Facing Up To the Real China Problem

President Bill Clinton’s decision last week to impose economic sanctions on the Burmese junta has exposed the incoherence of U.S. policy toward Asia. Under the 1996 Cohen-Feinstein bill, Clinton had to announce sanctions if the Burmese regime continued in its human-rights violations. But punishing Burma was a new Clintonian evasion: It amounted to choosing not to choose. For the president has expressed no qualms about human rights in dealing with Burma’s patron and a far greater violator of human rights--China.

Far from deflecting attention from its refusal to link human rights, trade and strategic issues in dealing with China, the administration’s focus on Burma could well have the opposite effect. The only rationale for isolating Burma, while courting China, is political expedience. Clinton’s equivocation only heightens the debate over how to deal with China.

Unfortunately, this debate has been sterile because it has focused on Chinese foreign policy to the exclusion of domestic policy. The crudity of the dispute between what might be called “engagers,” such as Henry A. Kissinger, and “containers,” such as George F. Will, is easily explained. Both sides are viewing China through antiquated Cold War spectacles. Engagers in the Clinton administration believe they can pursue a new detente in which economics transforms China into a Western-style democracy. Containers believe China can be subverted through relentless military and economic pressure.

Both are wrong. China’s internal economic and social problems suggest its strength may be exaggerated. No doubt China’s leaders would like to transform their country into a superpower, but the real question is whether they can accomplish this. A distinction must be made between Chinese intentions and capability, between rhetoric and reality. The real China problem may not be that it is becoming a superpower, but that it is headed for disintegration.

To tour the vaunted southern region of China, where most of the new economic activity is taking place, is to realize that a kind of Potemkin capitalism is emerging. In Shanghai, Suzhou or Nanjing, life has already been radically upended from a decade ago. Shanghai, virtually a showcase of change, consists of newly built skyscrapers and highways. The Harvard-educated technocrats who preside over the metropolis run roughshod, tearing down a city block a week, evicting locals and putting them in concrete bunkers on the city’s outskirts.

But even the stupendous transformation of Shanghai cannot disguise the fact that, for the much of the population, life has not improved. It has gotten worse. U.S. officials in Shanghai estimate some 5 million transients live in the city, a cheap source of labor that helps explain the building binge, though there is already a tremendous glut of office space.

After traveling through central China, it is not hard to see why tens of millions of transients are flocking to the cities. Unlike Russia, China never made the transition from rural to industrial economy, let alone a post-industrial one. These transients are a mounting problem for Beijing--the fear is they may eventually become a violent, uncontrollable force if the booming Chinese economy slows down.

The ultimate nightmare for Beijing is the emergence of a Solidarity in China that threatens the claim of the party to represent the workers. Given the gross disparities in wealth in China--from the hundreds of thousands of people living in shacks in Shanghai to the millionaires whose Mercedes clog the city streets--the potential for social combustion can hardly be exaggerated.

There are other problems. Despite huge growth, the national economy remains hostage to state-owned enterprises awash in red ink. Unemployment, already a problem, would be further exacerbated by widespread layoffs of state employees.

Significant tensions also exist between city and countryside. A sort of gold coast is emerging in cities like Shanghai, but inland rural areas are not benefiting from industrial progress. Any visitor to the countryside quickly realizes little has changed: Peasants rely on oxen and tend rice paddies with backbreaking physical labor. The only refuge for many peasants is heading to the city.

Compounding Beijing’s problems is the fact that it has trouble collecting taxes from the disparate regions of China. Particularly in the south, governors of various provinces turn over only a portion of their receipts to Beijing because they are reluctant to subsidize their poorer northern cousins. The government recently passed Draconian laws on official corruption, but they will probably prove ineffectual. Foreign businesses, from Germany to Singapore, have to bribe officials in order to get permits to employ workers and construct buildings.

So pervasive is the corruption that even while walking through the beautiful new Shanghai art museum, I heard a wealthy German businessman fuming to his aide about paying off Chinese officials: “When you’re making money here, they steal it from you by exaggerating your profits, but if you’re losing money, they do nothing for you. You have to stop them from the outset, or it’s hopeless.”

Then there is the question of the Chinese dependence on grain imports, energy and raw materials. China is already importing grain from the West. Poor crops in the future could result in famine, rumored to be taking place in some Chinese provinces, or force the regime to divert precious hard currency to more imports. China’s oil consumption is also soaring, from 3 million barrels a day to a projected 6.6 million by 2010, which could force it to import as much as 4 million barrels a day.

The rise in energy consumption in China has further ravaged the environment. By the end of the day in Shanghai or Changsha, my face was covered with soot. Many women wear surgical masks as they bicycle through the clogged streets of Suzhou or Shanghai. The cost of pollution in medical care and to farmland in China will be exorbitant.

China also faces problems on another front: nationalities. The propaganda is everywhere in China claiming a kind of post-modern single Chinese nationality. But bombings in Beijing and uprisings in Xianjiang show that, while China, unlike Russia, has a majority Han Chinese nationwide, the Muslin nationalities under its control are anything but quiescent.

China is not turning, as the engagers would have it, into a Western-style democracy. The far more likely prospect seems to be that, for the Communist Party, China is becoming an all-or-nothing proposition. Either the party will attempt to retain control over the population by giving the military increasing power or face the possibility of national disintegration. The stepped-up persecution of democracy activists and religious minorities reveals the party will not shrink from using any means necessary to guarantee its hold on power.

The engagers, however, glide over these realities in favor of missionary work to democratize China. In a recent speech, Secretary of State Madeleine K. Albright said, we are “visiting each other, studying with each other, doing business with each other, philosophizing with each other and learning from each other.”

This, however, assumes the two countries are morally equivalent. The United States and China have nothing to teach each other. It is logical that China, in the post-Cold War era, would regard the United States as its main foe: The U.S. is its principal rival for influence and power. But given the tremendous internal pressures China faces, there are compelling reasons to doubt it will be able to challenge the U.S. on a global basis.

The readiness of Washington to accede to Chinese demands is all the more perplexing since the United States has the upper hand. The U.S. should push China on human rights, because appeasing the regime means it will never address its social ills. The result may be the disintegration of the country with a descent into warring fiefdoms and tens of millions of boat people heading for America.

The containers and engagers should shake off their certainty that China is bound to be a success story, whether feared or hailed. In history, nothing is inevitable. China may not make it as a great power. The U.S. itself seems on course to remain the world’s strongest economic and military power. As the U.S. confronts China, it should remember the only thing more dangerous than a rising China might be a collapsing China.