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<DIV><FONT size=2>Will labor's bashing of China during the WTO/trade debates
give Bush political ammunition as he rattles his saber over the spy plane
crisis?</FONT></DIV>
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<TD vAlign=top width=*><FONT size=4><B>Commentary: Walker's World - The
real China debate</B></FONT><BR>
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<TD bgColor=#000000 colSpan=2><IMG border=0 height=1
src="http://workingfamilies.ibelong.com/images/1x1.gif"><BR></TD></TR></TBODY></TABLE><FONT
size=-4>Apr 08 2001 9:09 AM EST</FONT>
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<P>WASHINGTON, April 8 (UPI) -- Deep below the headlines, and far from
China's Lingshui air base where the American EP-3E spy plane still
languishes, at the heart of the complex relationship between China and the
United States lies a controversial theory about the relationship between
money, power and freedom.
<P>At its simplest, this theory states that free markets are inseparable
from free institutions. Economic freedoms are the springboard from which
all other freedoms, of the press and of religion and of thought and
political organization, all leap magically into life.
<P>"Over the long run, free trade is good for the development of democracy
and human rights in China," President Bill Clinton declared during the
United Nations' Millennium Summit last September, justifying the effort
his administration had poured into clearing China's path into the World
Trade Organization.
<P>This is very nearly a bi-partisan position in Washington. Texas
Republican Dick Armey, the House Majority Leader, claims that the Internet
is the soft underbelly of Communist rule. As the Internet spreads, Armey
enthuses, "The Chinese people will use those tools to spread information,
organize politically, protect themselves from the government and
ultimately demand a voice in their own affairs … .Free and open trade with
China offers the best hope of turning China into a free and open society."
<P>The theory itself is rather more complex, assuming an inevitable
feedback and interplay between economic and social life. The more trade,
the more wealth seeps into China, which will steadily create a larger
middle class, which will in turn require an ever greater voice in the
direction of national policy. The middle class has savings, to prepare for
their old age and to finance their ambitions for their children.
<P>The theory goes on to suggest that the private property rights that are
inherent in those savings have their own requirements: for an honest
banking and investment system, for a guarantee against government seizure,
for a free press than can convey reliable information that the middle
class needs to invest sensibly. Faced with a choice between protecting the
integrity of their savings and submitting to a corrupt and authoritarian
government, China's new middle class will demand freedom.
<P>It all sounds convincing. And there are some heartening examples in
what are today the democracies of Taiwan and South Korea that show the
process at work. And the broad relationship between prosperity and
politically free countries like those of North American and Europe also
seems well established, just like the connection between centralized state
rule and financial stagnation that marked the old Soviet Union and today's
North Korea.
<P>There are, however, a series of question marks over the broad theory.
First, some countries became highly efficient and prosperous without
enjoying what we would now call freedom, like the Germany of the Kaisers
from 1871-1914, or Imperial Japan until the disaster of 1941.
<P>Second, free countries do not necessarily stay rich. Leave aside the
global depression that shattered the prosperity of the United States and
Europe in 1931, and consider the British decline of the 1960s and 1970s,
or the Japanese stagnation of the 1990s. These examples do not destroy the
overall theory, but they do suggest that the relationship between
prosperity and freedom is quite as precise as Clinton and Armey assume.
<P>Finally, consider the ruthless efficiency with which Stalin
industrialized the Soviet Union in the 1930s, or the example of
authoritarian China in the past two decades since Deng Xiao Ping launched
the period of economic liberalization. Perhaps the explanation lies in the
way that wrecked and impoverished and essentially peasant societies can
for a period produce more wealth and output through state-controlled
change, industrialization in Stalin's day, free market prices for surplus
food output in 1980s China.
<P>But if that is the case, the grand theory linking freedom and
prosperity is weakened. The various counter-examples all point to cases
and examples where the connection between free markets and free
institutions becomes problematic.
<P>And that brings us back to China. Maybe, like South Korea and Taiwan
over the past 30 years, China is on a slow but steady path towards
political liberalization. If the theory is right, then China's Communist
leaders are wisely and selflessly working themselves slowly out of a job.
But that is not quite how it looks from the treatment of the Falun Gong
religious group, nor from the technical controls Beijing has put on
China's Internet servers, nor from the secretive way the struggle among
the Communist Party leadership for the succession to President Jiang Zemin
is now under way behind the walls of the Zhongnanhai compound.
<P>The powerful old men of Beijing seem to have something else in mind,
which may be as simple as replacing the failed ideology of Communism with
the traditionally reliable and unifying ideology of nationalism. That,
after all, was the explanation of so many of the exceptions to the theory
of free markets and free institutions. Nationalism worked for Hitler and
it worked for Stalin. Considering the way Chinese public opinion reacted
to the accidental bombing of the Chinese Embassy in Belgrade during the
Kosovo war, and the popularity of Beijing's tough line on Taiwan, maybe
some of Zhongnanhai gang think it will work for them too. They may yet
find that nationalism is just as unpredictable a force as freedom, only it
can be nastier.
<P>--
<P>Copyright 2001 by United Press International.
<P>All rights reserved.
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