It was snowing. A boy 4-year old in nothing but underpants was shivering in a cold street. The freezing temperature was especially severe due to the high humidity. “Run,” he was urged by a stern voice. He began to run but soon stopped. “Do push-ups,” was a further order. The boy put his small hands on the snow, started to do push-ups but he soon fell on the snow.
A passerby ran over, held up the boy, wrapped the boy in his coat and brought the boy into the nearest store to keep him warm. He was followed by some other passersby and a young man. The young man said, “Give me back my son.” “Are you really his father? How could you treat your son so cruelly?” asked the passerby.
“I am his father. I can do whatever I want to him. Mind your own business.” The young man tried to hit the passerby with his fist but was stopped by another passerby. They called the police and accused him of abusing his son.
It was found that the boy’s mother died a few months ago and his father was the only relative to take care of him. However, being a drug addict, the father hated his son and often beat him. That nude exercise in the snow was his new way to abuse his son.
Social workers later found loving foster parents for the boy, but it took years to cure the trauma caused by his sufferings. The boy used to have nightmare of running in underpants in the snow, drowning in icy water, etc. His foster mother had to sleep by his side to wake him and hold him in her arms when he had such a nightmare. Having lived in a loving family for quite a few years, he seemed to have been cured from the trauma and grew up into a normal teenager.
Now there is a Chinese ambitious loving father who gives himself the title of eagle father. He applied the abusive father’s method to make his son a super boy. What has he achieved? Has he imbued his son with courage, fortitude or unflinching willpower? No, the child has been made to fear that experience and never wants to endure such hardship again. Perhaps, he will have nightmares similar to the abused boy.
World Bank’s Feb. 27 report points out that China’s current export- and investment-led growth model is unsustainable and a further economic liberalisation reform shall be carried out to avoid hard landing and middle-income trap. Chinese leaders have to take World Bank’s suggestions seriously as decrease in growth rate may give rise to serious unemployment leading to the collapse of the CCP (Chinese Communist Party) Dynasty.
However, the key factor of reform, privatisation, is so radical that it will certainly be resisted by vested interests and the huge number of poorly educated workers and peasants including the about 30 million Party members among them who advocate Maoist public ownership and planned economy. The large number of bloggers who support Du Jianguo’s opposition to the report indicates the strength of the resistance.
In addition, corruption is so serious that former premier Zhu Rongji had to break his silence on July 18 to make implied criticism.
The next generation of leaders has to be superheroes to maintain the high growth rate. However, I am confident as they are the youngest of the generation of talented scholars with moral integrity described in my book who overcame lots of difficulties when they grew up.
Jiang Zemin and Zhu Rongji were superheroes able to radically transform state-managed enterprises and vigorously develop the private sector, but they were lucky enough to be able to exploit the pervasive fear in the Party caused by the Tiananmen protests.
When problems of the export-led growth model loomed, the financial tsunami gave rise to serious unemployment among migrant workers. Hu Jintao and Wen Jiabao are superheroes to maintain the high growth rate as they have been lucky enough to exploit the opportunity to overcome conservatives’ opposition to the reduction of restrictions to private capital and encourage private capital to enter various other industries where there were open and hidden barriers for private capital to enter in the past.
Private capital displayed its great vigor and potential in making surprisingly great achievements in those industries and soon employed back all the migrant workers they had laid off. Seeing the evil of the monopoly of China’s huge state-owned enterprises, they allowed private sector to compete with the public sector. In order to earnestly develop China’s private sector, the State Council issued on May 7, 2010 “Several Opinions of the State Council on Encouraging and Guiding the Healthy Development of Nongovernmental Investment” (the “Opinions”).
For implementation of the Opinions, the General Office of the State Council issued on July 22, 2010 “Notice of the General Office of the State Council on Division of Labor for Major Tasks of Encouraging and Guiding the Healthy Development of Nongovernmental Investment” (the “Notice”) to assign the responsibilities for helping private investment in various industries to various central departments and local governments.
According to the Notice, central departments and local governments are to encourage private capital to participate in transformation of state-owned enterprises, conduct independent innovation, transformation and upgrading and take part in international competition. They had to help private enterprises establish their engineering and technology research centers and technology development centers, increase their technical reserves, and satisfactorily train their technical personnel.
Further, private capital is encouraged to play its role in hi-tech sector, utilize high technologies to reform and develop traditional industries, vigorously develop recycle economy and eco-friendly economy, and invest in the development of the emerging industries with development potentials, such as the industries of energy conservation, emission reduction, water conservation, reduction of water consumption, biological medicine, information network, new energy, new materials, environmental protection, integrative utilization of resources.
After over a century of defeat and aggression by foreign powers, Chiang Kai-shek’s corrupt autocracy and Mao’s tyranny, China has had more than three decades of good luck. I hope its good luck will remain till 2030 when the radical economic reform has been completed and there is sound foundation for political reform.
In an interview with American Chinese basketball superstar Jeremy Lin, the Chinese Central Television (CCTV) reporter asked Lin whether he would play basketball for China in international matches. Lin said that he had not made up his mind yet.
The reporter is being condemned widely on the Internet. “Are gold medals so important that China wants an athlete from another country to help it win them?” asked some bloggers.
However, human history was a history of grabbing and snatching from abroad for thousands of years. Over 2,000 years ago, there were seven kingdoms in China. Qin, the strongest among them, fought one after another war to grab land from other kingdoms, but there was no United Nations to condemn it or a superpower to punish it for aggression. Finally Qin robbed all the land of the other six kingdoms, but the King of Qin who was later called Qin Shihuang, was praised in the recent popular film “Hero” for unification of China (a successful PRC propaganda) in spite of his cruel exploitation and persecution of Chinese people.
Quite a few Chinese still regard Genghis Khan as a great Chinese hero who conquered many countries, i.e. robbed all the land in those countries. They prefer not to remember that China was also a country whose land was grabbed by him. At first, his troops wanted to turn all Chinese land into grassland for breeding sheep and horses, but talented Chinese intellectuals persuaded them to allow Chinese people to continue their farming and thus create much more wealth for them.
Anyway, the Mongolian tyrants are not condemned for their grabbing.
In our current civilized world, grabbing by force is not feasible, but we can attract talented people by high remuneration and great respect. Obama precisely wants to do so. In his recent State of Union speech, he wants to change immigration rules to keep in America talent foreign intellectuals trained by American colleges. Certainly the same treatment shall be given to talented athletes too. Didn’t Yao Ming, a basketball star well-known in China, play NBA games in America?
The question is not whether a country is justified in grabbing talents by lawful means from abroad but whether it is cost effective for the country. Paying US$1,000,000 annual salary to win a gold medal seems too expensive, but if Lin is employed to set an example and help training Chinese basketball players and turn Chinese basketball matches into a business generating billions of dollars like the NBA in America, the return will be huge compared with the investment.
Nine years ago when I first met Uncle Ho at the shed 700 steps up on the hill, he told me he was eighty something. He looked eighty-odd year old then and I believed him.
When I asked about his age a few days ago, he was still eighty-odd years old. I studied his face meticulously and found that he still looked eighty-odd. It seems that the nine years have passed without leaving any trace in his appearance.
I asked other hikers. Some of them said that Uncle Ho told them he was born in the 1910s. I then asked Uncle Ho whether he was really born in the 1910s. He said yes. I said, “You must at least be ninety-two. Even if you were born in 1919, the last year of the 1910s, you must be ninety-two now. In what year were you actually born?”
“I prefer ceasing calculation of my age. I have long passed the normal age of death and shall enjoy the days I am still alive and healthy. Why shall I calculate my age everyday to remind me that death is coming increasingly closer. For me age is a meaningless figure. What counts is whether I am still healthy and happy.”
Uncle Ho comes to the shed often to make tea, provide it for hikers free of charge and sweep the steps. He walks only 700 steps up to the shed and never goes to the peak 1,500 steps up to keep fit like all the other hikers. I exercise earnestly every other day climbing up more than 2,100 steps as fast as I can for good health and longevity, but he spends most of the time chatting and joking with hikers who sit in the shed to enjoy the tea. They say the tea made with stream water tastes especially good, but I do not know the difference. Perhaps, I am no connoisseur.
I work hard to keep fit, but he climbs only 700 steps without effort and just enjoys the chatting and joking. However, I do not think I will live longer than him. What is his secret of longevity? I do not know. The stream water? The moderate exercise everyday? Or being always happy to enjoy life, chatting and joking?
About 30 years ago, my daughter got a beautiful Tibetan terrier but had no idea that the small dog was a bellicose dog. He would challenge to a fight any other dog he met no matter how big the other dog was. I liked his bravery, but did not want to see him fighting; therefore, I used to hold him up when he went near another dog. However, when he met a really big dog such as a German shepherd dog, I did not hold him up because every time he met a dog so big, the big dog just held him in contempt and ignored his fierce barking as if he had not existed.
North Korea is poor and weak. It is unable even to feed its troops let alone its people. When it challenges the United States, it is like my tiny dog challenging a lion. However, it was not held in contempt but regarded as a real threat. US media naturally exaggerated the threat due to its thirst for sensational news. Why shall American politicians also feel seriously threatened and regard North Korea as one of their priorities. Is America a lion with a weak heart?
They say that it is because North Korea has a small number of atomic bombs and some carrier missiles. Atomic bomb is the technology of the 1940s. Any country with the limited resources similar to what North Korea has can produce it now nearly 70 years after it was invented. America shall not be taken in by North Korea’s nuclear blackmail. It shall know very clearly that North Korea’s Kim regime is now on the verge of collapse.
In its New Year report, North Korea’s Korea Central News Agency (KCNA) said, “The food problem is a burning issue in building a thriving country” and urged various Party organizations to “resolve that problem to prove their loyalty.”
Obviously exacerbation of this decade-old “food problem” to a burning extent reveals those organizations’ failure to “prove their loyalty” to the regime.
The lack of loyalty is further revealed in KCNC’s quote of the New Year editorial jointly carried by three North Korean newspapers that “The whole party, the entire army and all the people should possess a firm conviction that they will become human bulwarks and human shields in defending Kim Jong-un,” Kim Join-il’s successor. Certainly, North Korean people do not possess such a firm conviction, or they would not be urged to have such loyalty.
A dynasty that cannot feed its people of course has a pressing need for the loyalty of its people, but how can it get such loyalty. Its trick is to create tension to fool its people that they are under the threat of invasion from America and South Korea so that the people need the protection of the regime. American media and politicians’ response to North Korea’s bluffing gave Kim Jong-il spotlight and thus make him a star worshiped by North Korean communists. What they shall do is precisely the contrary: ignore the bluffing and treat North Korea with contempt as if it did not exist.
They must be clearly aware that America has the capability to destroy North Korea thoroughly if North Korea dares to use its atomic bombs to attack any country; therefore, the Kim regime dare not really use the bombs. As for conventional weapons, North Korea lags far behind even China. Kim Jong-il visited China several times for supply of weapons but failed to get what he wanted. North Korea can be defeated within a week by South Korea with the help of American advanced air force and navy if it invades South Korea with conventional weapons. China will not be so foolish as to help North Korea again as Mao, the warlike tyrant, died long ago. Remember, Mao sent troops into Korea in spite of the opposition of all other Chinese leaders.
All North Korean propaganda about Kim’s genius of shooting, handling tanks and other skills is rubbish because for the leader of a country, those skills are useless. A good leader has first of all to be able to decide the right route for his country to follow and employ competent officials to successfully carry out his policies to make his country prosperous and his people happy.
According to PRC sources, Kim Jong-un has sent thousands of technocrats to China to learn from it its reform and opening-up, especially the development of private enterprises. There is also news that a joint venture coffee shop with Austria has recently been open in North Korea’s history museum to offer well-known European brand of coffee.
If he is really switching from communism to Chinese style of capitalism for his country’s prosperity and his people’s benefit, he is a true genius.
We need not worry that he is too young to have his way. He has China’s strong support.
Jiang Zemin was a mystery even when he was retiring after being spotlighted for more than a decade. So is Hu Jintao now. There were lots of speculation that Jiang was unwilling to retire, that there would be fierce power struggle between Hu and Jiang or Jiang’s protégés in the politburo, etc. that have never turned out to be true.
As the official history distorts the facts, I wanted for quite a long time to write about China to tell the truth based on my own sources and personal experience. However, there must be some authoritative source to support my book. Zhao Ziyang’s memoir provides such a source and what I have written in my book was further confirmed later by the memoirs of former politburo members Qiu Huizuo, Li Zuopeng and Wu Faxian and the books written by Qiu’s and another member Huang Yongsheng’s sons.
Even well-known diplomat Henry Kissinger helped the Chinese Communist Party to beautify Mao era in his book “On China”. I had to write a long review to tell readers his ignorance about China that caused his book to be full of misinformation about not only Mao era but also Chinese history and culture.
It is good that as the speculation about Jiang Zemin and Hu Jintao was proved wrong by later developments, people now regard Xi Jinping as a mystery instead of giving their views based on speculation.
Still, as China is the second biggest economy in the world now, knowledge about Xi Jinping, its leader-in-waiting, is indispensable for other countries and people doing business in or with China. Therefore, I believe that I have to give my view on him based on the little information available and my contacts with people of his generation.
How can we know more about Xi Jinping? As a Chinese who has been able to reduce the trouble I might be in when my father was imprisoned for a framed-up active counterrevolutionary crime, I am more sensitive to learn what lies underneath the limited available information.
We have enough information about Xi’s moral integrity, but that is not enough for the top leader of a state. He must be wise. Obviously he was wise in making critical choice in his life. First when he was to go the countryside, he chose his father’s base area where the officials and people still respected his father as his father was persecuted because of a fiction praising the contributions of the former leaders of those officials and people.
Second, all young boys of his age (13 years old then) were happy when they no longer had to study as school education ceased due to the Cultural Revolution. Xi, however, chose to go on studying on his own. When he was sent down to the village in northern Shaanxi, his major luggage was a box of books. He is thus one of the new generation of talented intellectuals with moral integrity that emerged during the Cultural Revolution.
Third, almost everyone who had been sent down to a rural area, wanted to leave for an urban job as soon as possible in order to improve his livelihood, but he preferred to stay as he was very clear with his father’s problems, the village in the area his father was popular is the best place for him to develop his career in the Party.
Fourth, he persisted in joining the Party despite his application has been rejected about 10 times. In my book, I described the emergence of a new generation of talented intellectuals with moral integrity in Shanghai. Judging by the emergence of quite a few good officials, academics, writers, artists, entrepreneurs of that age group throughout China, such scholars also emerged in other areas of China.
What is most important for a top leader is the ability to choose talented assistants with moral integrity. When Xi has just replaced Hu Jintao, he has no choice but to be assisted by those chosen by the core and Hu Jintao. Whether he has this wisdom has to be judged later by his own choice of assistants.
I described a meeting of the new generation of scholars I personally attended in Shanghai, where the way to save the nation was discussed. Some attendants suggested that they should join the Party, climb to the top and transform the Party. It turned out later that their way was the wise way that has transformed the Party without bloodshed. Xi is as wise as them in trying to join the Party and rise to the top though he was not in Shanghai at that time.
Domestically, he paid great attention to development of agriculture to make farmers rich. The increase in farmers’ income will force employers to raise wages for migrant workers as they will return home if the wages they earn are lower than what they may earn as farmers back home. Supplemented by the policies of provision of low-rent housing for migrant workers and equal educational opportunities for their children, there will be great increase in demand in Chinese domestic market.
As for his diplomatic policy, in the beginning he will continue to carry out Hu Jintao’s policy to strive for harmony. I hope and believe that he will try hard to ease tension between China and America during his current visit to America. As for his attitude when he is really in charge, judging by his hardline speeches when he visited Mexico, I think that due to his populist tendency, he will not easily submit to US pressure.
Western people regard Hu Jintao’s smooth succession to Jiang Zemin as the beginning of a new era of smooth succession in the Chinese Communist Party (CCP). Being accustomed to democracy, they had no idea that there is still a dynasty, the CCP Dynasty, in China.
According to Deng Xiaoping, there shall be a core of the collective leadership in China. He said that Mao was the core of the first generation of leadership while he himself was that of the second generation. Mao had the absolute power to cruelly punish all those who dare to express any view different from his. Deng was able to silence alone powerful conservative elders’ opposition to the reform by his Southern Tour when he was fully retired. Obviously, the core of the CCP has the absolute power of an emperor even when he has no official post.
When Deng selected Jiang Zemin to succeed him, he made Jiang CCP general secretary and chairman of the military commission and PRC president, but said that he would not rest at ease until Jiang became the core of the third generation of leadership. At that time, Zhao Ziyang who knew well how CCP’s power center operated, gave the following comment (p 34 of Zong Fengming’s “Zhao Ziyang: Captive conversations”):
“There is nothing certain in what has been said now about the core of the third generation of leadership. It is a transition period. As long as there are the elders, there will still be the rule of the elders. For example, though I was the general secretary, I was but the secretary general then.”
CCP power center is a black box. Zhao Ziyang was the first to reveal its operation in his memoir. There are now Memoirs of Wu Faxian, Li Zuopeng and Qiu Huizuo and Huang Yongsheng’s son’s book on his father that provide further revelations as the four were all politburo members from 1969 to 1971. They revealed that Mao and Deng acted as absolute monarch when they became the cores of the CCP leadership.
The third core is Jiang Zemin, who was at first regarded as a transitional leader but amazed every one when his protégés got a majority in the politburo standing committee (PSC) when he retired. Jiang had cleverly applied the art of being an emperor to exploit the fear given rise by Tiananmen Protests and America’s victory in Gulf War to establish his position as the core and conducted a coup to substitute intellectuals’ dominance for conservatives’ dominance in the Party and state. That is a long story that cannot be covered in this short article.
At the 17th Party congress, Hu Jintao was able to have five of his Communist Youth League (CYL) protégés elected into the politburo and one into the PSC, but failed to designate his man as his successor. Xi Jinping who worked for six months in shanghai where Jiang lived was selected unexpectedly as he had really not been exceptionally brilliant than other contenders. It proved that Jiang remained the core while Hu had not been able to replace Jiang as the core.
There was speculation that Xi could not be a successful successor as he was not appointed vice chairman of the CCP Central Military Commission for almost three years after the congress. However, his appointment to the post in late 2010 proved the speculation was unfounded. Jiang remained in control and Hu was unable to substitute Li Keqiang for Xi Jinping. The picture of succession at the 18th Party congress seems clear by 2010. However, there is rumor now that Wang Qishan instead of Li Keqiang will be selected as the next premier.
The striking hint was given by former premier Zhu Rongji. Zhu had pledged not to comment government work after he had retired. He had kept his silence until January 18, this year when he gave a 9-minute impromptu speech at the beginning of a Peking Opera show for Shanghai officials mostly at bureau-chief level. What provided much food for thought in his speech was that he recalled his work in Shanghai under the leadership of President Jiang Zemin and what he once said then: “We will have a satisfactory clean government in Shanghai and Shanghai will be able to achieve successes however great if only we watch closely our 506 bureau-level officials and give play to their talents.”
During his visit to Tsinghua University for its centennial celebration in late April, 2011, he said something to criticize the government but told his audience not to disclose what he said to outsiders. Immediately afterwards, the CCP Central Disciplinary Commission issued a notice that forbade such speeches.
Why did Zhu speak out in spite of the ban? Why did Shanghai boss Yu Zhengsheng give Zhu forum to air his views? Did Zhu hint that with a good president and a competent assistant to the president like Zhu to watch all the officials below and give play to their talents, there will be clean government able to achieve successes however great, but when Xi Jinping takes over, there will not be clean government and great achievements because Li Keqiang is not as competent as Zhu to do the job.
We do not know what is really happening in the power center, but we can be sure all the factions in the Party are now exerting to their utmost for the official posts after the reshuffle.
Xi will succeed Hu smoothly, but it will take years for him to establish his power base. The key is not the issue of Xi’s succession but the issue of who will succeed Jiang as the core. Hu refused the wording of the CCP central authority with Hu Jintao as the core but preferred that of the CCP central authority with Hu Jintao as the general secretary. Obviously, he is clear that he has not yet obtained the status as the core. Now, Jiang is old and has retired for 10 years, can he remain the core or is it time that Hu or any one else replaces him as the core?
We will find the answer when we see who will have the majority in the new PSC line-up after the 18th congress.
Xi is certainly not qualified to be the core now. It will not be Xi Jinping’s call to decide China’s future route when he has just taken over the post as the general secretary no matter who will be the core after the 18th Party congress.
When a friend gave me a cigarette to smoke for the first time, I found smoking so relaxing and the smell so good that I immediately became a smoker.
I knew well that smoking was unhealthy and quite a few of my friends and relatives tried to persuade me to quit, but I refused, giving the lame arguments that perhaps further scientific research might find some good ingredients in tobacco, that Churchill smoked heavily but lived a long life, that I smoked only half a packet a day, etc.
Perhaps, I was spoiled by my wife. Before marrying me, she praised me before her parents that I had no bad habit such as smoking, drinking, etc. But she never opposed my new bad habit. Instead, she sometimes bought my favorite brand for me though we were often hard up at that time.
I smoked for seven years and then quit suddenly on my own accord. It was quite common at the end of the Cultural Revolution. Quite a few people began smoking during the Cultural Revolution to reduce the bitterness they felt under persecution and quit smoking when persecutions ceased, but that was not the case with me.
I quit smoking to liberate myself.
The chaos caused by the Cultural Revolution undermined tobacco production resulting in a shortage of raw materials for cigarette production. I do not know what leaves cigarette factories used to mix with tobacco and caused cigarettes to lose its relaxing effect and good flavor. I began to pity myself: Why did I keep on smoking when I no longer enjoyed it? Because I felt very uncomfortable when I wanted to smoke but did not have a cigarette. I realized that it was what people called addiction.
In the past I was the master of cigarette. I could smoke when I wanted to enjoy smoking. However, by that time I had become cigarette’s slave. I could not do without cigarette. The communist government could control me by cigarette and force me to pay for the rubbish it passed off as cigarettes. I should not lose one more freedom when I had already been deprived too much freedom. I should liberate myself from the slavery of cigarette addiction.
With such a mentality, I have no difficulty at all in quitting smoking.
When I moved to Hong Kong, I saw the brand of cigarette I loved the best and had to beg my relatives to bring from Hong Kong for me when I was in Shanghai. I thought that now I was free to enjoy it at will. I bought a packet, but there was no longer the relaxing effect perhaps because I was no longer under heavy political pressure and did not have to do the toilsome job assigned to me by communists.
They say that cigarette addiction may come back easily. Fortunately, it does not come back to me. Before quitting smoking, I liked the smell of smoking when I smoked, but now I hate it. I don’t know why. I even find the smell offensive when another person is smoking by my side. However, when I was a smoker, I often smoked along with a few friends in my small room with windows and door closed in winter. It did not strike me that the air quality in the room was very poor until my wife came and told me to open the door and windows widely.
Perhaps, I am lucky in being able to quit smoking so easily.
When I am puzzled why China is catching up with America so quickly, I recalled my cousin’s words that Chinese were smarter in doing business than Jews.
My cousin told my father that when he graduated from secondary school, he could not find a job as wars between warlords, natural disasters and foreign aggression made China very poor. He had to go to Indonesia to earn a living, bringing with him nothing but an umbrella. But when he came back after World War II, he was so rich that he set up a big trading company in Shanghai. His company was later taken over by the communists and he had to move to Hong Kong to run the Hong Kong branch of his company, which was later listed in Hong Kong.
According to him, Jews in Shanghai were very successful but when they came to Shanghai they brought with them substantial capital to start their business. Chinese people, however, moved to Southeast Asia because they could not survive at home. They all had to start from nothing. Like Jews, they succeeded in business without any support from their country. At that time, Jews did not have their own country while China could barely avoid being conquered, let alone take care of its people abroad. However, the overseas Chinese in Southeast Asia formed close communities and helped one another in dealing with local despots and corrupt officials. With their business acumen, they finally dominated local economy in Singapore, Indonesia, the Philippines, Malaysia, etc. Therefore, my cousin believed that Chinese people were smarter than Jews in doing business. He even said that if China had had a good government that had been able to provide decent environment for Chinese businessmen, they would have been able to make China prosperous soon.
I did not believe him, thinking that the overseas Chinese were able to become rich in Southeast Asia because they were cleverer than the local people there. Chinese people cannot compete with Americans who are better experienced and educated.
Unexpectedly, as soon as private economy was allowed in China, in spite of lots of restrictions, there was a boom of private enterprises. My relatives in Zhejiang who traditionally were peasants, soon became entrepreneurs though they had no experience at all and were only better educated than other people. They have all become rich. The plant of one of them soon grew into a corporation with over US$10 million net assets. My cousin’s view seemed a little convincing to me then.
However, I was still not fully convinced as I worried especially when I read Gordon Chang’s prediction that China’s economy would collapse if there was an economic recession in Western developed countries.
When Chinese economy was hit hard by the financial tsunami in the West, most of China’s private enterprises were still engaged in textile, catering, real estate, automobile parts and other traditional industries with low added value that relied heavily on export. Quite a few of them were in great difficulties due to the sharp reduction of demand in world market and for a time laid off tens of millions of migrant workers, which might give rise to serious social problems. Chinese leaders were so clever that they immediately reduced the restrictions imposed on private capital and encouraged it to enter various other industries where there were previously open and hidden barriers for private capital to enter.
Chinese entrepreneurs displayed their great talents in making surprisingly great achievements in those industries and soon employed back all those who had been laid off. Seeing that, the Chinese State Council issued on May 7, 2010 “Several Opinions of the State Council on Encouraging and Guiding the Healthy Development of Nongovernmental Investment” (the “Opinions”). Note: the term “nongovernmental investment” means private investment as Chinese government prefers using that term instead of “private investment” to make it sound less capitalist.
In order to ensure the implementation of the Opinions, the General Office of the State Council issued on July 22, 2010 “Notice of the General Office of the State Council on Division of Labor for Major Tasks of Encouraging and Guiding the Healthy Development of Nongovernmental Investment” to assign the responsibilities for helping private investment in various industries to various central departments and local governments.
The Notice urges central departments and local governments to help private capital to invest in basic industries, public utilities, policy-related housing construction, financial service industry, etc. In addition, private capital is encouraged to participate in transformation of state-owned enterprises, conduct independent innovation, transformation and upgrading and take part in international competition.
Moreover, the Notice assigns the responsibilities to pay great attention to encouraging private investment in hi-tech sectors such as IT technology, recycle economy and eco-friendly economy and “in the development of the emerging industries with development potentials, such as the industries of energy conservation, emission reduction, water conservation, reduction of water consumption, biological medicine, information network, new energy, new materials, environmental protection and integrative utilization of resources.”
Chinese private enterprises have achieved great successes in those industries since then. Quite a few American enterprises, however, are still in difficulty in spite of the 30% rise of Renminbi exchange rate and the restrictions US government imposed on Chinese enterprises and their exports. Obviously, there is truth in my cousin’s view.
Now, of the 1 million Chinese seeking opportunities in Africa, 700,000 are from Chinese private sector. They are provided with capital when they went there and backed by their country that has become the second largest economy in the world. The incidents of killing and kidnapping there in the past few years indicate that there are great risks, but not so great as those encountered by the overseas Chinese when they were blazing their trails in Southeast Asia.
I believe that with such talented entrepreneurs, China will establish its economic leadership in Africa. It will utilize the cheep labor and rich natural resources there while providing investment, technology, management skill and its huge growing market for Africa. When African people grow rich, Africa will in turn provide China with a vast growing market.
China has already signed a free trade treaty with ASEAN, which Japan, South Korea and even India are interested in joining. Overseas Chinese have already had great economic strength in ASEAN countries. If China obtains economic leadership in both Africa and Asia, American capitalism will be defeated by Chinese capitalism in spite of American military superiority and efforts to contain China.
America must realize that its efforts since the Reagan Administration to contain China have entirely been ineffective. What is urgent for it to do is to reinvigorate its economy and enhance its economic cooperation with African and Asian countries including China as China’s huge growing market is too important for America. Otherwise, the 21st century will certainly be the Chinese century.