China in 2009 was the land we all hoped it would be: the enemy, the friend, the brilliant tactician, the bumbling oaf. China is such a mix of strength and weakness these days that it provides endless material for opportunistic arguments. Here are the top ten myths about China in 2009 and how they fared:
China’s carmakers will never range far beyond their borders. Fact: It was only six years ago that a prestigious report by the U.S. National Academies and the Chinese Academy of Engineering dismissed China’s engineering and vehicle-development capabilities, according to Dan Sperling, one of the authors. Well, in a moment oozing with symbolism, the Sichuan Tengzhong Heavy Industrial Machinery, an obscure heavy-machinery maker, unveiled a deal in October to buy GM’s Hummer. Around the same time, Geely Automobile Holdings Ltd, which got $334 million from Goldman Sachs in September, was named by Ford as the preferred bidder for Volvo. Geely is rumored to be offering $2 billion for Volvo, far less than the $6.5 billion that Ford paid for the brand in 1999. China, it turns out, may be a major automaker (or automaker owner) after all.
China sprinted through the global slowdown unharmed. Fact: Not quite. China’s economy continued to grow at a rate of eight per cent in 2009, but that does not mean that the economy is tuned to peak efficiency. The credit goes to a $586 billion stimulus package that was far larger than many people initially realized. Considering the size of its economy, the spending was nearly double that of the U.S. stimulus. With Chinese banks ordered to lend, and government agencies ordered to buy and invest, the health of the broader economy was far harder to measure.
President Obama’s visit was a disappointment. Fact: When Obama made his first visit to China, in November, he avoided fireworks and downplayed overt talk about human rights. The initial coverage from the White House press corps was cool, with many pieces asking some version of whether the Chinese “squelched” discussion of tough topics. But in the days that followed, some China-watchers reached a different consensus: Beijing coughed up its first targets for greenhouse-gas emissions controls; it agreed to join a U.S.-backed statement criticizing Iran for flouting U.N. resolutions, the first such declaration since 2006 to be backed by both China and Russia; and it indicated that it may widen its flexibility on reforming the exchange rate. Jim Fallows at the Atlantic has a good compilation of what has come out of the visit.
Chinese Web users have no impact on the government. Fact: In June, China unveiled plans to require all new personal computers to come with filtering software “Green Dam Youth Escort,” but an outcry from Chinese Web users and foreign technology companies forced the government to rethink. It would have been too embarrassing to abandon it completely, but the government postponed indefinitely the mandatory pre-installation of the software on new computers. Some Asian brands, including Acer and Lenovo, agreed to put it in package anyway. Eventually the government announced that schools, Internet cafés and other public-use computers would still be required to run the software.
The Internet might be censored but it can never be rolled back in China. Fact: Over the summer, China embarked on an unprecedented effort to maintain stability: it could be called The Great Internet Shut-Down. After scores of people were killed and hundreds injured in the worst ethnic violence in decades in the Xinjiang region, authorities simply turned off large portions of the Web in Xinjiang and left it off for months. No email, Skype, and IM, though local news sites and shopping and such were still available, as this good description points out. The effect on business and education is incalculable, but, in a measure of how much China is willing to do to protect stability, authorities kept the ban in place well into the winter. This would probably not work on a national basis, but the ban was a shocking reminder of what is possible.
China’s weak judicial independence is a problem for Chinese citizens but not for business. Fact: In July, 2009, authorities detained four employees of the Australian miner Rio Tinto, accusing them of stealing state secrets during acrimonious iron-ore price negotiations. They included Stern Hu, an Australian citizen and Rio Tinto’s top iron ore salesman in China. They were later formally arrested for stealing commercial secrets, and the investigation was recently extended into mid-January.
As China opens up, it permits dissidents to advocate because they have only a tiny following. Fact: One the curious things about the Chinese government in 2009 is how often it acted like an elephant afraid of a mouse. For all of its strength and sophistication in economic and diplomatic matters, it continued to rely on primitive political tactics to round up the perceived opposition. Liu Xiaobo, the co-author of Charter 08, a petition for reform, was detained in December, 2008, and formally arrested in June on suspicion of inciting the subversion of state power. An international outcry followed, but he remained in jail. Approaching the anniversary of his detention, his wife Liu Xia told the Guardian that it was “very possible” he could be sentenced to more than ten years. “My biggest hope is that the public can still pay attention to his case and Xiaobo can come back home soon.”
China is a land of no siblings. Fact: In July, the Shanghai government began encouraging eligible parents to have a second child in effort to counter the effects of an aging population. This is a major sign of a more relaxed attitude about the one-child policy in place since the seventies. In fact, two-child families are all over China, as parents earn enough money to pay fines or find loopholes in the policy, which is more porous than most outsiders imagine. Parents who were both only children are allowed a second child. Rural parents are also allowed to have a second child, if the first-born is a girl.
China’s work on climate change is more rhetoric than substance. Fact: China has concluded unmistakably that climate change is a security and stability threat, and it is treating it as such. In 2006, the same year that James Hansen, NASA’s top climate scientist, was accusing the Bush Administration of trying to muzzle his call for emission cuts, China released its first report on climate change, which predicted serious changes to its landscape—and, most importantly, its food supply. The report predicted that the output of major crops such as wheat, rice, and corn would fall by up to thirty-seven per cent in the second half of the century if no effective measures were taken in the next twenty to fifty years to address climate-change impacts, according to Xinhua. It embarked on major policy initiatives to prevent that.
China has already beaten the U.S. on the technology to combat climate change. Fact: China is making unmistakable strides on energy technology, but that campaign has vulnerabilities and the game is far from over. I’ll have more to say about this soon.
