I have just finished reading John Lee’s book, Will China Fail?, released by the Centre for Independent Studies. Lee has performed a valuable service by documenting what moving towards freer markets has achieved – stunning growth rates and lifting hundreds of millions out of poverty. He also notes the fundamental contradictions that must eventually be resolved by the Chinese Communist Party.
These contradictions arise from the tension between free markets and political authoritarianism. Free markets cannot exist in a vacuum. Markets require the defence of private property, enforcement of contracts and government organs operating under the rule of law. Though no longer a totalitarian state, China is still very authoritarian. It does not have an independent legal system, and thus cannot provide businesses the certainty they need to prosper.
This coming clash between authoritarian politics and laissez faire economics doesn’t mean China will become a Western-style democracy. I personally think this is highly unlikely. But I think it’s a safe bet to suggest that China will within the next 10-15 years become a democracy along the lines of Singapore. This process will be hastened by China’s entry in the WTO.
Singapore is a procedural democracy, not a multi-party Western-style democracy. The casting of ballots in Singapore is legitimate, as all votes are counted fairly without manipulation. But it is effectively a one-party state due to strict defamation laws and undemocratic rules that prevent opposition candidates from achieving much success. Such a system might still seem bad, but Singapore has a comparatively decent human rights record according to the US Department of State. Singapore has draconian laws, but unlike China’s government, it operates according to the law.
Lee compiles a long list of factors he thinks should temper optimism about China succeeding. He suggests it will either stagnate, decline or implode. But almost every single example he provides can equally be used to prove the opposite point, that China’s government will be forced to reduce political authoritarianism.
Once some regulations are removed, policymakers begin to see with greater clarity the stupidity of remaining regulations. Australia has experienced this. With microeconomic reform in the 1980s, we saw the benefits of financial sector deregulation. Today, policy dialogue takes it one step further. There’s little talk of nationalising and reverting to the dark ages of high tariffs. Once the move towards individual freedom and free markets has started, it is a process that cannot easily be reversed, at least not in full. Once people acquire a taste of freedom, they want more. For this reason, I am optimistic about China.
Likewise, I believe that China’s government knows the path it has to pursue to enshrine its legitimacy. Legitimacy arises from being able to improve the economic lot of its people. Yet to increase economic wealth it has to privatise and deregulate. It has to remove the intrusive State even further. So while Lee is correct to note the problems facing China are stark (high rural unemployment, too much capital diverted to inefficient government firms, etc.) I also think the regime is smart enough to know it cannot revert to socialism now that people have gotten used to an adequate standard of living. So it has to pursue reform to fix the problems that Lee notes. This will involve a further reduction in the scope of government, and in the long-run we will see a semi-democratic China.
No longer are there mass famines in China. While there is brutal political suppression, pragmatism and a growing informed middle-class have moderated the government response. Those who believe that the concept of freedom is indivisible (that is, economic and social freedoms are inseparable because infringing one affects the other) will not be surprised to learn that since China began moving away from Mao-style communism in 1978, it has greatly improved its record on civil liberties. Amazingly, China’s constitution has been amended to allow for private property.
Taiwan and South Korea became democracies after liberalising their economic systems. Singapore’s leaders at this moment face internal pressures to convert from a procedural democracy to a genuine democracy. Hong Kong has autonomy from China’s authoritarianism under the “one country, two systems” policy. Is there any example of a country that has not improved its record on civil liberties by moving towards economic freedom?
Australian Libertarian Society (old site) 
Population of Singapore: 4,680,600
Population of China: 1,321,851,888
China’s government is never going to be like Singapore’s unless there is massive decentralization of government.
Sukrit
I have always been curious as to how the ruling party in Singapore has managed to poll quite so well in every election. what are the ‘strict defamation laws and undemocratic rules’ that restrict a more open democracy?
Architectonic — there are only three things the Commies have to do to become a “procedural democracy” like Singapore: (1) make sure the judicial system is independent (2) pass a law stating that private property is sacred and cannot be seized except with compensation (3) obey the laws passed and subject its compliance to the courts.
None of these conditions require the Communist Party to relinquish power, or stop repressing Tibet with unfair laws. There have already been suggestions from inside the Party to move towards the accountability that is needed in a capitalist system, while still maintaining one-party rule. Private entrepreneurs are now allowed to be members of the Communist Party, so change is definitely coming.
Pommy — the Singapore Penal Code has a provision that allows for jail term of 2 years for defamation. This is in addition to civil damages, so the government routinely bankrupts political opponents (under electoral law, bankrupts can’t contest elections). Censorship is prevalent. No public speaking is allowed without a permit, meaning political campaigning is severely restricted. Despite all this and more, a few opposition members have been elected.
That wasn’t my point. It is possible that they both may be considered “procedural democracies”. But in practise the Singaporeans will have more political freedom – defined in terms of being able to influence the political systems.
defined in terms of being able to influence the political systems
In an undemocratic system lobby groups have MORE influence over government policy, because they don’t have to compete with opinion polls of the “masses”. Many lobby groups want democracy & less random killing.
The economic reform process by definition increases the liklihood of political freedom. Because when the government gets out of economic planning, people become wealthier. That means they don’t have to spend their time all day with back-breaking labour in the fields. With wealth comes opportunities for learning stuff about Western socities. And leisure time for political activism. Which makes it more likely people will organise to demand rights we take for granted (thousands of protests occur in China every year).
I personally think the evidence is overwhelming. China will become a procedural democracy. The CIS book is just exagerrating, and ignores recent events like WTO entry which will lead to more freedom.
Just a minor point. I don’t think being seen as legitimate requires economic improvement for the masses. Governments are generally seen as legitimate when they have governed for a long time with no significant power structure to rival them or when they have been installed according to long standing traditions and rituals (eg heriditary title, democratic election etc). China could go into a protracted long term economic depression and it’s government would still most likely be seen as legitimate. The only real threat to the legitimacy of the Chinese government comes from fracturing of the nation state (eg Tawain and the example it sets) or the import of foreign rituals and customs that displace local ideas (eg foreign ideas such as democratic multiparty elections). If the Chinese government sees either of these as a threat then it should reveal it through it’s behaviour, as in fact it routinely does.
This would be one of the dangers of attending the Beijing Olympics- the security guards.
Q. What do Australians like?
A. We like gamble, to bet-
You are splittist, being paid by DalaiLama! Tobet is part of China!!! Arrest him!
” Amazingly, China’s constitution has been amended to allow for private property.”
One wonders to who benefits from this “reform”. We hear quite a bit about riots by and punitive measures against peasants who claim to have lost access to property as it has been effectively enclosed. I would say the motivation here is to further entrench a ruling oilgarchy rather than enshrine the sanctity of individual property rights. For that to happen all would have to be equal before the law. Incidentally I heard that the PRC’s constituation also enshrines the right to free speech. It’s niave to think that unbridled capitalism will deliver any form of democracy, China has long history and none of it includes rule by the people.
what Surkrit says about Singapore libel laws is correct. But it’s not as if Singaporeans don’t actually know the failings of the system or that there are alternatives. In spite of everything, there is pretty robust online debate and most Singaporeans are well informed about politics, policies, etc. The Singaporeans I have known, even those critical of the government, tell me the reason the ruling party keeps winning elections is simply because Singaporeans recognise at the end of the day that they are a far more competent lot than the Opposition.
China is a far more corrupt place than Singapore and the institutions it has inherited are far weaker. Singapore has made a successful transition to a procedural democracy because it inherited one – it was a former British colony. In all areas of law other than those that have political implications it is essentially part of the wider common law tradition and usually meets the same high standards. Thus I am far more pessimistic about China’s prospects than Singapore. Look at how it kept the bird flu problem under wraps. And incidentally in the case of something like bird flu, the lack of transparency makes their incompetence and repression a menace to us as well as the Chinese population.
btw Singapore’s largest and oldest opposition party calls itself the Workers party. while they are not exactly behind the times, you can visualise the sort of people behind it – cardigan wearing academics.
Ironically the ruling PAP itself used to be a member of Socialist International but got kicked out when they started implementing successful economic policies.
Jason,
People in Singapore vote for the PAP because they did a good job and they are competent, not just because they are better than the other guys. In addition, the fact that Singapore had a successful transition is probably only in small part due their history. The large part is because they’re smart people that basically believe in education, hard work, and they don’t like crime. They’re also good at being capitalists. Which places aren’t successful that have these things excluding places with absolute tyrants destroying it all (most of East Asia excluding China has these characteristics, and most of East is succesful) ? In addition, whilst LKY may have been authoritarian, he was liberal economically, and he didn’t stop people from pursuing their own economic goals. In addition, as can be seen from tax rates, and perhaps due to the fact they don’t have to buy votes like Australia et al. (or perhaps because that is would really annoy the people), the PAP have historically not frittered money away.
While it’s true that the 2004 amendment to the Chinese Constitution permitted private ownership, it was restricted to the 550 million urban residents, who promptly bought cars and apartments. The 850 million rural residents are still not permitted to own their farm land.
Out of the largest 186 nations in the world (and including Singapore as a country), all of the most prosperous nations also have the highest levels of human rights (as measured by civil, political, and economic freedoms–17 variables). All of the nations with the worst levels of human rights are also located solely among the poorest nations in the world; this includes China, today.
If the per capita GDP growth rates continue in China as they have averaged over the past twenty-eight years, China will emerge from the ‘impoverished’ category ($30k) by 2026.
There are currently 20 nations in the ‘prosperous’ category of national income; all are also in the highest category measuring human rights. There are NO countries in the ‘prosperous’ category which have anything less than the highest levels of human rights.
China is the final great test: is ‘freedom’ the great motivator of human history, or not?
(World-wide freedom/prosperity data table–and summary–is on the “Stats” page at: http://www.duoism.org, and will soon be included on http://www.philohr.org. Write back, Australia, if you like the data set.)
Sorry, but the posting chopped off the data set summary: China emerges from ‘impoverished’ income levels (less than $10k) by 2011; from ‘lower middle’ (between $10k and $20k) by 2018; from ‘upper middle’ (between $20k and $30k) by 2024; and joins the highest ‘prosperous’ category (greater than $30k) by 2029, if not slightly sooner.
“btw Singapore’s largest and oldest opposition party calls itself the Workers party. while they are not exactly behind the times, you can visualise the sort of people behind it – cardigan wearing academics.”
Geez what a cowardly comment, you can’t help yourself can you. How about going to live in Singers and slinging off a bit at the ruling clique Jase. We’ll redirect your mail to the big house.
Actually you appear to be so idealogically blinded that slinging off would appear to be beyond you capacity.
(Just thought I’d go in to bat for those poor bastards who’ve been jailed for “defamation” and strung up for drug trafficking, Singapore, so civilised).
Patrick
try to be less emotional. I’ve criticised Singapore lots of times on my current blog, old blog and on various forums. But it’s simplt a fact that the voters would vote PAP even if speech was freer.
And people who have been strung up for drug trafficking are not the same as the people who’ve been bankrupted by defamation laws. Who says I agree with the drug laws in Singapore? As a libertarian I think all drugs should be legal. And how are they any worse than the laws in Malaysia?
Try not to embarass yourself next time.
And btw patronising (let me guess) lefty white boy – I used to live in Malaysia and I do have relatives in Singapore. I know exactly what it’s like.
I don’t think we should necessarily be too quick to condemn jail for defamation as a draconian law. After all, Britain and I believe Australia had criminal defamation laws up until approximately forty years ago. In 1994 two people were charged with criminal libel in Canada (max. of two years jail), and, according to Wikipedia, it is still the law in some American states. For those who believe the law of defamation is justified, the current practice of making the offending party pay damages is not always an adequate deterrent to libel. Instead of a large well resourced publishing house what if the muckraker is some barely solvent dole bludger who spends his days spreading gossip on his blog? Or what happens when the ABC of SBS is found liable for defamation? They hardly pass around the hat amongst all the staff. In that case it is always the poor taxpayer footing the bill.
Sukrit writes:
That doesn’t really make sense. High unemployment and a very low standard of living in rural China, which encompasses a large portion of the population, produces a harsh dynamic when coupled with the urbanites who might have gotten used to an “adequate standard of living.” Nothing like wealth disparity to pull a country apart at the seams, lots of rural poor living a short brutal life while watching city dwellers do much, much better. Almost a script for trending back to socialism.
Then there’s the environmental issues — the water tables getting lower, desertification, loss of top soil, water and air pollution — and still growing population. Add to that the oil price rise and China’s in real trouble, the kind of trouble that free markets can’t mitigate. It’s also bound to fate of the US economy which isn’t looking to good these days.
We live in interesting times.
Re, ‘Freedom’ and China.
I am reading a fascinating book, “The Birth of Plenty”, by William J. Bernstein. He thinks a country needs four features before it can really become wealthy- 1) Property Rights, 2) Scientific Rationalism, 3) Capital Markets, and 4) An Efficient Transport System.
Whilst China seems to have these, point 2 needs free speech, and they don’t have that, and how can you discard old ideas if you can’t mention alternatives? Unless China changes, it won’t meet these requirements.
I certainly recommend the book, because it explains a lot- France under the aristocracy, with their inefficient system of tolls every few miles on Transport, was always going to struggle, for instance.
Just think- the Chinese authorities thought it was GOOD that a Western leader could speak Cninese! I’ll bet they wish they could ‘interpret’ his comments now! (I wonder if the Chinese will cancel the Olympics? Better that than have them cancelled because of violence.)
Oh, dear! When they corrected my link to wordpress, they messed up everyone else’s! Is anyone out there?
If you are, what do you think of human rights and trade? Should they be linked together: if so, why and how?
Being a Chinese myself, I do not see a democratic China in 100 years. Even they have a democracy in the future, it will not be like Taiwan or Singapore or the West, more likely like Pakistan or Indonesian kind of democracy.
In connection with remarks about Singapore . Singapore is not , and until things change dramatically , will in any way be a democracy. In a democracy people do not live in fear of a government or its services , and have freedom of speech, press , and the functioning of the government and its decisions are transparent. Also things like electoral boundaries are not manipulated at the last minute , and the executive and judicairy are separated.
Living in South East Asia I find it very difficult to find a real democracy in the region.
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I do not often have the opportunity to debate China and its politics with other Chinese in Australia.
This may sound surprising given that I am married to a Chinese woman, am aquainted with many Chinese, and often have dinner with various Chinese born Australians.
Oddly, I have reluctantly concluded that I have a greater interest in China’s history and its current politics than most Chinese that I come in contact with. This is a shame given the richness of the cultural and political landscape that is China.
I find that even my very own wife lacks any genuine interest in discussing the increasing prominence of China’s actions on the world stage, and what its internal struggle for democracy means for those living in China. She is more interested in events that may impact her directly, such as the value of the yuan or the performance of the Chinese stock market.
There are however a few people I know who do have very interesting views on China, and who are not afraid to express themselves. These people have grown up in China, and so their views are of paticular interest to me.
Having said that I should state from the outset that not only am I an unabashed Sinophile, but that I also appreciate the difficulties that the Chinese government must deal with in order to keep such a large and diverse nation together.
Unlike many of my highly educated colleagues at my work, I do not take the view that democracy above all is the most important goal of a nation. Quality of life must come first, and it is here that I think the cautious but ultimately benelovent approach of the Chinese government shines through.
Make no mistake, I realise that the government has made many serious mistakes and that poverty and corruption is rampant in China, but I am speaking in relative and pragmatic terms, not in ideal terms.
What has really caught me by surprise however has been the general agreement on this point from those least expected.
Why is this so surpising you ask?
Well, these very same Chinese that I refer to were the same Chinese who as students in Australia in the late 1980s effectively defected from China after the Tianemen Square protests. These people had a rabid resentment for the oppressive Chinese government at the time, so much so that they permanently left China as a result.
These same people now praise the current Chinese government and defend its actions.
Surprising yes, but not remarkable given the changes in China over the last 20 years.
Overall, I think that the general political apathy of most Chinese Australians, and the otherwise supportive attitude towards the Chinese government’s iron hold of the vestiges of political power, says a lot about the Chinese, their aspirations, values and their hopes.
It seems that at least for Chinese Australians, health, wealth and happiness is the ultimate goal of life, and although political freedom is a nice to have for most people, it plays little role in the thinking of most Chinese.
JStone; Democracy is not a requirement for the securing of liberty. While I in no way suggest that what exists in China is liberty, they have opened up their economy to competition and a freer form of trade and have reaped the benefits.
While democracy is more consistent with the concept of liberty the old idea of the benevolent despot, or enlightened absolutism is still relevant.