China's doing well enough

Many in the West held the Tiananmen Square massacre to be a portent. Six years on, there is no sign of the expected political conflict

In the six years since the Tiananmen Square massacre, the Chinese authorities have responded in style. They have presided, in that short time, over a doubling in Chinese living standards. Even by the demanding standards of Japan or Korea, the Chinese regime has been spectacularly successful.

This disjuncture between the politics of repression and the economics of opportunity is troubling from several standpoints. It sets in apparent opposition the different dimensions of human rights: rights to a decent standard of living versus the right to dissent. It starkly poses a conflict between brutal means and worthwhile ends. It also strikes at the heart of contemporary Western beliefs about the way the world works.

The collapse of Communism in the Soviet Union and Eastern Europe, and of numerous non-Communist tyrannies around the world - from South Africa to Argentina to the Philippines, had created a powerful sense that liberal democracy is irresistible; that successful capitalism and democratic government go hand in hand; and that unrepresentative systems relying on state coercion are destined to fail economically as well as politically.

China does not fit at all comfortably into this End of History story. Its regime parades the doctrine that there is a trade-off between economic and political freedoms. China, moreover, is not alone; Indonesia and Vietnam also combine exceptional economic performance with scant regard for Western sensitivities regarding human rights and political dissidence.

If China, in particular, is able to maintain something approaching current levels of economic performance, the idea will surely gain ground - especially in transitional societies such as Russia and many poor countries, perhaps even in the West - that there is a lot to be said for the right kind of authoritarian governments.

Such disturbing ideas arebeing kept at bay by a fashionable Western pessimism about China: that it is heading for an acute crisis brought on by "unsustainable" economic policies, a messy and possibly bloody leadership succession and various real, or imagined, forces pulling the country apart.

There will, indeed, be difficult times ahead. And China has been through enough catastrophic discontinuities in the last century not to rule out another one. Certainly, there are tricky problems of economic management. China's difficulty - managing double-digit growth without creating double- digit inflation - is, however, one that any other government would be deeply envious of. There is more than a suspicion that scenarios of doom and gloom are a product of disapproval and disbelief rather than insight or foresight; an unwillingness to accept that the perpetrators of Tiananmen Square, Tibet and much else - Communists to boot - could be responsible for a remarkably successful economic transformation.

Honesty demands that the extent of this economic success should be fully acknowledged. This is not a country like Stalin's Russia (or Mao's China) which relied on lies, statistical creativity and gullible visitors to sustain a myth of rising welfare. The advances that have occurred in China since the 1978 reforms, and accelerated since the Tiananmen Square crisis, are real. They are not to be measured in the conventional Communist units of account - tons of steel and cement and gains in net national product - but are clearly visible in diet, dress and the widespread availability of goods to which the countless foreign businessmen, tourists, documentary film makers and scholars are witness. On almost every measurable social and economic indicator of quality of life, China is substantially ahead of, for example, democratic India which has, itself, shown very robust development in the past decade and a half.

The alchemy that has produced a golden era of economic advance is reasonably well understood and extensively documented. The story is not particularly controversial (though there is a simplification which treats Deng's accession in 1978 as Year Zero when, despite the horrors of the Great Leap Forward and the Cultural Revolution, some at least of the foundations were laid in Maoist times). The human energy and zest for self-improvement that are the hallmarks of modern China can be traced back to the reforms that liberated peasant agriculture, transformed prodigious savings into investment in entrepreneurial small-scale industry, allowed markets to flourish, and opened up the economy, in stages, to foreign trade, technology and investment; creating, in a word, capitalism. The economic liberalisation has continued apace and was largely uninterrupted by the political upheavals surrounding Tiananmen Square. The agenda for tackling the next stage of more sophisticated economic problems is well mapped out.

Detail apart, the economics of China's development are not controversial. The politics are. There are radically different interpretations of the role played by the Communist ruling class, and where it goes from here. One view, broadly that of Western liberals, is that an authoritarian, command-and-control, one-party state is incompatible with the demands of an emerging market economy. It has survived because Deng had the wisdom to jettison its economic ideology. This, in turn, allowed the market to deliver enough prosperity to make party rule acceptable.

In future, it is argued, this formula will not work. Communist ideologues will not be able to let go of loss-making state enterprises and the remaining instruments of state control. A more sophisticated, urban, educated China will demand more political pluralism and self-expression than the apparatchiks will ever concede. Without a political transformation to match the economic there will be a Soviet-style crisis of stagnation. On this interpretation, Tiananmen Square was of seminal importance; an advance warning of a systemic crisis to come.

There is, however, a radically different view which is forcefully expressed by Deng himself. This is that the state, and its political underpinning, promotes an essential public good order. Or, more precisely, it provides the fulcrum that balances order and stability on the one hand and, on the other, the decentralisation necessary for efficient and responsive government.

The concern for order in China is based on a long history of disorder and the inherent problems of managing a vast, widely dispersed, easily fragmented society with a population more than 20 times that of Britain. Deng's warning that "the consequences of bourgeois liberalisation are terrible" sounds like Marxist-Leninist cant but reflects a deep and understandable preoccupation with orderly government. The sentiment is widely understood, if not expressed in that language, across East Asia, where "bourgeois liberalisation" has rarely been allowed to get in the way of rapid development.

China's leadership is much more vulnerable domestically to the charge of failing to maintain order than to one of insufficient sensitivity to political dissidence. China currently has a problem of weak government, not strong government. The economic managers are struggling to contain inflation and overall macroeconomic stability in large part because far- reaching decentralisation has eroded the central government's revenue base. The government tiptoes around the problem of bankrupting and slimming loss-making public industries since it fears strikes and demonstrating workers.

Peasants riot because the government is unable to pay its bills. Lawlessness is a major preoccupation. Party cadres and state officials are less likely to be administering political correctness - or running the country - than minding their own businesses. Anything further removed from the suffocating, centralised discipline of Brezhnev's, let alone Stalin's Russia, would be difficult to imagine.

The preoccupation of any Chinese government in the next few years will be in restoring the balance between national institutions and the centripetal forces of order, and the centrifugal forces of decentralisation, in favour of the former. If there were any doubts, the chaotic disintegration of the Soviet Union has banished them. There are many possible alternative ways in which the future can play out, some dramatic. It seems highly plausible, none the less, that the coterie of secret policemen and Soviet- trained engineers in the Politburo who are in the process of inheriting supreme power from Deng will navigate a course which entails continued economic reform, some recentralisation of authority and no concessions at all to political liberalisation. The formula has, after all, worked well enough.

The outlook for political rights in this scenario is bleak.In years to come, there could be a softening of the authoritarian face; Korea and Taiwan are possible models of quiet evolution from political repression to limited pluralism. But neither of these countries opened up their political system until their economic development was well advanced. There is no reason to believe China will evolve in a substantially different way.

The issue for the West, as it has been since Tiananmen Square, is how to position itself in relation to a China of growing economic weight, and appears genuinely to want good relations with the West, but is unyieldingly autocratic. There will be calls from outraged liberal opinion - as there are already in relation to Indonesia - to "punish" the transgressions using the few instruments available, notably trade.

Past experience suggests that such postures will collapse ignominiously as competing Western interests scramble for market share and as China is called upon to help in policing nuclear weapons proliferation and other tasks of global governance.

Protest will be treated with derision not just in China, but across much of Asia, where there is a growing willingness to say "no" to the West rather than defer. There is also a growing sense of Asia as a club, if not yet as a cohesive bloc. China is part of that club. China benefits from this new mood of self-confidence, which is derived from the belief that the lifting of tens of millions of Asians - and now, in China, hundreds of millions - out of poverty is one of the century's great achievements. As we, rightly, commemorate the anniversary of Tiananmen Square, we should also have the grace to recognise that this liberation from poverty is a great step forward in human rights.

Vincent Cable is author of 'China and India: Economic Reform and Global Integration', Royal Institute of International Affairs. 0171-957 5700.