China’s Failed Crackdown

Pro-free speech protestors are rallying against government censorship in Hong Kong as the government tries to pass a rule that would criminalize dissent in the former British terrority.

Hundreds of thousands of Hong Kong residents took to the streets on the sixth anniversary of the handover to China of the former British colony. Their grievance: an “anti-subversion” law known as Article 23 that is expected to pass next week. Opponents fear it will become an instrument to stifle free expression and imprison dissenters.

China is headed on an immovable course towards more democracy. From the moment Deng Xioping began reforming the Chinese system the authority of the central government has been slowly fading away in the face of increased economic freedom. What the Chinese Communist Party has forgotten is the same thing that many in the United States forget: political freedom and economic freedom are two linked concepts. As people have increased economic freedom they will have more need for increased political freedom. Political freedoms are equally useless without economic freedom. In the end, China’s experiment with democratization cannot be turned back without tearing the nation apart. President Hu Jintao must realize that the only course that China can steer is one towards increasing freedom. If he attempts to turn back, the results will be far greater than the protests in Hong Kong.

11 thoughts on “China’s Failed Crackdown

  1. It depends. China’s a long way from democracy, and they’re industrializing a lot like the way the Soviets did in the 1950s. Back then, there were worries that the Soviets mean industrial output would be greater than the US – instead it was so badly managed that the output they did have was going virtually nowhere and they still suffered massive shortages of goods in stores.

    Personally, if China became a free-market democracy, it would benefit the whole world. I’m fine with a bipolar world so long as those two powers aren’t engaged in a Cold War-style conflict. A constructive relationship with a free and prosperous China would probably be a good thing – unfortunately that won’t happen until the old Communist hierarchy is either reformed out of existence or collapses.

  2. There are some big differences between China’s industrialization and that of the Soviet Union:

    #1: Over half of China’s economy has been privatized.

    #2: Unlike the Soviet Union, China is part of a world economy, and their industrial sector has become extremely interconnected with that of the US. You can hardly swing a dead cat anymore without hitting an object that was built in one of their factories.

    #3: They’re spending massive amounts of money building their education system and their tech sector, which will, in today’s world, only accentuate discontent on the coasts.

    I agree with Alex here- China is definitely the next great power in the world. Let’s just be thankful that Hu Jintao appears to be a boring technocrat who doesn’t have his eyes on carving out a pacific empire…

  3. It would be ideal if hundreds of years worth of mistrust between China and the West could be obliterated simply by “market forces”, but cultural reality leads me to believe that the ideological rift will continue to be incompatible between the West and China into the 21st century. The upward mobility of the Chinese economy (heavily the result of American entrepreneurs cashing in on the misfortune of their huddled masses) is frightening for many reasons, but none more than the fact that global market forces will ensure China’s virtual monopoly of the production end of the economy in the coming decades, leaving the rest of the world at their mercy for imports. A nation that controls the manufacturing economy of the world is not “one of two superpowers” in relation to a nation of paper shufflers and store clerks as America is becoming, but the ONLY superpower.

  4. First of all, America is by no means an industrial lightweight. We still have a wide and stable industrial base from the Great Lakes steel industry to the high-tech assembly lines at Boeing and Lockheed in the West.

    Secondly, good are only worth something if there’s someone to purchase them. A bilateral trade relationship like the one between China and the United States can’t be so simply broken. If China were to try to leverage such power, they’d lose access to the most lucrative market on the planet. Overproduction is one sure way to ruin an economy. (Again, see the Soviet Union that "produced" tons of goods that went absolutely nowhere.) In other words, doing as Mark suggests would be economic suicide for the Chinese.

    Even the Chinese are concentrating on more than manufacturing, trying to bring in global capital through Hong Kong and other Special Economic Zones, as well as expanding their technical educations system.

    China could well be a world power, but it will take a sizeable number of growing pains to get there.

  5. America’s existing manufacturing economy, along with that of the rest of the Western world, is in the primary stages of being priced out of existence. Even imported labor from the most desperate regions of the world won’t be able to work cheap enough within America’s borders to compete with Chinese wages. My guess is the American steel industry has five years left before it’s gone. Once that happens, the presence of Boeing and Lockheed plants will be irrelevant since we’ll be at mercy of Chinese steel imports to produce them.

    Doesn’t OPEC leverage its power over the West since its member nations possess a product in great demand? Think of OPEC’s muscle in the global economy and multiply that by thousands and you’ll get the amount of power China will have if the gluttony of global marketplace thinking runs its course and directs the production economy to where its “efficiency will be best maximized.” Such a scenario is proof that the rules of the marketplace often stand in stark contradiction to the necessities of society construction and national defense if left unregulated…..a lesson we seem bound and determined to learn the hard way.

  6. OPEC is a good example, because their power is failing. As Condoleezza Rice pointed out a few months ago, if OPEC wants to cut off oil to the rest of the world they’d better get used to eating their oil.

    World trade doesn’t work like you describe. Let’s say I somehow become the only person in the world that can make qoobits. I pronounce to the word that only nations that do what I like can get their supply of qoobits. Does this give me any real power?

    The answer is no, because these countries will either stop buying qoobits, in which case I have warehouses full of products and nowhere to sell them, or they will start making them by themselves. In essence, my monopoly power means exactly jack squat.

    China would be in the same boat. Let’s say that China announces that they will no longer sell goods to the United States, or they impose massive tariffs on exports. What happens then?

    Simple, the Chinese economy collapses. China may have a billion people, but it’s better to have a 300 million people with large incomes than a billion people who live in poverty. Even if China could cut sweatheart deals with other countries, isolating themselves from the US economy is nothing short of economic suicide. Goods are only worth something if there are enough people willing to buy them at a high enough price.

    The same predictions about first-world manufacturing being outpriced by the third world have been made for years. It hasn’t happened, mainly because labor costs are only one small part of the equation. High-tech industries require an educated workforce, which is why the US is the leader in high-technology. If there was such a great advantage to moving operations to overseas markets you’d see a massive exodus of jobs from the US to places like China and Mexico. In the past 20 years, it’s been the other way around as foreign laborers have been begging to get into the US to work in the high-tech workforce.

  7. High-tech industries require an educated workforce, which is why the US is the leader in high-technology. If there was such a great advantage to moving operations to overseas markets you’d see a massive exodus of jobs from the US to places like China and Mexico.

    You might be interested in this [] article which describes exactly that phenomenon. From the article: “These aren’t low-level jobs we’re talking about. These are America’s best-paying jobs.”

  8. Not only that, quite a bit of our high tech service sector is being outsourced to India and Southeast Asia… part of this is economic, but another significant part of it is the increasing difficulty of immigration- many companies would like to bring more talent from overseas, like they did in the 90’s, but our anti-immigrant policies are stifling this, resulting in entire divisions being outsourced to take advantage of foreign labor.

    Also, on the China issue, their goods *aren’t* piling up (as with the Soviet Union), they’re being shipped here, there, and everywhere (everywhere being mainly Japan and Europe). We’re underwriting China’s massive industrial growth. Of course, this does get some of the more labor-intensive and pollution-intensive industries out of our backyards, and when industrial automation and nanoproduction become the norm in several decades, this shouldn’t present a problem… I hope. 🙂

  9. Several points are worthy of rebuttal here. Condoleeza Rice can posture about OPEC’s power being obsolete all she wants, but the bottom line is that the West IS dependent on the product they peddle, meaning that they do have tremendous power. OPEC could definitely hurt themselves by getting too greedy, but within reason, can micromanage the oil distribution to their convenience.

    When China becomes the OPEC of all manufactured goods, as the global marketplace will naturally lead towards, their power over non-production oriented economies dependent on their goods will become gargantuan. Your “qoobit” example would fit if it were an isolated product with limited demand and viable alternatives available to meet that limited demand. This is not the case currently with the highly-demanded product OPEC peddles and would definitely not be the case if qoobits were one of thousands of products all, or mostly, manufactured in one country. Clearly, supply and demand laws will prevail to an extent and keep China from trying to stiff us too badly on qoobits or other goods, but would this be the case during wartime? If China was either at war with us directly or opposed one of our increasingly controversial foreign policy initiatives, they could easily impose economic sanctions on any variety of manufactured goods to force us to play by their rules. As I’ve stated before, there is no greater threat to America’s national security than free trade as it’s currently being constructed.

    Nations being squeezed by such a scenario would potentially have the option of returning to a manufacturing economy they had previously given up, but it would pretty much have to be government-financed in a country with substantially higher labor costs than China since any entrepreneurs who would otherwise be interested in manufacturing the goods would already be taking advantage of Chinese labor. In the event of war, foreign armies could charge in and blast us full of holes while we’re busy constructing makeshift weapons and clothing factories and trying to resurrect abandoned steel mills and iron ore mines. Even outside of war, the cost to a society of losing manufacturing capacity and then trying to reintroduce it when they don’t like the result would almost certainly outweigh the mythological cost savings consumers get when purchasing tennis shoes or steel products manufactured by pre-pubescent Chinese girls.

    You’re right about the predictions of American labor being priced out of existence in the past. And if you paid closer attention to what’s going on across the tracks from you, you would realize that the future is now. The loss of manufacturing jobs in the current economic downturn is in the MILLIONS, and the nature of the global marketplace today ensures that very few of these jobs will be replaced. And as has been stated by other posters, even white-collar jobs that affect the “important” people in your world are being outsourced to India to suppress wage levels. Perhaps if you were more supportive of trade policies that keep jobs in the United States, you would have been able to find a job yourself out of college rather than waving so many jobs goodbye as they drift off to sea from the Pacific Coast.

    Nicholas, losing labor-intensive jobs is not necessarily desirable since the disparity of the skills that individuals in our economy bring to the table ensures that the most successful economic structure in proportion to our population is one that is diverse. As for pollution-intensive jobs, isn’t it more desirable to see such jobs located in nations where there’s political pressure to limit their ability to pollute….as opposed to say, China??

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