Book Review

Middle way for global giants

The Writing on the Wall: China and the West in the 21st century

The theme of this book is not what its title might at first suggest: that this century will see China ineluctably succeed the United States as the greatest power on earth. Will Hutton's concern is, rather, that the two countries find a middle way between the Leninist corporatism of the first and the flight from Enlightenment values in the second. What he means by "Enlightenment" needs explaining. The usual definition is that emphasis on reason and empirical enquiry which led to the rise of liberalism, democracy and capitalism. However, the outcome was not always so benign: the despotism of Frederick the Great and Catherine the Great, and the Communist state founded on dialectical materialism, of which China is the greatest living manifestation, are also among its fruits.

What Hutton envisages is the society created by the American Enlightenment, characterised by egalitarianism, individualism, commitment to education and institutional checks on private power. He sees this model as  undermined since the early 1970s by a rampant form of capitalism aimed not at building businesses but at maximising immediate financial returns to shareholders. Thus his thesis that to help China make the inevitable shift towards a more pluralist polity, the United States needs to rediscover its Enlightenment heritage while resisting calls to erect barriers to Chinese goods. The worst way to respond to Beijing's tendency to nationalist rhetoric, he writes, is confrontation. "The smarter policy is to build China into the world system and genuinely offer it the possibility of co-managing the system for mutual benefit."

Hutton, aided by his Mandarin-reading researcher, Philippe Schneider, writes convincingly about the political and economic cul- de-sac in which the Chinese leadership finds itself. The "household responsibility system", whereby peasants closed down the communes and returned to farming the plots of their ancestors, and the boom in town and village enterprises laid the foundations for the astonishing boom of the past few decades. But against the emergence of China as a major global trader must be set the vast sums poured into the barely profitable state-owned enterprises, and the appalling cost of corruption. "China must become a more normal

economy, with higher consumption, lower savings and more efficient enterprises," Hutton writes. "But that will demand major changes in Leninist corporatism. The Chinese Communist Party ... can relax its political control to allow the economic reform process to be completed. Or it can retain political control, watch the economic contradictions build and so create the social tension that may force loss of political control. The party's instinct is to muddle through. The force of events, I suspect, will force more radicalism."

The first option could involve recognising property rights, allowing independent trade unions and introducing taxes to finance a more comprehensive welfare system. But the party is rightly terrified that such concessions could lead to the loss of its monopoly of political power. Likewise, it is resisting a significant upward revaluation of the unit of currency, the renminbi, for fear that the consequent fall in agricultural prices will trigger unrest. China's economic growth cannot disguise the fact that at heart the state is weak - stuck in an ideological halfway house whose walls are being battered by the waves of globalisation.

Hutton is also persuasive on the need to avoid the siren call of protectionism when confronted with a flood of cheap Chinese goods. He urges the West and Japan to have more confidence in the advantages brought by high productivity, good vocational training, a strong legal system, adaptability to consumer demand and generous welfare provision. "This is a moment when both Americans and Europeans need to hold their nerve about their economic strength and keep their markets open," he writes. What chance is there of China and the United States eventually coming together on an enlightened middle ground? To achieve equidistance between his two poles, Hutton exaggerates their differences. He writes that the retreat by the Americans from their Enlightenment tradition is "a world event to rival the emergence of China".

That is an excessively bleak view of a vibrant democracy with a unique system of checks and balances, in which a swing against the neo-conservative unilateralism of the Bush presidency is already apparent. The distance that the Chinese have to travel to create a pluralist polity and modern economy is far greater, and more hazardous, than that facing the Americans if they are to rectify the imbalance of recent years.

More egregious is his equating of the Great Leap Forward with what he terms the "aggressive implementation of the Washington consensus and the financial liberalisation that was forced on much of the world" in the 1990s. Having quoted elsewhere from the Jung Chang/Jon Halliday biography of Mao, Hutton should know better. Those authors estimate that close to 38 million people died of starvation and overwork in the Great Leap and the famine which ensued. To bracket that and the macro-economic policy prescriptions of the IMF and World Bank as "utopian grand ideas" which "do not respect the complexity of real human communities" is grotesque.

As to the question posed above, there is, as I have indicated, a good chance that the United States will reform itself while keeping its markets open. China's trajectory is far more difficult to predict. The Communist Party could seek to divert attention from social upheaval at home by invading Taiwan, in which case hopes for cooperation between what the author calls "the last genuine great powers" would be dashed. In his praise of the middle way, Hutton writes surprisingly little about Europe, beyond extolling the Nordic ex-

ample. Both France and Germany believe they offer a more balanced economic and social model than that in America. Yet what is acknowledged as the "crucial role" of the European Union is mentioned only briefly in the closing pages. They also contain a critique of British business which would have belonged better to the chapter on the American betrayal of Enlightenment ideals.

Some other smaller points of criticism. I would not call South Korea under Park Chung-hee or Taiwan under Chiang Kai-shek "significantly pluralist". Chris Patten's democratic reforms in Hong Kong were indeed backed by John Major against pressure from both China and within Britain, but Beijing has since stifled further advances. The resort by Chinese leaders to nationalistic tub-thumping is not a future risk; it has already happened. To describe the NHS and BBC as "successful public institutions" begs a host of questions. And Nafta stands for the North American Free Trade Agreement, not Area.

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