Thor's China Diary

The Chinese Economic Union??

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 The ASEAN states leaders have been making grand statements about an East Asian Economic Union -- free trade, common currency, free movement of labour ... etc. Mm. I'll believe it when it happens.

China is supposed to have been an political and economic union for most of the last two thousand years. That's what the history books tell us, the ones written on behalf of dynastic mandarins, ancient and modern, on the principle that if you say it often enough folk will believe you. In terms of common belief that principle does seem to have worked, notably because the Chinese peoples, ancient and modern, have been kept blithely ignorant of real events in their own provinces, and in the wider world.

Both Chinese peoples and most outsiders tend to find talk of a "Chinese Union" rather strange, a bit like calling the cells constituting the human body a "co-operative union of living creatures". However, when you get down to tin tacks, the Chinese Union is a decidedly imperfect entity. It does not have, and never has had, a free movement of labour, or of peoples generally. Its common currency covers a mosaic of banking, credit and payment systems that are often obstructed between cities, let alone between provinces. Even retail savings deposited at one branch can often not be withdrawn at another. I cannot place an order for a book published in Beijing or Shanghai with a Wuhan bookseller because such businesses consider the transfer of payments for individual orders too arcane and unreliable.

One of the first and most startling facts of life in China to strike an expatriate is that the multitude of ingenious Chinese products available in his home country are simply unobtainable, and unheard of, in the real China where he now lives. In a big city such as Wuhan he will haunt department stores, hole-in-the-wall shops, street hawkers, looking for distinctive products. It is an utterly futile search, for all these places sell the same sorry little collection of shoddy manufactures. He will invent theories as to why this should be so. Maybe the people can't afford to pay for quality and variety, he thinks. There is a grain of truth there, but only a grain. As in most nation states, there are parallel economies for various income levels. Those items which are of reasonable quality are often two to ten times dearer than similar Chinese made goods in Australia or the United States.

The prime reason that the shops are full of the same pathetic, overpriced junk, is simply that genuine competition is strangled, and distribution systems within or between provinces are so poorly organized and hampered by parochial interests. In other words, China is not a free economic union. Perhaps it is surprising enough that the thirty-two member provinces, each the size of a European Union country, have achieved any kind of cohesion. Beijing may promulgate national plans, but it is the provinces which have to execute them. These provinces, of course, have their own agendas, which generally means protecting local products and services by fair means or foul. State taxes, charges, customs duties, inspection fees, license fees etc., are used to ambush any kind of interprovincial (let alone international) trade. Where these money tricks are not disincentive enough, the whole armoury of embargoes, product banning, long inspection delays, bribery, extortion etc., as well as outright bureaucratic stonewalling and general passive resistance to outside interests comes into play.

The Beijing mandarins make a public show of fighting entrenched provincial interests. The methods they use haven't changed much since the Tang Dynasty over a thousand years ago: notably the rotation of high level officials to forestall any tendency to a growth of regional power bases. It is rather pathetic. A People's Daily editorial (27 November 1999) complains that local protectionism is a root cause of gross failures in quality control throughout the nation, and wanly hopes that WTO entry will herald a brave new world. What the Chinese government hasn't grasped is that the very centripetal forces that hold together large unions like the United States and Europe, are actively undermined by their own policies.

I recall that as a child I once dismembered a golf ball. After I had penetrated the seemingly tough outer skin, it tore and peeled off remarkably easily. Beneath that I found a tightly bound mass of rubber bands which took ages to unwind. This is not a bad analogy for the substance of personal and institutional relationships in America or Australia. Let us consider the outer facade of government, administration, law enforcement & defence etc. to be the skin of the golf ball. This facade or skin seems well designed to withstand constant daily battering, but under real stress it can collapse suddenly. In a Western representative democracy, such collapses are not catastrophic. Indeed, they are common enough to be seen as a form of organic renewal. This is possible because the inner core is genuinely tough, resilient and self sustaining. That inner core is in fact a myriad of personal, group and business relationships right across the nation that are growing, diversifying, multiplying, endlessly and invisibly. Freedom of association in that environment is taken for granted. The personal mobility of individuals for employment, profit, interest or relaxation is a major defining feature of these communities. The back-up services of state and national administrations are just that. They are dwarfed by a multitude of voluntary services performed by individuals and groups every day as part of living responsibly in a civil society.

Now, consider China. Civil society in the Western sense is almost entirely absent; (my first lesson as a university teacher here was that Chinese students never, ever volunteer for anything). Public trust does not exist. Those who hold political power, feeling that they have a tiger by the tail, are terrified of their own populations. Meetings of more than a handful of people have to be licensed, and the larger the meeting, the higher the political authority that must approve it. Information is censored, ever more desperately, by every level of bureaucracy. Booksellers, as their capitalization and stocks increase, must be licensed and supervised at ever-higher levels, so that only a few behemoths are permitted to distribute nationally. Mailing lists are the lifeblood of Western businesses, organizations and societies of all kinds. In China a mailing list is tantamount to a political conspiracy against the state.

If we think about a golf ball analogy as characterizing the resilience of Western communities, how should we think about the Chinese nation state? I am tempted to imagine an egg. The outer shell is hard, but brittle. Inside are the makings of life, but once the shell is cracked the unformed inner yolk and albumen will splatter all over the floor. Well, analogies are only analogies. I make sense of what I can. There are sure to be forces at work here which I barely comprehend. But looking at China with my limited understanding, it seems to me that an omelette truly called The Union of Chinese States is some way from the making.

TM @28-11-99

"The Chinese Economic Union??" copyrighted to Thor May 1999; all rights reserved
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