Postcard from China - China: Communist Icon or Capitalist in Disguise

Postcard from China
China : Communist Icon or Capitalist in Disguise

China is the largest communist country in the world and while elsewhere communism has become a euphemism for ‘failed state’ (former Eastern bloc),’extreme poverty’ (North Korea) or simply an anachronism of times past (Cuba); China is an strengthening economic and political giant. So is it really communist ?
There are few experiences more disconcerting than being shouted at loudly in another language. Concerns of social faux paus, fears of imminent injury, horrors at being in the wrong place or combinations thereof flash through your mind. As such upon walking back to our hotel one day, we immediately froze upon being verbally assaulted by a Chinese man leaning out of a bus with a sign berating us to come forward. We soon learned that he was none other than a budding entrepreneur attempting to fill his bus before taking off to destinations unknown. Routes and timetables do not exist for buses in Shanghai. They go when and where the customers want; pure unadulterated capitalism.

Hopefully the bus driver knows which lane !
As our heart rate lowered momentarily (walking in China is hazardous at the best of times), we did give pause to wonder the absolute contrast this presents. A true communist nation would probably have a centrally planned bus system with large buses running practically empty and the driver completely indifferent whether you caught the bus or not (like Auckland for example). How has this state of affairs evolved ?


Perhaps history provides some clue. The modern Peoples Republic of China was formed by Mao Zedong through a proclamation to the masses at Tiananmen Square on Oct 1, 1949 following the communist victory over Chiang Kai-shek. While in power, he started a series of experiments aimed at speeding up China's economic development known as the Great Leap Forward. This aimed to make China self-sufficient in steel while giving town collectives the ability to market and sell excess produce. The policies saw some initial progress before ill-advised economic policy diverted further workers from agriculture to industry. This combined with multiple natural disasters caused the great famine from 1959 – 1961 where millions of Chinese died.

The start of modern economic China can be traced to one of Mao’s trusted lieutants, Deng Xiaoping who gradually assumed power following Mao’s death in 1976. While paying lip service to the teachings of Mao, he turned China towards an economic programme that has been described as “Socialism with Chinese Characteristics”. This has involved the gradual evolution of a system where more and more economic decisions are based on price and more resources are in private hands. The gradualism of the approach is particularly notable and an important part of their success given the failure of perestroika and other ‘crash’ programs of economic liberalisation sponsored by the IMF and other Western bodies. Economic programs in China are often iniated at local level and then slowly expanded if successful. Democracy will and is following a similar path. The recent de-linking of the Yuan from the dollar is a classic example of the gradualist Chinese approach to their economy. One commentator we spoke to said that not only is this second nature for the pragmatic Chinese but absolutely necessary in a country this size.

In effect therefore, the Chinese run an extremely planned, centralised management of the macro-economy which is handled with exceptional technical proficiency by the inner circle. Top economic advisers from around the world tread a well-worn path to the Beijing party headquarters to help the Government pull the right levers in managing the economy. Experienced commentators are extremely complimentary about the skill with which the Chinese hierachy steer their large and growing economy.

Central planning certainly has its advantages too. One of the absolute highlights of Shanghai is the Urban Planning Exhibition Hall. Laid out on a floor space about the size of a basketball court is a complete detailed map of the entire city as it will look in 2020. It struck us as not only supremely efficient, but also hugely confident. We even found a perfect scale model of our hotel ! Compare this with democratic New Zealand where Auckland has been lumbered with all manner of horrific apartment buildings, one of which is 8m wide top to bottom ! Is this really a better system ?


Shanghai in 2020 Holiday Inn Shanghai
This urban development plan was certainly being enacted as we gazed down from the observation level of the Shanghai tower. We could quite clearly see entire city blocks being demolished in preparation for the next batch of office / residential towers in conformity with the centralised plan. Clearly there are advantages of the New Zealand model as competing interests and other stakeholders do get a hearing, but you cant help but be impressed by the outcome in China.

Phase II of Ten Year Plan ?

But evidence of capitalism abounds everywhere you look on the streets.. We were only in China for about 2 hours before we were touched (literally) by a tropical downpour. The rain seemed to fall on fertile grounds as umbrella sales people seemingly grew from the pavement offering rather flimsy looking protection from the elements.

Similarly climbing the Great Wall can be a reasonably difficult physical exertion but requires not nearly the effort as trying to keep away the incessant hawkers trying to off- load t-shirts, coins, postcards, certificates, books, toys, scratchings, engravings, paintings, scarves, and blankets amongst other things. For peak enjoyment of the Chinese experience though you need to walk down the famous Nanjing Rd in Shanghai where you are offered all manner of western consumer articles every thirty seconds or so. “CD, DVD, Puma, Rolex ?” is the standard opening patter from these ‘entrepreneurs’ as they open a brochure showing these items. A firm ‘no’ only sees the sales pitch toned down to the inevitable seconday query of “lady, lovely lady; sexy massage?”. What kind of shop are they running over there ? Objection handling is obviously a compulsory subject at Chinese schools.

Furthermore, the Chinese economy is extremely open and global brands are everywhere. The Great Wall’s grandeur and impact are lessened somewhat by the Starbucks at the entrance. Tom Cruise peers ominously down from the War of the Worlds billboard. We even saw the products of a small trading nation at the bottom of the South Pacific !

It is thus extremely important to distinguish between economics and politics. Insofar as the politics are concerned, China remains a strict one party Communist state with the Government and Communist Party (note the two are not synonymous) extremely influential at all levels of society. But in terms of the economy, China is one of the most wide open trading nations in the world and host nation to some large, burgeoning and increasingly important multi-national companies. Furthermore, it is home to literally millions and millions of budding, hard-working, energetic and, as in the case of our bus owner, extremely persistent entrepreneurs.