TheWorldJournal.com

China is Going Strong
By Jean-Francois Numainville, TheWorldJournal.com

The largest country in the world is in the middle of a series of deep structural changes that will turn its traditional socialist and under performing economy to an open and very competitive market, where the sky is the limit. Leader Deng Xiaoping set a milestone in its country's history by launching the actual economic transformation process.

The Good:

Recently, China joined the World Trade Organization (WTO), which is an agency in charge of ruling and increasing trade between its members. The importance of this event is not to be underestimated: That means that one of the biggest market is going from isolation to a open and free economy where anyone can go and try their chance at grabbing immense opportunities. For the moment foreign participation is concentrated in fields where domestic expertise is not sufficient, like telecom firms mandate to build a nationwide fiber optic network. But just as so many possibilities of entering the Chinese markets are at the reach of occidental firms, they should brace themselves for an invasion of Chinese goods in their own market. You read right, cheap and mostly high tech products from China are about to find a place on shelves of a store near you. Companies such as Nokia, Compaq and HP were unpleasantly surprised about the growing number of Chinese firms capable of delivering cheaper substitute. Although Chinese corporations can't compete with their western counterparts for state of the art products market, they certainly can deliver more basic electronic goods. As a result of good performance in domestic market combine with WTO trade policies, it's only a matter of time before we see established Japanese manufacturer battling against products bearing a "Made in China" label. Although cars are certainly not part of the list, many others are; Cell phones, computers and CD/DVD players are among a string of imports soon to come straight from the country of Confucius.

It certainly seems awkward at first glance to consider the already saturated and ailing world market getting even more competition especially from a country so economically distant as China, but the facts are there to back up this eventuality. China is by far the country having the biggest growth potential: It has the largest population, with a constantly increasing skilled and educated workforce. The country is geared with numerous natural resources and as access to the Pacific and continental Asia. Existing Facilities (factories, airports, schools, hospitals) are mostly aging yet well maintained by the government. However they remain insufficient to suit the enormous and growing needs of the Chinese society, so the government has reacted by turning the country in a massive construction site. The people, resources and the facilities of China combine to make the best recipe for a successful nation since the golden age of the United State.

The Bad:

Although the future looks bright for China, the path to take to make it there spurs passionate debates between the conservatives and progressives visions, which divides the regions of China. Modernity is now seen by many as a threat to a basis of the Chinese society: Its traditional heritage. Remote regions of China are mostly inhabited by people living on farms, producing just enough crops to feed their family. Millions of Chinese are surviving performing jobs the same way they ancestor did centuries ago, and the WTO new productivity policies will eradicate this way of living, thus forcing masses to move to cities seeking employment. Joblessness will plague China in the transition period to a modern economy, but this transformation time might be punctuated by social mayhem stirred up by those left behind. In the next few years, before the changes pass the no return point, China will have to face choices that will shaped its future.

The Ugly:

All of this brings the question: what's going to have to go? Well, the Chinese totalistic regime's answer is simple: "Not us". The communist party has been at the head of the country ever since the Mao era (1949), and has no intention of sharing the power. In facts, the entire change process is not a way to gradually give up the direction of the country to a democratic system, as some might imagine; its purpose is to insure the survival of the actual regime. Witnessing the fall down of the USSR in the early 90's due to the popular uprising for better living conditions, the Chinese government decided to design a plan to give more than the communist regime could while keeping the hot seat. So they came up with this series of changes, figuring that the Chinese will be satisfied by this way of living. But the current situation remains that such things as freedom of opinion and religion are still refused to the Chinese people. Furthermore, International relations is something the Chinese government haven't quite got an handle on: they imposed their authority to the people of Tibet and they are striving to do the same to Taiwan. But let's hope that the people of China will seize the opportunity to join the rest of us in the free world without going through another dark period, they had too much of those already.

© January 4, 2002

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