January 31, 2005

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Bowing to masters

The World Economic Forum at Davos gathers the great and good to discuss the pressing issues of the day. It acts as a headline grabber for a week and allow "networking" opportunities between various elites. Bill Gates has used the platform to perform a Rupert Murdoch, lavishing praise on China's leadership. Naturally part of his motive will be to advance the interests of his company. But I suspect Bill has mixed his message. Gates said:

They have this mericratic way of picking people for these government posts where you rotate into the university and really think about state allocation of resources and the welfare of the country and then you rotate back into some bureaucratic position."
China has historically had meritocratic methods of selecting public servants. The CCP have continued that tradition, albeit with large dollops of nepotism and corruption. But again that is just as it has always been throughout China's history.

His praise for the leadership:

This generation of leaders is so smart, so capable, from the top down, particularly from the top down.
Again, there is an element of truth in this. This generation of leaders is the first in generations to consist of technocrats rather than despots and autocrats. Whether they deserve the lavish praise Gates has lauded upon them is a different matter. Gates also partially got something else right:
[Gates] says [China] has created a brand-new form of capitalism that benefits consumers more than anything has in the past. "It is a brand-new form of capitalism, and as a consumer its the best thing that ever happened."
China is, to some extent, a more "capitalist" economy than many realise. That's partially because regulation and law lags the rapid changes in China's economy. There are some true "laissez-faire" aspects in modern China. At the same time, however, the state owns the largest banks and biggest manufacturers. The state plays a key role in allocating contracts and capital. Bill's right: it's capitalism but not as we know it. He's right on one other aspect, with one small omission. It's great for American consumers. But wait, there's more:
He characterised the Chinese model in terms of "willingness to work hard and not having quite the same medical overhead or legal overhead"
To some extent he's right. China's lack of basic safeguards for workers mean labour costs are low. It also means China loses a horrendous number of lives to industrial accidents, has an army of labour with no protection if they get sick, when they retire or if there wages aren't paid. But that's the price you pay if you want cheap t-shirts.

According to Rebecca MacKinnon, China has been a hot theme at the Davos Forum. She an interesting take on the meaning of democratic values in China:

Of all the people in China who I got to know well - from itinerant artists to farmers to students to intellectuals to government officials - I never met anybody who didn't believe that "democracy" is something China needs more of. The problem is they want to get from here to there without revolution, violence, or risks to their jobs. Most Chinese now have enough to lose after 25 years of reform. They don't like foreigners lecturing them about how they should run their country even if they don't like the way the current leadership runs it - it's called pride. But some Chinese will also admit that the embarrassment of outside media scrutiny and diplomatic pressure is also helping to change some less-than-democratic government behaviors.
For mine this is only part of the answer. As people have more to lose, especially materially, they demand a greater say in how things are run to preserve and continue their prosperity. China's current leadership have gained legitimacy by engineering the current boom. So long as they remain competent economic managers their reign is likely to continue. Things such as human rights and democracy aren't on most people's radars. They're too busy making money. It's when the merry-go-round stops the leadership will find itself in trouble. The current tensions in the country come from inequality, discrimination against minorities and poor working conditions. Keeping a lid on these requires redistribution of wealth. In order to stay "Gatesian" capitalist, China needs to become more Communist. Ironic, isn't it?

Update: Lest you think the title of this post is sarcastic, I put to you that Beijing runs Boeing.

posted by Simon on 01.31.05 at 10:29 AM in the


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