A Great Dragon Surges Toward Modernity : Accelerated change is having huge impacts in China, both good and bad

China’s march toward modernization continues at a dazzling pace. Five years ago a narrow two-lane road, crowded with horse carts and people, was the path out of the Beijing airport. Today there’s a modern, multilane toll freeway. China’s make-over goes on literally around the clock, with many thousands of construction workers fashioning new highways and perched atop bamboo scaffolds knocking down old buildings or putting up new ones. China is embracing Americana from old Shirley Temple movies to the Hard Rock Cafe. English is in, Russian is out.

Yet with China’s rapid transformation to a “socialist market economy” come undercurrents of instability. Millions of people are on the move in search of better-paying jobs as market forces disrupt a system that guaranteed lifetime employment. Millions more are jobless. Inflation is running at more than 25%. Corruption is on the rise. There have been sporadic incidents of worker and peasant unrest. Children begging at the train station in Guangzhou and on the main street of Beijing reflect the unintended consequences of reform.

If Beijing succeeds in the incredibly complex task of managing a transformation, it could become a new model of economic development. Should it fail, the world’s most populous nation could fall into chaos, with horrifying international implications.

With China in flux, the United States must keep Beijing engaged in a constructive and broad-based relationship. When President Clinton severed the link last May between human rights and renewal of China’s most-favored-nation trade status, the move was controversial and unpopular but was correct for the long term: U.S.-China relations cannot be assessed through the narrow prism of human rights alone. The relationship must embrace issues that include security, the environment, trade, immigration and drugs.

Like it or not, the Chinese interpretation of human rights is to feed, clothe, house and employ its people. The numbers are daunting despite a one-child-per-family policy since 1979. A population of 1.2 billion in 1995 and of 1.3 billion by the end of the century is predicted. About 80 million Chinese subsist below the poverty line now. The well-being of the nation’s citizenry is critical to stability.

Meanwhile, the Chinese enjoy greater personal freedom and mobility than in the past. They can seek jobs in new places (although they cannot permanently reside in a new city without permission). More than a quarter of a million Chinese are studying abroad, mostly in the United States. More households have TVs than refrigerators; foreign programming and news can be seen now, even though television remains state-controlled, as do newspapers.

To date, Beijing has managed most of the economic realignments through incremental changes. The central government has allowed the provinces to establish industrial zones and special economic development zones. Joint ventures with foreign companies have been encouraged. This has resulted in some odd combinations--like a firm that produces the pricey designer clothes of Escada and builds power plants too.

Bigger, more disruptive changes may come as Beijing moves next year to remake inefficient state-owned enterprises, of which a third to a half are losing money. The government will also have to tackle bigger challenges, including creating a new monetary system and revamping its tax system. Conforming to international legal, financial and trading standards will be necessary in order to restore Shanghai as a major international financial and banking center.

China now is spreading across the Pacific. The state-owned Xinmin Evening News in Shanghai has a Los Angeles office and this month began distributing a U.S. edition via satellite. A Beijing restaurant that specializes in Peking duck opened an outlet in Los Angeles.

When senior leader Deng Xiaoping, the architect of economic reform, traveled to southern China to invigorate change in 1992, he reportedly said it was pointless to argue whether something was Western or Eastern. He said there is now a common world civilization of which China should be part. It most decidedly is.