Since the economic liberalization policies of Paramount Leader Deng Xiaoping beginning in 1978, China has experienced a tenfold increase in its economic output. In 2010, amid a global recession, China experienced a real growth rate of 10 percent and became the world’s largest exporter. What’s more, investment accounts for 45 percent of China’s Gross Domestic Product—roughly four times America’s investment as a percentage of GDP.
As Henry Kissinger extolled in his book, “On China,” “China produced a greater share of total world GDP than any Western society in 18 of the last 20 centuries.” With China experiencing rapid economic growth in recent years, Americans increasingly see Chinese gains as zero-sum—that is, at America’s peril. Polls indicate most Americans view China’s economic expansion as bad for America. Leaders in Washington have taken note.
Despite fears of Chinese preeminence, China’s irreverence to free trade policies and allegiance to draconian social policies may significantly inhibit further Chinese economic expansion. Without greater economic and political liberalization China will have a hard time sustaining economic growth. Next week Chinese Vice President Xi Jinping will be promoted to president. I believe this offers the chance to realign with the values of political and economic liberalization, which have brought broad prosperity to Western countries.
Last year, Vice President Joe Biden penned an Op-Ed in which he debunked common misconceptions about Sino-American relations, such as the belief that China holds the majority of America’s outstanding debt. In reality, China holds just eight percent while Americans hold 70 percent.
After decades of economic liberalization, China was granted entry into the World Trade Organization (WTO) in 2001 with the contingency that it would eliminate thousands of tariffs, quotas and subsidies.
Since China’s readmission to the WTO a decade ago, China has become the focus of a myriad of WTO disputes. Many Chinese corporations have little or no respect for international intellectual property rights. Furthermore, China has implemented policies to devalue its currency, the Renminbi, making Chinese goods and services more attractive in foreign markets. Despite economic liberalization, roughly half of China’s economic output still comes from state-owned enterprises, which comprise 80 percent of China’s stock market. Many Chinese policies violate WTO rules and ignore the free market doctrine that has brought unrivaled prosperity to Western economies.
State control has stifled China’s political culture, too. Since the People’s Republic of China was founded in 1949, the Communist Party has maintained autocratic rule. The Chinese government has derived its legitimacy solely from the nation’s ever-increasing prosperity. Historically, however, a nation’s rise to middle-income level—which the Chinese people are quickly approaching—brings increased demands for liberty, political participation and opposition to autocratic rule.
China is no exception. In 2010, disillusioned Chinese citizens mounted on average nearly 500 protests, demonstrations and riots per day in opposition to countless policies. In response, the Chinese government has suppressed opposition. Last year, Ai Weiwei—a prominent artist, political activist and critic of the communist regime—was arrested following his call for a democratic revolution similar to those that took place in North Africa and the Mideast.
Similarly, China has utilized Internet censorship to quell protests and uprisings. The Chinese government has specifically targeted social media sites such as Facebook and Twitter, which played an integral role in disseminating information for pro-democracy demonstrations throughout the Arab Spring.
It has been 34 years since Deng Xiaoping implemented economic liberalization policies that led to China’s rapid economic expansion. Since then, Chinese leadership has eschewed broadened economic liberalization and failed to legitimize its leadership through political liberalization. On Nov. 8 current Chinese Vice President Xi Jinping will be promoted to president. Mr. Jinping, who experienced democracy and capitalism while studying agriculture in Iowa, is likely to be more supportive of economic and political liberalization. A multitude of research conducted by political scientists and economists reveals that countries that suppress economic and political freedoms cannot sustain economic growth. The Chinese people stand to benefit greatly from freermarkets and a freer political culture. Hopefully Mr. Jinping can deliver.
Michael is a freshman majoring in political science. Send all feedback to opinion@dailycardinal.com.
