Chinese Association for International Understanding

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China Still Undergoing Transformation


Holger Mann What is China today, where is the most populous country on earth headed - and where does it want to go? During an International Exchange Programme from September 8 to 17, I had the chance to gather impressions on this issue. Together with two colleagues from Germany, two from the United States and one each from Italy and the United Kingdom, we were met by four Chinese representatives of politics, media, science and administration. The delegation trip was perfectly organized and escorted by General Secretary Ni Jian and four staff members of CAFIU (the Chinese Association for International Understanding). Over a period of 8 days we were able to freely travel the country and communicate with them. We visited various stations in and around the capital Beijing with its 23 million inhabitants as well as the western province of Qinghai. The latter is counted among the scenically most beautiful although less developed regions with 6 million inhabitants on twice the area of the FRG, with over 50 ethnic minorities and numerous religions. In addition there were 3 workshops and a conference which aimed at introducing and discussing the focal points of the economic policy as well as foreign and domestic politics of the Chinese Government. We even discussed issues that are serious and potentially charged with conflict. On the whole there was a palpably sincere effort for open dialogue and improved mutual understanding on all sides. While the image of the rising economic superpower China is still predominant in Germany-shaped by the megacities of the Far East-we learned that China is still facing major structural challenges. Particularly in the West large parts of the country must still be classified as developing regions. Here China strategically adopts a geopolitical approach, culminating in the 'one road - one belt' project (the so-called Silk Road Initiative). The objective is to develop a complete region and to promote international trading by employing elements like transnational development banks, free trade agreements and large-scale infrastructural projects in the energy and transport sectors. On the whole Chinese economy is still lacking with regard to innovative drive and competitive capacity. The Chinese Government seeks to promote change by further opening to international investors, by simplifications for new entrepreneurs, upgrading academic facilities and with publicly funded incubators for business start-ups particularly in the IT and research sectors. Corruption and patronage - another obstacle to development - is now being tackled with unprecedented force by the leaders of the Chinese Communist Party. So far over 30,000 court proceedings have been initiated, not even sparing the highest-ranking representatives of the Chinese state leadership. Unofficially the figures may even be considerably higher. The impression spread by Western media that this is all about image and internal power struggles will likely prove to have been wrong. The proclaimed goal of this anti-corruption initiative is to fully restore the credibility and the claim to leadership of the Communist Party, no more and no less. Despite all investment and growth initiatives China seems to gradually turn away from its previous path of development. This new path seems to lead away from highly quantitative growth towards an ecologically and economically more acceptable level of further qualitative growth. The catch phrase 'new normal' with growth rates of 6 percent is circulating which seems quite understandable in the light of previous enormous growth rates and high-rise settlements springing up everywhere. Spoilt by China's double-digit growth rates in the past, international financial markets are nonetheless getting nervous. Rising wages and a currency made that much stronger by an enormous foreign trade surplus is putting a lot of pressure on the export economy. Economic risks in China are related to the fact that the building sector holds a massive share in the economic growth while the real estate market is potentially overheated. One can only guess at the explosive force within a sector that offers employment to China's 250 million migrant workers. The demographic trend shows an ageing of society, confronting China's leaders with yet another challenge, forcing them to rethink the previously strict one-child policy. In this context even reforms and new features of the social insurance system are being considered. To sum it up, China is engaged in a very dynamic process of transformation. The political challenge now is to satisfy the increased material needs - even those of a middle class of about 400 million people - without exacerbating the social divide and the tensions that result within. Still, China's leadership has a noticeably strong interest in engaging in the international dialogue and in confidently taking its place in the international community. With this the Chinese Communist Party is following a course that was set on the occasion of Nixon's visit in 1972, opening up the country at first economically, then also regarding the cultural dimension. Reform and open-door policy as defined above presents a chance it does not pose a threat to the West. Incidentally, this is also a course that seems to enjoy broad support among the population. Not only was incredible hospitality bestowed upon us, we also felt an increase of self-confidence and a great interest in the Western world, especially when talking to the younger generation. The country is still undergoing a transformation.