First, Beijing looks the other way as Sars spreads from Guangdong. Then world health authorities sound the alarm. The news hits the media and fear spreads. The disease is seen as the first of a series of pandemics that will sweep the globe in the coming century. So the central government cracks down, sacks the minister of health and the mayor of Beijing, and decrees that henceforth transparency will reign in health matters. The gloss is off the China boom, and the government must scramble to shore up its reputation.
That, in essence, is the lesson that the rest of the world has absorbed about mainland China in the first half of 2003. Last year, both news and perceptions were rather different. Mainland China topped the United States as the prime target of inward direct investment, and accounted for about 50 per cent of global economic growth. Manufacturers based in India and Mexico talked about the China challenge. With accession to the World Trade Organisation in the bag, and the Beijing Olympic Games of 2008 to look forward to, China seemed set to emerge as a pillar of global society.
With such erratic signals, it is not surprising that interpretations of where the mainland is heading vary so much. The paradox is that both the China pessimists and the optimists are right. The mainland's growth depends more than ever on market confidence at home and abroad. That requires the successful absorption of market-friendly norms into daily business practice, while institutions adapt to continuing social and economic changes. The mainland is in the midst of several transitions, from a command to a market-based economy, from a rural to an urban society, from economic independence to interdependence, and from membership in the international communist system to participation in a global polity.
Few Chinese want to revisit da luan, the terrible disorder of the past two centuries. Hundreds of millions of mainland Chinese have experienced a sharp improvement in their living standards over the past quarter of a century. Better, the great majority says, to explore the way forward pragmatically than to take risky, if heroic, great leaps into the unknown.
This is the compact between the party-state and the people at the heart of China's politics, business and economics. The Chinese Communist Party's collective body language is exploratory rather than dogmatic: be careful, it is saying. We will deal with that one when it comes up. Nothing is out of the question. We will consider it. In particular, let us eschew western proposals for big-bang policies in favour of careful exploration of alternative avenues for action.
But there is also urgency to Chinese conservatism. Kenneth Courtis, a vice-chairman of Goldman Sachs, Asia Pacific, tells the story of asking former premier Li Peng why he took so long to counter inflationary pressures in the economy. 'Mr Courtis', came the reply. 'If you were running a marathon, and 1.3 billion Chinese were pounding along behind you, would you turn round and ask them to stop?' China's citizens are making their own future, to which the party is by no means insensitive. Take, for instance, the country's high savings rate. Guaranteeing the value of those savings is the party-state's main function. Hence, the central government gives priority to price stability, the ending of subsidies to inefficient state or township enterprises, and improving the allocation of resources for an ageing population.