THE VIEW
The View
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Xi Jinping’s ‘China Dream’ is transforming the idea of slower growth into a virtue

President Xi has adjusted the bar lower when it comes to expectations of future prosperity

PUBLISHED : Monday, 12 September, 2016, 11:21am
UPDATED : Monday, 12 September, 2016, 10:55pm

Chinese President Xi Jinping has been compared to Mikhail Gorbachev – because of China’s stepped-up privatisation of state assets – and to Mao Zedong, on the back of Xi’s tendency towards personality cult and repression. Here’s another comparison worth considering: Xi and Mother Teresa.

Ok, sure, this connection is less obvious. Mother Teresa is a Catholic nun who was this month elevated to sainthood, for her charity work among the poorest of the poor in India.

Her canonisation is a controversial one, because critics say Mother Teresa intentionally kept conditions austere in her network of charity hospices, with few modern comforts, or pain relief, or medical interventions. She once spoke of the beauty “in seeing the poor accept their lot, to suffer it like Christ’s Passion.…. The world gains much from their suffering.”

As a public relations offensive, now might be a good time to emphasise that it is shared societal values – not ownership of Rolex watches – that make a nation great

I imbibed a strain of this thinking growing up Catholic, and reading the thrillingly gory books on the Lives of the Saints, filled with hair shirts and lion maulings. But there is universality to this idea that suffering is noble and character-building. Many philosophers, from the ancient ascetics to modern Schopenhauer, have argued self-denial is a safer path to happiness than indulgence.

Modern-era policymakers deal with similar issues in countries where material excess has replaced deprivation as a public policy issue. The field of economics has branched out into behaviouralism, with ideas such as nudge theory designed to curb social ills. Governments tax cigarettes and booze and even sometimes sugar. This “new paternalism” is chronicled in economist Harold Winter’s book, The Economics of Excess: Addiction, Indulgence, and Social Policy.

Which brings us back to Xi, and his curious idea, embedded in his China Dream ideology that China will continue to get rich - but not too rich. Mother Teresa would have surely approved.

Xi’s stated goal is for China to become a “moderately prosperous society” by 2020, and thereafter he envisions a subdued version of affluence, one where the there is harmony in society, national pride and appealing surroundings (i.e, not hopelessly polluted). At the time, Chinese propagandists have launched cultural attacks on conspicuous displays of wealth.

There is historic precedent here. Emphasis on moderation and sacrifice can be found in ancient Chinese verses, Confucianism, and the Taoist yin and yang philosophy. And recall the drab-garb uniform of Maoist communism, and the glorification of sacrifice and deprivation on the Long March.

But how exactly does “moderation” and “harmony” translate into concrete economic policy? Is China veering towards a Scandinavian style of development, where wealth is redistributed to ensure no one is too rich or too poor? Probably not, because the country’s tax policy is not moving in that direction, and the social safety net remains thin.

Perhaps Xi is just trying to put a positive spin on a harsh reality? Growth momentum is slowing and the nation could very well fall into the middle income trap, where developing nations get richer, but for mysterious reasons never catch up with the richest countries on a per capita basis. As a public relations offensive, now might be a good time to emphasise that it is shared societal values – not ownership of Rolex watches – that make a nation great.

Then there is a theory that Xi’s vision for his nation was inspired not by Confucius so much as by American newspaper columnist Thomas Friedman - who has written that China needs an alternative version of the American Dream that consumes fewer resources.

If Friedman was the inspiration for the China Dream, this is an interesting case of cross-cultural dialectics. One could easily see a certain kind of Westerner cottoning on to the idea of “moderate prosperity” as a post-industrial revolution philosophy. Take the green party types, with their advocacy of the small-house movement and planet-saving vegetarian diets. Even certain conservatives - such as monetarists who disapprove of modern central banking’s excesses - might find some appeal in the concept.

Whatever Xi’s motives, the goal of “moderate prosperity” is intriguing. In the West and in Japan, politicians promise a revved-up economic growth, but such a revival does not seem feasible, based on demographics. Maybe it’s time to start spinning the “new normal” of slow growth as a positive.

Cathy Holcombe is a Hong Kong based financial writer