September 18th 2010

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Articles from this issue:

EDITORIAL: Gillard sweeps Greens into power

CANBERRA OBSERVED: One outside shock could topple Gillard Government

NATIONAL AFFAIRS: The Green menace we must mobilise against

WATER: A solution to the Murray-Darling Basin crisis

WESTERN AUSTRALIA: Why WA will acquire land for Browse Basin gas project

OPINION: Absentee voting an open door to fraud

CHINA: It's capitalism, but not as we know it

FOREIGN AFFAIRS: China's military build-up threatens Taiwan

OPINION: Australia: no place for sharia law

CULTURE: Pathology as entertainment

UNITED NATIONS I: UN conference downunder sidesteps controversy

UNITED NATIONS II: A farce: the UN's World Youth Conference

ENVIRONMENT: Radical environmentalists inspired US eco-terrorist

Army Reserve numbers (letter)

'Our' new government (letter)

Actors or actresses? (letter)

AS THE WORLD TURNS: US government funds mosques abroad / America's dying constitution / US consumers will drag us back into recession / Economic defeatism taking hold


BOOK REVIEW: THE KINDLY ONES: A Novel, by Jonathan Littell

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It's capitalism, but not as we know it

by Ian H. McDougall

News Weekly, September 18, 2010
China is one of the greatest economic success stories in history. Hundreds of millions of people have been lifted out of poverty in the last 30 years.

When Deng Xiaoping announced that "to get rich is glorious", he had a receptive audience. The new heroes are not Mao's lower and middle peasants, but wealthy entrepreneurs. The peasants are back to where they have always been - the foundation of China's society, ripe for exploitation by whoever happened to hold power in Beijing.

When you mention "peasants" to anyone in China, especially their successful children, you receive an uneasy response. The neng fu are easily recognisable. Their clothes are worn and serviceable, rather than fashionable, and their skin is blackened by the sun. Their hands are hardened by manual labour and their fingernails short and uneven.

When they see "foreigners" - anyone Caucasian - they stare in amazement and are often so stunned that they crash their primitive motor vehicles. Many villages in the interior of China have never been visited by a foreigner.

Their children do not want to stay on the farm. These rural people are the prime targets of recruiters for the booming factories on the coast of China. Wages may be low and the working conditions and hours worse than those of Dickens's England, but it's a lot better than labouring on the farm. Frequently, to emphasise that they do not labour with their hands, Chinese men will grow the fingernail on their left little finger.

For factory workers, conditions are often far worse than Victorian England. At least, the workers who fuelled the British Industrial Revolution had Sunday off. In China, factory hands often work 10 to 12 hours a day, seven days a week, with one day a year off - Chinese New Year.

The second generation of migrant workers in coastal regions where China's export-based miracle has seen it fullest flowering are becoming militant, so factory-owners are opening plants in the interior, but the demand for labour is still enormous.

Taiwan's Foxconn, which makes Apple's door-busting new gadgets on contract at its mainland factories, employs over 400,000 workers at one plant alone. Just driving from one entrance to another takes an hour. A spate of suicides at its anthill-like dormitories put Foxconn on notice that all was not well in its massive plants and they began to take corrective measures before the political heat became too intense.

Officially, China's national mission statement is "to build socialism with Chinese characteristics", but it's hard to discern much socialism in China's headlong dash for growth.

China has recently surpassed Japan to become the world's second-largest economy, and, if China continues to boom while America stagnates, it will overtake the United States within 15 years to become the largest economy in the world.

What spurred this dash for growth? According to Sterling Seagrave, in his Lords of the Rim (Corgi, 1995), it was to prevent economic catastrophe. He wrote: "Since 1949, China had achieved equality, but without freedom or prosperity. The Party was discredited by the Great Leap Forward and the Red Guard movements. Communist doctrine was in shreds, and ideology and terror were no longer adequate glue. The centrally-controlled economy was foundering.

"Facing collapse on Soviet lines, in 1979, Deng and the Party leadership decided to save themselves and to preserve their control by sacrificing communism. They rallied support by providing unprecedented material benefits, and setting loose free enterprise." (pp.335-6).

The bedrock of China's economy is hundreds of millions of cheerful, hardworking and ever-optimistic workers and small-business owners.

But the benefits have been very unevenly distributed. At the local level, the fruits of prosperity are distributed by an unholy trinity of the Party, business and government. These men - and they are almost always males - drink together, womanise together and swap favours in an intricate network of friendships and alliances known in Chinese as guanxi.

At the national level, a similar network exists because big business is controlled by the state and the Party. At the highest levels, these men interchange between government, the Party and big business. Government and the Party are not good training grounds for business, and the top executives who are parachuted in are often woefully inept in the commercial world.

At the very highest levels, the levers of wealth and power remain in the hands of the families of the revolutionary leaders, known as Princelings. The family remains at the base of Chinese society, and the wealth of the offspring of revolutionary leaders such as Li Peng and Deng Xiaoping, among others, can be measured in the billions.

Their wealth may be held offshore, or be in the hands of trusted underlings, but who pulls the strings is well known. China may be now officially Communist, but the family remains at the base of China's society and economy, as it has been for millennia, and the Princelings have control of Lenin's "commanding heights" of the economy.

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