Big boulders block change
The World Bank's blockbuster 468-page report urging China to make wholesale economic reforms towards more freedom and a true market economy if it is to achieve its potential as an economic superpower simultaneously shows the great strength of China and the bank and their immense weaknesses.
It is strong because it is a careful and sustained analysis of the second-biggest economy in the world; it is weak because enormous political boulders stand in the way of change, and the political changes advocated would destroy powerful vested interests and transform the face of China forever.
I say 'World Bank report', but Robert Zoellick, the bank's president, went to great pains to underline that the report is a joint effort by the bank and the Development Research Centre of China's State Council, with premier-in-waiting Li Keqiang leading on the Chinese side.
Zoellick praised the 'unwavering commitment' of Li and quoted Vikram Nehru, the bank's team leader on the project, as saying that 'at the end of the day, both the Chinese and World Bank teams had truly become one joint team with common objectives and deep friendships.'
One intriguing question is who is giving cover to whom. The World Bank on its own, however eminent its economic analysis and advice, is not the power it was. As The Economist cruelly pointed out, 'China remains a big deal for the bank, but the bank is not a big deal for China ... The bank's outstanding loans (worth US$20.6 billion) are equivalent to only 0.6 per cent of China's foreign exchange reserves.' But China's reformers must be hoping that the World Bank's name will give critical catalytic leverage to the plea for reform.
The report is sugar-coated with heaps of praise for China's economic achievements since Deng Xiaoping opened its doors, evidence that there will be bitter and powerful resistance to the changes suggested. Even the title of the report, 'China 2030: Building a modern, harmonious, and creative high-income society', is full of feel-good buzzwords deflecting or hiding the tough political issues that lie in the way of change.