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The Writing on the Wall: China and the West in the 21st Century

by Will Hutton Little, Brown; Free Press HK$320

It is high time for a fresh look at China, and this intellectually searching, politically challenging book by one of Britain's most incisive economic journalists sparkles with new ideas.

Will Hutton warns that China is approaching the moment of truth when its two decades of run-away economic growth can no longer be sustained without profound changes that will challenge the primacy of the Communist Party.

But he acknowledges that 'the writing on the wall' is not only for China, but for a western system that has failed to live up to the values it expects China to copy.

The broad sweep of Hutton's argument reaches back into history as well as across continents. He assesses the strengths and weaknesses of post-1949 China and does not duck the multimillion-renminbi question of how to judge the role of Mao Zedong.

Hutton rejects the fashionable revisionist view that communism was a disaster for China from the very start of the People's Republic and says most peasants were in favour of moderate collectivisation but Mao's impatience to speed up the 'socialist transition' wrecked this pact with the people.

Yet even so, peasant savings were channelled into investment on a grand scale, creating a new industrial base (the size of the rail network, for instance, more than doubled), vastly improving literacy and health, and doubling the area of irrigated land. Many Chinese suffered in the process but, Hutton argues, the shift from an agrarian society to market economy has always been a painful one.

His argument on Mao goes further and will infuriate those who have recently concluded 'Mao was a monster' and that there is nothing further to be said. Of course, writes Hutton, Mao was callous and immoral but his millenarian aspirations had 'genuine appeal at the time'.

If it is wrong to take a wholly negative view of Mao, it is equally dangerous to get carried away with praise for Deng Xiaoping and his successors. Deng started with the advantage that decentralisation under Mao meant the state plan only controlled 1,200 commodities, unlike the Soviet plan which controlled virtually everything. The pragmatic approach of the 1980s as Deng felt his way forward also meant the mistakes in post-Soviet Russia of premature privatisation were avoided.

Here Hutton delivers another analytical bombshell to do with the consequences of the Vietnam war. By delaying the communist victory until 1975, he argues, the US 'had bought a crucial decade' for the Asian economies to begin their export-led growth.

With capitalist development proving itself elsewhere, China under Deng moved away from socialism to the market, thus acknowledging ideological defeat. This, Hutton says, represented 'a de facto victory for the United States in the Vietnam war [which had been] in effect, a surrogate war against China'.

I should at this point register a connection with the author: we were colleagues on The Guardian and The Observer. On this issue, that the US effectively won the cold war against China, I happen to agree.

If during the 1980s that perennial question 'Whither China?' still had more than one potential answer, the 1990s narrowed Beijing's choices dramatically. After Tiananmen Square, rapid and extensive economic growth became the only way of avoiding social dissent if the Communist Party was to cling to power. And the gathering forces of globalisation cast China readily in the role of the world's workshop.

Hutton warns  against western 'hyper-bullishness' about the so-called Chinese miracle. The current system, he says, is a 'halfway house' beset by a shaky banking system, riven by corruption, and reliant on exponential growth (at mounting social and environmental costs) to keep control. Anyone who has seen the proliferation of empty highways and lavish bank buildings across China can agree that there has been 'astonishing wastefulness'. Anyone who has travelled down the Yangtze without once seeing the sun knows the price paid in pollution.

It was doubly unfortunate China's entry to market reform  coincided with the ascendance of the utopian free market philosophies under Ronald Reagan and Margaret Thatcher. Instead, Hutton argues, capitalism and the market need to be underpinned by a 'soft infrastructure' that guarantees human rights (including the rights of property and labour) equality and justice.

Is Hutton's gloom justified, and is his prescription remotely feasible? Sometimes he seems to fail to understand the subtlety of Chinese political culture. Some of the political levers in what he calls the 'Leninist state' are really the old system of guanxi (personal connections) in operation.

Hutton blames the lack of health provision and society security - which inhibits consumption as people save for the future - on 'Leninist corporatism', but are these not equally a feature of the US today?

However, we should take seriously his warning that the Chinese system could be undermined very quickly by a severe shock such as 'a prolonged water shortage, a further increase in the price of oil, or unilateral tariff increases by the US'.

Taiwan also remains a potential flashpoint, although  Hutton urges the US not to revert to protectionism or provoke chauvinism in Beijing by opposing China's peaceful rise.

Hutton's intellectual rigour compels him to acknowledge that the model of enlightened capitalism he presses on China is deeply flawed in the west. The US and Britain have allowed the social bargain between state and people to decay, while protectionism at the WTO and environmental neglect is a 'dereliction of [US] duty'.

Is a lack of democracy the root cause of China's problems or is it at least in part that they have learnt the lessons of contemporary capitalism too well? Perhaps the answer lies not only in Beijing but in western capitals where too often we urge the Chinese to 'do what we say, not what we do'.

John Gittings covered China for The Guardian and is the author of The Changing Face of China: From Mao to Market (Oxford University Press)



The Writing on the Wall: China and the West in the 21st Century