Who's bullish on China? For starters, the Chinese


BEIJING -- I'm bullish on China. I know the downside. The country is ruled by aging authoritarians who jail dissidents and censure the media, threaten Taiwan and torture Tibetans.

But that is only part of the story, and not the chief concern of most ordinary Chinese.

Travel around China and you can't help but be infected by the spirit of optimism of the people. The Chinese see their lives getting dramatically better, not just in the wealthy coastal cities but inland, even in poorer provinces. Although a visitor in a country this huge and diverse is like the proverbial blind person feeling an elephant, the mood is too pervasive to be ignored.

The changes over the last decade are stupendous. Ten years ago, Shanghai's Nanjing Road was a sleepy thoroughfare traversed only by bicycles and a few taxis; today it's jammed with traffic and lined with high-rises and neon, and glitzy department stores crowded with shoppers from China's new middle class.

Ten years ago, Huili village was a collection of hovels in the poor, coal-mining province of Shanxi and had no electricity or decent housing; today there is a color television in most homes, many of which are new.

Ten years ago, this was a tightly controlled country dominated by a centrally planned economy. Today, the state sector produces only 40 percent of China's output, stock markets are booming in Shanghai and Shenzhen, and private entrepreneurs are the country's lifeblood. Provinces are increasingly independent from the central government, and people talk freely to each other, even if newspapers are controlled.

Talk in airport waiting rooms to Chinese businessmen, who fly around the country in search of new clients; to students at Beijing University, who once flocked to Tiananmen Square, but now want to make money; to young bankers, who are helping to modernize China's financial structures; to migrant workers at Shanghai construction sites or Shanxi mines, who are salting away wages to start a business back home.

Most expect their prospects, or at least their children's, to keep improving. (Contrast this with most Russians, who can't see a way out of their country's economic free fall.) Most say a better life takes precedence over more political freedom. For now.

Of course, skeptics will argue that China's phenomenal double-digit growth can't continue forever. They say foreign investment will slow down. They say the growing gap between China's new rich and old poor will cause instability. They say that without political reforms, China's economic progress will eventually stall.

But I remain bullish for several reasons, some unique to China.

First, the overseas-Chinese factor. The bulk of foreign investment in China comes from Chinese businessmen in Hong Kong and Taiwan, along with wealthy Chinese families from Singapore, Indonesia, Thailand and the Philippines. These investors have emotional ties to the motherland that go beyond their keen profit instinct. They will keep investing in China.

Second, Chinese thriftiness. The Chinese are big savers. Now, they are making money and saving it in local banks and even in new Chinese mutual funds with names like Dragon Fund. This money provides more capital for growth. Again, compare this to Russia where anyone who makes big bucks quickly shifts them into Western banks.

Third, the emerging-middle-class factor. Young professionals, bureaucrats, businessmen and two-worker families are creating a middle class. They now can buy apartments and private cars, or send their kids to private schools or college abroad. They talk freely with their friends, even tell jokes about political leaders. They are becoming numerous enough to create a key lobby for change: Eventually, they will demand more political say.

Fourth, and most important, the pragmatism factor. China's dramatic economic progress happened because Deng Xiaoping freed up the country's innate pragmatism from the shackles of Mao Zedong's ideology. China's motto became, "If it works, do it," even if the "it" violated communist dogma. Or, as Mr. Deng put it: It doesn't matter if a cat is black or white, so long as it catches mice.

Keeping faith alive

Unfortunately, Deng Xiaoping is slowly dying. And his successors lack his shrewd touch. But they know their very political survival depends on keeping people's faith in the future alive. That means that even if they talk more dogma, they know they must continue practical policies that enable the economy to grow.

They also know that China's leadership now gets its legitimacy from giving its people a higher standard of living, not from any ideology. That kind of pressure concentrates Chinese leaders' minds in a way that no dissident can. That economic imperative will force certain kinds of political change that otherwise would be resisted.

It is happening already. Village elections, which now take place all over China, began in part because peasants were upset over corruption by officials who collected their taxes. Granting them a vote gives them more faith in the system and heads off instability.

Another example: Legal reform -- creating a legal code that may actually be taken seriously -- was propelled by the need to give foreign and local investors protection. Now, China needs independent courts to enforce the law and independent legislatures to make more and better laws.

One Chinese intellectual, who played an active role in the pro-democracy movement that preceded the Tiananmen tragedy, told me he believes that political reforms will begin again in three to five years. "History goes on," he said. "Chinese will start insisting on political change because the lack of political reforms will hinder economic reforms."

He thinks China's leaders will then recognize that they have no choice but to go forward, even if there are bumps along the way or even some unpleasant diversions. My gut tells me his prediction is right.

Trudy Rubin is a columnist for The Philadelphia Inquirer.

Pub Date: 12/25/96

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