John Naisbitt is a popular futurist who is now focusing on China, and joined by his new wife Doris in writing "China's Megatrends." After traveling numerous times throughout China, interviewing a range of professionals, and monitoring local newspapers in all of China's provinces, they offer a book built around eight 'pillars of the new system.' Unfortunately, these pillars do not translate well into concrete concepts, and are instead mostly illustrated with anecdotes and described by effusive paeans. Nonetheless, "China's Megatrends" also provides valuable perspectives and background with which to view our Asian competitor.
The Naisbitts believe China has a different ('vertical') type of democracy than western nations, and explain how the nation has a single party with local elections taking place in 680,000 some locales, with those elected approving budgets at that level and electing representatives to higher levels. The book, however, omits the key role and requirement of Chinese Communist Party (CCP) membership. The Naisbitts concede that censorship does occur, but largely in the context of the Confucian values of politeness, loyalty to the state, and saving face - euphemisms in Western eyes, at best. The good news is that dissent is much more tolerated than previously, and Confucian values also include an obligation of the leader towards his/her followers.
On the other hand, "China's Megatrends" also raises important points that deter an overly quick rush to judgment of China using our values. The Naisbitts state that they "don't feel entitled to lecture a leadership that has led millions out of poverty, has the support of the vast majority of the people, and is well aware of what needs to be done." They then ask, "Why has 'autocratic' China succeeded in making economic progress, while many democratic states have failed?" The Naisbitts believe that the CCP's constancy has allowed China's long-term direction to be set and carried out without the distractions and disruptions of western elections, and that when a nation is on the brink of collapse it cannot afford the time to discuss and vote on how to get out of the mess. Specifically, Deng Xiaoping and his successors took one billion people divided in a class struggle after Mao's death and united them behind the goal of transforming the country. When the transformation began in 1978, most any work carried on outside the state structure was illegal, and only 165,000 Chinese graduated from a university. Today, state-owned enterprises (SOEs) account for less than half of China's industrial GDP, and 4.5 million Chinese recently graduated from a university.
"China's Megatrends" also points out how its leaders often moved forward through experiments, one of the best known being designating five coastal areas as 'special economic zones' free of traditional regulations. Another was allowing small banks to sell up to 15% of themselves to western banks as a means of learning improved practices. Probably most important was the pact initiated by 18 destitute farmers in October, 1978 - agreeing to split the commune's cropland into 18 plots to be worked by the individual farmers and their families. (During the Cultural Revolutions, farmers, many owning less than an acre, had been persecuted, dispossessed, even killed.) The group of 18 were supported by the local CCP first secretary, and then Deng Xiaoping. At about the same time peasants were given drastically reduced quotas. What food they grew beyond the quota was sold on a free market at unregulated prices. This was an instant success, quickly causing one of the largest increases in standard of living for such a large number of people in such a very small space of time. This system maintained quotas, and thus, the element of socialist societies in which food and employment was ensured by the state.
The 'problem' with these new-found successes (emulated also in industrial production) was that a two-track pricing system ensued - one for state-produced goods, and a higher one for goods produced independently. This led to citizens upset over officials profiting from transferring SOE products to the private market, March, 1988 price decontrol (per recommendation of Milton Friedman, and endorsement by a citizen survey), 95% inflation the next month, government allocation of food and fuel in August, and economic growth hitting a nadir in 1989. Hundreds of thousands then gathered to mourn the death of a pro-democracy and anti-corruption former Secretary General Hu Yaobang in Tienanmen Square (more at about 400 other locations as well), and eventually began protesting for more (or less) economic and political change. After about six weeks of continued unrest, the Chinese army was called in, and arrived June 4, 1989 - despite being hampered by demonstrators and burning blockades. Ergo, tanks, troops, and tragedy in Tienanmen Square. The 'good news' is that civil war did not result (a fear acerbated by China's Cultural Revolution history), nor were the economic reforms undone.
Other reforms since then include Jian Zemin's 1997 support for SOEs having financial problems to pair up with healthy enterprises - rarely were both brought down, no longer requiring farmers to pay land tax (2005), and allowing farmers to lease their land as of 2008. Future plans include increasing China's R&D (more funds for laboratories, projects), continued recruitment of Chinese 'sea turtles' - highly educated Chinese science, management and finance professionals previously working in the U.S. that return to China for attractive research and professorial positions, having the government bear most medical expenses by 2011, increased use of non-polluting power generation, 50% college graduation rate, etc.
The importance of Confucianism in China's society is another important topic brought out by the Naisbitts. Since at least 200 B.C. it has provided the working rules and ethical precepts for Chinese to follow, stressing societal and family obligations, loyalty, and education. U.S. history, howevever, stresses personal initiative and independence - attributes that were key to our early development and economic success, but more problematic in a nation crowded with 300+ million and significant environment issues.
Interesting side-note from "China's Megatrends:" Shanghai's largest bookstore is 7 floors, each the size of a football field.
Bottom Line: "China's Megatrends" is incomplete and embarrassingly biased in some sections, and tells its story in a cumbersome, overly-anecdotal manner. On the other hand, the Naisbitts provide a significant service pointing out that we should not be so quick to criticize China's leadership,values, and culture. No other national leaders have done so well over such a short period of time. Still, we cannot forget the terrible prior record of Mao Zedong - his 'Great Leap Forward' (created widespread famine), 'Cultural Revolution,' and political purges are widely believed to have caused the deaths of between 50 to 70 million people. Nonetheless, it is time to rethink our own values and problems in the light of China's recent successes vs. our own flat-lining economy and inability to resolve major problems such poor international pupil achievement rankings, high health care costs, global warming, deteriorating infrastructure, and ever-deepening deficits.
