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How the “China Model” lifted 850 million people out of poverty

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In 1989 more than 9 out of 10 Chinese were living in extreme poverty (defined by the World Bank as living on less than $1.90 per day).  Today, that proportion has been reduced to about 1 out of 100.  The World Bank has described China’s development during this period as “the fastest sustained expansion by a major economy in history.”

Or, to put it another way:  “In less than forty years, China has quintupled its share of global output, and transformed itself from a poor country and source of cheap toys and textiles to a fierce competitor in high-end manufacturing, advanced technologies, and military might.”  (p. 1 Red Flags)

Near the beginning of this transformation, Chinese leader Deng Xiaoping announced that economic development was aimed in part at providing “four big items… to consumers in the countryside: a bicycle, a sewing machine, a radio and a wristwatch.”  (p. 6) 

Today’s economic goals are a bit more ambitious.  The government plan “Made in China 2025,” includes such goals as leading the world in robotics, information technology, and clean energy within the next five years.  The plan also aims for China to produce 70% of the component parts in its products domestically.  This will reduce imports and also create “self-sufficiency for domestic companies [which] would then enable Chinese companies to compete for a greater foothold in global markets.”

In a TED talk about some of the implications of all this growth, Harvard Professor Graham Allison noted that:  “If you have two dollars a day, most of your [time] is spent trying to find enough food to eat for you and your family, just barely struggling to survive… [But today] from Louis Vuitton stores in Beijing to a buzzing stock exchange in Shanghai, the trappings of capitalism are ubiquitous in China… Former Czech president, Vaclav Havel… put it best:  ‘All this has happened so fast, we haven’t yet had time to be astonished.’”

How did China do it?

Scholars who have studied this success and how it could be applied in other countries call it the “China model.”  While experts have actually proposed a number of different “China models,” all agree that the central feature in China’s success has been the government’s unrelenting focus on the economy, and its willingness to do whatever it takes to raise living standards.  And, oh yeah, the China model also assumes an authoritarian government that can crush all opposition.

As William Overholt put it in his fascinating book China’s Crisis of Success, p. 9:  “The policies required for rapid growth entail enormous social dislocations. And [in democratic countries] political leaders who consider imposing such dislocations reasonably fear for their jobs.”  But strong dictators don’t spend a lot of time worrying about their job security, so they can take whatever steps they deem necessary to grow.

In capitalist economies, companies must make a profit, or they will go out of business.  At least that’s the theory.  (Unless they are like Uber, Lyft, Tesla, Pinterest, Spotify, Zillow, Snapchat, and Pinterest, all companies that are valued at over $1 billion, despite the fact that they have never made any money.  Investors are gambling that the stock prices of these tech giants will not crash the way Napster, Lycos, Kozmo, Pets.com, and many other companies did in 2001 when the dot com bubble burst.)

In China, a significant portion of the economy is controlled not by private capitalists who are motivated by profit, but rather by “State Owned Enterprises,” companies financed by state-owned banks that do not need to ever make a profit.  Instead, they primarily aim to meet government objectives, such as increasing the Gross Domestic Product (GDP), by any means necessary.

Communist ideological purity is no longer an important goal.  Instead, “socialism with Chinese characteristics,” as the economic system is called, adapts Marxism-Leninism to China’s unique needs, as they exist at a moment in time.  For example, “Deng Xiaoping Theory” guided action in the 1980s when China was a very poor country.  But it has now been replaced by “Xi Jinping Thought” which outlines policies and principles which better fit the needs of a growing economic power.

Near the beginning of China’s transformation, according to Bloomberg News, “many outside the communist country expected that as its economy became more capitalist, its politics also would become more democratic. They didn’t. Instead, the Chinese system, which puts stability and cohesion ahead of individual freedoms, became adept at delivering prosperity, with the Communist Party still firmly in control.”

The geopolitical implications of China’s success are hard to overstate.  A few years ago, a South Sudanese politician named Anthony Kpandu “led a delegation to China. What he saw there blew him away: modern industrial parks, high-speed trains, gleaming infrastructure, dazzling skylines. ‘It was magnificent,’ he enthused. ‘You can’t believe it, but it’s there. I’ve never seen anything like it.’ 

Reactions like this, along with China’s focus on building relationships in the underdeveloped world, contribute to “a growing fear in the West that developing countries are finding the… ‘China model’ more appealing than liberal democracy.”

According to former Wall Street Journal writer Dinny McMahon in his book China’s Great Wall of Debt (p. 52) “The key to China’s success lies in the scale and speed at which it’s been able to build [the] infrastructure” that so impressed Mr. Kpandu.  They built “big shopping malls, huge dams, luxurious mega-hotels in small cities, the world’s greatest railroads” (China’s Crisis of Success p. 62) and more, whether each individual development made sense or not.  When state-owned banks decided whether to finance a new project, they were often less concerned with profits or even repayment than they were in supporting the government’s growth program.

China developed new standards of efficiency during this building boom.  In the United States, if a skyscraper is scheduled to be completed within one year, no one will be very surprised if it actually takes two years or more.  Someone will then be sure to say “Well, Rome wasn’t built in a day.”  But as Graham Allison has noted (Destined for War, p. 13), at the height of China’s building boom “Someone… forgot to tell the Chinese.  By 2005, the country was building the square foot equivalent of today’s Rome every two weeks.”

They did this with remarkable construction techniques, like the company named Broad Sustainable Building (BSB) which built a 57-story skyscraper in a little less than three weeks.  A CNN report of this astonishing construction includes a time lapse video showing the building going up.  The article explained that “By preparing more than 2,700 modules in a factory for four months before site work began, BSB says it was able to assemble the structure at the rate of three stories per day — like a giant vertical jigsaw pieced together from a minutely detailed set of instructions.”

Of course, an enormous national program like this building boom has not been without problems.  One is that China’s banks had to borrow money to pay for unprofitable projects, and as a result “China’s debt accumulation could be among the fastest in modern history” (China’s Great Wall of Debt, Kindle loc 107).  China’s national debt now stands at $5.5 trillion, which represents about 48% of its GDP. 

That is indeed an enormous debt problem, but it’s not as bad as ours.  US national debt currently stands at $26.7 trillion and is growing fast.  It is projected to exceed 100% of GDP next year for the first time since World War II.  And the US actually ranks only 8th in the world in the debt to GDP ratio.  Number one is Japan whose debt is 234% of its GDP.  Greece, Portugal, Italy, Bhutan, Cyprus and Belgium also have higher debt to GDP ratios than the US.  Put it all together, and the picture is a world economy built on a foundation of hopes for the future rather than capital.  This is one of the reasons that some economists think a significant portion of the world’s wealth is a house of cards which could come crashing down in the wake of covid, as explained in a recent New York Times article entitled Why the Global Recession Could Last a Long Time.

Another problem which resulted from China’s rapid economic growth is an enormous gap between rich and poor.  850 million people may have increased their income, but a few have become billionaires while most others are struggling to join the middle class.  One would not expect to the rich do better than the poor so openly in a “Communist” country.  That is such an important issue, in China and around the world, that it will be the topic of a separate post in this blog.

Criminal “justice” in China

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Last March, senior Communist Party official Ren Zhiqiang criticized President Xi Jinping’s handling of the coronavirus in Wuhan.  Writing in his social media account to tens of millions of followers, Ren said he hoped the party would “wake up from ignorance” and oust the leaders getting in its way. “I see not an emperor standing there exhibiting his new clothes,” he went on, “but a clown who stripped naked and insisted on continuing to be an emperor.”

Soon after calling Mr. Xi a clown, Mr. Ren disappeared.  A few weeks later, an official statement was released reporting that he was being investigated, but the announcement “did not provide Mr. Ren’s whereabouts, give details about the status of his case or make mention of [his social media post].” 

China experts assumed that Ren had fallen victim to “shuanggui,” a system which NYU Law Professor Jerome Cohen described as allowing officials “to indefinitely confine Party members incommunicado in secret… facilities. There, for as much as a year or two, the detained members have undergone investigation and have been interrogated [including]… torture… until their captors decided what to do with them…  So feared has been this secret process of indeterminate length that some who have been summoned have committed suicide rather than endure it.”

Note that the harsh realities of shuanggui apply only to the 92 million members of the Communist Party.  As Richard McGregor has noted in his book The Party (p 137)  “Senior Party members… cannot be arrested by civilian law enforcement bodies… until… allegations have been investigated by the Party first.”

In Mr. Ren’s case, the initial investigation was completed in July.  He was expelled from the Communist Party for “‘smearing the party and country’s image’ and resisting the party’s investigation into him — phrasing that suggests he has refused to admit any wrongdoing…”

Next, Mr. Ren will almost certainly be sent to the criminal justice system for trial. 

The good news about China’s criminal justice system is that there is one.  When Mao Zedong was in power (1949 – 1978), “the legal system was attacked as a counter-revolutionary institution and the concept of law itself was not accepted. Courts were closed [and] law schools were shut down.”  But since Mao’s death there has been a gradual attempt to create a fair and transparent criminal justice system.  For example, in 2012, the national Criminal Procedure Law was revised to ban the use of illegally obtained evidence in trials.  Limits were also set on how long the police can detain civilian suspects:  three to 30 days, depending on the type of offense. 

The bad news is that, according to Professor Cohen, the police have “demonstrate[d] their mastery of the art of distorting legislative attempts to curb their arbitrary powers…  they routinely allow themselves 30 days whenever they choose, regardless of the circumstances of the case.”

In addition, Cohen continued, for cases involving national security, terrorism or bribery, police frequently add “‘residential surveillance’ in a police-designated incommunicado location on suspects for up to six months… before deciding whether to treat them in accordance with the detention time limits prescribed for ordinary criminal cases…  in some cases that they regard as unusually important or difficult, [police] may repeat the initial extraordinary six-month detention.”    

This is one of many examples of the gap in China between the theory of law and its practice.  Another can be seen the fact that the practice of “re-education through labor” was banned in 2013.  For the half-century or so before that “it had empowered the police, without meaningful opportunity for defense or review by other official agencies, to detain people in the equivalent of a prison or a labor camp.”  However, the one million Muslim Uighurs and others who are currently being held in labor camps know that in fact “re-education through labor” is still very much alive and well.

So, put it all together, and Mr. Ren’s future prospects are not looking bright. The evidence collected in his investigation will next be turned over to civilian prosecutors who will decide whether the evidence is sufficient to proceed to trial. 

When it goes to trial, there will be no jury, no right to remain silent, and there may not even be a defense lawyer.  A panel of judges will ask all the questions. According to a website for defense lawyers compiled by International Bridges to Justice “Witness statements are merely read aloud in court, depriving either the prosecution or the defense of the opportunity of cross-examination.”  Defense lawyers “are rarely allowed by police to collect evidence or to conduct any other activities that would help [them] develop a solid defense case.”

Altogether, “Lawyers often play a small role in Chinese trials… [they] rarely dispute anything that the prosecutor alleges against the defendant or actually defend the client…” Their role is “usually limited to asking for more lenient sentences…”

The result of all this is that, as noted in an article entitled “China’s deeply flawed criminal justice system,” the conviction rate in China’s criminal courts is 99.9%.

With a rate that high, you might guess that not everyone who is convicted in China is actually guilty.  Of course you’d be right, but you’d have a tough time proving it.

In one highly publicized case, a man confessed under torture to killing his wife and was sent to prison.  Eleven years later she showed up alive.  This man was released, but in a second well known case, the evidence of innocence came too late.  In 1995, 21 year old Nie Shubin was convicted of murder, then executed.  His family fought for years to clear his name, to no effect.  Finally, in 2005 another man admitted that he had committed the crime.  But it still took another 11 years after that for lawyers, journalists, and Nie’s family to officially clear his name. 

Like most red blooded Americans, I am appalled by these examples.  This criminal justice system clearly violates the United Nation’s Universal Declaration of Human Rights:  “recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world.”

Many US politicians have taken up this cause, including US Secretary of State Mike Pompeo who recently said that: “We, the freedom-loving nations of the world, must induce China to change …” 

Good luck with that.

As I’ve been emphasizing since the first post in this blog, cultural differences often lead Chinese citizens to see the same facts in a very different way from Americans.

As Harvard Professor Graham Allison has noted “Chinese culture does not celebrate American-style individualism… Indeed, the Chinese term for ‘individualism’—gerenzhuyi—suggests a selfish preoccupation with oneself over one’s community…  For China, order is the highest value, and harmony results from a hierarchy in which participants obey Confucius’ first imperative: Know thy place… China’s equivalent of ‘give me liberty or give me death’ would be ‘give me a harmonious community or give me death.’”

In mainland China, most citizens seem to care less about liberty than about nationalism and the economy.  In their view, it is “social stability… [that] enabled China to lift hundreds of millions of people out of poverty in a mere few decades, generate huge economic growth, and peacefully re-establish China as a major power among nations.”  In addition, “there have been intense campaigns against what have been condemned as ‘Western’ or ‘universal’ legal values, such as… judicial independence, the separation of powers, [and] political and civil rights.”   

As China becomes more powerful, the US would be well advised to put less effort into exhorting Chinese politicians to think and act like Americans, and more effort into protecting world peace.  Once the State Department has world peace under control, then they can decide whether to encourage Chinese citizens to think and act more like Americans.

Climate change and China

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Were you as alarmed as I was by the fact that much of Siberia, north of the Arctic Circle, just had a six month heat wave?  It was capped by a record high temperature over 100°F, and accompanied by record wildfires.  According to a recent Washington Post article, a team of “climate researchers from multiple institutions in France, Germany, the Netherlands, Russia, Switzerland and the United Kingdom [concluded this] would have been virtually impossible without human-induced global warming.”

If current trends continue, the Earth’s average temperature will increase somewhere between 2.5 and 10 degrees Fahrenheit over the next century.  Which, I guess, should not be surprising since “97 percent or more of actively publishing climate scientists agree [that] climate-warming trends over the past century are extremely likely due to human activities.”   

Unless we change our greenhouse gas emitting ways, our children and grandchildren will continue to see ever more damaging effects from climate change, including stronger and more intense hurricanes, more droughts and heat waves, more frequent wildfires, and sea levels rising 1-8 feet by the year 2100, threatening hundreds of millions of people who live in coastal areas.

So what is China doing about it?  More than you might think, and not nearly enough.

What Manhattan could look like as a result of rising sea levels from global warming.

“Since coming to power in 2013, President Xi Jinping has been calling on his countrymen to ‘build an ecological civilization’…  [and] the Chinese government has pledged more than $1 trillion dollars in air, water, and soil cleanup plans… [In the seven years since], Beijing has invested billions of dollars in green energy, including wind and solar, and is one of the largest markets for wind turbines, solar panels and electric vehicles. It also exports two-thirds of the world’s installed solar cells.” 

The best way to evaluate China’s impact is to compare their results to the goals for international progress which were negotiated by representatives of 196 countries at the meeting that led to the signing of the Paris Agreement. The goals of this treaty included “holding warming well below 3.6°F (2°C), and pursuing efforts to limit warming to 2.7°F (1.5°C)” over pre-industrial levels.

To date, 189 parties have signed the Paris Agreement including every country on the planet large enough to have an impact, except Iran and Turkey.  Oh yeah, you can put an asterisk next to the United States, since we did sign, but announced in 2017 that we plan to withdraw.  Advance notice is required under the terms of the agreement, so technically the US cannot withdraw until November 4, 2020, which ironically is one day after the next US Presidential election.

The Climate Action Tracker measures and evaluates “climate change mitigation commitments” to date by 32 countries which are responsible for about 80% of the planet’s emissions. Based on commitments to date, each country is categorized into one of six groups.  The group that has actually made the necessary commitments to meet Paris Agreement goals is called “role model” group. Unfortunately, this is a bit theoretical, since not a single one of these 32 countries can be classified as a role model. 

China’s results were most recently classified in the group that ranks 5th out of 6 with a “highly insufficient” response,  (The US results were even worse.  We were classified in the lowest category in this report:  “critically insufficient.”)    

China’s activities have been contradictory.  It is “both the greenest [country] in the world, [and] also the most polluting. It has more wind and solar power than anybody else, yet it is also the world’s biggest builder of new coal plants.”  

The most effective of Beijing’s green initiatives can be seen in its approach to solar power. China encouraged the development of this infant industry even before Xi Jinping made his first “ecological civilization” speech by offering a variety of financial incentives to develop solar power, including loan discounts and an above-market price for electricity delivered to the grid. They also succeeded in attracting investment from other countries, including California venture capital. 

The result was that “by the 2010s, China had a huge domestic market for solar panels and dominated the world market. It also brought the price of panels down far enough to stimulate the growth of solar energy markets around the world… [Then] with business booming, China began to reduce its subsidies to the solar industry in 2014.”

The industry has continued to grow.  As of 2018, “China [had] more solar energy capacity than any other country in the world, at a gargantuan 130 gigawatts [billion watts]. If it were all generating electricity at once, it could power the whole of the UK several times over.”

According to a study published last year, “344 Chinese cities… have solar systems producing energy at lower prices than the grid, without any subsidies.”  Experts say that “China is also driving down solar prices around the world thanks to the scale of production and learning curve effects.”   To put it another way, “in effect, China seeded the global green energy industry by lowering initial costs and creating artificial demand.”

As other countries turn to solar power, Chinese companies have also gained a huge competitive advantage in getting contracts to help build their solar farms, including the world’s largest, the Noor Complex Solar Power Plant in Morocco.  The first stages went online in 2016, and it will be fully completed in the near future.  When finished, it will “be the size of 3,500 football fields [and] produce enough electricity to power a city the size of Prague, or twice the size of Marrakesh.”

As a result of this type of progress, China is “in a very influential position as the world’s renewable energy superpower,” according to a report by the Global Commission on the Geopolitics of Energy Transformation and the International Renewable Energy Agency. 

So what does all this mean for US-China relations?  Well, you don’t have to be a regular reader of this blog to know that Americans have become increasingly aware of China’s opposition to US interests in many different areas.  But if there is one single goal that China and the US should be able to agree on, it is reducing the effects of global warming.  After all, we share the same planet, and if rising seas continue to threaten New York, they will also threaten Shanghai.

And since “China is simultaneously the world’s largest consumer of coal and the largest developer of renewable energy… the choice it makes, domestically and abroad, between the technology of the past versus the renewable future will have a lasting effect on the world’s ability to limit warming to 2.7˚F.”

This impact was underlined at a UN Climate Change conference in Madrid last year.  As the Washington Post summed it up:  “For all the good intentions of the governments gathered in Madrid, a humbling reality hangs over the latest climate change conference. The effectiveness of what is agreed and done will ultimately stand or fall on the actions of just one country: China.”

Will China become the most powerful country in the world?

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Will China someday be the most powerful superpower in the world?  Yes, they will.  It may take 10 years or 20 years or 50 years or more.  The Chinese are not in a rush. 

There are many reasons China’s continued ascension seems inevitable.  Here are four very simple factors that convinced me:

1. China is really, really big

China’s population is 1.4 billion, or more than four times that of the US (327 million people).  Seven of the world’s 50 largest cities are in the US, topped by New York with a population of 8 million.  But China accounts for 17 of the 50 largest cities, and they are much larger than ours:  27 million people in Shanghai, 20 million in Beijing, 15 million in Chongqing, 13 million in Tianjin, and so on.

American companies already sell more than $100 billion worth of products to China every year.  Many companies – including such name brands as General Motors, Starbucks, KFC, Coca Cola, Apple, Microsoft, Intel, Gillette, and Nike – rely on China for a significant portion of their revenue.  And the potential buying power of 1.4 billion consumers makes CFOs salivate as they project future sales. 

China’s sheer size also makes it a formidable foe, and the country has been flexing its diplomatic muscle in Southeast Asia for some time.  At a meeting of the Association of Southeast Asian Nations in 2010, when the discussion turned to China’s aggressive actions in the South China Sea, “China’s foreign minister matter-of-factly [said]… ‘China is a big country, and you are small countries.’”

2. The people work harder than we do.

There was a time when the US was known as a worldwide leader for its hard work and “can do” attitude.  Now, it is known as a leader in obesity, entitled workers, and people pushing for a shorter work-week.  Summer jobs that used to be filled by college kids are now handled by illegal immigrants, because they are the only ones willing to do heavy lifting.

Meanwhile, in China, many companies follow the “996 system,” working from 9 AM to 9 PM, 6 days a week, for a total of 72 hours. 

So let’s do a little math.  According to Pew research, the US labor force includes 157 million workers.  For simplicity, let’s ignore lunch, assume that they are all employed, and work 40 hours per week.  This would come to a total of about 6.3 billion labor hours per week for the US.

China’s labor force consists of about 806 million people.  If each worked 72 hours, China’s total would be 57.6 billion work hours per week, or about nine times as many total labor hours as the US. 

3. They study harder than we do.  

According to one recent study the average student in China spends 65-77 hours a week studying.  As they get older, the number goes up.  When it comes time for college admissions, every student in China takes the same standardized test over the same three days.  The gaokao, as the test is called, includes Chinese literature, English, Math, Physics, Chemistry, History and Politics.

In the US, of course, standardized tests are an important factor in determining college admissions. But they are just one factor.  Grades, class rank, essays, recommendations, interviews, sports, extracurricular activities and more are also considered. 

In China, everything depends on your gaokao score. Of the 10 million students who take the gaokao, about 60% will not get into any college.  For the rest, your score will determine whether the college you attend will be the Chinese equivalent of Harvard, or Podunk Community College.  And this will in turn have a major impact on the job you get after graduation.  In other words, in a way your whole professional life depends on this one score.  Students are therefore under enormous pressure to do well.  Some of them spend an entire year preparing for the gaokao in “exam factories,”  where they study up to 16 hours a day, 365 days a year.

Some of this work ethic survives even after people emigrate from China to the US.  In a Wall Street Journal article entitled Why Chinese Mothers Are Superior, Yale Law Professor Amy Chua, author of the bestseller The Battle Hymn of the Tiger Mother, described a study comparing the attitudes toward education of American mothers and Chinese immigrant mothers.   “Almost 70% of the Western mothers said [things like] ‘stressing academic success is not good for children’… By contrast, roughly 0% of the Chinese mothers felt the same way. Instead, the vast majority of the Chinese mothers said that they believe… that ‘academic achievement reflects successful parenting,’ and that if children did not excel at school… parents ‘were not doing their job.’”

4. They cheat

My post “The Biggest Theft in History” provided a number of examples of the way Chinese merchants and scientists do not play by our rules and have stolen intellectual property to leapfrog their US colleagues. 

Stealing intellectual property is not just a habit of imitation Apple stores, under some circumstances it is actually required by law.  “According to Article 7 of China’s National Intelligence Law ‘Any organization or citizen… shall support, assist with, and collaborate with the state intelligence work in accordance with the law’… In addition to espionage and cybertheft by the Ministry of State Security, the party tasks some Chinese students and scholars in the U.S. and at other foreign universities and research labs with extracting technology.”

So, to sum up, China has four times as many people as the US, its laborers work nine times as many hours as ours, and its students work much harder than ours too.  And oh yeah, stealing intellectual property is the law of the land. 

As a reformed academic, trained to examine both sides of every coin, I feel compelled to admit that not everyone agrees that China will become more powerful than the US.  For example, a recent report from Capital Economics concluded that “The widespread assumption that China will overtake the US as the world’s largest economy is likely to be proved wrong.”  The most common counter-arguments usually stress key challenges China faces, including economic storm clouds, enormous debt, an aging population, income inequality, and corruption.

I reviewed corruption in a recent post, will discuss each of the other issues in the future.  For the purposes of this five minute post, I will simply agree that all of these challenges potentially affect the leadership of the Communist Party, and even its very existence.  But while they may slow China’s progress, I don’t believe they will derail it.

Regime change may sound attractive to some politicians, but, according to a Washington Post article:  “Given the landscape of nationalism and xenophobia that already exists in China, a successor regime to the CCP is likely to be as unfriendly — if not even more belligerent — than the present leadership.”

What’s more, according to Richard McGregor in The Party (p. xxii) “The Party’s marginalization of all political opponents makes it somewhat like the Iraqi army after the second Gulf war.  Even if it were disbanded or fell apart, it would have to be put back together again, because its members alone have the skills, experience, and networks to run the country.”

Similarly, Harvard Ph.D. and CNN analyst Fareed Zakaria has written that:  “China’s… population dwarfs that of the United States, and [it is] the world’s largest market for almost every good… It houses some of the planet’s fastest computers and holds the largest foreign exchange reserves on earth. Even if it experienced some kind of regime change, the broader features of its rise and strength would persist.”

Current US policy sometimes seems friendly to China and other times seems shaped by the belief that “This planet ain’t big enough for both of us.”   As I explained in my post entitled “Dueling superiority complexes” politicians in China and in the US are both convinced that “our system is better than your system.” 

I certainly agree the US system is better for me.  The more I learn about China, the more I want my grandson to live under the US system, and fear what it would be like if he had to live under Chinese rule.

In any case, it is clear that “China’s ascension to global power is the most significant new factor in the international system in centuries.”  Sooner or later, the US must find a path to an acceptable world order in which we are tied for number one or – gasp – clearly number two.

If you want to get ahead in China, join the Party

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It’s not easy to join the Chinese Communist Party (CCP).  In the US, if you want to become a Democrat or join the Dr. Fauci Fan Club, all you have to do is sign up.  But to become a Party member in China, you need to take courses and tests, get recommendations, pass a screening process that looks not just at your background, but also at your parents, serve a probationary period, take an oath, and fulfill duties for the rest of your life. 

Less than 10% of those who apply are accepted.  Even Xi Jinping, now the leader of China, was rejected at first.  As a fascinating New Yorker profile notes, when “Xi [applied] to join the Communist Party’s Youth League… his application was rejected seven times.”  The problem was that although Xi’s father was a leading Communist official who had fought with Mao, the father had also lost several power struggles and been purged.  As a teenager, Xi himself was sent to the rural countryside and lived in a cave where he “learned from workers and farmers.” (During the Cultural Revolution, about 17 million “privileged youth” like Xi were sent to rural areas in the “Up to the Mountains and Down to the Countryside Movement.”)  But Xi persisted in applying, and on his eighth try he was accepted.

The CCP has about 90 million members, about 7% of the Chinese population.  They are motivated by both idealism and ambition.  As the BBC has noted  “loyal membership [in the Communist Party] is essential for anyone who wants to climb the career ladder.”  This applies not just in politics and government, but in every area of life.  Even the richest person in China belongs (Jack Ma, with a net worth of about $39 billion).  So does Fan Bingbing, one of the most famous actresses in Asia, best known to Western audiences for her role in X-Men: Days of Future Past.  

According to the Constitution of the Communist Party of China, members must “Adhere to the principle that the interests of the Party and the people come before all else” (p. 11).  In addition, Party leaders such as representatives to the National Party Congress are pre-screened for such qualities as “‘unshakable belief,’ ‘correct political stance’ and ‘good moral quality’…” 

The constitution also states that the goal of the Chinese communist party is to “lead the people in building a harmonious socialist society.. that is prosperous, strong… culturally advanced… and beautiful.”  In the real world, according to Karl Minzner in The End of an Era (p. 18), “Since 1989, Beijing has firmly adhered to one core principle:  uphold the rule of the Chinese Communist Party at all costs.”

And they have achieved that goal.  As a recent BBC news report summed it up, “The Communist Party of China is in complete control of the country, from government to police to military.”  It is embedded in, and intertwined with, not just government positions but every part of the economy.

As Xi Jinping himself said at the most recent meeting of the National Party Congress “Government, military, society and schools, north, south, east and west – the Party is the leader of all.” (See Xi Jinping: The backlash, Kindle loc 67.)

At the heart of the Party’s power is the “Organization Department” which controls the assignments of Party members, and maintains secret files on all 90 million members.  According to a brief article published by the official China News Service, the Organization Department “always wears a mysterious veil in public,” so little is known about its operations, outside or inside China.

However, as noted in the first post in this blog, it is known that the department oversees virtually every important appointment in government, business, TV networks, newspapers, universities and think tanks. According to Richard McGregor in The Party (p. 74), the department “maintains files on top level officials in the public sector, to keep tabs on their political reliability and past job performance, making it indispensable to the Party’s control of the country” (p. 73). 

When I went to a Catholic elementary school many years ago, the nuns used to threaten us that if we misbehaved, a big black mark would “go in your permanent file.”  For China’s 90 million Communists, there really is a “permanent file” and the Organization Department has it.

Along with your record, advancement is often based on who you know.  (It’s a good thing institutions don’t work that way in the US.  Oh wait…) In China, building and maintaining business relationships requires attending frequent elaborate business banquets.  A traditional Chinese banquet includes eight to ten courses, and many many “bottoms up” toasts (or ganbei in Mandarin).  After each, you are expected to hold your glass up to show that it is empty. 

Drinking alcohol is such a critical part of building relationships that one educational guide to travel includes a section on drinking culture which notes that in China “You can have friends, be rich and drink …. or don’t drink and be lonely and poor.”  Another observer described advancement in the Party this way “If you didn’t have a liver of steel to cope with all the hard-liquor toasts, you were in the wrong line of work” (p. 21).     

(As a result of Xi Jinping’s reforms, Communist Party business banquets are now “limited by edict to four dishes and a soup.” (p. 243).  I am not aware of any limits on drinking.) 

Once you belong to the Party, you’d better follow the rules.  Fan Bingbing, the X-Men actress mentioned at the start, learned that the hard way when she suddenly disappeared from public view in 2018.  According to the New York Times, at the time this “fueled a flurry of rumors of personal rivalries and political intrigue… though few concrete facts.”  

Imagine what it would be like if Meryl Streep suddenly disappeared and no one knew where she was. The ratings for Entertainment Tonight would skyrocket, and tabloid reporters and paparazzi would swarm every possible location where she might appear.  The Chinese media was more subdued.   After a few months, Fan simply reappeared, publicly described her house arrest for tax evasion and noted “that she would have been nothing ‘without the party and the state’s good policies.’”  Sounds like she learned her lesson.

What does the Party’s control mean for relations between China and the rest of the world?  According to US Secretary of State Mike Pompeo, “The Chinese Communist Party wants ‘international domination’ and has embarked on a ‘global campaign’ to sway countries to their side… we want to see a liberalized China that allows the genius of its people to flourish.”

From the Chinese perspective, Pompeo’s problem is expecting Chinese “people to flourish” on our terms, through Western liberalization.

In 2013, a dissident leaked an extremely influential internal memo entitled Document 9 which describes the need for China’s “complicated intense struggle” with seven “false ideological trends.”  According to the New York Times, the secret memo “bears the unmistakable imprimatur of Xi Jinping.”

Number one on its list of seven false and dangerous trends was “Promoting Western constitutional democracy.”  Number two was “espousing ‘universal values’ to claim that the West’s value system… transcends nation and class, and applies to all humanity.”  Number five was “Promoting the West’s idea of journalism, challenging China’s principle that the media and publishing system should be subject to Party discipline.”  And so on.

So it seems quite clear that the Chinese Communist Party is not aiming to imitate or accept the Western way of life.  In the US, the question for wise politicians is not can we beat China.  It is instead, how can the two superpowers learn to live together?

13.5 tons of hidden gold: Can Xi stop corruption?

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There is an old saying in China that “If the Communist Party executed every official for corruption, it would overdo it a little.  But if the Party executed every other official, it could not go wrong.” 

In 2012, two days after assuming office as the most powerful person in China, Xi Jinping gave a speech warning that corruption could “doom the party and state.”  Soon after, he announced a systematic campaign to crack down on both “tigers” (senior party officials) and “flies” (mid and lower level civil servants).

In the eight years since, according to Professor Kerry Brown, Xi’s anti-corruption campaign “has really drawn blood, in ways that no other kind of campaign like this has ever done.”

The most dramatic example to date was a provincial official who might be classified as a “fly.”   Zhang Qi was a member of the Standing Committee of Hainan, China’s smallest province with a population of about 9 million.  When investigators searched his home, they found a hidden room in his basement where he had stored 13.5 tons of gold.  Based on the current price of gold (roughly $1,700 per ounce), those gold bars would be worth about $734 million.  But wait, that’s just the flashy part of his portfolio.  Zhang also had 268 billion yuan (about $37.5 billion) in various banks, for a total of $38 billion.

Before he was arrested, Zhang Qi may have been the richest man in China, depending on the day’s price of gold, and his other assets.  The top two Chinese billionaires in Forbes magazine’s 2020 list were Jack Ma, cofounder of ecommerce giant Ali Baba at $38.8 billion, and Ma Huateng (aka Pony Ma) cofounder of Tencent, another ecommerce behemoth, at $38.1 billion.  Zhang Qi did not make the list.

Zhang Qi and some of the gold hidden in his basement

The sheer size of Zhang’s fortune was nearly unbelievable.  It was equal to more than half of the $74 billion annual GDP of his province.  He must have siphoned it off over many years.

According to an official statement last month, Zhang has been expelled from the party and is currently being detained and investigated for violating the “Party’s political discipline and rules on frugality… [and] clean governance.” 

Xi’s campaign against “tigers” has not uncovered revenue anywhere near that total.  But from a political perspective it has been far more significant, because it violated the unspoken rule that China’s top leaders were immune to criminal prosecution. 

In 2015, when Zhou Yongkang, China’s former chief of domestic security, was sentenced to life in prison for abuse of power, accepting bribes and revealing state secrets, the New York Times described the sentence as “defang[ing] the most dangerous tiger yet… [Zhou was formerly one of] the nine-members on the Politburo Standing Committee, which governs the country. Now he is the most senior leader to be jailed for corruption in more than 65 years of Communist rule.”

Mr. Zhou was found guilty of accepting about $118,000 in bribes and of “leaking six secret documents to… a Beijing fortuneteller.”  The Times went on to report that these “dollar amounts mentioned in the verdict were tiny compared with the Zhou’s wealth… [His] family had documented assets of more than $160 million, a conservative figure that did not include bank accounts, real estate, assets held by proxies or other wealth not reflected in publicly available records.”

Sounds like a case where Mr. Zhou – the $160 million plus “tiger” – may have had a lot to learn from Mr. Zhang – the $38 billion “fly.”  But they both ended up in jail, so they probably had much more to learn from those who have not yet been caught.

In any case, these two well publicized examples are just the tip of a very large iceberg.  According to one official estimate, “51 officials at or above the provincial/ministerial level [“tigers”] were among a total of 621,000 people [“flies”] punished” for corruption in 2018.  An official communique quoted in the same article ominously promised that “We will continue to see that… no stone is left unturned and no tolerance is shown for corruption,”

China experts are split about whether the motivation behind this continuing campaign is for Xi to purge rivals or this is a genuine attempt to reform the Communist Party.  Actually, it is both.  According to Professor Kerry Brown:  “There’s no question at the so called tiger level, where they’re targeting senior officials that it is very politicized. . . . [But] at the so-called flies level… the motivations are quite different… Xi correctly understands that [when]… local officials shake down the citizenry on a daily basis… [it] is eroding the party’s status with the public.”

The road to reform will be a long one, because Xi is fighting against a tradition of corruption that goes back hundreds or even thousands of years in Chinese society.  For a list of 17th century examples, see The Book of Swindles, which is still available on Amazon.

In the Chinese Civil War (1927-1949), corruption was so widespread in Chiang Kai-shek’s Kuomintang that it reduced popular support and contributed to the ultimate victory of Mao Zedong’s Communist Party.

Corruption increased as an unintended byproduct of the government’s approach to rapidly growing the economy.  For example, over the last two decades China has built the world’s longest high speed rail network.  Trains can reach speeds of up to 215 miles per hour over its 22,000 mile length. New lines are still being built, and it is expected to extend to about 25,000 miles within five years.  Much of the funding has been provided by the government. 

Construction came to a temporary halt in 2011 after the fatal collision of two bullet trains killed 40 people, and injured nearly 200 more.  Local officials at first tried to cover up the details by quickly ending rescue operations and burying the high speed cars that had been damaged.  This was followed by a public outcry not just online but also in state-controlled media.  An investigation concluded that the accident was caused by defects in both construction and in management.  A fascinating New Yorker article which explored the background of this tragedy concluded, in part, that this “famous public-works project was an ecosystem almost perfectly hospitable to corruption—opaque, unsupervised, and overflowing with cash.”

A variety of reforms and new safety measure have since restored public confidence, and the 2011 crash remains the one and only fatal accident in the history of Chinese high speed rail.

Ironically, experts believe that corruption and easy money greased the wheels of China’s economic growth.  A recent New York Times article argued that “in 1990s and 2000s, when the country grew the fastest… officials could often be corrupt, but even the party’s fiercest critics sometimes acknowledged that they got things done. Liu Zhijun, the former railway minister, is serving a lifetime sentence for taking bribes and abusing power. He also oversaw the creation of China’s high-speed rail system, which vastly improved life in the country.”

Similarly, a November Wall Street Journal article entitled “China’s Corruption Paradox” argued that “In the 90s and early 2000s, China was very corrupt but also fast-growing. These days, the country is less corrupt by most measures but also slower growing.  That may not be just a coincidence: A growing body of work hints that in the absence of deep institutional and financial-sector reforms, a certain degree of corruption might actually have been essential to China’s growth model…. The basic argument is that when public institutions like courts and markets are fair and well functioning, corruption hurts growth.  When they aren’t – and when officials have a direct stake in growth – moderate corruption can help local bureaucrats and companies circumvent ineffective institutions or nonsensical regulations.”

It will be no surprise that corruption is very difficult to measure.  The most widely accepted metric is the Corruption Perception Index published by Transparency International which “captures the informed views of analysts, businesspeople and experts in countries around the world.” 

In its summary of 2019 published last January, China ranked number 80 in corruption out of 180 countries.  (Denmark and New Zealand were tied for the least corrupt, the United States ranked #23, and Somalia was the most corrupt.)  Still, China’s scores have shown a gradual but definite increase in transparency and reduction in corruption since Xi’s anti-corruption campaign began in 2012.

What would China need to do to improve its rank?  According to a January article in the South China Morning Post:  “If Beijing is serious about tackling corruption, it has to make more transparent its processes in decision making, policy setting and accountability, establish judicial and legislative independence, and empower citizens.”  Similarly, Professor Minxin Pei has argued that “To get rid of corruption in an economy, you really have to strengthen the rule of law, you have to downsize the government, reduce the role of government in the Chinese economy, and also… give the press more leeway in exposing corruption.”  Well, that’s not happening anytime soon.

So, to answer the question in the title of this post, Xi Jinping cannot stop corruption under the current system.  But he can and will continue to reduce it because, as Professor Brown summed it up:  “This is a treacherous time. If the Party is not able to discipline itself . . . then it will lose its mandate to rule, and it will be game over. So the stakes are high, and… this struggle is not going to disappear any time soon.”

Human rights in China: The Uighurs

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The Uighurs are an ethnic group of about 11 million Sunni Muslims who live primarily in Xinjiang, the westernmost province of China.  For more than a century, there has been tension and violence between the Uighurs and their Han Chinese neighbors.  These days, the Chinese government routinely sends elite Uighur students to universities around the country, in the hopes of training a new generation of Uighur citizens who are loyal to the Party.

Recently, when one group of students returned home for a vacation break, they were astonished to learn that their parents and other relatives were missing.  They were informed by the police that the missing were in a school set up by the government, “to learn new skills to get better jobs, and improve their understanding of Chinese laws, and of Mandarin.” 

We know exactly what the students were told, because the police were quoting from a prepared list of questions and answers, the kind of script an American telemarketer might use to try to sell you a credit card.  The actual script was found among 403 pages of secret documents leaked to the New York Times last November.  The source was “a member of the Chinese political establishment who requested anonymity and expressed hope that their disclosure would prevent party leaders, including [President Xi Jinping], from escaping culpability for the mass detentions.”

The secret script also recommended “that police officers in plain clothes and experienced local officials meet [the students] as soon as they returned ‘to show humane concern and stress the rules.’”  These representatives assured students that they had “absolutely no need to worry” about relatives who have disappeared… [in part because prisoners would have] even better…  living standards than some students have back home’… [And] if you want to see them, we can arrange for you to have a video meeting.”

When some students pushed for more details, “The guide recommended increasingly firm replies telling the students that their relatives had been ‘infected’ by the ‘virus’ of Islamic radicalism and must be quarantined and cured…”  Students who pressed too hard were warned that their behavior could lengthen – or shorten — their parents’ detention.  In extreme cases, it could even lead to detention of the students themselves.

The offenses which had landed Uighurs in these re-education camps included: attending services at mosques: fasting during Ramadan; expressing interest in religious pilgrimages; studying Arabic; obtaining a passport, even if it was never used; having a prayer rug; sending texts that include verses from the Koran; praying too many times per day; naming a child Mohammed, Medina, or other common Muslim names; wearing long beards; not drinking alcohol; not smoking (because this displayed an insufficient “commitment to secularization.”)

The official government documents that were leaked to the New York Times went on to say that “as many as a million ethnic Uighurs, Kazakhs and others [have been sent to] internment camps and prisons over the past three years.” 

A few accounts of day to day life in the secretive camps have been published by former prisoners.  For example, according to one:  “There were almost 20 people in a room of [172 square feet]… There were cameras in [these] rooms, and also in the corridor. Each room had a plastic bucket for a toilet. Every prisoner was given two minutes a day to use the toilet, and the bucket was emptied only once a day. The prisoners wore uniforms and their heads were shaved. Their hands and feet were shackled all day, except when they had to write. Even in sleep they were shackled, and they were required to sleep on their right side… anyone who turned over was punished.”

During the day, classes in Mandarin and Chinese law are designed to “make them better citizens…  Detainees are forced to pledge loyalty to the CCP and renounce Islam… as well as sing praises for communism and learn Mandarin.” According to another prisoner, “The main purpose is to brainwash you, so you forget your roots and everything about Islam and ethnic identity.”

US Secretary of State Mike Pompeo has called the existence of these camps the “human rights stain of the century.”  (Mike must be an optimist.  The human race has about another 80 years to come up with a bigger human rights stain before the century ends.) 

In response, Congress passed the Uighur Human Rights Policy Act, which denounced the internment camps’ violations of human rights, and included sanctions against top Communist party officials.  The Senate passed this bill by unanimous consent; the House passed it 407-1.  Can you believe it?  Republicans and Democrats actually agreed on something. 

So what happened next?  The details are a little fuzzy, but it appears that the White House did not want the bill to reach the President’s desk.  If he signed it into law, it could upset delicate trade negotiations with China.  And if he vetoed the bill, it might look like he did not care about human rights.  So what happened was that the “path [of this bill] to the White House was stalled [last December] by a congressional process.”

The one thing Republicans and Democrats could agree on almost unanimously was stalled by a “congressional process”?  Yes it was.  That’s democracy in action, 2020 style.  If you have any questions, call Mitch McConnell’s office.

In reaction to the bill the Chinese government argued that “ the situation in Xinjiang was ‘not a human rights, nationality, or religion issue at all, but an issue of anti-terrorism and anti-secession.’”  Also, they said, it was none of our business.

The secret government documents recently published by the New York Times help put this view in perspective.  Massive imprisonment of Uighurs began soon after President Xi Jinping visited Xinjiang in April 2014, a few weeks after Uighur militants stabbed more than 150 people at a train station, killing 31.  On the last day of Xi’s trip, a suicide bombing outside another train station injured nearly 80 people, killing one.  Less than a month later, another bombing at a vegetable market wounded 94 people and killed 39.

In a speech back in Beijing responding to this violence, Xi said:  “We must be as harsh as them, and show absolutely no mercy.”

The next year, the top security official in Xinjiang issued a directive calling terrorist attacks in London “a warning and a lesson for us.” It blamed the British government’s “excessive emphasis on ‘human rights above security,’ and inadequate controls on the propagation of extremism on the internet and in society.”

Chinese “officials claim the camps have prevented violence” since there has not been a single terrorist attack since December 2016, around the time camps were being built.

Does this Chinese argument — that it’s none of our business — affect the legitimacy of the Uighur Act?  Well, how would we feel if the Chinese passed a law threatening sanctions unless we closed Guantanamo prison?  (Prisoners have been held there, mostly without trial, for 18 years, since the prison opened as a result of September 11th.  There were 780 prisoners at the peak; forty remain today.) 

Or how would you react if China passed a law to protect the human rights of the 95% of US elementary school children who have been forced to participate in “active shooter drills.” The drills are designed to prevent the recurrence of a tragedy like Sandy Hook Elementary School, where 20 six and seven year olds were shot, along with six adults.   But according to the nation’s two largest teachers’ unions, these drills may be damaging the mental health of an entire generation of school children, such as “one little girl who refused to wear light-up shoes after a drill, because she was told it could make her an easier target.”

Part of the disconnect between the US and China in this area is based on cultural differences in the definition of human rights.  In a thought provoking book subtitled “explaining the East-West culture gap,” Gish Jen argues (p. 44) that the Chinese government defines human rights in terms of “the people’s collective right to a livelihood… [and it] is therefore… not violating human rights when it arrests dissidents or suppresses public protest.  Quite the contrary: It is protecting human rights against self-centered individuals.”

Don’t get me wrong.  I am not arguing that the US and China have equal records on human rights.  I am arguing that the countries define human rights differently, and that can lead to significant tensions and misunderstandings.

In my first post in this blog, I included a table summarizing nine key cultural differences between the countries, including a “core value” of freedom in the US vs. a “core value” of order in China.  As I wrote there, “The cultural differences between China and America are so great that they can easily lead to profound misunderstandings and even to war.”

These differences are complex and nuanced and will be hard to resolve.  But the alternative is worse.  As Samuel P. Huntington wrote in his weighty academic tome The Clash of Civilizations (p. 21), “avoidance of a global war… [now] depends on world leaders accepting… the multicivilizational character of global politics.”

China’s mass surveillance technology

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Have you heard how the Chinese government used drones when they were first trying to limit the spread of the coronavirus?   

One video shows a man working in Wuhan without a mask, when suddenly a voice from the sky says “Why did you come outside without wearing a mask?”  The man seems confused and looks around to locate the voice.  When he spots the drone, he smirks a little.  “Don’t laugh,” the drone says sternly.  “Now get on your cart and go home immediately.  Don’t come outside if not necessary.”  The man looks at the drone again, and starts to drive his cart away, but apparently not quickly enough.  “What are you looking at?” asks the drone operator.  “Go home now.”  Which the man does.

According to a CNN piece a few weeks ago, a variety of mass surveillance techniques have been used in the first few months of trying to stop coronavirus, and “China’s top prosecutor issued a notice warning that anyone… who refuses to accept quarantine or treatment, will be ‘severely punished.’”   

Now I must admit that when it comes to trying to prevent a worldwide pandemic, there’s an argument to be made for doing whatever it takes.  But if I heard voices from the sky telling me what to do, I’d either see a psychiatrist or join the resistance.

My recent post on the social credit system mentioned a few of the ways technology is being used for mass surveillance, but those were only the tip of the iceberg.  Throughout China, there seem to be cameras everywhere.  According to a Comparitech study of the relative number of CCTV cameras in 120 cities around the world:  “Eight out of the top 10 most-surveilled cities are in China.”  (The other two are London and Atlanta).  And it’s only getting worse.  The same study reports that “By 2022, China is projected to have one public CCTV camera for every two people.”

In some cases, these systems are being used to fight crime.  For example, some individuals violate customs laws by illegally buying tax free goods in Hong Kong and then reselling them in mainland China.  This got a lot harder when facial recognition systems were installed at several border check points to compare travelers’ appearances against a database of faces and travel information.  That system now informs custom officials whenever a suspected illegal trader has been flagged.

Can this type of technology be applied when an individual is walking around in a crowd?  You betcha.  Some police in China have been given smart sunglasses that allow them to snap a quick photo of anyone they see, and then instantly compare each face to a database.  In one demonstration of this technology, police in a crowded high speed rail station used this systems to capture suspects accused of crimes ranging from hit and run accidents to human trafficking.

Of course, the basics of facial recognition are not exactly cutting edge technology.  If you use an iPhone, you may have unlocked it this morning by showing your face.  But in China, “Facial recognition… has become a normal part of many people’s lives, used in subways, office buildings, schools and even safari parks to check season-ticket holders.”  Another article provided additional examples, including “a KFC outlet in Hangzhou, China, has rolled out a ‘Smile to Pay’ system [and] universities use it to screen staff and students.” 

There are even facial recognition systems outside some restrooms to prevent people from wasting toilet paper.  Step in front of a camera for 3 seconds, and you will be rewarded with 28 inches of toilet paper on your way in.  But if you need more, you are going to have to wait 9 minutes, because the system knows who you are, and 28 inches is all you’re getting.  (To see how people reacted, watch this video.)    

Facial recognition technology has even been applied in classrooms.  According to a 2018 government press release, a Hangzhou classroom installed “a facial recognition camera that scans the classroom every 30 seconds [and]… records the facial expressions of the students and logs whether they look happy, upset, angry, fearful or disgusted.”  Not to mention whether they are paying attention.

However, this classroom experiment was greeted with a wave of bad publicity.  The negative reaction to this system was too much even for China.  Last September the Ministry of Education issued guidance recommending that in the future “schools seek the opinions of parents, students and teachers before introducing technology.”

So if you are working for a startup that hopes to develop mass surveillance technology for China, keep this in mind:  toilets may be OK, but classrooms are off limits.

Note that as this is written, none of the systems described have been installed throughout the entire country from border to border.  And there is no nationwide big data analysis in progress to integrate all the data from independent computer systems, so that the government can track everywhere you go and everything you’ve done.  So if you are a known toilet paper waster in Beijing, you can probably get away with more waste in Shanghai.

But that doesn’t mean the Chinese aren’t working on combining data from multiple sources.  The New York Times reported one experiment on combining mobile phone and CCTV camera data to increase accuracy at “a dingy apartment complex in Zhengzhou… which hosts cheap hotels and fly-by-night businesses.”  They compared facial data with phone location and “if a face and a phone appeared at the same place and time, the system grew more confident they belonged to the same person.”  Within four days, the system had matched 3,000 phones with their owners’ faces.

So the systems of the future may be far more accurate and complete.  But even with just today’s technology, some mass surveillance systems have been quite effective in helping to suppress dissidents.  Some of China’s most advanced and intrusive mass surveillance systems are being deployed in Xinjiang, a vast territory of mountains and deserts on China’s western border.  The area is home to many ethnic minorities, including about 11 million Muslim Uighurs. 

The Uighur minority has been subjected to a wide variety of harsh policies which will be described in my next post, with the goal of forcing them to abandon traditional Muslim practices and embrace Chinese identity and nationalism. 

Here’s just one example:  A few years ago, mobile phone users in the capital of Xinjiang received a message from the government requiring them to install the “Jing Wang” app on their mobile phones.  The notice came complete with a QR code to simplify downloading the app, and an explanation that the app would “automatically detect terrorist and illegal religious videos, images, e-books and electronic documents.”

One article describing this included a photo of police checking phones with this caption:  “Authorities from Xinjiang are checking to make sure that people are using the official Jing Wang application… If they are caught at a checkpoint and their devices do not have the software, they could be detained for 10 days.”

And if that’s not invasive enough, according to a NY Times opinion piece, “All communication software is banned except WeChat, which grants the police access to users’ calls, texts and other shared content.” 

As an excellent New York Times overview noted:  “By themselves, none of China’s new techniques are beyond the capabilities of the United States or other countries. But together, they could propel China’s spying to a new level, helping its cameras and software become smarter and more sophisticated.” The proliferation of systems like this seems inevitable in an authoritarian state that values security over privacy.

China’s social credit system: Myths and realities

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In some parts of China, Santa-type lists of “who’s been naughty and who’s been nice” are being used by the government to control behavior in their widely publicized “Social Credit System.” 

If you’ve been naughty – which could mean anything from committing a crime all the way down to jaywalking – you may be banned from

  • Getting your kids into private schools
  • Getting a good job
  • Staying at luxury hotels

According to Business Insider, nine million people with low scores have been blocked from buying airline tickets for domestic flights.

When you cross certain intersections in Beijing, the combination of advanced facial recognition technology and CCTV cameras everywhere enable a computerized shaming system to project your face and ID number on a giant billboard.  And when friends call you on the phone, the first thing they hear will be a siren and a recorded message such as “Warning, this person is on the blacklist.  Be careful and urge them to repay their debts.”  Even bad dog owners can be punished.  If BaoBei’s loud barking keeps your neighbors awake at night, she could be taken away. 

Monitors display a video showing facial recognition software in use at the headquarters of the artificial intelligence company Megvii, in Beijing, May 10, 2018. Beijing is putting billions of dollars behind facial recognition and other technologies to track and control its citizens. (Gilles Sabrié/The New York Times)

But if you’ve been nice – which could mean anything from serving in an important Party position to just getting to work on time every day — you may be able to:

  • Get more matches on dating websites
  • Get a discount on your heating bill
  • Rent an apartment without a deposit
  • Get a better interest rate at banks
  • Buy tickets for China’s high speed trains
  • Skip hospital waiting rooms
  • And much more

Add it all up, and you have what Vice President Mike Pence described as an “Orwellian system premised on controlling virtually every facet of human life.” 

Oh wait.  That’s the myth.

In fairness, the myth can be traced to a 2014 official government document which described a 2020 deadline for assigning a single “social credit” score to every one of China’s 1.3 billion citizens, and using these scores to shape behavior.  The goal of this system was to “allow the trustworthy to roam everywhere under heaven, while making it hard for the discredited to take a single step.”

This goal has proven elusive.  Last July, an article in Wired magazine, described the current reality:  “The [social credit] system as it exists today is [just]… a patchwork of regional pilots and experimental projects, with few indications about what could be implemented at a national scale.”  As Chinese scholar Xin Dai summed up the current state of the art, “You have this really massive but also chaotic scene of different people trying to put together different types of programs.”

Every example mentioned above has been implemented somewhere in China, and many related systems are still being built and tested.  But as Time magazine summed it up:  “It’s difficult to generalize about all of them, since they can vary widely.”

So it is clear that the idea that a comprehensive Orwellian nationwide system being completed soon is a myth  The reality is that there is no chance that it will be completed by this year’s original deadline.  In fact, it may never be completed.

Nevertheless, although the components of the system are neither complete nor nationwide, some examples still sound quite frightening to my Western mind. 

From my perspective, one of the most interesting things about the planned social credit system is the reaction of China’s citizens.  If just one of the examples mentioned above were planned for the US, it would be blocked by ACLU privacy lawsuits for decades, if not forever.  But many Chinese citizens don’t seem to care.  In fact, they embrace it.

A recent “survey of Chinese citizens shows 80 percent of respondents either somewhat or strongly approve of social credit systems.”  As noted in a Washington Post article, “the reality [is] that there are different cultural expectations of the government in China than in other countries. China’s governance tradition of promoting good moral behavior goes back thousands of years… [But] fraud is now so widespread that anyone who has lived in China in recent years has most likely experienced it in some form.” 

According to an excellent social credit article in Time, “In China, cash has long been king. As recently as 2011, only 1 in 3 Chinese people had a bank account. The nation’s rapid rise from collectivized penury to the world’s No. 2 economy meant it never had the chance to develop Western-style credit histories. That meant people could default on loans, or sell shoddy or counterfeit goods, with few repercussions. Society was dogged by a question: Whom can you trust?”

China’s recent history compounds the problem.  During China’s Cultural Revolution (1966-1976), nobody could trust anybody.  Mao Zedong’s campaign encouraged students to form “Red Guards” to root out the “four olds” – old customs, culture, habits, and ideas.  They did so with a vengeance.  Millions were accused of being bourgeois reactionary rightists, had their property seized, and were harassed, tortured, and in some cases even executed.  Student groups attacked their teachers, their parents, and each other.  

Even Party officials were not safe.  Both Deng Xiaoping (China’s leader from 1978 to 1992) and Xi Zhongxun (vice-chairman of the National People’s Congress, and father of China’s current leader Xi Jinping) were exiled to work in rural work camps.  By the time the Cultural Revolution ended, as many as 20 million people had died.

So given that fraud is widespread, and that less than 50 years ago, parents could not even trust their own children, it is easy to understand why Chinese citizens would embrace a system that helps them know who to trust. 

The Time article quoted a shopkeeper in Chongqing as saying “Chinese people don’t care about privacy. We want security. It’s still not enough cameras. We need more.”  A high school teacher added:  “Because of the Social Credit system, vehicles politely let pedestrians cross the street, and during a recent blizzard people volunteered to clear the snow to earn extra points,”

No matter how sanguine Chinese citizens are about this, there can be no doubt that technology is being used to shape citizens’ behavior.  Details of a few key examples will appear in my next five minute post on mass surveillance.

Is the “Belt and Road” a step toward China ruling the world?

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In 2013, soon after coming into power, Chinese leader Xi Jinping announced a new plan to invest in a “Silk Road Economic Belt” to improve railways, highways and airports that linked China to its neighbors throughout Eurasia.  Since then, this plan has evolved into the “Belt and Road Initiative” (BRI) and has expanded several times to include Africa, Latin America, and the Arctic, as well as improved maritime ports, telecommunication networks, oil and gas pipelines and much more.

To date, China has signed BRI cooperation agreements with 123 countries and undertaken over 3,100 projects.  Chinese banks have invested more than $210 billion so far, and Chinese state-owned enterprises are getting most of the work, “more than 70 percent of the combined value of [the] contracts launched under the initiative.”  And they are just getting started.  The total cost of the BRI is expected to exceed $1 trillion. 

Typical BRI projects includes highways and roads in India, Georgia, Tajikistan and Montenegro; railways in Thailand, Laos, Bangladesh, Malaysia and Saudi Arabia; ports in Sri Lanka, Myanmar, Djibouti and the UAE; hydroelectric power projects in Cambodia and Uganda; improved fiberoptic links with Pakistan; pipelines in Azerbaijan; and solar power in Kazakhstan.  BRI has even expanded into outer space with the BeiDou Navigation Satellite System (BDS) which is scheduled to become fully operational this year.  BDS will provide a Chinese alternative to the US Global Positioning System (GPS), which enables Siri to give you directions to the nearest Burger King, and US missiles to hit their targets.

Is there a giant map showing all of BRI’s planned projects?  Nope.  On the contrary, “The Belt and Road is not an entity with fixed rules; rather it is deliberately intended to be informal, unstructured and opaque… It is an idea, a concept, a process.” (Belt and Road, p. 35, 24).  As a result, any maps of its major routes, including the one that appears below, are simply rough guides and very much subject to change.

Why would China invest over $1 trillion in other countries? According to a report from China’s Ministry of Foreign Affairs and its Ministry of Commerce, the official BRI goals include working with China’s neighbors to “jointly create an open, inclusive and balanced regional economic cooperation architecture that benefits all… It is a positive endeavor to seek new models of international cooperation and global governance, and [to] inject new positive energy into world peace and development.”

Hmmm.

Critics have called the program “a dagger aimed at the heart of [Western] economies and societies” and noted that “Whoever is able to build and control the infrastructure linking the two ends of Eurasia will rule the world.” (Belt and Road, p. 11, 3)

However benign or malicious its intent, there can be no question that from the Chinese perspective, the BRI is an absolutely brilliant idea because it provides so many different benefits, including: 

  • Increased economic growth, by opening new markets to China and providing an outlet for the industrial overcapacity that resulted from China’s over-building boom.
  • Support of a “‘going global’ strategy funded by Chinese banks… and staffed by Chinese workers”
  • Increased trade by lowering transportation costs through improved infrastructure.
  • Closer diplomatic and economic relations with BRI countries so that “Instead of gunboat diplomacy and coercive military power… China [can] use economic leverage both as an incentive to garner support for its interests… [and] as a means to punish recalcitrant countries.”
  • Increased stability.  For example, “By investing in volatile countries in central Asia, [Xi] reckons he can create a more stable neighborhood for China’s own restive western provinces of Xinjiang and Tibet.”  
  • Increased returns on China’s immense foreign exchange reserves, most of which are currently invested in low-interest US government securities.  The interest rate on loans to finance BRI projects are higher.
  • Increased use of the official Chinese currency – the renminbi – to replace the dollar in international trade.
  • “Debt-trap diplomacy.”  Countries that owe China money are less likely to challenge China on human rights or territorial disputes such as the South China Sea.  And if countries are unable to repay, China can restructure or forgive the debts in return for strategic concessions.  For example, “In 2011, China wrote off an undisclosed debt owed by Tajikistan in exchange for… 447 square miles of disputed territory.”  Debt-trap diplomacy is seen as a particularly troublesome challenge to the US.  “In September 2018, the head of the Overseas Private Investment Corporation (OPIC), a U.S. government international finance development agency, accused China of purposefully plunging recipient countries into debt in order to ‘grab their assets’ and to go after ‘their rare earths and minerals… as collateral for their loans.’”  (I wonder whether China would forgive part of the growing US national debt if we offered them South Dakota.  Just a thought.) 
  • And last, but definitely not least, no one should ever lose sight of the potential military benefits.  As one expert put it:  “If it can carry goods, it can carry troops.”    

It is important to note that these benefits focus on BRI’s physical infrastructure projects.  More broadly, however, BRI aims for “‘five connectivities’: policy coordination, infrastructure building, unimpeded trade, financial integration, and people-to-people exchanges. Taken together, these five links reflect the Chinese leadership’s vision for a region more deeply integrated around China… The ultimate objective of BRI is not only to enhance infrastructure connectivity across Eurasia but to ‘move toward a community of common destiny and embrace a new future.’” 

Yikes.  Guess what country would be the dominant power in this new future.

However, it is also worth noting that there is no lack of controversy about whether BRI will succeed.  Critics outside and inside China believe the initiative “might easily fall short of the great claims made for it… It could [also] give rise to new problems for Chinese financial institutions, and debt service problems for countries with weak credit ratings.”  (Red Flags, p. 175)  According to a New York Times article, “The initiative has been plagued by allegations of corruption, overspending on vanity projects, excessive debt and other problems in countries like Malaysia, Sri Lanka, Pakistan and Uganda.” 

If we wanted to review all of BRI’s main projects and discuss what will and will not work, we could be here for weeks.  Indeed, the BRI has become “so big it is almost impossible for one person to have mastery of it.”  (Belt and Road, p. 8). 

But this post is designed to provide a five minute big picture summary, so let’s stop here and return to two of the BRI goals quoted above.  Which seems more accurate?  Is the BRI a “new model of international cooperation… [to lead to] world peace and development” or part of China’s attempt to “rule the world”? 

Actually, from the Chinese perspective, it may be both.

If you ask me, the Belt and Road Initiative is still another example of China thinking long-term while the US thinks short-term.  We are getting outsmarted again.