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Let the masses consume


CHINA’S CENTURY: The Awakening of the Next Economic Powerhouse, edited by Lawrence J. Brahm. John Wiley & Sons, 2001, 421 pp., $24.95 (cloth)

Pick up an international paper published before Sept. 11, and China is either on the front page or generously featured inside. Not anymore. The rising giant of East Asia was swept from the media’s mind last year faster than you could say “Osama bin Laden,” and has been upstaged by the terror wars, which provide more urgent and exciting reading than, say, global centers of economic might shifting at glacial speed. This means a major architect of tomorrow’s world — China — rises in the shadows, out of sight, and, as the saying goes, out of mind.

Beijing, then, must be beaming. With the exception of business-page gushing about the promise of 1 1/4 billion consumers, China, especially in the United States, had mostly been getting bad press: child labor, unexplained explosions, the suppression of Falun Gong, the Taiwan Straits tension, and so on.

“China’s Century” is an attempt to offset such media negativity and skepticism within the business community, and call for more constructive cooperation — that is, investment — between China, Europe and the U.S. It is a compilation of pieces by Chinese ministers, Western ambassadors to Beijing, and the heads of multinationals in China such as Siemens and Goldman Sachs.

Editor Lawrence Brahm, a Beijing-based lawyer and adviser to Fortune 500 companies, introduces each chapter with the clear aim of winning friends to the pro-China camp. The effort is laudable, but his approach a turn-off, especially when he comes off as an apologist for Beijing’s authoritarianism by remarking that both the Cultural Revolution and, yes, Washington’s budget freeze of 1996 are examples of the excesses of democracy. Anyway, it’s the contributors who provide the meat of the book.

Discussing China is often a numbers game, and the numbers never fail to be staggering. One contributing analyst puts China’s “bad loans” at between $200 and $300 billion, inventories at up to 15 percent of GDP, and the further “redundancies” expected in the next few years due to industrial “restructuring” at up to 40 million workers. The implications of these figures are not pretty.

Nonetheless, what follows are unfailingly upbeat synopses on anything from banking reform (by the governor of the People’s Bank of China) and legal reform (by China’s chief justice) to China’s burgeoning telecommunications sector (by STAR TV’s James Murdoch). Add to that the foreword by Chinese Premier Zhu Rongji, and Brahm no doubt offers an impressive line-up of “big guns” from China’s political economy.

Regrettably, though, this book about a nation now in the painful throes of economic transition is dotted with puzzling and disparaging treatment of economic concerns of a social (rather than a business) nature. For instance, regarding beggars — whom this reviewer has seen proliferate on Chinese streets — an economic adviser to Beijing asserts, “They are few in number. . . . Many are professional beggars, not persons really in need.”

This is an odd statement, considering that, later in the book, a World Economic Forum analyst puts the number of rural unemployed and underemployed at between 120 and 150 million, equivalent to the entire population of Japan. Surely, among those jobless there must be legions of “persons in need.”

The WEF analyst and others see the private sector as the answer to this employment crisis. But they then fail to address the tremendous net job loss that competition and privatization have so far produced in China.

But more telling than what the contributors write about is what they exclude. “China’s Century” suggests that, according to the official wisdom, the welfare, health, skills — indeed, the well-being — of a workforce has no place in a discussion of economics.

The book’s only brief mention of health care, for example, is made by the chairman of German pharmaceutical giant Bayer in a chapter on chemicals.

As for education, the book doesn’t go into how spending an appalling 2.4 percent of GDP, as China does, on its public schools (less than India and far below Taiwan’s 7 percent, according to the World Bank) is investing in a future economic powerhouse.

Tragically (for the unwealthy), free education in China is over. Starting 10 years ago, Beijing stopped funding China’s 2,000-plus rural counties, leaving county officials to tax and spend on their own. While public lower education remains officially “free,” parents face fast-rising “miscellaneous” fees, such as for heating or supplies, to enroll their child, costs that vary according to the whims of local officials, and that in impoverished areas keep many children out of class.

Meanwhile, Beijing throws billions of dollars at grandiose, graft-prone and often dubious infrastructure projects supposedly aimed at “lifting” China’s poorer interior.

“China’s Century” aims at being a “comprehensive picture of a country in transition,” examining “key issues affecting (its) future.” But it can’t deliver, not with hardly any of its more than 400 pages dealing with the daily concerns of the billion-plus ordinary folk confined by these contributors to a consumer’s role.

The policymaking crowd shaping the economic arena and power structures of tomorrow’s China are here ignoring pressing human concerns. This begs the question: What kind of economic powerhouse is China gearing up to become?