Where Is China Heading?

Mark Leonard's book “What Does China Think?” presents a number of China's modern beliefs and challenges.  Mr. Leonard discusses China's current struggles and the new priorities the Chinese State has determined are essential to address contemporary problems.

It is interesting, for the first time in China’s history, the State's 11th five-year plan does not list economic growth as the top focus. The plan includes mantras, such as: “put people first”…“respecting the natural environment”… and introduces a model which resembles some Scandinavian attempts in Social Welfare to address existing concerns.

The Book suggests China’s most pressing problems are:

1. The rise in protests,
2. The gap between rich and poor,
3. The near bankruptcy of the rural economy,
4. The lack of domestic consumption,
5. The pervasive corruption of the political elite,
6. The environment.

Official records cite 87,000 protest demonstrations in 2005, which is a ten times the amount of such displays since 1993.  It is most likely, the actual number of organized public protestations is much higher.

Mr. Leonard maintains the theory, modern China hopes to develop into an “Asymmetric Superpower”.  This conception believes the USA has an unhealthy obsession with military production, and this is the United States' greatest weakness, blinding policy-makers to the wider picture of military strategy.  Mr. Leonard's offering suggests the current Leadership of China, must include the use of economic, legal, and political tools as well, which is referenced: “non-military warfare”.  This modern version of China's “Economic Warfare” includes investing billions of dollars in “Special Economic Zones” within foreign Nations.

However, today China invests billions to improve it's military might, as Chinese Leaders correctly believe economic power without a strong Military, in context to the rest of the World, will reduce China as an overall power.  They prefer to obtain a Military Force which will become equal to the United States.

“China is attractive to other nations because of its economic power but this attractiveness will not last. It will need to change its political system to become a ‘Hyper-Power’ equal to the USA”.

But for China to achieve this status, the State will need to eliminate its incongruous and obsessive policy on a number of issues, it has mistakenly elevated to threats to its survival: Taiwanese and Tibetan freedom, the relationship with the Dalai Lama, the rise of Falun Gong, and various radical Muslim Enclaves.

India – What Hinders Its Development?

Some thoughts on the interesting book “In Spite of the Gods – The Strange Rise of Modern India” by Edward Luce, the Financial Times' Washington Bureau Chief. He worked and lived in India for years.

While his conclusion is that India will become an economic super power, its many negatives will delay its development.

Some of the negatives:

Its massively ineffective and corrupt "quasi-socialist" political system.

Labor laws are too restrictive, cannot fire or lay off any employees, even if they are criminals, which supports the case for outsourcing only and not investing in 100% owned operations.

Literacy in China is 90%, in India it is 65% - female literacy is 48%. Focus in India is on university education, not elementary school education which China has focused on to build a viable work force. By comparison, the USA's literacy rate was 90% during its industrial and economic ascendancy in the 1800s.

India lacks investment in infrastructure, just starting to build roads and highways.

Bulk of population lives in small villages, not an urbanized country most developing countries tend toward. Of 1 billion population, 750 million live in small villages.

People are not motivated to seek a better life, caste system is an obstacle, lack of ambition somewhat stifled by elite strata which are still very British oriented.

Corruption is pervasive and extensive. Bribes are commonplace.

A telling difference between China and India is that China has accepted capitalism. Surprisingly for China's controlling government, its economy is based on market-driven industrialization. India has not accepted capitalism with its over-regulated private sector which is a draw back to growth and development.

An interesting fact:
India's police have "encounter specialists" which are policemen who kill criminals the police decide are guilty - prior to a trial. India has a 27 million criminal and civil case backlog. Police kill criminals because evidence gets lost, witnesses die, low-paid judges are easy to bribe and it takes too long for cases to come to trial.