Political reform: China’s next modernization?

China boasts the world’s second-largest economy, delivering double-digit economic growth on a seemingly permanent basis. It pursues the world’s most ambitious program of military modernization, emphasizing the projection of power beyond its borders. It is the planet’s biggest steel producer, car market, commodity consumer and exporter. As President Hu Jintao prepares to visit Washington next week, his country’s model of authoritarian development looks unstoppable – with troubling implications for American primacy in world affairs.

Yet China may soon bump up against the model’s limitations. An aging demographic profile means the population’s share of prime workers has already peaked. Resource constraints and environmental devastation will increasingly complicate economic development. Worried neighbors across Asia are moving closer to America and each other, challenging China’s room to maneuver in its region.

But it is China’s political model that may be the most significant obstacle to the country’s economic modernization. This would invert the belief that China’s developmental dictatorship has catalyzed its economic dynamism. But it is the opinion of no less than the country’s No. 2 official, Premier Wen Jiabao.

In remarkable public comments last summer, Wen said Chinese officials “must continue to liberate their thinking and make bold explorations” in reform. Without “reform of the political system,” he argued, “it will be impossible for the goal of economic reform and modernization to be realized.” China must reverse “the excessive concentration of unrestrained power” and “create conditions for the people to criticize and supervise the government. . . . People’s democratic rights and legitimate rights must be guaranteed” for economic growth to continue.

Wen leaves office next year. His remarks may be an effort to shape his legacy and throw his weight behind the reform agenda in the face of resistance from regime hard-liners – including President Hu.

But the premier’s comments reflect broader leadership concerns about growing social inequality and rising demands among citizens for the rule of law and an end to corruption. To sustain the legitimacy of their rule, some of China’s mandarins appear to understand that full economic modernization requires a political opening that fuels innovation, promotes broad-based social welfare and strengthens the institutions that underpin the free market.

As a former senior official of China’s central bank, Yu Yongding, recently wrote in the China Daily, “China’s rapid growth has been achieved at an extremely high cost. Only future generations will know the true price.” Yu called China’s inability to innovate its “Achilles heel” – and urged political reform aimed at “breaking this unholy alliance” between government officials and business elites. “[M]eritocracy is a prerequisite for good governance. But meritocracy has been eroded by a political culture of sycophancy and cynicism,” he wrote. China risks a “serious backlash” that will stall growth unless it moves beyond a “capitalism of the rich and powerful.”

The implications for America of China’s reform debate are clear. The Obama administration should not shy away from promoting universal values in its China policy. Ultimately, U.S. policymakers may find that a reluctance to speak out in defense of human freedom and the rule of law in China leaves them on the wrong side of a debate whose outcome will have enormous consequences for the Chinese people – and the 21st-century world.

Rather than declaring, as Secretary of State Hillary Rodham Clinton once did, that the United States would not let issues such as human rights “interfere” with closer Sino-American ties, Washington could calibrate its cooperation with Beijing based on China’s reform progress – both for intrinsic reasons and because the way the Chinese state treats its citizens is an internal manifestation of how other countries should expect to be treated by China in its conduct of external affairs.

American assistance and exchange programs to strengthen the rule of law, free media, labor rights and local elections could help Beijing manage a graduated reform agenda. Closer U.S. relations with such developing giants as India and Indonesia could strengthen the hand of Asian democrats in ways that influence their neighbor’s own debate about political reform.

As a large group of senior Chinese scholars and activists wrote in an open letter urging the release of imprisoned Nobel Prize winner Liu Xiaobo, China should “join the mainstream of civilized humanity by embracing universal values. Such is the only route to becoming a ‘great nation’ that is capable of playing a positive and responsible role on the world stage.” President Obama would do well to remind President Hu of these words next week.

Daniel Twining, the senior fellow for Asia at the German Marshall Fund of the United States. He was a member of the State Department’s policy planning staff from 2007 to 2009 and the foreign policy adviser to Sen. John McCain (R-Ariz.)

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