Op-Ed: China’s future hinges on the power of diverse economic systems

Late last month, the American actor John Cena issued a groveling public apology after having referred to Taiwan as a “country” in an interview to promote his latest film, “F9.” Though he was using the term to refer to a linguistic media market with a discrete distribution channel, not to the status of the island of Taiwan in international law, the Chinese government would make no allowance for such distinctions.

What are we to make of this episode? Clearly, globalization has gone terribly wrong. The speech restrictions dictated by China’s authoritarian government apply not just to China, but also, and increasingly, to the outside world. Even in my own day-to-day experience, I have noticed that far too many people now speak elliptically, elusively and euphemistically about contemporary China.

I could do that, too. But I prefer to speak frankly and directly about the real issues that lie behind terminological disputes over Taiwan.

In my view, it is in China’s own interest that the government in Taipei remains the sole authority on the island, so that it can continue to follow an institutional and governance path that is different from that of the People’s Republic. Likewise, it is in China’s interest that Hong Kong remains a separate system. The government in Beijing ought to recognize that substantial regional autonomy, especially for areas with non-Han-majority populations, will serve its own long-term ambitions.

The appalling and tragic history of genocide, ethnic cleansing and forced assimilation in the 20th century suggest that a top-down approach will sow resentments that will last generations and create conditions for serious trouble in the coming years and decades. Humanity has grown up enough to know that diversity, regional autonomy and cosmopolitanism are better than the alternatives. A regime that aspires to lead the world toward a brighter future should be especially cognizant of this.

Nonetheless, President Xi Jinping very much wishes to centralize authority in Beijing. Rightly fearing careerism and corruption in the Communist Party of China, he seeks not a Cultural Revolution but a cultural renaissance to restore egalitarian values and utopian aspirations across the leadership ranks. Supremely confident in his ability to read the situation and issue the right commands, his main concern is that his orders won’t be implemented properly. The solution to that problem, he seems to have concluded, is much greater concentration of power.

It is a huge mistake to ignore the benefits that come with more regional autonomy. Consider an alternative history in which the People’s Liberation Army had overrun both Hong Kong and Taiwan in 1949; Sichuan had not been allowed to pursue pilot reform programs in 1975, when Zhao Ziyang was appointed provincial party secretary; and China’s centralization had proceeded to the point that the Guangzhou military district could not offer Deng refuge from the wrath of the Gang of Four in 1976. What would China’s economy look like today?

It would be a basket case. When Mao Zedong died in 1976, China was impoverished and rudderless. But it learned to stand on its own two feet by drawing on Taiwan and Hong Kong’s entrepreneurial classes and financing systems, emulating Zhao’s policies in Sichuan, and opening up Special Economic Zones in places such as Guangzhou and Shenzhen.

At some point in the future, China will need to choose between governmental strategies and systems. The more that China centralizes, the more it will suffer. But if decisions about policies and institutions are based on a rough consensus among keen-eyed observers who are open to emulating the practices and experiments of successful regions, China will thrive.

A China with many distinct systems exploring possible paths to the future might really have a chance of becoming a global leader and proving worthy of the role.

J. Bradford DeLong, a former deputy assistant U.S. Treasury secretary, is a professor of economics at UC Berkeley and a research associate at the National Bureau of Economic Research.