A Shining Model of Wealth Without Liberty - washingtonpost.com http://www.washingtonpost.com/wp-dyn/content/article/2007/05/18/AR...

A Shining Model of Wealth Without Liberty

By James Mann
Sunday, May 20, 2007; B01

The Iraq war isn't over, but one thing's already clear: China won.

As the United States has been bleeding popularity and influence around the world, China has been gaining
both. That's largely because it has been coming into its own as the first full-blown alternative since the end of
the Cold War to Washington's model of free markets and democracy. As the U.S. model has become
tarnished, China's has gained new luster.

For authoritarian leaders around the world seeking to maintain their grip on power, China increasingly serves
as a blueprint. We're used to thinking of China as an economic miracle, but it's also becoming a political
model. Beijing has shown dictators that they don't have to choose between power and profit; they can have
both. Today's China demonstrates that a regime can suppress organized opposition and need not establish its
legitimacy through elections. It shows that a ruling party can maintain considerable control over information
and the Internet without slowing economic growth. And it indicates that a nation's elite can be bought off with
comfortable apartments, the chance to make money, and significant advances in personal, non-political
freedoms (clothes, entertainment, sex, travel abroad).

This all adds up to a startling new challenge to the future of liberal democracy. And the result is ominous for
the cause of freedom around the world. China's single-party state offers continuing hope not only to such
largely isolated dictatorships as Burma, Zimbabwe, Syria and North Korea but also to some key U.S. friends
who themselves resist calls for democracy (say, Egypt or Pakistan) and to our neighbors in Cuba and
Venezuela.

The China model has emerged from the confluence of two independent developments over the past decade.
Each stands on its own, yet the interaction between the two has been especially toxic for democratic values.

First has been the failure of U.S. foreign policy, symbolized above all by the war in Iraq. Over the past
decade, U.S. foreign policy has been dominated by a school of thought that emphasizes military power and
has tied the spread of democracy to the use of force. Not only has this failed, it has also undermined support
for democracy. U.S. attempts to export free markets and political liberty by force have been unable to bring
even security, much less prosperity, to Iraq. And they've eroded our appeal and clout worldwide.

The second key development has been the staying power and economic success of the Chinese Communist
Party. In the years immediately after the crackdown on pro-democracy protesters around Tiananmen Square
on June 4, 1989, Western pundits predicted that the Chinese government had one foot on a banana peel. Any
day now, they said, it would fall or be forced to embrace far-reaching political reform to survive. Instead,
China's economy expanded by a factor of nine, and the Communist Party remains firmly in control.

Westerners next seized on the Internet as the inevitable liberator of the Chinese. "Information will knock
down the bamboo curtain!" went the refrain. Instead, Chinese cops in the 500 cities that have established
Internet police bureaus are using the Web -- tapping into people's e-mail accounts and monitoring individuals
using politically sensitive Web sites -- as a handy tool to stamp out dissent.

China's stability has belied the hopes and forecasts of Western leaders that growing prosperity would
significantly alter the country's one-party political system. Over the past decade, presidents, prime ministers

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and others have frequently offered a soothing scenario about how China will inexorably move toward
freedom and democracy. In 1997, President Bill Clinton said China was on "the wrong side of history."
Political change would come "just as, inevitably, the Berlin Wall fell," he predicted. President Bush has
repeated many of these same themes: "Trade freely with China, and time is on our side," he once said. British
Prime Minister Tony Blair said two years ago that he thought there was "an unstoppable momentum" toward
democracy in China. Not quite.

The optimists assume that once a country becomes more affluent, its emerging middle class will press for
democratic change. But in China, the middle class (itself still tiny as a proportion of the overall population)
supports or at least goes along with the existing political order; after all, that order made it middle class in the
first place. The ruling party allows urban elites the freedom to wear and buy what they want, to see the world,
to have affairs, to invest and to profit mightily; in return, the elites don't challenge the Communist Party's
hold on power. Moreover, China's new business community is hardly independent of the party; in effect, it is
the party, linked to China's power structure through financial connections or family ties.

In economic terms, China doesn't fit into the standard model of a free-market system, either. American
magazines and television programs have for years joyously proclaimed that China has "gone capitalist" -- a
supposed sign (along with the proliferation of McDonald's, Kentucky Fried Chicken and Starbucks) that the
Chinese are becoming like us. In fact, the fast-growing economic system that China is developing is quite
different from the American model -- a fact not lost on other countries. Yes, China has private firms and stock
markets. But only a small portion of the stock of any given company is traded on the stock market; the
majority is held by state-owned enterprises. Communist Party officials frequently retain a majority of the
seats on boards of directors and keep veto power over personnel decisions. And when it comes to foreign
businesses, the Chinese system has been so good at attracting outside investment and fueling economic
growth that the German magazine Der Spiegel recently asked, "Does Communism Work After All?"

Of course, the Chinese model doesn't really work for, say, Burma; China is unique because of its sheer size
and the allure of its massive markets, which no other country can match. Still, repressive regimes elsewhere
are increasingly looking to Beijing. And often the sympathy flows both ways: China has, in recent years,
helped to prop up Zimbabwe, Sudan, Uzbekistan, Cuba and North Korea.

So what can U.S. leaders do to turn things around? The most important change is a conceptual one. We need
to get beyond the arid framework of seeing every policy dispute involving China as a choice between
"engagement" and "isolation." Those loaded words set up a false selection and have little meaning anymore, if
they ever did. With the third-biggest trading economy in the world, China is already engaged.

We also need to get beyond the notion that our trade, investment and interaction with China are going to
transform its political system. Any serious policy must be based on China as it is, not on our mistaken
assumption that prosperity and liberty inevitably go hand in hand. Trade and investment should be evaluated
for their economic costs and benefits to the United States, not for their political impact on China.

Take, for example, the economic meetings coming up this week between Treasury Secretary Henry Paulson
and Chinese Vice Premier Wu Yi. China has maintained its currency, the yuan, at a value so cheap that the
U.S. trade deficit with China has soared to more than $200 billion a year. The result has been to boost
Chinese exports and depress U.S. employment and production. But some American officials are concerned
that pressing China too much on this issue might spoil U.S.-China ties. I don't think so.

Above all, we should approach China through the lens of our national interest. That includes not just security
and prosperity but our interest in a world with open political systems and the freedom to dissent. If we don't
take China's new model as seriously as the rest of the world does, we could find that we're the ones on the
wrong side of history.

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jmresponses@comcast.net

James Mann, author in residence at Johns Hopkins University's Paul H. Nitze School of Advanced
International Studies,

is author of "The China Fantasy."

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