China Ascendant

A Post book review:

“When China Rules the World” [is] a compelling and thought-provoking analysis of global trends that defies the common Western assumption that, to be fully modern, a nation must become democratic, financially transparent and legally accountable. Jacques argues persuasively that China is on track to take over as the world’s dominant power and that, when it does, it will make the rules, on its own terms, with little regard for what came before.

China is growing at a tremendous rate. Yet it refuses to follow the Western model of establishing genuine elections, an independent judiciary and a freely convertible currency. In fact, its restrictive currency rules have made China the world’s leading creditor, while the United States sinks ever deeper into debt. And while the United States sacrifices the lives of its soldiers in Iraq and Afghanistan, the Chinese make money in both countries without losing a drop of blood.

Yes!  The world has emulated Western policies mainly because those nations were high status, not because their style of law or government was obviously more efficient.  Chinese styles are likely similarly efficient, and if China becomes higher status, the world will emulate it instead. The book reviewer still can’t quite believe:

As a journalist who lived and breathed China for years, I felt sure that the Communist Party, following its loss of credibility at Tiananmen, would fall to ashes. During the boom of the 1990s, I knew that economic modernization would force Chinese institutions to become accountable and democratic. I was wrong again and again. My assumptions were out of date.  Still, one can’t help wondering if China’s trajectory, as unwavering as it may look now, may fizzle. Take, for instance, China’s inability to accept or integrate outsiders — Jacques calls it “the Middle Kingdom mentality.”

Westerners pride themselves on their attitudes on diversity, and yes those may have some advantages.  But if so they are weak advantages, easily overwhelmed by other large Western disadvantages.  If China continues to outgrow the West, it will likely be because they do a few things very right, as did the West before. If China comes to dominate the world, it will likely then also overestimate how many of its peculiar styles give big efficiency gains.

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  • Eric Johnson

    Internationalist democro-idealism is as dumb and naive as internationalist communism, if you ask me. From what little I know it sounds like Russia would be an oligarchic melee if it didnt have a strong power on top.

  • Eric Johnson

    Yeah, I think you hit the nail on the head. To sum it up, the West has hubris.

  • Cormac

    “The world has emulated Western policies mainly because those nations were high status, not because their style of law or government was obviously more efficient.”

    How do you know status seeking is the reason the world has emulated Western policies? You give a couple of anecdotes, but this is all. It seems equally possible that the world emulated Western policies because the West is incredibly rich in comparison – and that these countries felt that adopting Western policies was the most reliable way to achieve wealth. Whether this is in fact the best way for these countries to attain wealth is beside the point, as we’re only considering their motivations.

    So outside of a few anecdotes, how do we know status seeking was even a major motivator? Perhaps it is, perhaps it isn’t – but some more evidence would be great. Especially when we’re considering arguments from someone who see status seeking in everything 🙂

    Also, how would you consider the evidence of countries in the future emulating China’s policies? Would this be evidence of status seeking also? Or would this be evidence countries absorbing new data and making rational new decisions?

    • gwern

      The power & wealth of the West gave the West tremendous status.

      If you read your history books about the height of imperialism (or even just watch _The King and I_), you’ll find all sorts of now-amusing anecdotes about ‘westernizing’ kings or emperors or officials who will buy suits and go around dispensing medieval justice, or have small model steam-engines going around their estates though they take rickshaws or palanquins everywhere else.

      This concern with civilized trappings and not substance is a major indicator, to me, of status-seeking and affiliating behavior.

      • Jackson

        Tails of Lekcess, I call it.

        The Peacock tail is now mal-adaptive.

  • Kakun

    IMHO, this analysis relies on too many weak links to be right. First, AFAICT, most of those who feel that growth leads to democracy believe that the point where democracy is adopted is a GDP per capita of 7,000-8,000 US dollars, which China has yet to reach. Second, it’s also questionable whether China’s growth will continue: it may drop in the future, or it may have already begun- Chinese statistics are not very trustworthy, and related measures like electrical production have dropped off sharply.

    Also, I simply don’t understand your claim that Western advantages in diversity are negated by our status-seeking behavior. Are you claiming that non-Western nations don’t seek status? The Beijing Olympics seem to show that China has the exact same flaw.

    • Joe Unlie

      What’s wrong with this thesis is that the richest places in China don’t seem to be angling for political liberalism much faster than the poorer areas- in fact, one could almost say the opposite. Wealthy Shanghai, Zhejiang, Nanjing, Beijing, etc. aren’t exactly hotbeds of pro-democracy activism; on the other hand, grassroots democracy and a vibrant “demonstration” culture seem to be taking root in the poor interior areas.

      On the other hand, the people in the large, affluent coastal cities can generally “buy” their freedom- illegal media and drugs, cell phones, passports, internet (and proxy servers), satellite TV, foreign tutors, attorneys, headhunters, gambling, sexual services- if you want it, you can acquire it in Shanghai, and fairly easily. As far as day-to-day freedoms are concerned, Shanghai and Shenzhen are probably more “libertarian”, for most people (not, say, professional journalists), than a typical big city in the American nanny-state… no helmet laws, seatbelts, barely-enforced traffic laws, barely-enforced corporate regulations (which are easily bypassed with bribes), gambling, prostitution, knockoff goods, etc., etc. For some reason, this “police state” often feels as lawless as the wild west.

  • Bill

    You can have single party totalitarian states that have private ownership of property. In fact, private owners of property may become entwined with governing elites. See Nazi and Fascist states.

    In fact, what may become the mode of development would be party elites moving into business, getting financial support from state banks or relying upon seizure of land where property rights are ill defined, and, after becoming successful enterprises, restricting entry by other firms. Or, worse still, entrants form joint ventures with local elites and the initial state supported enterprise and the foreign joint venture partner go to other weak states and do the same thing.

    Capitalism as we know it requires a rule of law; but, there can be different ownership systems that have private ownership but have state support or control.

    The risk we have is not the rise of China, but emulation of similar behavior in our country, with business elites controlling government. Perhaps it is time to look at the argument that capitalism is equal to democracy. You have to be vigilent.

    • http://www.rationalmechanisms.com richard silliker

      Bill >The risk we have is not the rise of China, but emulation of similar behavior in our country, with business elites controlling government. Perhaps it is time to look at the argument that capitalism is equal to democracy. You have to be vigilent.

      BINGO!

  • Doug S.

    China has one very big problem that may or may not have something to do with lack of democracy. They have trouble enforcing the laws on the books. In China, you can put antifreeze in a bottle labeled “glycerin” and get away with selling it. There’s fairly widespread corruption in local and regional government. They’re currently in a Gilded Age, not a Golden Age.

    • anon

      Even in the Gilded Age, lacing bottles of glycerin cough syrup with antifreeze would have made you liable for civil damages and criminal penalties. Can we state the same about today’s increasingly corrupt China? My guess is we can’t

      • Joe Unlie

        Yes, we can. There is a functioning legal system in China that does hold corporate criminals accountable… provided the prosecutor has stronger party guanxi (relationships/connections) than the defendant. Even then, sometimes a prosecutor with weaker connections wins a court case. The system is highly flawed, but surprisingly functional.

    • Eric Johnson

      I’ve heard that too. But I wonder if there is an effect of relative poverty? Maybe there will be less incentive to break the law once their mean GDP/cap is $25,000. Enforcement will also be a lot more affordable once they are that rich, for sure. I wonder what the corruption picture in the USA or France was back when we were making $5,000 a head. Ethylene glycol in medicine isnt a good example of corruption as I see it; it can only represent either rock-like stupidity, or actual malice.

  • http://entitledtoanopinion.wordpress.com TGGP

    I wrote about wrong classical liberal predictions regarding China here. I might also point out Singapore & (until recently) Dubai, along with possibly Russia under Putin, as countries that openly deviate from Western ideals and seemed successful in doing so.

    Doug S., there are some who think our Gilded Age WAS the Golden Age!

    • Doug S.

      Have you heard about Ikea’s recent troubles with opening stores in Russia? It’s not a good place to do business unless you’re a mafia.

  • Millian

    “The world has emulated Western policies mainly because those nations were high status, not because their style of law or government was obviously more efficient. Chinese styles are likely similarly efficient, and when China seems higher status, the world will emulate it instead.”

    This is a vague statement that can’t be disproved because we don’t have a measure of status. Besides, if we ask what confers status, I’m sure we get either:
    1. a concession that efficiency leads to status, or
    2. a clear case of a high-status country (Russia?) that didn’t inspire people to follow it because of its low efficiency.

    • Eric Johnson

      > This is a vague statement that can’t be disproved because we don’t have a measure of status

      Its a little over-demanding to want some objective unit for this, and not necessary. The Brits had a worldwide empire on which the sun never set. And elites everywhere wear their clothes today; in Japan even the middle class does. The most powerful mideastern and Indian elites were educated in Britain (and America), eg Benazir Bhutto, etc etc. Then America took over by defeating the three non-democratic world powers, Japan Italy and Germany, and imposing its own form of government on these subdued peoples, who were cowed with the help of the world’s most powerful military invention, the atom bomb. And american pop culture was emulated universally. These anglo nations, let alone the West generally, ruled the world in terms of both power and culture for two centuries ever since Waterloo. Even their tongue became the lingua franca of the globe, as well as the widest-spoken except for, what was it, ah yes, Mandarin Chinese.

      However, its not so clear what form and magnitude the chinese ascendancy will have. Since we all have a zillion ICBMs these days, a conquering attack on the West or Russia will not take place. Soft-power conflict over oil seems likely, but a shooting war doesnt seem like it would profit either side. A worldwide clash of political ideologies is possible, as well as conflicting views on how to deal with threats from non-state actors. So is contention over claims and achievements in outer space, and a technological battle over missile defense is possible, with China likely to prevail. China may eclipse the Anglosphere in cultural influence, but probably not Zentraleurope, I would guess.

      • Millian

        Non sequitur response. Did Japanese people start wearing suits because Britain was high-status? Sure, probably. But Robin Hanson asks a different question: Did Japanese people change their economic policies because Britain was high-status?

        Surely you can see how a Chinese official who wears a suit and listens to American pop music is nonetheless not thereby implementing Anglospheric policies.

  • nazgulnarsil

    the world is scary when the whig blinders fall off.

  • http://www.nancybuttons.com Nancy Lebovitz

    How sure are you that the next leader will be China rather than India? Or some new coalition? For the latter, I’m assuming that population size is crucial.

  • gregorylent

    “democracy” is over-rated …

  • Ben Goertzel

    One of the things China is doing much better than the US, these days, is thinking medium-term and long-term rather than short-term.

    China is planning decades ahead, in their technology and science development, in their energy and financial policies, and many other areas as well.

    Whereas in the West, we seem to be mired in a “next quarter” or “next election” mentality.

    Granted, the American system sometimes does great mid-range planning by accident. For instance, the dot-com boom looked kinda stupid at the time, but a lot of that “wasted” venture $$ funded the build-out of Internet infrastructure of various kinds, and the prototyping of technologies that later became refined and successful. Those VCs would not have funded infrastructure buildout or prototyping explicitly, but they funded it accidentally. So the US system planned things 10 years in advance implicitly, without any one person explicitly trying to do so.

    We can’t explain the dot-com boom example by simplistic “market economics” arguments because so many of the investors and entrepreneurs in the dot-com boom actually lost their money and didn’t get paid much for their time, and their work and $$ ultimately went to benefit others. But we can say that the whole complex mess of the US economic system did implicitly perform long-range planning.

    Yet, this kind of implicit long-term planning has its limits, and seems to be failing in key areas like my own research area of AI research. The US is shortchanging AI research badly compared to Europe as well as Asia, because our economic system is biased toward shortsightedness.

    There are strong arguments that long-range state-driven planning has benefited developing countries — Singapore, South Korea and Brazil being prime examples. In these cases, it supported the development of infrastructures that probably would not have developed in a less state-centric arrangement like we have in the US.

    So, one interesting question is whether explicit or implicit long-range planning is going to be more effective in the next decades as technology and science continue to accelerate (or, to put the question more honestly but more confusingly: what COMBINATIONS of explicit and implicit long-range planning are going to work better)?

    My gut feel is that the implicit approach isn’t going to do it. I think that if the US government doesn’t take a strong hand in pushing for (and funding) adventurous, advanced technology and science development, then China will pull ahead of us within the next decades. I don’t trust the US “market oligarchy” system to implicitly carry out the needed long-range planning.

    The Chinese government is trying to figure out how to combine the explicit planning of their centralized agencies, with the implicit planning of the modern market ecosystem. They definitely don’t have it figured out yet. But my feel is that, even if they make a lot of stupid mistakes as they feel their way into the future, their greater propensity for thinking in terms of DECADES rather than years or quarters, is going to be a huge advantage for them….

    [FYI I have spent a lot of time in China recently and am an adjunct prof at a university there.]

    • Glen

      “The Chinese government is trying to figure out how to combine the explicit planning of their centralized agencies, with the implicit planning of the modern market ecosystem. They definitely don’t have it figured out yet. But my feel is that, even if they make a lot of stupid mistakes as they feel their way into the future, their greater propensity for thinking in terms of DECADES rather than years or quarters, is going to be a huge advantage for them….”

      And I lived in Japan in the late 1980s when it was taken for granted on both sides of the Pacific that the reason a nation half the size of the US was crushing it economically, in industry after industry, and obviously on its way to ruling the world, was the huge advantage of having a powerful government agency (Ministry of International Trade and Industry) planning DECADES, even centuries in advance. American academics claimed that the US economy, lacking guidance by similarly powerful federal critical thinkers, was left in the unfortunate position of having people and companies making their own decisions about what to do with their own money. Without the kind of wise, long-term guidance that only federal agencies, national ministries, or central committees can provide, the US would be doomed to making short-term decisions—an unbearable handicap.

      Japan’s long-term plans don’t seem to have been much of an advantage over the decades they planned for. The US, without long-term plans, rapidly adapted to the world as it actually turned out to be, with the quick, unplanned rise, and often fall and replacement of companies like Microsoft, Apple, Adobe, Netscape, Oracle, Google, Yahoo, eBay, Facebook, Twitter, ….

      I’m not saying long-term planning is foolish. If you guess right, you may benefit significantly, but I’m not sure how often that can be expected to happen. (I’d be interested to know.) For now, whenever I hear about how China has a huge advantage because of their long-term thinking, I think it’s deja vu all over again. I think the competitive risk from China comes more from the prospect of 1.3 billion smart, ambitious people finally FREED from the grip of long-term planners and allowed to make their own decisions.

  • Ben Goertzel

    I wrote an expanded, edited version of my previous comment and put it on my own blog at

    http://multiverseaccordingtoben.blogspot.com/2009/12/china-ascendant-comment-on-robin.html

    The expanded version makes my point better…

    ben

  • Grant

    I think Robin is saying that government policies typically seek status moreso than wealth? I think there are stronger arguments for this position:

    Governments themselves obviously do not seek status, but their elites do. Elites have no use for national wealth qua wealth unless they can siphon it off for their own uses. Most all nations have more wealth than the elites can consume, or have barriers preventing elites from consuming large amounts of it. So making their nation richer will not make themselves richer. However, making their nation higher status will increase their own status, both among their own people and among the world.

    Of course making their own nation richer makes elites higher status, but I would argue that wealth is the byproduct of status-seeking in this case.

  • Thomas

    Shall we cut to the chase? Clearly, our generous but inefficient habits are a form of vebleinian signalling; the less effective the better because it shows we can afford it. (It would be quite interesting to learn whether this proclivity is humanly universal or merely cultural.)

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  • http://lorenzo-thinkingoutaloud.blogspot.com/ Lorenzo

    Why has no one mentioned India? Compared to China, its political system is inherently more stable, its population growth is greater, it has very respectable economic growth and it has no serious pressure points with the West.

    There is some status effect in being successful. But there is also the reality of being successful. Western ways of doing things clearly were (mostly) more efficient: often much more efficient.

    The fascinating question about Chinese history is not “when will it dominate?” but “why did it not?” As a broad generalisation, if it was invented before 500BC it was invented first in the Fertile Crescent + Egypt, if was invented from 500BC to 1500 it was invented in China, except that anything to do with horses when it was invented in Central Asia. After 1500 it was invented in the West. China is still absolutely playing catch-up in a situation where Western intellectual dominance has increased in the last century or so, not lessened.

    The notion that, in some very important senses, the West was not successful or that Chinese history is going to be upward curves with no turning points are both very dubious bases for analysis.

    • http://www.hopeanon.typepad.com Hopefully Anonymous

      China vs. India is a very interesting comparison. Also China vs. India vs. EU, three nations of comparable size. Perhaps the 4th would be the Anglosphere (including Israel), given the near complete coordination by the anglosphere + israel post WWII.

      My money is still on the anglosphere.

  • Asher

    China will surpass the US because it ignores notions of human rights and the farcical equal dignity of all human beings. If China had been attacked in a matter similar to 9/11 they would have invaded Saudi Arabia, ejected the existing populations from oil producing areas and begun pumping oil for themselves. A response we should have adopted. Would millions have died? Sure, but it’s not like we have any moral obligations to them.

    • Joe Unlie

      If China had been attacked on 9/11, they would have punished Afghanistan in a brief punitive expedition, then gone home. They don’t do extended imperial adventures… why conquer a country for it’s oil when they can simply offer technical aid to the nation, develop it’s resources, and buy them off of them?

      As far as military adventurism goes, I find China much less threatening than the US. They’re amoral, but not aggressive. They prefer to wage their wars economically these days.

  • Joe Unlie

    “As a journalist who lived and breathed China for years, I felt sure that the Communist Party, following its loss of credibility at Tiananmen, would fall to ashes. During the boom of the 1990s, I knew that economic modernization would force Chinese institutions to become accountable and democratic.”

    This is a typical misunderstanding by someone who hasn’t really studied how the Chinese have done things. First off, one has to remember that, like Japan, China is a society where mianzi (“face”) is extremely important.

    Take Tiananmen. The typical western line is that China was supposed to go the way of the western Communist nations, and their government was supposed to collapse- but instead, they took a hard line and smashed the protests. Half-true, but you’re ignoring what was going on inside Zhongnanhai in those heady days. The nationwide protests were NOT being seen as discrediting communism, but as discrediting Deng Xiaoping’s “Reform and Opening” policies, which were leading to chaos. The new Prime Minister, Li Peng (Zhou Enlai’s adopted son), was a hard-line Maoist, deeply critical of Deng, and seen as likely to succeed him as the future head of state. As attempts at quelling the Beijing protests with local police and guard units failed, Li ordered PLA units from the Dongbei provinces, the heart of Maoist support in the wake of their industrial stagnation of the late 80’s.

    Li was plotting a coup. Deng, of course, was one of the canniest politicians in history, and saw this coming- thus he ordered Li to march his forces on Tiananmen, thus turning a would-be Maoist coup into a crackdown, and leaving Li with egg on his “face”. Li’s reputation never recovered- after the arrest of reformist Zhao Ziyun, the new President, Jiang Zemin, reduced Li to a paper-shuffler until his retirement. Li is to this day a national embarrassment; if I bring up his name in conversation in Shanghai, people laugh. So, through Deng’s decisive action, a terrible situation (crackdown followed by Maoist coup) was turned into a better one (crackdown followed by Maoist embarrassment). Deng saved his program of reform and laid the Maoist ghost to rest, though he had to throw a lot of good people under the bus to do it. (Not that this was anything new to Deng, who had pretty much built his career on being the most quietly ruthless sonofabitch who ever lived.)

    Likewise, there have been other significant changes that get underplayed because they don’t fit into our usual models of “democracy”. Take Zhu Rongji’s reforms, in line with Jiang Zemin’s “Three Represents”. Zhu forced hundreds of old oligarchs into retirement, brought many “missing” sectors of society into the CCP, and did quite a bit to transform a creaky post-maoist oligarchy into a formidable technocracy. However, because these reforms were done in a typically “Chinese” way, they’re quite opaque to western journalists and political scientists. (And what makes Zhu all the more fascinating is that, after serving his five year term- he quietly retired from all his posts and stepped off the stage. The Commie Cincinattus, indeed.)

    Or take China’s political ideology. Many think that China today has no political ideology outside of, say, bald-faced opportunism. Far from the case. The ruling ideology, Hu Jintao’s “Scientific Development Concept”, is a technocrat’s dream come true. An expansion of Deng Xiaoping Theory, and based (loosely) in Marxist developmental thought, Scientific Development Concept essentially takes technocratic dictatorship to it’s logical end- analyze problems, look for solutions, implement them on a trial basis, gather data, and based on those conclusions, roll them out for nationwide implementation. There’s more to it than that, but I’m sick of typing this comment for now, and this would deserve a post of it’s own.

    In any event, though, China today is a very fascinating place, because they are trying to write a new rulebook. What will happen? Who knows…

  • http://topologicalmusings.wordpress.com Vishal Lama

    The world has emulated Western policies mainly because those nations were high status, not because their style of law or government was obviously more efficient.

    Not to put too fine a point on it, your assumption is flawed at best. I seriously think you need to reconsider some of your assumptions on this one. I don’t know how much experience you have living in a developing country (take India, for instance) but I certainly possess quite a lot and I can assure you that many developing countries gravitate toward adopting (emulating, if you insist) Western policies because those policies are more humane, promise greater individual liberties and personal freedom, provide greater scope for growth (in the most general sense), etc. It is somewhat unfortunate that you seem to be blind to many of the best things that the West has to offer the world.

    (Note: I am a big fan of your blog, but on this one I felt you were being rather flippant. Not all Asians are mesmerized by the Chinese political structure or their economic model.)

  • Philo

    “So why don’t we apply the same argument as eagerly there?” Who are “we”? I apply it. And therefore I suggest you not hold your breath till “a low-free-speech nation becomes higher status”; it isn’t going to happen. By the time it gains high status, China will be a moderate-to-high-free-speech nation (I predict).

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