June 13, 2005

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Mark Steyn on China

Mark Steyn's piece on China is, typically, a mix of the sensible with the incendiary. Steyn divines sees two Chinas:

On the one hand, there's the China the world gushes over - the economic powerhouse that makes just about everything in your house. On the other, there's the largely unreconstructed official China - a regime that, while no longer as zealously ideological as it once was, nevertheless clings to the old techniques beloved of paranoid totalitarianism: lie and bluster in public, arrest and torture in private.
He goes on to say that inevitably the two systems will collide:
If the People's Republic is now the workshop of the world, the Communist Party is the bull in its own China shop.
So far the CCP have proved incredibly adept at dealing with the forces their economic reforms have released. The CCP is not even Communist but nationalist. In other words, we might not like it but the CCP has "form".

Steyn divines the problem of the current economic setup:

But Maoists with stock options are still Maoists - especially when they owe their robust portfolios to a privileged position within the state apparatus.
Here I take issue: even in the United States being in a priveleged position helps with success. The difference is in China it's a matter of being a Government official rather than a company director. Indeed even being the relative of an American Government official or politician can confer massive advantages. We're talking matters of degree, not type. And can you really call these people today "Mao-ists"? What does that mean? I find it difficult to see what that statement means other than a trite soundbite.

Moving onto the latest hot topic, intellectual property rights:

...new China's contempt for the concept of intellectual property arises from the old China's contempt for the concept of all private property: because most big Chinese businesses are (in one form or another) government-controlled, they've failed to understand the link between property rights and economic development.
Yet this is changing rapidly. The push to listing the big state-owned banks on the stockmarket, the growing private sector and torrent of foreign investment are all forcing China to codify and enforce property rights. Furthermore "old" China's contempt for property rights only extends back to the Communist takeover. Prior to that private property rights did exist in various forms. Finally China's theft of intellectual property is actually simply following a well-worn economic development model: that so successfully used by South Korea and Japan to name but two examples. Here's where Steyn comes off the rails:
China hasn't invented or discovered anything of significance in half a millennium, but the careless assumption that intellectual property is something to be stolen rather than protected shows why.
That's one hell of a statement. Besides being unprovable it is also meaningless. For the past 500 years China was mostly a relatively poor country that wasn't accused of intellectual property theft until the last few years as it has rapidly developed. Steyn's point is a valid one - China's advance will eventually rely as much as its capacity for creativity and intellectual value-add as manufacturing. But in aggregate that day is not here, yet.

The article compares China with India:

India, by contrast, with much less ballyhoo, is advancing faster than China toward a fully-developed economy - one that creates its own ideas...The return on investment capital is already much better in India than in China.
That's news to anyone who's followed both countries. Indeed Indian politicians lament how far behind China the Indian economy remains and discussions continue whether India's democracy hinders its economic development (for mine it doesn't, but that's another matter). If India's return on investment exceeded China's, India would be drowning in a wave of foreign investment and China receiving a trickle. That is not the case, partly because India's economy remains largely rule-bound and restrictive compared to China. And don't mention that Communists effectively hold the balance of power in India at the moment.

Steyn's conclusion:

China won't advance to the First World with its present borders intact. In a billion-strong state with an 80 per cent rural population cut off from the coastal boom and prevented from participating in it, "One country, two systems" will lead to two or three countries, three or four systems. The 21st century will be an Anglosphere century, with America, India and Australia leading the way. Anti-Americans betting on Beijing will find the China shop is in the end mostly a lot of bull.
There is very little danger of China splitting as its economy advances. A major concern of the CCP leadership is ensuring the peasantry enjoy some of the economic gains of the coast. While rural incomes lag those of the coast, they are rising. Indeed it could be argued it is a true case of trickle-down economics. The paranoia of the final sentence belies the rest of the article. Believing this could be China's century does not exclude it being an "Anglosphere" century. Nor is it anti-American to bet on Beijing.

The world isn't binary, black or white, a zero sum game. It is fair to say the Communists may have sown the seed of their own destruction with economic reform. It is not fair or even true that China's emergence will come at a cost to the rest of the world.


Chinpunbeifun has a look at the same article (via Roger L. Simon).

posted by Simon on 06.13.05 at 04:14 PM in the


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a fisk of steyn
Excerpt: Mark Steyn is one of my favorite columnists, but his latest column did deserve a mild fisking. Simon delivers.:Here's where Steyn comes off the rails:China hasn't invented or discovered anything of significance in half a millennium, but the careless as...
Weblog: asiapundit
Tracked: June 13, 2005 09:29 PM


Australia!?!? Who knew Oceania was going to be setting any geopolitical trends?

In all seriousness though, I agree with your assessment over this article but I feel you are being too charitable. That this was opinion/editorial is duely noted, that it is also pretty stupid should be given more attention. Mark Steyn's article, whoever the hell he is, is essentially a summation of Angry American (though I understand he is British, someone ought to inform him that his empire is dead and gone and living through it's surrogate, the US, is unbecoming) Conservative talking points. Essentially a slew of bravado mixed with contempt with a generous dashing of ignorance.

Forgoeing the obvious problems with establishing Chinese cultural norms by quoteing from an early 20th century American popular fiction writer. The article only continues from there to pile idiocy upon idiocy.

His noting of jail journalists is admirable, his contrast of it to Chinese economic developement is nonsensical. There is no coorelation between the two and China can and has continued to develop irrespective of any number of jailed journalists.

The author obviouslly hasn't a clue about the complexities of PRC-DPRK history that governs the relationship between Beijing and Pyongyang but covers his gross ignorance by using a gangster metaphor, subtle.

Calling present day CCP members "maoists" is a non-sequitor, but is an insult (at least for his regular readership) to denote an even more radical brand of communists. Of course it that neither Steyn nor his readers even know the definition of the word and maoist doesn't even begin to describe China's present communists. When was the last time you saw Hu Jintao advocating militant agrarian based revolution aimed at the destruction of capitalist order and the total restructuring of society.

Honestly theres so much more wrong with this article I hardly know where to continue and this simple comment has already gone far longer than I intended. I have to hand it to you Simon that you've done an admirable job of debunking this sorry excuse of an "informed" opinion.

posted by: Jing on 06.13.05 at 09:20 PM [permalink]


You're right re Maoists - that's a particularly silly part of the article.

The shame of it is the underlying message is a valid one: that China needs to allow more intellectual freedom to benefit fully from its economic growth and that all the China hype does not necessarily mean this will be China's century. As I said in the post, it's not an either/or situation. Unfortunately too many see it as such.

Mark Steyn is Canadian, I believe.

posted by: Simon on 06.13.05 at 10:22 PM [permalink]

The economic arguments in the article were mostly nonsense as well.

posted by: Guy on 06.14.05 at 02:34 AM [permalink]

"For the past 500 years China was mostly a relatively poor country that wasn't accused of intellectual property theft until the last few years as it has rapidly developed."

Actually, as late as the 1700s (and later), China (and India) accounted for the bulk of the world's economy.

posted by: HUICHIEH LOY on 06.14.05 at 06:13 AM [permalink]

Huichieh, you would have to do better than that if you want to refute the assertions.

For instance, your statement that China and India accounted for the 'bulk of the world's economy' in the 1700s is pretty ambiguous. It doesn't mean that China was rich, does it? Where is your supporting evidence?

posted by: Rick on 06.14.05 at 03:47 PM [permalink]

Huichieh is referring to gross manufacturing output and economic activity Rick. Prior to the Industrial Revolution. India and China with their respective massive populations, were indeed the largest economies in the world. Even then however, China was not rich persay, as the average Chinese peasant was still poorer than the average European peasant, possibly due to the smaller land plots. Considering both societies were pre-industrial at the time, the differences in income were not very appreciable.

posted by: Jing on 06.14.05 at 08:48 PM [permalink]

like I said in another blog: this article is complete bollocks. The only proof one needs to realize tis guy doesn't have the faintest idea of what he's talking about is when he brings out that tired neo-con fantasy that China will break apart into several independent states. Sorry people, it ain't gonna happen. But you play right into China's hands when you keep up that pipe dream.

posted by: Prince Roy on 06.14.05 at 11:45 PM [permalink]

It's stuff I learned in a course on Late Imperial China when in college, so you will have to forgive me if the references are not necessarily on the internet. And considering that I don't specialise in the period (I do early--really early, like 3rd Century B.C. early--China), the references are not exactly at the top of my head.

I do remember that there are some figures in Paul Kennedy's The Rise and Fall of the Great Powers (e.g., about world steel production as an indication of economic power) if anyone is interested to look it up. And I also remember reading in an article that as late as the 1800s, one Chinese province of Canton (Guangzhou) imports more cotton from India in one year than England in a decade (!). It's all about sheer size. Keep in mind that by mid-Qing, China already had a population of 450 million.

Can't vouch as much for per capita income though--assuming that reliable figures are available for any part of the world. But if memory serves, what evidence available would suggest that China wasn't poor by those standards either well into the 1700s, if not the early 1800s (after the Industrial Revolution really took off). Fabulously rich, but more and more decadant by the year. (Incidentally, that was the cliche in European discourse in the period.)

And I definitely can't vouch for anything about "intellectual property"--assuming that the Late Imperial Chinese operated with any such concept in the first place. (There is an infamous saying: tou shu bu suan tou--to steal a book, i.e., to plagarise, does not count as stealing; there's a book about this entitled To Steal a Books is an elegant offence by Alford, William; Stanford University Press, 1995).

Another bit of historical information about the economy that might be relevant. It wasn't really until the later 1800s that China imported a lot of stuff--but for the notorious exception of opium--from the rest of the world. Not counting the very specialised trinkets and scientific toys that the Imperial Court always have had an interest in. And it wasn't because China was too poor to import, but there weren't really a lot that they were interested in that they did not already have, more cheaply and in better quality. (Remembered a case study on cotton clothing--the market simply found the local product cheaper--because labor is so cheap--more resilent and better suited to the climate than the British machine made import.) Conversely, the 'West' imported massive quantities of tea, silk, porcelain, etc., from China. If not for opium, the trade imbalance in hard silver would have been staggering. In fact, it was staggering at one point. In the 1600s, silver taken from Peru by the Spanish were paid to the financial houses that bankrolled the Habsburgs as fast as they can make the journey from New to Old World. From there, much of it pass, via many middlemen, into China in exchange for, you guessed it, tea, silk, porcelain... Right now, the only reference I can recall is Paul Kennedy's book.

posted by: HUICHIEH LOY on 06.15.05 at 01:17 AM [permalink]

Found a relevant web source here. It references many of the scholar works I read when I was reading the course on Late Imperial China. The writer is a reader in Economic History at LSE. Some highlights:

"Perhaps the most spectacular market phenomenon was China’s persistent importation of foreign silver from the fifteenth to nineteenth centuries during the Ming-Qing Period. It has been estimated that a total of one-third of silver output from the New World ended up in China, not to mention the amount imported from neighboring Japan (Flynn and Giráldez 1995)."

"The sheer quantities of China’s handicrafts were impressive. It has been estimated that in the early nineteenth century, as much as one-third of the world’s total manufactures were produced by China (Kennedy 1987: 149; Huntington 1996: 86). In terms of ceramics and silk, China was able to supply the outside world almost single-handedly at times. Asia was traditionally China’s selling market for paper, stationary and cooking pots. All these are highly consistent with China’s intake of silver during the same period."

"In the context of China’s high yield agriculture (hence surpluses in the economy which were translated into leisure time for other pursuits) and Confucian meritocracy (hence a continued over-supply of the literate vis-à-vis the openings in officialdom and persistent record keeping by the premodern standards) (Chang 1962: ch. 1; Deng 1993: Appendix 1), China became one of the hotbeds of scientific discoveries and technological development of the premodern world (Needham 1954–95). It is commonly agreed that China led the world in science and technology from about the tenth century to about the fifteenth century.

The Chinese sciences and technologies were concentrated in several fields, mainly material production, transport, weaponry and medicine. A common feature of all Chinese discoveries was their trial-and-error basis and incremental improvement. Here, China’s continued history and large population became an advantage. However, this trial-and-error approach had its developmental ceiling. And, incremental improvement faced diminishing returns (Elvin 1973: ch. 17). So, although China once led the world, it was unable to realize what is known as the "Scientific Revolution" whose origin may well have been oriental/Chinese (Hobson 2004)."

"It has been argued that in the Ming-Qing Period the standards of living reached and stayed at a high level, comparable with the most wealthy parts of Western Europe by 1800 in material terms (Pomeranz 2000) and perhaps in education as well (Rawski 1979). Although the evidence is not conclusive, the claims certainly are compatible with China’s wealth in the context of (1) the rationality of private property rights-led growth, (2) total factor productivity growth associated with China’s green revolutions from the Han to the Ming-Qing and the economic revolution under the Song, and (3) China’s export capacity (hence China’s surplus output) and China’s silver imports (hence the purchasing power of China’s surplus)."

posted by: HUICHIEH LOY on 06.15.05 at 04:10 AM [permalink]

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