The Hindu Business Line : China and diverse perceptions

If China and Mao inspired young and dreaming socialists across the globe in the 1950s and early 1960s, the country became the centre of attention since the late 1970s for its non-stop economic advance. People elsewhere feel a bit depressed looking at their own economies moving at a snail's pace. But some may feel content with civil liberties, free (if not totally fair) elections and similar manifestations of political freedom, which are not even thought of as a medium term possibility in China. But true to its originality and independence in policy thinking and making, China has now decided to allow private property rights, though limited in scope as of now.

What does the crystal ball show for the mighty dragon economy? It is unfashionable and almost unacceptable in intellectual discourse to simply take a trend forecast based on the experience of the past three decades and say that China will continue to grow and become a positive force for global peace and economic progress. Once the simplistic is eschewed, sky is the limit to imagination and extrapolation, as the following views demonstrate.

First, there is the view that growth will not continue at the same pace as in the past. This could happen if wages in China rise to such an extent that it is no longer viable to host industry based on unskilled and semi-skilled labour. On the same basis, those using China to outsource finished and semi-finished consumer goods might think of moving elsewhere for outsourcing.

The view on growth deceleration could be countered on two planks: It is only natural that a large economy, resulting from historic high growth rates will not need to grow as fast; and growth rates may continue to be fairly high if China's massive investments in skills and education were to lead to new found comparative advantages in sectors that are now not the growth propellers.

Second, it is often said, at times prompted by apparent jealousy, that growing inter-personal income inequality and inter-regional inequalities in income and other dimensions could de-stabilise the nation, glued together on the basis of visible equality all along. To avoid such instability, China's leadership might try the time tested method of giving more political freedom to the people and let inequalities flourish. One can also extrapolate further and expect all sorts of affirmative actions in favour of disadvantaged people.

Finally, there are grave environmental concerns arising from high growth, but going by the note by William McDonough in the Harvard Business Review of February 2006, it would seem that China in fact could be the ground for all sorts of environmental innovations.

On all counts, China seems unstoppable and hence will continue to be researched by intellectuals keen to punch a hole or two, though with little convincing result.

(The author is Visiting Faculty, Sri Sathya Sai University, Prashanti Nilayam. He can be reached at bhanoji@gmail.com.)

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