The Post-American World - Fareed Zakaria [49]
This is not, however, a complete picture. While China is growing fast and opportunities abound on every level, the state—thanks to the incremental reform approach—still commands many heights in the economy. Even today, state-owned enterprises make up about half of GDP. Of the thirty-five largest companies on the Shanghai stock market, thirty-four are either partly or wholly owned by the government. And state control is often at odds with openness, honesty, and efficiency. China’s banks, which remain mostly government entities, disperse tens of billions of dollars a year to shore up ailing companies and funnel money to regions, groups, and people for noneconomic reasons. Corruption appears to be rising, and the share of corruption cases involving high-level officials is up dramatically, from 1.7 percent in 1990 to 6.1 percent in 2002.4 Regional differences are widening, and inequality is skyrocketing, causing social tensions. A much cited statistic—from the government itself—tells of an important trend. In 2004, there were 74,000 protests of some kind or the other in China; ten years earlier, there were just 10,000.
These two pictures can be reconciled. China’s problems are in many ways a consequence of its success. Unprecedented economic growth has produced unprecedented social change. China has compressed the West’s two hundred years of industrialization into thirty. Every day, tens of thousands of people are moving from villages to cities, from farms to factories, from west to east, at a pace never before seen in history. They are not just moving geographically; they are leaving behind family, class, and history. It is hardly a surprise that the Chinese state is struggling to keep up with this social upheaval. In describing the declining capacity of the Chinese state, Minxin Pei points out that the authorities cannot manage something as simple as road safety anymore: the fatality rate is 26 per 10,000 vehicles (compared with 20 in India and 8 in Indonesia).5 But it is, at the same time, crucial to note that the number of cars on China’s roads has been growing by 26 percent a year, compared with 17 percent for India and 6 percent for Indonesia. When India overtakes China in growth, as it is set to do, I would wager that it will also see a marked rise in its accident rate, democratic government or not.
Consider the environmental consequences of China’s growth—not to the planet as a whole but to China itself. Some 26 percent of the water in China’s largest river systems is so polluted that they have “lost the capacity for basic ecological function.”6 There are nine thousand chemical plants along the banks of the Yangtze River alone. Beijing is already the world’s capital according to one measure—air pollution. Of China’s 560 million urban residents, only 1 percent breathe air considered safe by European Union standards.7 But it is also worth pointing out that almost all these figures and assessments come from the Chinese government. Beijing has placed environmental considerations higher on its agenda than most developing countries have. Senior officials in China talk about the need for green GDP and growth with balance, and environmental considerations figure prominently in President Hu Jintao’s plan for a “harmonious society.” One Western consulting firm has examined China’s new laws regarding air pollution and calculated that demand for products that remove particulates from the air will increase 20 percent a year for the foreseeable future, creating a $10 billion market. Beijing is trying to manage a difficult dilemma: reducing poverty requires robust growth, but growth means more pollution and environmental degradation.
The greatest problem China faces going forward is not that its government is incurably evil; it is the risk that its government will lose the ability to hold things together—a problem that encompasses but goes well beyond spiraling decentralization. China’s pace of change is exposing the weaknesses of its Communist Party and state bureaucracy. For several years, the government’s monopoly on