By Paavan Gami
AMY Chua’s book Battle Hymn of the Tiger Mother whipped up an international storm. While criticisms defending Western parenting gained prominence, the Chinese perspective itself was neglected. In China, the book was paradoxically heralded as a how-to guide for achieving success in the Western education system, but this phenomenon has not been insular. It is quickly apparent upon entering Chinatown – and noting America’s highest density of SAT tutors per block – that college admissions, specifically to top Western universities, is of paramount importance to Chinese immigrants. This societal concession that the Western higher education system is better than its Eastern counterpart is a rare one.
From their nation’s name – Zhongguo, meaning “center nation” – to the idea that their emperor possessed the “mandate of heaven,” the Chinese are instilled with the belief that the Chinese national destiny is hegemony, that China ought to be the center of civilization. Today, the country is arguably closer than it ever has been before to that goal. Pundits have been quick to declare China the next global superpower, generating hype and even fear about the eastern giant’s economic and military clout.
However, when one considers the fundamental factors underlying China’s growth, its long-term prospects as an export-based powerhouse are not so rosy. Many of the lauded Chinese Communist Party structural policies are slowly backfiring, and it has become increasingly evident that the country’s temporary boom in export prowess has evaporated. However, Chinese domestic society, as viewed from a liberal paradigm, is gaining steam as a legitimate system to provide for the needs of the Chinese people.
At the most basic level, China was able to leverage its inherent advantage – a huge labor force – to attract international investment. This advantage is unfortunately disappearing; the nation is in the same demographic quagmire as the West, with a growing elderly population that will need to be subsidized by the state, as well as a dwindling working class. The one-child policy, once used to restrain mushrooming growth, has backfired in a massive way, reducing birth rates to far below the population replacement rate. Even worse, a cultural paradigm that values male over female children has created a tremendous disparity in the gender ratio in the younger generation. Experts estimate that one in five Chinese youth will be unable to find a spouse by 2020.
Further reducing labor efficacy is an age-old Chinese policy called the hukou, or the household registry system. The system institutionalizes a labor division between rural and urban workers; in order to migrate from one area to another, workers have to apply for permits. A relic from the country’s Maoist command economy of yore, it was originally justified as a method of stabilizing agrarian production and controlling labor allocation. As a present-day policy, it has caused huge, irrevocable problems. The rural region that still possesses an untapped labor reservoir does not have the mobility to access the urban industrialized zone’s employment opportunities. This has created a void for multi-national corporations looking for cheap labor while also antagonizing the rural populace; rural workers believe they have been deprived of a basic right.
This issue, the marginalization of minorities, is an overarching theme of Chinese Communist Party governance. Unrest originating in ostracized groups like the Mongols and Uighurs is slowly spreading across the nation. Catalysts, month after month, from the arrest of activist and Nobel Peace Prize winner Liu Xiabo to the July 2011 train crash that killed forty, are inciting mass protests. This sort of movement is an eventuality in any society in China’s position.
As Karl Marx argued, industrialization brings workers together such that they, for the first time, identify as a discrete class deserving particular rights and conscious of deprivations thereof. While such deprivations may have initially been justified as a path to economic growth that provided for more basic needs, once those needs are provided, quality of life becomes of paramount importance. As China emerges as a developed country, its population will continue protesting until workers’ rights and environmental protections reach levels comparable to the West. This sort of social development will almost certainly lead to slower economic growth as increased costs drive production away.
External pressure is supplementing this internal push for labor standards. Consumers in the West are frequently using their purchasing power to chastise corporations engaging in unethical production in China. Furthermore, human rights organizations and Western governments are increasing diplomatic pressures to improve labor standards. To maintain profit margins, multi-national corporations are investing elsewhere. Another external influence is the movement to pressure China into legitimately unpegging the Renminbi, the Chinese currency.
Though China officially unpegged the Renminbi in the summer of 2010, many controls persist; the currency is still approximately 30 percent undervalued. Ongoing diplomatic pressure from the United States and other Western nations to remove all controls has recently been supplemented by a larger worry that monetary policies like China’s had a part in causing the sovereign debt crisis. The idea is that pegged currencies, maintained through purchasing large amounts of foreign currency, artificially deflate interest rates and make debt cheaper than it ought to be. These increasingly powerful international forces will force China to let the Renminbi freely float. As the currency appreciates to its true value over time, exports from China will become pricier, exacerbating capital flight from the country.
As production and export costs in China rise, the appeal of countries like Vietnam and South Korea – who have not yet entered the stage of labor protest – increases exponentially. The United States and European Union both recently signed free trade agreements with South Korea and reinforced ties with the Association of South East Asian Nations (ASEAN). The result has been a tremendous outpouring of foreign direct investment (FDI) into these countries. While China’s FDI grew approximately 30% from 2006-2007 (before the global economic recession), Vietnam’s FDI tripled over the same time frame.
It is incredibly clear that the model of Chinese growth as being export-dependent is due to expire soon; China faces internal labor problems, external pressures to be more equitable in monetary practices, and tough competition from other Asian countries. However, this does not mean that China’s day is in any way over. Though it may not have ultimately succeeded through the lens of hegemony via economic growth, it is on the path to achieving reforms that better provide for its citizens. The very labor standards painted as devastating to economic growth also better the quality of life for workers. Indeed, even unpegging the Renminbi, a move that will certainly reduce exports, will also increase the purchasing power of the Chinese populace.
If the Chinese adopt the Western liberal paradigm of societal success as quickly as they did the Western educational one, perhaps they too will realize that their loss of export dominance will inevitably come hand-in-hand with tremendous societal gains.
Paavan Gami is a freshman in Silliman College.