China’s last 70 years should be viewed in context

The national celebration for the 70th anniversary of the founding of the PRC is the biggest ever seen in China, the achievements celebrated by China should be appreciated by those beyond its borders   

2 October 2019 | Marcus Reubenstein (Picture: Enrique Lopez Garrea)

The first task of any nation state is, or at least should be, to deliver two things to its people, stability and prosperity – by any reasonable measure the People’s Republic of China has been enormously successful in doing both.

Like every nation China has, and will always have, its detractors but even its most strident critics cannot ignore what the past 70 years has delivered to China and its people. Within the past generation the Chinese government has overseen the ‘economic miracle’ of moving hundreds of millions of people out of poverty into the middle-class.

In doing so China first filled the coffers of resource rich nations like Australia and Canada in buying the materials to create its economic growth infrastructure. Now an enormous Chinese middle class is delivering greater riches to the global economy with their seemingly unquenchable demand for foreign brands and quality goods.   

China’s next generation can expect a life of greater prosperity

Counter this with the recent history of the west.

Call it the Trump-era; the battle of conservatives and progressives; political correctness versus old fashioned pragmatists; or simply left versus right – many in the west are questioning whether we are now grooming a generation for whom life will not be measurably better than their parents. Indeed, many westerners (and I am not one of them) believe that the current generation is doomed to a lesser life than their parents.

Even in the United States, that great beacon of progress and hope, the tide has changed. Tens of millions on one side of the political divide bemoan the loss of traditional values; an equal number on the other side blame the world’s woes on those clinging to such values.

In 2019, there is little doubt that the overwhelming majority of China’s younger generation will grow up in a world of greater prosperity and opportunity than was seen by their parents and grandparents. The new generation not only appreciates its prosperity but the obligation it has to others for building the foundation.

Unfortunately for China, most westerners cannot reconcile ‘prosperity’ without ‘democracy’. And for the generation which by and large dominates western politics, academia and the media, their worlds were defined by two great geo-political struggles – the defeat of fascist and imperialist dictatorships in WWII and the re-building which followed; and the Cold War standoff between the west and the communist Soviet Union.

Not only is China not a democracy it is a communist state. The fear of those two things can only be likened to the fear of heights, snakes and flying; these are real fears but, at the same time, totally irrational. Pity the Sinophobe who is flown to Canton and made to eat a bowl of snake soup…

The Chinese Communist Party is no more or less legitimate than the US Republicans and Democrats, Labour and Conservatives in the UK or Australia’s Liberal and Labor Parties. Simply because China is a one-party state it is very wrong to assume that it cannot act in the interests of the majority of its people.

China is not without its challenges, it is run by an increasingly authoritarian regime and has problems both within and outside of its borders. Public criticism of the Communist Party of China is often harshly dealt with but the Chinese government tends not to kick the can down the road. Unlike its great geopolitical rival, the United States, China usually tries to avoid small problems becoming large problems.

America has a seeming knack for not addressing major issues and then convincing its people those running the country are not responsible. Four in ten U.S. households have no net worth, 30 percent have no access to health care, gun violence and mass killings continue unabated, powerful lobby groups—guns, pharmaceuticals, weapons, and investment banks—control Congress.

Real wages have effectively remained stagnant for the past 40 years while company earnings rose by 300 percent, this left the working class with no choice but to take on debt, particularly credit cards, with American households now owing more than $900 billion in credit card debt. Wall Street banks gamble with other people’s money, safe in the knowledge that if they go bankrupt the government will bail them out. Total U.S. debt is now three times the size of GDP. Essentially the U.S. is not a democracy, it is a capitalist state where those with capital (corporations and billionaires) make the rules to serve themselves. China is a free market economy, not a democracy or a capital market. The difference is that in China the government runs the billionaires, in America the billionaires run the government.   

China succeeds where the Soviet Union failed

Though not the main headline of the People’s Republic of China’s 70th Anniversary celebrations, there is a very clear reason why 70 years is such an important milestone. Only astute observers of 20th century history would remember that Soviet Communism – upon which China based its national framework – lasted just 69 years.

Marxist-Leninist ideals ended in failure for their creators, China was able to find a way for them to not only work but work very well.  

The PRC’s “Socialism with Chinese characteristics” did not bear fruit thanks to socialism it succeeded because of the Chinese people. In fact, some commentators have reworked that philosophy to “Capitalism with Chinese characteristics.”

Jim Rogers’ “global context”

Legendary US investor Jim Rogers, who in the 1970s co-founded one of the most successful hedge funds in share market history (The Quantum Fund, which returned 4,200% in a decade) made his first trip to China in 1988. He bought a motor bike and probably became the first westerner to ride across the entire country; returning home he preached to American investors of the rise of China.

In 2010 I was invited to spend half a day with Jim Rogers at his Singapore home, where he summed up China thus, “I don’t care if you call them communists, the Chinese are the best capitalists in the world.”  

Rogers is often mistaken as an apologist for the Chinese government, he assured me he is not. China, he said, has problems and it will continue to have problems. His point was governments, like people, are never right all of the time. It is counterproductive to point at mistakes and suggest that they wipe out generations of achievement.

In established and supposedly sophisticated first world democracies, governments make mistakes – all the time. That’s why voters are so eager to throw them out of office at very regular intervals.

Look at Europe over the past decade, amidst Brexit, a sovereign debt crisis and EU turmoil, Germany’s Angela Merkel is the only leader to have not lost her job. Refer to the opening sentence of this editorial: it is the job of nation states to deliver “stability and prosperity” and Germany has been better than any other European nation at that.

China is entitled to feel somewhat aggrieved that Germany is lauded for delivering these outcomes while China’s exact same success is treated with much suspicion abroad.

China has engaged with more nation states in a shorter period of time than any other nation

Part of the problem can be put down to China’s failings in diplomacy both in traditional high-level political diplomacy and, particularly, in soft diplomacy. China’s international engagement is for the most part consistent and pragmatic. Foreign relations carried out by the bulk of global players are almost never consistent.

Though somewhat simplistic, international diplomacy can be likened to most judicial systems, the United States provides but one example. Say two men in New York rob a convenience store of several hundred dollars, each faces up to 15 years in prison. According to one independent US study, a corporate criminal can steal up to $2 million and has only a 30% chance of going to jail, while those who go to jail typically spend no more than 3½ years behind bars.

It’s not always about fairness or consistency and this is a reality that China’s leadership must face on the international stage.

The reality the world must face is that China has only been engaged in international diplomacy for less than 50 years. It’s been a steep learning curve both politically and culturally – and China is in the completely unprecedented position of emerging from isolation and then having to engage virtually every one of the world’s 191 other nations at the very same time.

Just 43 years after unification, Germany was embroiled in the First World War, France’s Third Republic was a similar age when it entered the same war. The United States was formed out of conflict with Britain, the seeds of discontent were sewn almost immediately and that eventually led the US into four years of civil war in 1860s.

It took a great deal longer than five decades for these great nation states to find their feet on the international stage. If China is marked against history – rather than a vague set of contemporary western expectations – it has done exceedingly well in finding its place in the international community.

It should also be noted that while dealing with external relations China’s government is also responsible for managing a population of 1.4 billion people.

Part of China’s diplomatic consistency is not meddling in the domestic affairs of other countries on issues which do not involve them. At the same time China faces much domestic policy criticism from other nations whose own domestic situations are far from perfect. Solutions will have to be found, on both sides of this argument, in dealing with these issues.

In Australia, Chinese businesses and groups are under ever-growing scrutiny for the belief that they are attempting to influence government policy.

Each year Australian state and federal politicians and their departmental heads jet off to China wooing Chinese government officials and the bosses of Chinese state-owned enterprises. This culminates in the massive Australia Week in China delegations – organised by the Australian Government – which sees a cadre of politicians from all states, headed by the prime minister, joined by an army of business leaders. Are they not trying to influence China?

The greatest economic transformation in history

When putting China under the microscope you will only ever get a micro view. China deserves to be viewed in context of a great many things.

Since 1949, China’s annual economic output has grown by an incredible 450 times, an impoverished war-ravaged nation lifted itself to become the second biggest economy in the world. Millions of lives have been transformed for the better and opportunity awaits future generations.

In 1949 a Chinese citizen could have expected to live no more than 35 years, today China’s life expectancy is 77 years of age. These are outcomes for which the Chinese people have every reason to celebrate and be applauded by the rest of the world.  

Marcus Reubenstein is a former senior correspondent with SBS News, he studied politics and economics at UNSW and worked as an adviser to the Federal Parliamentary Liberal Party between 1992 and 1994.