The Hindu Business Line : Beijing: In and outside the sixth ring road

THERE ARE several ring roads around Beijing. My travel guidebook, published in 2002, tells me that plans for a fifth ring road exist on paper but construction is yet to begin. Early this month, as I travelled east on the Jingtong Expressway away from the city towards Zhangjiawan in Tonghzou district to visit a suit-manufacturing unit, I cut across not just the fifth but a sixth ring road. Two roads built in about two years. These roads are six-lane highways of international standards, well lit with several exits to allow access to different parts of the communities that encircle Beijing.

This is just an example of how rapidly things get done in China, and contribute to the scorching pace of growth. If you lift your eyes towards the sky around Beijing, it would be difficult to find a patch that is not dominated by one of those tower cranes. They dot the landscape like emaciated giants working to put up yet another multi-storied building. The Wall Street Journal reported that in 2003, China accounted for 7 per cent of global oil consumption, 27 per cent of steel, 31 per cent of coal and 40 per cent of cement.

The economy grew at 9.7 per cent the first quarter of the year. This worries the government that had announced a growth target of 7 per cent, slow for China, although seemingly beyond reach for many economies of the world.

The government has resorted to physical restraints to soft land the economy at a more sustainable level, and check inflation fears. Banks have been instructed to restrict lending to several sectors such as steel, real estate, aluminium and automobiles. An early indication that this may be working is that domestic steel prices have fallen marginally while still almost 30 per cent higher than same time last year. There are rumours that an interest rate hike is in the cards.

China is all about stability and the economy will also have to be managed to achieve that stability. The desire for stability cuts across several areas. With economic freedom now well under way, you would think that the people will be chafing at the bit for more political freedom. Remember the massacre at Tiananmen Square in 1989?

Talking to intellectuals and the middle-classes who have benefited from the growth suggests that there is no hurry to bring in democracy and free speech. I was discussing economic reforms with a professor of finance in a leading university in Beijing when the topic turned to press freedom. I had been getting a bit tired of all the good news here. The English language China Central TV channel constantly tells me that the people are happy in the rural areas, the poor are benefiting from aid and development, old traditions are maintained, and so on. Having complained about all the disaster news that the television stations in the US constantly blare (murders, fire and arson, war, pestilence), I did not realise that constant fare of only good news will also tire me so soon.

I asked my colleague about the telecast of the US Vice-President, Mr Dick Cheney's talk at Fudan University just a few weeks ago. While the speech, which had some sections considered critical of the country's policies, was available in full on the US Embassy Web site, it was heavily edited for consumption in the local media.

My colleague said, yes, he had read the full version. But what he said later surprised me. I know how important press freedom is in the US, he said. While he agreed that there is a need to loosen controls a bit more, he felt that full freedom of news would cause instability. Ah, stability again.

Beijing's look and prosperity confirm it is a city that has arrived, and can proudly compete with any leading world capital. Beijing is full of broad boulevards, and six lane highways (apart from service lanes and bicycle paths). Flyovers and clover-leaf intersections move the traffic.

Rapidly increasing automobiles on the roads have begun to result in traffic jams during peak hours. There are no graffiti on the walls, flower-beds decorate road dividers, advertising posters in well-regulated sizes sit in well-designed holding frames near bus stands or atop the buildings so there are no giant hoardings ruining the skyline.

The city is well on its way to preening itself before the throngs that will arrive in 2008 for the Olympics.

How deep the beauty and prosperity has reached the country is debatable. There is an underclass that you do not often see. While there are no slums, tenements are protected from peering eyes with high walls or attractive hoardings in front. Uniformed city workers keep picking up trash to maintain city streets clean. But I spot a cyclist with a basket stopping at every trash bin looking for plastic bottles that he can collect and cash in at the recycling market. The rules preventing migration to the city are not enforced strictly to ease the labour supply for the construction. These millions are `stateless' in their own country, without access to medical services and earning below average wages as befits their `illegal' status. There is uneasiness that income inequalities are widening in this workers paradise.

My trusted tour book again warns me that Beijing is `a cosmetic showcase and not a realistic window' on China. Just about 25 km outside the city and beyond the sixth ring road, I look around and might as well in the middle of Kattankoluthur, outside Chennai. Open sewage flows beside a new housing complex. A local artisan has strung a set of car seat covers between two trees hoping a passerby by would stop and buy one. Having just left a five-story glistening mall (and there is one in almost every block in the city), you realise that it will take time for the prosperity to reach out and beyond.

China has identified Beijing, Shanghai and others as tier-one cites for their focussed push into modernity and hopes a trickle-down effect will benefit the others. Some students I met disagree that the benefits have spread to the hinterland. Official statistics show that in 1998, the index of per capita GDP for the coastal areas was more than twice that for Central and about three times that of Western China.

That is understandable since foreign direct investment in coastal areas was six times that of central and 17 times that of western regions. A very unbalanced development, but the Chinese leadership does not have to worry that like Mr Chandrababu Naidu in Andhra Pradesh, they will be removed from office by a disgruntled populace on the grounds that the rural areas did not benefit from development.

Recent increases in prices have fuelled further worries about the overheating economy. To what extent does the party have control over the economy is the big issue. On the one hand, the country is actively seeking recognition as a market economy, which would mean there is less freedom for direct intervention with a strong hand. But old habits die hard. Remember how during the SARS outbreak in 2003 the government downplayed its spread thinking it could manage the situation, till it became untenable.

But, on the other hand, this is also a government that issued an order to Beijing residents that cars with odd number plates are not to be on the road during the visit of the team from the International Olympic Association that was evaluating Beijing as a venue. The government wanted to project an image that there was no traffic congestion in the city.

(The author is professor of international business and strategic management at Suffolk University, Boston, US. His Internet address is cgopinat@suffolk.edu)

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