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Physicist, Startup Founder, Blogger, Dad

Sunday, January 04, 2015

Fukuyama and Zhang on the China Model

This is an interesting discussion between Francis Fukuyama and Zhang Wei Wei on the so-called China Model. Zhang is an apologist but overall the discussion is enlightening. Fukuyama's perspective is the familiar liberal democratic one so I excerpt Zhang below.
ZHANG | ... In his presentation, Dr. Fukuyama raised four issues concerning the China Model, namely, accountability, rule of law, the “bad emperor” and sustainability. I would like to respond to Dr. Fukuyama’s view. I think what China has been doing is very interesting. China is now perhaps the world’s largest laboratory of political, economic, social and legal reforms in the world. What Dr. Fukuyama said reminds me of my conversation with the editor-in-chief of the German magazine Die Zeit last February. The topic was also the China Model. After a recent visit to Shanghai, he felt that there were more and more similarities between Shanghai and New York. In his eyes, China seems to follow the US model. “Does it mean there is no China Model but only the US model?” he asked. I counseled him to look at Shanghai more carefully and know the city well. A careful observer will find that Shanghai has overtaken New York in many respects.

Shanghai outperforms New York in terms of “hardware” such as high-speed trains, subways, airports, harbors and many commercial facilities, but also in terms of “software.” For instance, life expectancy in Shanghai is three to four years longer than New York, and the infant mortality rate in Shanghai is lower than New York. Shanghai is a much safer place where girls can stroll the streets at midnight. My message to this German scholar is that we’ve learned a lot from the West; we’re still learning from the West, and will continue to do so in the future, but it’s also true that we have indeed looked beyond the Western model or the US model. To a certain extent, we are exploring the political, economic, social and legal systems of the next generation. In this process, the more developed regions of China like Shanghai are taking the lead. ...

... I have visited the US on many occasions and found that the definition of corruption matters a lot. In my new book, I put forward a concept of “corruption 2.0,” as the financial crisis has exposed many serious “corruption 2.0” issues. For instance, rating agencies gain profits through regulatory arbitrage by granting triple A’s to dubious financial products or institutions. I think this is corruption. But these issues are called “moral hazards” in the American legal system. I think the financial crisis can be better tackled if these problems are treated as corruption.

We can also make horizontal comparisons. I have visited more than one hundred countries. The reality is that no matter how much Chinese complain about corruption at home, it is much worse in other nations of comparable size, say, those with a population of 50 million and above, and at similar stage of development such as India, Ukraine, Pakistan, Brazil, Egypt and Russia. The evaluation of Transparency International echoes my view.

Furthermore, it’s necessary to look at such a large country as China in terms of regions. China’s developed regions are more immune to corruption. I once stayed in Italy as a visiting professor and visited Greece several times, and I think Shanghai is definitely less corrupt than Italy and Greece. ... Indeed, whatever political system, be it a one party system, a multi-party system, or a no party system, it must all boil down to good governance and what you can deliver to your people. Therefore, good governance matters most, rather than western-style democratization.

This brings me to Prof. Fukuyama’s “end of history” thesis. I have not published my point of view yet. But mine is exactly the opposite to Prof. Fukuyama’s. I take the view that it is not the end of history, but the end of the end of history.

The Western democratic system might be only transitory in the long history of mankind. Why do I think so? Two thousand and five hundred years ago, some Greek city states like Athens, practiced democracy among its male citizens and later were defeated by Sparta. From then on, for over two thousand years, the word “democracy” basically carried the negative connotation, often equivalent to “mob politics.” ...

But today, this kind of democratic system cannot solve the following big problems. First, there is no culture of “talent first.” Anyone who is elected can rule the country. This has become too costly and unaffordable even for a country like the US. Second, the welfare package can only go up, not down. Therefore it is impossible to launch such reforms as China did in its banking sector and state-owned enterprises. Thirdly, it is getting harder and harder to build social consensus within democratic countries. In the past, the winning party with 51% of votes could unite the whole society in the developed countries. Today American society is deeply divided and polarized. The losing party, instead of conceding defeat, continues to obstruct. Fourth, there is an issue of simple-minded populism which means that little consideration can be given to the long-term interest of a nation and society. Even countries like the US are running this risk.

In 1793, King George III of the UK sent his envoy to China to open bilateral trade. But Emperor Qianlong was so arrogant that he believed that China was the best country in the world. Therefore China did not need to learn anything from others. This is what defined the “end of history” then, and ever since China lagged behind. Now I observe a similar mindset in the West.

It is necessary to come to China and see with one’s own eyes how China has reformed itself over the past three decades. Small is each step, yet the journey is non-stop. The West still has strong faith in its own system, but it is the same system that has become more and more problematic. Greece, the cradle of Western democracy, has gone bankrupt. The British fiscal debt is as high as 90% of its GDP.

What about the US? I did a simple calculation. The 9/11 attack cost the US about $1 trillion, the two not-so-smart wars cost US about $3 trillion and the financial crisis about $8 trillion. Now the fiscal debts of the US are somewhere between $10 to 20 trillion. In other words, if the US dollar was not the main international reserve currency—this status may not last forever—the US would be bankrupt already. ...
See also Zhang's NYTimes editorial Meritocracy Versus Democracy.
... Virtually all the candidates for the Standing Committee of the Party, China’s highest decision-making body, have served at least twice as a party secretary of a Chinese province or at similar managerial positions. It takes extraordinary talent and skills to govern a typical Chinese province, which is on average the size of four to five European states.

Indeed, with the Chinese system of meritocracy in place, it is inconceivable that people as weak and incompetent as George W. Bush or Yoshihiko Noda of Japan could ever get to the top leadership position.

Take the incoming leader, Xi Jinping, as an example. Xi served as the governor of Fujian Province, a region known for its dynamic economy, and as party secretary of Zhejiang province, which is renowned for its thriving private sector, and Shanghai, China’s financial and business hub with a powerful state-sector.

In other words, prior to taking his current position as the heir apparent to President Hu Jintao, Xi had in fact managed areas with total population of over 120 million and an economy larger than India’s. He was then given another five years to serve as vice president to get familiar with running state and military affairs at the national level.

China’s meritocracy challenges the stereotypical dichotomy of democracy v. autocracy. From Beijing’s point of view, the nature of a state, including its legitimacy, has to be defined by its substance: good governance, competent leadership and success in satisfying the citizenry. ...
Related posts: Is there a China Model? , China 3.0 and China 1793.




37 comments:

HomoSapiens said...

I wonder what it takes to get elected to the ruling committee? I am willing to bet that it takes more political skills than "merit". This guy is an apologist for the regime. George Bush was governor of Texas before getting elected to the presidency.

As for the comparisons between the US and China, I'll believe the Chinese system is better when I see large numbers of Americans moving to China illegally in order to partake of its superior system.

Fred__R said...

"Indeed, with the Chinese system of meritocracy in place, it is inconceivable that people as weak and incompetent as George W. Bush or Yoshihiko Noda of Japan could ever get to the top leadership position"

Yeah, it's definitely the West and not China that is too arrogant...

Fred__R said...

I'm struck by how closely Zhang's talking points about the failures of Western democracy (obstructionist losing parties, need for better infrastructure, corrupt ratings agencies) resemble complaints that have already appeared ad nauseum over the past few years in the US media. It's worth pointing out, as he does, that good governance is of prime importance when evaluating political systems, but I don't see much original thinking here.

Christopher Chang said...

One obvious test of the China Model going forward is Beijing air quality. It's a technical problem that the leaders have every incentive to solve; how efficiently can they do so?

Zhengzheng Zhou said...

Reargding the "no original thought" characterization, have you read the full article, dated Fall 2011? He predicts that the Arab Spring will end badly for all, including American interests. He alludes to that the separation of power into three branches of government, while wonderful for 18th century America, is inadequate for today's oligopolistic US. There are other tidbits. Besides, the focus of that discussion is not the US.

Fred__R said...

I skimmed it. It was a decent (if obvious) point about Arab Spring, bad point about separation of powers. I think my criticism stands.

Magus Janus said...

probably much like London solved its issues in late 19th century. First priority is industrialization and rapidly raising GDP per capita and lowering extreme poverty. After that is accomplished you start moving onto "higher" order goods like clean air, water, etc. which they're gradually doing now.

5371 said...

Well, I suppose Saudi Arabia's system is far superior to that of the US then, since compared to its own population it has many more immigrants and would-be immigrants than the US does.

HomoSapiens said...

You miss my point. Those immigrants are coming from places like Bangladesh, Philippines and Sudan, not the US. So they have made the calculation that life in Saudi Arabia, even with all its unique challenges, is better than their respective countries. I have never heard of an American immigrating illegally to Saudi Arabia. There have been cases of the reverse, however.

5371 said...

Plenty of Americans work both in Saudi Arabia and China. I have no idea whence you get your fetish for illegality.

dxie48 said...

So you would wait until USA reduces to the status of Mexico before considering any changes are necessary?

HomoSapiens said...

I think you think we are discussing a different topic than the one of the blog post. Can you expand a bit on your question?

HomoSapiens said...

Most of the Americans that work in those countries are going to do skilled or professional jobs. The reason is that those countries are less developed and have huge deficits in terms of qualified natives to do those jobs. Those Americans going to those countries are filling a gap and can command higher salaries. (I suspect, although I have no data beyond anecdotal, that this holds more in Saudi Arabia than China). There are also people who move there either for cultural/family reasons because their families originate there or to experience the "exotic" cultures, etc. Nevertheless, there is no mass immigration of Americans to those countries.
I have no "fetish for illegality", to use your rather supercilious term. The point is that when people immigrate illegally from one country to another (in the absence of factors like war or political persecution that make it necessary for survival), it is because conditions in the second country are comparatively better. They are willing to leave a relatively safe environment for one in which their status is indeterminate. You can think of it in terms of risk premiums if you like. The risk of being a person with no legal status, very little in way of rights and a lot more likelihood of bad things happening, must be balanced by a bigger payoff than would result from staying at home and trying to make do. Hundreds of thousands of Chinese citizens have made that calculation. Very few Americans have. That was my point.

RealityIsComplicated said...

China has done an amazing job on economic development, crucially lifting a huge portion of the world’s poor out of poverty. China’s sheer scale makes this a much much more remarkable task than it was for a smaller country like, say, Singapore.

That said, it’s rather amusing how Zhang can refer to China as a meritocracy. If you believe the actions and statements of the State, as Zhang seems to, the country has shown exceptionally bad judgment in selecting its leaders. From Zhou Yongkang (arguably the 2nd or 3rd most powerful person in the Hu Jintao days), to the recent announced investigation into Hu Jintao’s former chief of staff, Ling Jihua, it’s hard to keep a straight face while saying that China’s leaders are all well vetted, and ‘merit’ their positions of power. And in the case of non-corrupt leaders, it becomes hard to say how their families ‘merit’ their hidden billion dollar fortunes. Even more difficult for Zhang to explain would be why instead of investigating hidden fortunes that have been aired by investigative journalism, China’s response has been to block access to the news agencies involved.

(For those that missed it: http://www.nytimes.com/2012/10/26/business/global/family-of-wen-jiabao-holds-a-hidden-fortune-in-china.html )

The silencing of journalism, of course, hints at a deeper question as to how we can expect merit to be rewarded, and large scale development to occur in a country that does not have checks and balances / pluralism. For me, this makes China’s accomplishments over the last ~3 decades all the more remarkable.

dxie48 said...

As you said, "I'll believe the Chinese system is better when I see large numbers of
Americans moving to China illegally in order to partake of its superior
system.", i.e. when the relative position btw US and China is the same as that btw Mexico and US currently.

HomoSapiens said...

I get that but I don't understand what you mean by me "considering any changes are necessary?". We were not discussing changes of any sort

5371 said...

Again, more hundreds of thousands of Chinese citizens have moved to countries in Africa where, whatever their legal status, the "likelihood of bad things happening" is much greater than in the US. Does that mean those countries offer comparatively better conditions than America?

Zhengzheng Zhou said...

In Western corporate culture there is a perceived positive correlation between pushiness and advancement. Pushy people under lax oversight will likely grab what they can for themselves; this is a solvable technical problem. "Meritocracy" in such settings is not based on moral standards or publishing record but on outcome-oriented leadership. There are modes of highly effective leadership that borders on the sociopathic. Scrupples may correlate with timidity.


Anecdotally, corrupt leaders did deliver. The former Rail Minister is dirty to his core -- billions of dollars and scores of models and actresses -- but also extremely competent in his job. The high speed rail system in China is his legacy. The current one seems so far a goody-goody but is reviled for he go-slow approach.

Bob said...

Hundreds of thousands of illegal African immigrants have arrived on Southern chinese shores despite repeated deportation.

HomoSapiens said...

The question was to compare USA vs China, not Africa vs China

millermp1 said...

Too bad "apologist" is such a pejorative. Zhang makes powerful points. I would not be surprised if the US experiences its Suez Moment in the next 5 to 10 years, with China reprising our former role.

millermp1 said...

"I'll believe the Chinese system is better when I see large numbers of Americans moving to China illegally in order to partake of its superior system"


I think the long view leaves this scenario very much open to speculation. Tomorrow? Next month? Of course not. But a decade or two can go by in a hurry.

dxie48 said...

Guess who is studying the Chinese model. From the CFR http://blogs.cfr.org/asia/2014/12/09/zuckerbergs-love-affair-with-xi-jinping/

The relevant photo http://www.theage.com.au/it-pro/business-it/mark-zuckerberg-snapped-with-chinese-president-xi-jinpings-book-20141209-1233er.html

HomoSapiens said...

You are committing the fallacy of including your conclusion in the premise. You start by assuming that poor Americans would move illegally to China to work. Then you conclude that they do not do so because of the lack of social safety nets for poor Americans in China. The correct inference to make from the lack of illegal American migration to China would have been there is no incentive to do so. The lack of such an incentive would be a good indication that the American model, as it currently exists, works better for Americans than the Chinese model does for Chinese. This may change in the future but that is not what you're saying.

5371 said...

The average resident of the South Bronx, eastern Kentucky or the Navajo Nation would vastly improve his standard of living if he became a resident of Shanghai. I just explained to you why, in spite of that fact, he does not move there. With your simplistic concept of "incentive" you are incapable of understanding this - or many other things, it would seem.

HomoSapiens said...

I may be simplistic and incapable of understanding your point but you seem to be incapable of understanding the concept of proof or logical argument. You make assertions without justifying them. You have never explained why the average resident of South Bronx, eastern Kentucky or the Navajo Nation improve his standard of living by moving to Shanghai.

5371 said...

However simply I express myself, I will never be able to descend to a level comprehensible by you. I realise that now, and bid you farewell.

Realist said...

You quoting the NYT is too funny...certainly a bastion of meritocracy.

Realist said...

No country is more arrogant than the United States.

Realist said...

I am a big fan of Meritocracy. Democracy is a form of government in that which stupidity has no level for disqualification.

Realist said...

Modt Americans cannot speak Chinese. It would be very hard for most Americans to learn Chinese.

Realist said...

"I wonder what it takes to get elected to the ruling committee? "
If you had watched the video you would know.
GWB was an idiot as is Obama.

Realist said...

"The silencing of journalism, of course, hints at a deeper question as to how we can expect merit to be rewarded, and large scale development to occur in a country that does not have checks and balances / pluralism."
You're kidding right? You mean like this country? America has no checks or balances, they just brag about a nonexistant system. The media are sycophants for the government.

Stevie Mac said...

And if you criticise the government too harshly, you'll be taken away in the night? No thanks, I'd rather have democracy. Besides, China is a unique case. I don't believe other countries could successfully emulate the Chinese system without a 'bad emporer' tyrant taking over. Its too easy.

HomoSapiens said...

Mao was a 'bad emperor' tyrant

Stevie Mac said...

Indeed but I mean the Chinese system as it is now. I don't know how likely it is but its conceivable a strongman tyrnant could take full control there too. I imagine its more likely than if they had a democracy.

HomoSapiens said...

I am pretty sure the internal behind-the-scenes political machinations were not spelled out in the video.

I'm also pretty sure idiots would have a hard time climbing to the highest position in the land.

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