastrous effects on the economies reliant on China as a source for trade, which basically includes every country on the planet. Economies around the world would fall, and history has demonstrated that countries during these difficult times can be unpredictable, at best, on the world stage.
China’s current leaders are acutely aware of the problems their country faces, and are trying to adjust economic growth and introduce policies designed to account for the problems created by unchecked economic growth. They have set a goal for slower economic growth, have called for increased development and investment in China’s poorer provinces, are considering policies to respond to concerns voiced by farmers and migrant workers, and are attempting to crack down on corruption. Ironically, China’s nominal communist ideology somewhat prepares China’s leaders for these challenges – after all, who understands the political challenges posed by burgeoning economic inequality and a rising middle class better than a Marxist?
America’s Gilded Age began after the national trauma that was the Civil War and a remarkable period of Reconstruction that saw significant internal development and stabilization. China’s Gilded Age began after the national trauma that was the Great Leap Forward and the Cultural Revolution, and occurred after a remarkable period of internal development and stabilization under Deng Xiaoping. The United States’ Gilded Age lasted for 16 years, ending with a financial panic in 1893 that turned into a depression, then a Progressive era that saw reform at home and adventurism abroad. It has been 22 years since 1989 signaled the end of Deng Xiaoping’s post-Mao Reconstruction and the beginning of Shanghai-style economic growth under the leadership of Jiang Zemin.
Ultimately, Beijing’s ability to navigate China’s staggering challenges will fall to the next generation of leadership in Beijing, set to come into power next year. There’s currently a debate roiling the halls of power in Beijing, with some calling for a retrenchment of unchecked economic growth and others hope to avoid the mistakes of their American predecessors and are calling for what amounts to a Chinese Progressive era. There’s no reason why China must follow America’s painful path out of the Gilded Age, and the United States should do everything it can to help ensure that China’s rise is peaceful and stable. Yet the past is not encouraging. Indeed, as Twain is often quoted as saying: history does not repeat itself, but it does often rhyme.
Abraham Denmark is Asia-Pacific Advisor for CNA Strategic Studies. He was previously a fellow with the Center for a New American Security and served as China Director for China Affairs in the Office of the Secretary of Defense.
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gregorylent
which are easier to solve, china’s problems or america’s problems?
i think china’s are easier.
Immanuel Goldstein
@John Chan: You remind me of the Germans before the First World War, strutting themselves before the world, waiting for the excuse to use their military to dominate the world. Please think hard before you do that. The Germans came to grief because of their ambitions, and so will the Chinese. You simply don’t have the resources to conquer all of Asia, and the sooner you understand that the better off we will all be. Work on your productive capacity, manufacture things the rest of the world wants and be a good little law abiding nation. If you go for militarist glory, you will come to grief.
Liang1a
Immanuel Goldstein wrote:
November 27, 2011 at 1:36 pm
@John Chan: You remind me of the Germans before the First World War, strutting themselves before the world, waiting for the excuse to use their military to dominate the world. Please think hard before you do that. The Germans came to grief because of their ambitions, and so will the Chinese. You simply don’t have the resources to conquer all of Asia, and the sooner you understand that the better off we will all be. Work on your productive capacity, manufacture things the rest of the world wants and be a good little law abiding nation. If you go for militarist glory, you will come to grief.
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The Germans came to grief because they were too small. Their population was probably smaller than the French and the Brits combined. And their technologies were not much more advanced. Add to that the population of the Americans and the Russians and it is obvious that the Germans were no match and doomed to fail. But the Chinese population is more than 1.3 billion. The population of S. E. Asia is only around 600 million or 1/2 of China’s population. China’s economy is near $7 trillion while the combined economies of ASEAN is around $1.8 trillion or less. Do you think China will lose? If China can shift to domestic development then its economy will be $30 trillion based on 90 trillion yuan and 3 yuan per dollar by 2020. Even adding Japan’s $6 trillion and India’s $2 trillion The Asian economies will amount to only around $10 trillion. So China’s economy by 2020 will be 3 times as big as the rest of Asia combined. And China’s military will be just as powerful. By 2040 China’s total GNP will be some $100 trillion when it achieves full productivity. By that time its GNP will be anywhere from 50% to 100% bigger than the rest of the world combined. And China’s military will be just correspondingly bigger and more powerful. So can China conquer the world? You betcha! But, of course, China won’t conquer the world. Why not? Because there is no need. China will be the richest and with its overwhelmingly powerful military will be the most secure. So why waste the time conquering poor people who would only be a burden on China’s wealth. And China can simply trade for the few resources it doesn’t have like platinum. And with China’s superior technologies it can replace many resources it lacks with domestically available substitutes. For example China lacks oil. But it can replace oil with electric cars that runs on batteries made from lithium and charged with electricity generated from renewable sources. And ultimately China can even get the resources it lacks from the oceans through nano-technology or by mining the asteroid belt where there could be literally mountains of platinum and lithium and any other minerals.
As I pointed out repeatedly, China’s future does not rely on selling its cheap labor but relies on achieving full productivity based on producing goods and services for themselves to consume. Only the Chinese can be rich enough to afford their own goods and services. All the arrogant assumptions of the West that China is fit for no more than being the West’s coolies will be proven wrong. The fact that the West has come to believe in their own everlasting superiority is a sure sign that they have lost touch with reality and have gone mad with their overweening pride. As the saying in the West goes, God first make mad whom it would destroy.
And you shouldn’t be haranguing John Chan because he absolutely believes in China’s inability to rise independently. John Chan is the West’s best friend in China. With more Chinese like him and they will give you China on a platter.
John Chian
@Liang1a,
Your overzealous faith in numbers is flawed. Thru Chinese history there are repeated evidence to prove that superior number does not count unless there is superior quality to support it. For the moment the quality in China is lacking, unless you do not live in China.
The spirit of Boxers in Qing was admirable, but they plunged China into disaster. Your projection is some time in the future; until China can get there, your projection is only a mirage. Based on a mirage to advocate close door policy, I am not sure where you are coming from actually. Everybody has a differnt opinion to achieve that same goal, your opinion is not the only way to achieve that goal.
You neither have the moral supremacy to dominate other bloggers’ right to expression as the imperial Westpac is trying to do, nor you have the monoploy of patriotism. Chinese bloggers are here not only to fight smearing against China, they are also here to fight aginst bigatory and totalitiran regardless where those bad elements are coming from. They are here to fight for liberty, justice and freedom of speech for the humanity as well.
A blogger said he smelled a rotten core, it seems he is right.
ari
John Chan, why do I feel that you are a very negative person? And not just negative but a defeatist and a pessimist? Please make an appointment with your psychiatrist or psychologist. Reading your thoughts depress all of us. Makes me wonder if you aren’t in the pay of the CIA.
a_canadian_observer
@Liang1a: Your plan for china is excellent!
Huang
@a-canadian-observer,
laing1a’s plan is a talker’s plan NOT a do-er’s tactic nor strategy.
The CCP will continue to be a great pain in you guys’…..for a long time to come.
lainga1’s ideas and suggestions could be useful at scaring some people and they can also invite hatreds toward China and the CCP which already responsible for so much self-inflicted pains to many(clowns)already.
a_canadian_observer
@Huang: Time will tell, buddy.
numbers are just that
Is it even possible for China to keep up their rapid growth for much longer? They are consuming such a large amount of resources, the Chinese people are underpaid, there is no welfare system, a large portion of the population is discontent, and they are facing huge challenges everywhere they turn, “You can build a throne from bayonets, but you cannot sit upon it for very long” -Boris Yeltsi how long can the Chinese government keep up the previously unthinkable rapid growth? China is a great nation with vast amounts of money, people, and power, but how they will handle both the responsibility, and the challenges that come with the two is yet to be known.
On a side note, why do you only add that Blacks and Latinos need to increase their productivity? I agree that the American people need to stop leeching off of the system, and need to work for what they have and want, but that is the entire population in a whole, not just the two above named MINORITIES in America, yes they are the larges minorities, but still not even close to being a third of the population.
Liang1a
numbers are just that wrote:
December 8, 2011 at 11:03 am
Is it even possible for China to keep up their rapid growth for much longer? They are consuming such a large amount of resources, the Chinese people are underpaid, there is no welfare system, a large portion of the population is discontent, and they are facing huge challenges everywhere they turn, “You can build a throne from bayonets, but you cannot sit upon it for very long” -Boris Yeltsi how long can the Chinese government keep up the previously unthinkable rapid growth? China is a great nation with vast amounts of money, people, and power, but how they will handle both the responsibility, and the challenges that come with the two is yet to be known.
On a side note, why do you only add that Blacks and Latinos need to increase their productivity? I agree that the American people need to stop leeching off of the system, and need to work for what they have and want, but that is the entire population in a whole, not just the two above named MINORITIES in America, yes they are the larges minorities, but still not even close to being a third of the population.
===================
Liang’s response:
Whether China can continue to expand depends on what it does. If it relied on exports then it obviously cannot. The reason is the rest of the world simply cannot continue to increase their imports of Chinese products. But if China relies on domestic development such as building hundreds of millions of affordable housings over the next 3 decades then it is perfectly able to continue to expand while increasing the productivity of the Chinese people. The problem is the West simply cannot imagine the vast potential of the Chinese people. But there is no reason for China to be unable to provide themselves with more goods and services than the Americans. All they have to do is to be as productive as the Americans by using the same efficient machines and tools.
I have good data on which to support my argument. If you look at the figures given below you will see that the blacks and the Hisponics are much poorer than the whites in America. And the incomes and wealth of the Asians are significantly higher than even the whites. Notice that the incomes of the Asians are $64,300. The incomes of the Chinese-Americans are even higher than the Asian-American incomes. Therefore to use the figure of $66,000 for Chinese-American incomes is actually conservative. The argument is very sound that Chinese in China can make the same per capita GNP as the Chinese-Americans can make in the US. Therefore, for the Chinese in China to make $66,000 per capita GNP and $100 trillion total GNP based on a population of 1.5 billion is very compelling. (Per household median income is the same as the per capita GDP as it happens to be.)
Also notice that the wealth of the blacks is only 1/20 of the whites in America. I have not concocted imaginary figures about underachieving black and Hispanic Americans. These minorities do significantly dilute the American productivity, incomes and wealth. They are a living condemnation of the American system. They belie the sanctimonious claims of equality and democracy in America. While China should become more democratic, America has no moral authority to condemn China before it can redress the racial inequality in America.
=============================
http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/
The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009.
As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149.
—————————
http://www.usatoday.com/news/nation/story/2011-09-13/census-household-income/50383882/1
Asian: $64,300
White: $54,620
Average: $49,445
Black: $37,759
Hispanic: $32,068
Chris
Not to be rude John, but why should the United States ever export useful technologies to China? Mediocre consumer goods are not worth exporting technology, if another country desires it either trade something useful for it or try and steal it via espionage. Understand though that this is coming from the perspective of a structual realist that values relative gains as opposed to focusing on absolute gains.
John Chan
@Chris,
I can’t believe you are opposing free market and capitalism, on top of that you are insulting the intelligence of all American businessmen who are importing/exporting with China to improve Americans’ lives, are you a cloaked communist?
Please be respect the patriotism of the Americans doing business with China, they will try their best to gain advantage over Chinese, by that extension they are gaining advantages for the USA, slandering them not looking after USA’s interests is not fair.
Chris
First off free markets mean that prices are determined by supply and demand, limited government intervention, and private individuals own the factors of production. That’s does not mean if government money is involved in the R&D of a technology that people can do whatever they want with it. Also you have to understand that China is also the closest thing to a peer competitor for the United States and one of its goals would be to keep China as technologically backwards as possible while still having trade relations. Just like the UK in the 1700s trying to prevent the exporting of textile technology as much as possible, countries are very protective of competitive advantages.
John Chan
@Chris,
Then do you believe there is a free marekt in the world? If there isn’t, does it mean the whole western free market capitalism is fake? If this foundamental value of western civiliztion is fake, what else of the western foundamental values are fake?
How can China be a closest thing to a peer competitor for the USA while China’s government is keeping China as technologically backwards as possible? Your logic is puzzling.
Chris
John, please read more carefully I said that the US could and in my opinion should try to prevent the export of technologies to China and attempt to keep it as technologically backwards as possible. Also, you need to understand that there is no such thing as a pure free market, the closest you can get is a bazaar or a flea market, almost all countries economies exist as mixed economies with private and public ownership of the factors of production. I do not believe that this renders the fundamental values of “western” civilization “fake” as you say. In the future resist the urge to use ad hominem attacks like saying I insult business people’s intelligence, it isn’t constructive to reasonable dialogue.
a_canadian_observer
@Chris: John was just trying a pre-emptive move to stop you from any criticism of china, just in case. :)
roland redoble
100T economy? Wow! My calculator cannot accomodate that figure- 1plus14 zeros in all! The total global economy is not even near that. China aspires to hit that. That is pure dreaming. If there is anything that globalization has taught us, it is the economic fact that THERE IS A LIMIT TO A NATION’S ECONOMIC ASCENT IN ABOSLUTE NUMBERS. Japan hit that at its current enomic zenith. It is doing everything to go beyond the present height without any luck. The US is trying to go beyond its current level still at a very slow phase in spite of its enormous technolgical advantage. Unless they will agressively impliment a new imigration wave for cash rich upper middle class it will continue to languish at the vicinity of the current level. China will eventually hit its limit. Using the figure of the US and the first world, probably it will hit a zenith of US$25T. Beyond that, the diviner in Beijing’s Central Committee must be seeing something new other economist have not yet seen. And a new exclusivist economic positioning will hamper the achievement of that US$25T ceiling. China cannot afford to be a stand alone economic powerhouse. NO COUNTRY CAN! And that is an economic fact.
John Chan
@roland redoble,
Questioning Liang1a’s overzealous projections is reasonable, but using Japan and mainstream economist capabilities as zenith is rather underestimating China’s capability. Your analogy is similar to the medieval Europeans insisting the earth was flat.
Liang1a
roland redoble wrote:
November 26, 2011 at 2:23 pm
100T economy? Wow! My calculator cannot accomodate that figure- 1plus14 zeros in all! The total global economy is not even near that. China aspires to hit that. That is pure dreaming. If there is anything that globalization has taught us, it is the economic fact that THERE IS A LIMIT TO A NATION’S ECONOMIC ASCENT IN ABOSLUTE NUMBERS. Japan hit that at its current enomic zenith. It is doing everything to go beyond the present height without any luck. The US is trying to go beyond its current level still at a very slow phase in spite of its enormous technolgical advantage. Unless they will agressively impliment a new imigration wave for cash rich upper middle class it will continue to languish at the vicinity of the current level. China will eventually hit its limit. Using the figure of the US and the first world, probably it will hit a zenith of US$25T. Beyond that, the diviner in Beijing’s Central Committee must be seeing something new other economist have not yet seen. And a new exclusivist economic positioning will hamper the achievement of that US$25T ceiling. China cannot afford to be a stand alone economic powerhouse. NO COUNTRY CAN! And that is an economic fact.
———————————————————
First a few facts. It is a fact that the per capita GDP of America is some $50,000. It is a fact that more than 1/3 of Americans are blacks and Latinos who underachieve the average American by some 35% or more. It is a fact that the Chinese-Americans overachieve the average American by some 30% or more. The per capita GDP of Chinese-Americans is some $66,000. China’s population by 2040 will be around 1.5 billion. With a per capita GDP or GNP of $66,000 equivalent China’s total GNP will be $100 trillion (300 trillion yuan with 3 yuan per dollar exchange rate on a per capita GNP of 200,000 yuan). This is just simple arithmatic and a logical consequence of the Chinese people’s productivity based on China’s advanced technologies. China is unique in its highly industrious people who have historically accounted for more than half of the world’s total GDP. And if America had 1.5 billion people then its GDP would be some $75 trillion in 2011, which is 1.5 billion multiplied by $50,000. And if the blacks and Latinos can increase their productivity by 35% or more then America’s total GDP would approach $100 trillion. There is nothing mysterious about it. It is only making people productive through the maximal utilization of technologies and keeping technologies advancing.
In the final analysis China’s ultimate GNP depends on whether the Chinese government can be smart enough to understand the relationship between productivity and standrad of living and can shift China’s economy from exports to domestic development based on the urbanization of the farmers to make all Chinese productive and at the same time advance China’s technologies to make the Chinese people more productive than the advanced countries. If the Chinese government can accomplish these essential tasks then China will achieve the $100 trillion GNP and more. First you must have the vision, then you achieve the knowledge, and the result will follow automatically.
Wow
Let’s see… you’re basing your numbers on some contrived average income of the typical “Chinese-American”? Instead of that, why don’t you use the average Chinese-Chinese? I think it’s rather unfair to make that kind of comparison seeing as the per capita income in China is $7,600. China would have to have to do some catch up in that regard. And you were also diluting the the results by throwing in the “underachievers” in the US. Are you saying that ALL Chinese in China will have income/performance 30% greater than the average American? Last I checked China is rife in corruption at all levels, has an overabundance of low-income families, and… “China’s advanced technologies”? Wonder where those came from…