Saturday, February 4, 2012

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN





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China and America in the New Century

Op/Ed Commentary: Andy Scott

Mar. 8 – China’s national legislature, the National Party Congress, began its annual meeting last week, and voting on several measures, including changes to a state secrecy law that been under revision for 14 years. The legislative body passing laws, albeit largely by rubber-stamp, stands in stark contrast to the deadlock that can be found on the other side of the world, where U.S. politicians seem incapable of moving any sort of legislation through Congress.

In the United States, government has largely devolved into a political and legislative stalemate where Republicans and Democrats find themselves apparently unable to agree on anything. The partnership has gotten so bad that even ordinary procedural votes are being stymied and slowed by round after round of infighting. Where the ruling elite in China have a virtual lock on all votes, in America, it seems impossible to even hold a vote. The administration of President Barack Obama, beset by problems both foreign and domestic, has seemed slow and ineffectual at leading the Congress through this impasse.

A little over a year ago, the mood of the United States, and to an extent the world, was much more hopeful. Obama was going to restore the international prestige, bring back diplomacy to its rightful place in foreign affairs, fix the economy, resolve the situation in Iraq and solve the Afghanistan riddle.

With the administration locked in a battle over health care, two wars, an economy that is refusing to recover and a Congress unable to legislate, it can be a little hard to remember the feeling of hope that ushered America’s first African American president into the White House.

Obama created what has been called the most diverse cabinet in U.S. history. Fewer than half of the 22 cabinet officials are white males; Eric Shinseki is the first Asian-American Veterans Affairs secretary; Eric Holder is the first black attorney general; six cabinet officials are women. The cabinet was designed purposely to resemble the United States, a melting pot of ethnicities – Blacks, Latinos, Chinese, Caucasians. The cabinet reflects America itself. And while the biggest failing of the current Congress has been an inability to overcome diverse opinions and compromise, the creation of those very same types of diverse opinions are largely responsible for system that has ruled America for over 200 years.

The power to attract and promote the best of cultures from across the globe in intrinsic to what it is to be American. It is something that has been largely absent in the rise of the new giants in Asia. James Fallows writes in cover story from the January issue of The Atlantic, “China (like India) is a more racially open society than, say, Japan or Korea. But China has come nowhere near the feats of absorption and opportunity that make up much of America’s story, and it is very difficult to imagine that it could do so – well, ever.”

China, for all of its massive population, remains effectively a homogeneous society. One in which the majority hold a whopping 93 percent of the population. It is this difference in which intrinsically sets it apart from the United States. While China has had its share of internal integration issues over the years – most recently the riots that swept through the Xinjiang in the west of China – it has come nowhere close to the national struggle that the United States has had over its ethnic integration. China national psyche has been shaped by its subjugation in the 19th century by colonial powers, and the nationalist fervor that the Chinese Communist Party continues to rely on today for legitimacy has as much to do with connecting to that legacy as it does the creation of a wealthy society tied to runaway economic growth. But as the NPC comes together for its annual session this week, many problems lay before it: from the state secrecy law to question on how to maintain growth after the last of the massive RMB4 trillion stimulus package funds run out.

One thing that the Chinese Communist Party can rely on is the votes of the 2,987 delegates to the legislature. While the NPC has the sole authority to pass legislation in China, it has never had power independent of the party leaders. The delegates largely serve a ceremonial role, rubber stamping legislation that has been backed by the party. While they, and the 2,252 member Chinese People’s Political Consultative Conference which also meets at the same time as the NPC, provide an opportunity for the party’s leaders to show they are “among the citizens,” the events of last week and this remain largely staged.

While the party leaders are genuinely trying to consult more with delegates, Chinese leaders “cannot get away from the Leninist view of nonparty organizations,” David Shambaugh, a Chinese political scholar told The New York Times.

The system has slowly begun to open up and delegates, especially those from the emboldened eastern provinces where the pace of development has created a new class of middle class citizen, are now much better informed, independently minded and eager to express their opinions online. It is these new pressures of consumerism and that will begin to exert on the party’s future control, not only of the annual NPC and CPPCC meetings but of the development of China’s very political structure.

In his article, Fallows cites China scholar and Claremont McKenna College professor Pei Minxin, who predicts in China’s Trapped Transition, that “within the next few years, tension between an open economy and a closed political system will become unendurable, and an unreformed Communist bureaucracy will finally drag down economic performance.” Diversity of opinions, and therefore diversity of options, is what is needed for China going forward.

And so, the two powers that seem destined to be linked in the coming decades see themselves at a strangely similar crossroads. China, fast developing and seeking to impose itself on the world stage, must learn to foster debate and dissent, concepts that may seem alien to the roots of its political system or its culture. The world requires a diversity of ideas and opinions. America, built on the melding of ideas and cultures, must not lose itself in the divisions of its many ideas and opinions. The world requires a diversity of ideas and opinions, but it also needs compromise and concession. In the new century, failure to compromise is just as dangerous as failure to allow dissension.

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