Three Billion New Capitalists: The Great Shift of Wealth and Power to the East
by Clyde Prestowitz
Basic Books, 321 pp., $26.95
China, Inc.: How the Rise of the Next Superpower Challenges America and the World
by Ted C. Fishman
Scribner, 342 pp., $26.00
China’s Urban Transition
by John Friedmann
University of Minnesota Press, 168 pp., $56.95; $18.95 (paper)
Made in China: Women Factory Workers in a Global Workplace
by Pun Ngai
Duke University Press/Hong Kong University Press,227 pp., $79.95; $22.95 (paper)
The River Runs Black: The Environmental Challenge to China’s Future
by Elizabeth C. Economy
Council on Foreign Relations/Cornell University Press,337 pp., $17.95 (paper)
Three superb recent books by John Friedmann, Pun Ngai, and Elizabeth C. Economy explore the effect of China’s economic “rise,” not on the United States but on China. John Friedmann’s China’s Urban Transition looks at it through the lens of urbanization. Mao Zedong was anti-city, partly for military reasons: industries were to be dispersed into western mountains and caves, provinces were to be self-sufficient. The population was divided into a privileged urban minority (17 percent) and an exploited rural majority (83 percent). The Maoist city was seen as a production, not a consumption, unit, with workers coralled into factory barracks. The flow of rural labor to cities was tightly controlled; indeed in the decade of the Cultural Revolution millions of “decadent” urbanites were forcibly sent to the countryside. The one-child-per-family policy, originally introduced in cities, held in check the urban population.
For Mao’s ideas, Deng Xiaoping substituted the “Ladder Step” doctrine. The country was divided into three big regions, coastal, central, and western, each to be assigned a specific task in overall development. Priority was given to the coastal region. Prosperity would be generalized, not so much by trickling down as trickling west. Four hundred and twenty-four focal growth points were identified mainly in two delta areas, those of the Pearl and Yangtze rivers. This approach implied opening up the cities to rural labor and opening up investment to foreign capital. Hong Kong businessmen shifted most of their light industry—toys, clothing, low-end electronics—into the Pearl River delta. Local authorities gave them free land, free factories, and free rein. The resulting increase in rural–urban inequality—the inequality ratio reached the same level as America’s—has shifted attention back to developing central and western China, now being linked to the coast by huge transport and communications projects.
The unique feature of China’s development during the Deng period was the amazing upsurge of rural industries, leading to the creation of vast urban sprawls radiating out from the cities. It was these “township village enterprises” (TVEs), now employing a quarter of China’s workforce, which lifted 200 million people out of poverty in a decade. This was a form of growth that was not so dependent on foreign capital. Why did rural manufacturing, promoted so assiduously and unsuccessfully by aid agencies all over the developing world, happen spontaneously in China?
Friedmann combines several answers: very high rural population densities (comparable to metropolitan densities elsewhere), large numbers of underemployed workers who could be moved out of agricultural production without affecting output, historical antecedents of industrial production in craft traditions, resourceful local leaderships, entrepreneurial talents, and a high level of household savings. TVEs were the product of a remarkable convergence of Party, local government, and private business, often with the local Party boss becoming the leading entrepreneur, and the villages being reorganized as companies or conglomerates, out of whose profits collective services like schools and hospitals could be financed. This is a property system unknown in the West.
But the dual nature of municipal government—part state bureaucracy, part buccaneering capitalism—had less-happy effects on cities, which Friedmann describes as follows:
The heady mix of fragmented markets, profiteering, administrative land transfers, speculation, endemic corruption, increasingly desperate attempts to uphold the pyramid-like system of central control over local affairs, gung-ho capitalism, ancient poverty, and crass new wealth give the appearance less of the calm stateliness of 1920s Beijing…than of a frenzied construction site.
Friedmann asks whether economic choice will inevitably lead to a demand for political choice. Is a civil society developing as huge groups of people engage in activities not organized by the Party while acquiring disposable income and a home of their own? Much of the new leisure is spent watching TV. New hobby associations have sprung up. There is a skyrocketing number of new publications. “Hotlines” dispensing “advice” abound. What is more, the state cheers people on to become active consumers. “Small state, big markets” is a slogan that seems agreeable to Beijing. Liao Xun, of the Chinese Academy of Social Sciences, prefers to say “small government, big society.” The state must be purged of its “bureaucratic sickness.” Citizens must be free to choose not just consumer goods but education, occupations, political loyalties. There should be competitive elections for provincial government.
Friedmann is skeptical of how far the movement for political emancipation will go. The public sphere in the Western sense has not developed in China. Duties toward the state, family, community remain paramount: the middle ground of civil society in which there is a sphere of public life quite outside the control of the bureaucracy is missing. All NGOs are “coopted” by the state. But “so long as the party-state itself is not directly challenged, an ever-widening range of opinions and interest articulations can be publicly discussed.”
From the mid-1980s tens of millions of agricultural workers came flooding into coastal cities, their suburbs, and their rural and semi-rural hinterlands to work in factories producing for export. In Pun Ngai’s Made in China, the making is not of goods but of the new class of people who produce them—”the dagongmei,” the casual young women workers from the villages who are paid 40 cents an hour to manufacture low-priced goods for the customers of Wal-Mart. Her book starts with the story of Xiaoming, a twenty-one-year-old migrant woman worker, the only survivor of a toy factory fire in Shenzhen in 1993 which killed more than eighty workers and left her hideously disfigured. “I was satisfied with my job,” Xiaoming told Pun Ngai. “It was terribly hard work, but we had fun too. We had a plan. Before we went back home for marriage, we were going to save money to go to Beijing. It was such a big dream.”
Pun Ngai, a sociologist from Hong Kong University, had a dream too—to do fieldwork in one of Shenzhen’s factories. As she puts it with disarming frankness: “The search for identification with the female workers helps to prop up my intellectual…fantasy of resisting the irresistible advent of global capitalism.” In 1995 she got permission, through family connections, from the Hong Kong owner of the “Meteor Electronic Company” (not its real name) to do her fieldwork there. For eight months she worked alongside the factory girls on the shop floor, slept in their dormitories, shared their meals and leisure, their dreams and nightmares, and every night wrote up the notes on which this book is based. Harrowing in places, sometimes ludicrously overtheorized, her book exemplifies the strength, flexibility, and also limitations of neo-Marxist sociology.
The dagongmei are a product of the system of hukous, or residence permits, which denies laborers with agricultural hukous the right to reside in cities, i.e., to establish families there and receive medical care and social welfare. This results in widespread use of dormitory labor in industrial and development zones. The workers, being migrants, can be exploited at will. Most return to their villages to marry or set up a small business with their savings, being replaced by more like them from a seemingly inexhaustible supply. Others become sex workers. (“No sex, no money,” one girl tells the author.) China’s rise is built on migrant workers from the villages. Since the Chinese state is behind the drive to make China the world’s workshop, it doesn’t allow independent unions or enforce its own laws setting minimum wages, safety standards, and hours of work. (The legal workday is eight hours, but most women work twelve-hour shifts, extended to eighteen hours when a rush job is needed.) This leaves companies free to maximize profits, without having to worry about replenishing the supply of labor in the long run.
As described by Pun Ngai, the exploitation of the dagongmei recapitulates the horrors of Britain’s industrial revolution. Is factory work freely chosen or in some sense coerced? Dagongmei labor, Pun Ngai insists, is not coerced. There is no violence, no deception involved in labor moving into the industrial world. Young Chinese village girls are well informed about the hardships of factory life. Pun Ngai argues that they are escaping from an oppressive patriarchal culture, left intact by Maoist communism. This contradicts other testimony that a major reason for their leaving home is to support their families. Moreover, her claims that their migration is voluntary are greatly weakened by her view that the girls’ “wants” are manipulated by the seductions of Chinese capitalism to lure them into the ogre’s den of deadening labor, prostitution, and mindless consumerism. As a Marxist, Pun Ngai needs “false consciousness” to explain voluntarily chosen behavior which contradicts “objective” class interest.
Factory owners prefer women to men because they are thought to be easier to regulate and control; however, the dagongmei, Pun Ngai argues, are not “docile” but “tactical” bodies, a specifically Chinese mixture of collaboration, transgression, and defiance. The main example is the use of illness and particularly menstrual pain to sabotage the assembly-line schedule. “The painful body…is not the defeated body but rather the resistant body.”
There is an inevitable conflict between women’s bodily time and industrial time. From this conflict arises the possibility of liberation; the nightly scream of Yan, one of the girls, becomes a metaphor of resistance:
Dream, scream, fainting, menstrual pain, inner splitting of self, workplace defiance, slowdowns, fighting, running away, and even petition and strike are all points and lines of resistant behaviors, forming a cartography of resistance that will inevitably direct a challenge to power and control.
It’s a shaky enough peg on which to hang the fantasy of revolution.
Mao Zedong may have been anti-city, but he did not like the country. Nature was to be conquered, not cherished. One of his more lunatic projects was to order villagers to get rid of sparrows and bugs. China’s population of sparrows almost disappeared, and with it the first line of defense against locusts and other pests. But capitalism has done no better. Elizabeth Economy’s The River Runs Black describes the devastating environmental costs of two decades of “economic development run amok.” Like Pun Ngai she starts with a disaster. In 2001, heavy rains flushed more than 38 billion gallons of highly polluted water from tributaries into the Huai River, which flows through one of the most fertile regions of eastern China. “Downstream, in Anhui Province, the river water was thick with garbage, yellow foam, and dead fish.”
Known for its rich supplies of grain, cotton, oil, and fish, the Huai River basin has over the past two decades become home to tens of thousands of small factories—paper mills, chemical factories, and dying and tanning plants, all dumping their waste into the river. Mao’s dam-building program did not help. Besides killing hundreds of thousands when the dams collapsed, the opening of sluice gates by local officials has repeatedly released polluted water that has poisoned crops and fish downstream. Reservoirs further limit the river’s capacity to dilute the pollution.
Beijing’s response has been fitful. Not only is there no “compelling ethos of conservation,” but, Dr. Economy writes, “the imperative of economic development continued to overwhelm environmental concerns.” Factories evade waste disposal regulations; local officials, who are often factory owners, fail to enforce the edicts of environmental protection agencies.
What has happened in the Huai River basin is typical of today’s China. In 1998, the Yangtze River flooded, killing more than three thousand, destroying five million homes, and inundating 52 million acres of land. The culprits were two decades of rampant deforestation and destruction of wetlands. Desert covers one quarter of the country and the pace of desertification has doubled since the 1970s. Increasing water scarcity, partly due to pollution, has limited access to water for more than 60 million people, while more than 600 million drink contaminated water daily. China’s forest resources, among the scarcest in the world, are being cut down at an unsustainable rate, resulting in “loss of biodiversity, climatic change, desertification, and soil erosion.” China has six of the ten most polluted cities in the world; acid rain affects one third of the country. Pollution-related illnesses are soaring. The economic costs of environmental degradation are estimated at between 8 and 10 percent of GDP. To cap it all, China’s immense population has still not been stabilized, despite the one-child-per-family policy.
A familiar debate is going on between pessimists and optimists. Greens argue that market-led economic development produces devastating levels of destruction of the natural habitat, because the market does not properly account for external harms. (And not just the market: the centrally planned economies were the greatest of all polluters.) Optimists counter that economic development brings technological change, increases the capacity of the state to control damage, and causes transformations of values that will enhance environmental protection. The pessimists argue that globalization increases the rate of ecological degradation, by causing developing countries to specialize in pollution-intensive industries. The optimists reply that free trade, by alleviating poverty, will allow governments to spend more protecting the environment, and give them greater access to environment-friendly technologies and less-polluting industries. Neo-Malthusian pessimists believe that more people means more environmental deterioration; the optimists claim that population growth can drive the technological progress that will lead to long-term improvements. Dr. Economy rightly concludes that “these debates…resist a discussion of the role of political institutions and politics in shaping a country’s environmental and developmental pathway.”
This brings us back to state policy and civil society. China’s leaders, Dr. Economy writes, have started “the long, slow process of developing a formal environmental protection apparatus,” but this often makes little headway against business-minded local leaders. As a counter, and safety valve, Beijing has welcomed the establishment of environmental NGOs, encouraged aggressive attention in the press to environmental issues, and allowed independent legal investigation and redress. China has also started to look abroad for inspiration and assistance. But these openings carry dangers to the regime: NGOs may use environmental issues as a cover for wider grievances; international bodies may take up human rights issues the leaders want to avoid. The success of Deng Xiaoping’s gamble, Dr. Economy writes, depends not just on fulfilling the promise of enrichment but on protecting China’s environment.
China’s explosive arrival on the world scene, and the way the Chinese view it, call into question many Western preconceptions. In the West, China is seen as a challenge, even a threat. In China, it is the West, more often than not, that is seen as a threat to “Chinese values”: an attitude which goes back to Western colonialism and the unequal treaties of the nineteenth century. This partly explains resistance to an honest accounting of the disasters of the Mao era: to do so now, at any rate, would be to capitulate to a Western interpretation of China’s history and prospects.
Part of the problem lies in the use of the word “rise,” which suggests something open-ended. Although some Chinese officials talk about China’s “rise” (and argue about whether it will be peaceful or not), others prefer to talk about its “restoration,” which sounds less menacing, signifying a restoration of a disturbed natural order of states rather than a hegemonic design. China renounces hegemonic ambitions. Chinese will tell you that China is a status quo power: it is the US that is revolutionary. That is why China bases its foreign policy on the United Nations, where it regards its veto in the Security Council as the first line of defense against US aggression. When Donald Rumsfeld, recently visiting Beijing, wondered why China needed such large armed forces, he ignored the fact that it had frontiers with India and Russia, and also grossly misperceived how others see America. Where Americans see themselves full of benign intentions, others see the cloven hoof of imperialism.
The causes of China’s “rise” or “recovery” also tend to be disputed between China and the West. Both Clyde Prestowitz and Ted Fishman, as we have seen, stress the importance of foreign capital in integrating China into the world economy. Chinese spokesmen emphasize the role of Chinese savings, as well as their own innate entrepreneurial spirit. Most of the “foreign” investment came not from Western multinationals but from off-shore Chinese family firms. It was Chinese enterprise and Chinese patriotism that triggered China’s growth, not global capital mobility. Chinese values and practices are embedded in it, just as they were in the earlier “East Asian” economic miracle of the 1980s.
Western economists find it difficult to understand the hybrid nature of Chinese property rights, much less explain why they do not seem to have impeded economic growth. No dogma is more fervently held by mainstream economists than that economic development depends on well-specified and well-protected private property rights. Recently, the Peruvian economist Hernando de Soto has been praised for work showing that lack of legal title to property prevents the poor of the Latin American favelas from using their “squatters” holdings as collateral, and thus improving their lot. This whole perspective on property rights and growth is challenged by China’s hyper-growth rate sustained for twenty-five years, which is based on property rights that are notoriously “fuzzy.” Standard property rights theory would predict disaster for the Chinese model. This prediction has not been fulfilled so far, and it may ignore a crucial strength of the system—its ability to solve conflicts informally. The debate is between those who see hybrid property as a transitional form, heading toward full privatization, and those who see it as a permanent part of a superior “Chinese” system.
What seems undeniable is that hybrid property rights—as well as the fuzzy distribution of responsibilities between state and provinces—stand in the way of a coherent response to many of the problems thrown up by unrestrained growth: the uncontrollable urban explosion discussed by Friedmann, the dire conditions in the Pearl River delta, the sweatshops highlighted by Pun Ngai, the ecological deterioration analyzed by Elizabeth Economy, as well as the vast internal migration, and the rapid increase in inequality. The Western concept of the separation of political power from property does make it much easier to define a proper role for the state as protector of the public interest.
Western observers find it hard to understand how the Chinese can hold on simultaneously to both communism and capitalism without feeling a sense of contradiction. There are several partial explanations. First, the formation of the People’s Republic in 1949 is viewed much more as a “liberation” from Western colonialism than as the inauguration of a failed economic system. The Chinese Communist Party retains its mystique as the agent of liberation.
Secondly, the Chinese attitude toward economics is instrumental: it’s a question of what works. Unlike in the West, the nature of the economic system is not considered fundamental to the nature of the state. That’s why the Chinese can criticize Mao for his “economic” mistakes without thereby calling into question the legitimacy of his rule, just as they can enter the world economy under the slogan “economic globalization yes, political globalization no.” Many, perhaps most, Chinese reject, that is, the assumption that economic integration with Western countries will inevitably lead to the establishment of the political norms of Western democracy.
Curious intellectual gymnastics are performed to justify the continued rule of the Communist Party. China is officially designated a “socialist market economy.” When I remarked, on a recent visit, that there was not much sign of socialism, a Chinese official shot back:
Capitalism for now, socialism for later. Capitalist development means more inequality. Socialism will be needed to correct it. Much better to have the Communist Party in power through both stages than have another revolution.
This is not a universal perception. Enough Chinese take ideology seriously to be embarrassed by the spectacle of capitalism “exploiting” the worker at the behest of the Communist Party. This, of course, was exactly the perception of Pun Ngai, who fantasized about a revolution simultaneously directed against both communism and global capitalism. After the Tiananmen Square events, there was a crackdown on dissent, but things have gradually loosened up. Today China abounds in institutes, think-tanks, and policy experts. Anything can be discussed, especially in “inside” circles, provided it does not directly assail the official doctrine of incremental political change. But the government still cracks down on dissenting intellectuals, journalists, lawyers, and religious activists, sending thousands to prison, reeducation camps, and detention centers. In practice two lines of licensed deviance have emerged: those who emphasize a specifically Chinese route to modern society (made up of Confucianism, Taoism, and traces of Maoism) and Western-minded liberals, who want a full-fledged market economy or Western-type civil society, or some mixture of both.
There is still a tendency to gloss over Mao’s crimes. Even liberal Chinese are anxious to distinguish him from Hitler or Stalin. I was told: “He wanted to make people better, not cut the grass.” His prowess as a calligrapher and poet is much admired.
The official ideology is protected by two features of Chinese thought. First, Confucianism is directed toward fostering virtue in a ruler, rather than limiting his power. In this respect it resembles Plato’s ideal of the philosopher king, not Western constitutionalism. Secondly, the Taoist doctrine of yin and yang stresses the dualistic character of nature (dark and bright); their interaction is needed to maintain harmony. The two principles are represented in Chinese iconography by two interlocked curved shapes within a circle, one white and one black, with a spot of contrasting color within the head of the other. Taoist discipline is for the individual. It is about how to experience harmony. But it is also true that any ethical doctrine in which good and evil are intertwined, not as a contingent fact but as a principle of order, offers a poor basis for condemning mass murder and other horrible crimes that dictators commit.
How will the Chinese experiment affect China’s impact on the rest of the world? At present most commentators are mesmerized by China’s astonishing rate of growth, and they calculate its effect on world economics and politics by simply extrapolating it into the future. This is what makes Prestowitz and Fishman so alarmist.
They are in a long tradition of prophets who have been disproved by events. A best-selling British alarmist tract at the end of the nineteenth century was called “Made in Germany.” This was soon followed by “Yellow Peril” alarms as the first stirrings of Japan became evident. In 1959 Newsweek warned that the Soviet Union was “on the high road to economic domination of the world.” Japanese growth rates between 1963 and 1973 implied that Japanese output would overtake America’s by 1998. Soon after these prophecies were made, both economies slowed down—Russia’s eventually going into reverse. Paul Krugman has argued, rightly, that both countries’ growth was based on large-scale mobilization of labor and huge rates of investment rather than on productivity growth, and that both were, therefore, subject to diminishing returns. Much the same will be true of China.
China is still a giant processing factory. The driving force in its rise has been the rush for quick advantage through exploiting cheap labor. Innovation in technology was ignored, the Chinese preferring copying to innovation. Prestowitz and Fishman argue that this is about to change. Science and industry, they believe, are linked together. Brain will inevitably follow brawn in order to reap the gains of synergy. Enterprises with joint R&D and manufacturing have increasingly shifted eastward. The Chinese use Western partners to gain access to Western technology by insisting that all intellectual property must be shared by joint partners, freeing them of development costs. In 2003 General Motors was shocked to find that a $9,000 small family car it was just unveiling had an exact double at $6,000 in China. The deflation of car prices has the potential to deflate entire economies, throwing millions out of work. The counterpart to this is the hollowing out of US manufacturing capacity. It is reported that the US had to turn to a Dutch firm, De Boer, to supply mortuary facilities for bodies from Hurricane Katrina.
Is there any technology immune to Chinese challenge? Prestowitz and Fishman do not think so. China has established its first semiconductor foundry in Pudong. Lenovo, a Chinese company, recently bought the PC hardware division of IBM. Biotechnology will forge ahead in fields like embryonic stem cell research which some Western countries find “ethically sticky.” Beijing’s Genomics Institute has invented more reliable, faster screening of athletes for banned substances. China is set to launch its first space rocket in 2007; it expects to make its first large commercial airplane by 2018. It already graduates four times as many engineers as the United States. It is extremely hard to stop the diffusion of technology. Patents can be protected, but how to stop the transfer of R&D facilities?
Ever since competition in manufactured goods started toward the end of the nineteenth century, people have asked: What does a leading country that is losing its original technological edge do next? Britain’s Joseph Chamberlain put it this way when campaigning for protection in 1903:
Your once great trade in sugar refining is gone; alright try jam. Your iron trade is going; never mind, you can make mousetraps. The cotton trade is threatened; well, what does that matter to you? Suppose you try doll’s eyes. But for how long is this to go on? Why on earth are you to suppose that the same process which ruined the sugar refinery will not in the course of time be applied to jam? And when jam is gone? Then you have to find something else. And believe me, that although the industries of this country are very various, you cannot go on for ever. You cannot go on watching with indifference the disappearance of your principal industries.
Chamberlain was no doubt unskilled in the theory of comparative advantage, which states that countries should concentrate on exporting goods and services which they can produce with a lower relative cost than other countries. Even in Chamberlain’s time it was suggested that Britain should switch from producing manufactures to producing services. But Chamberlain asked: “If we import something which is equivalent to a pound of wages—do we export the equivalent of a pound of wages?” The question, if loosely phrased, was fundamental. Jobs destroyed could always be replaced. But would the new jobs be as good?
Recently the Nobel Laureate Paul Samuelson has answered: not necessarily. If China experiences a productivity gain in a good which it imports from the United States, its cost will go down, and the US may lose its comparative advantage in making that good. And this may happen with one good after another. It is “not that US jobs are ever lost in the long run; it is that the new market-clearing real wage [at which everyone looking for work would be employed] has been lowered….” Countries may move down as well as up the ladder of comparative advantage. This was Chamberlain’s point. As Samuelson put it in an interview, “being able to purchase groceries 20 percent cheaper at Wal-Mart does not necessarily make up for the wage losses” suffered as a result of foreign competition. Even when trade does produce a surplus of winners over losers so that winners could in principle compensate losers, there is no guarantee that they will.
One US response to the cut-throat “China price” would be to follow neither the laissez-faire policy that Prestowitz condemns nor the social-democratic path that he advocates, but to revive the “military–industrial complex” against which Eisenhower warned. America would seek to preserve its manufacturing edge by resuscitating the “military Keynesianism” which preserved its technological leadership during the cold war. Seen in this light, Bush’s “new strategic doctrine,” which calls for absolute US military superiority, seeks to adapt American policy not to the terrorist threat but to the Chinese threat to US manufacturing. Protectionism would be revived in the name of security. But such a strategy implies an enemy much stronger than Osama bin Laden and his suicide squads. Moreover, any serious attempt to revive the “military–industrial complex” implies a new arms race with China—and possibly with Russia as well. That would be a horrible, but far from impossible, culmination to the era of globalization.
China too has huge choices to make. We never tire of telling the Chinese that they save too much and consume too little (as though there were right proportions to these things). China invests a large part of its savings in US Treasury bonds—whose value is bound to decline as the dollar depreciates—in order to force its exports on the rest of the world. More export-led growth is the only way it knows of tackling the social problems created by…export-led growth! This strategy, together with the fiscal incontinence of the American government which makes it feasible, is the chief reason for the huge imbalances in the global economy, and a potent source of trade and currency conflict.
To this dilemma of “excess savings” one may posit either a free market or a Keynesian solution. One Harvard-trained Chinese economist explained to me that China saves too much because too many people still live in the countryside, which lacks large domestic markets and adequate social safety nets. His remedy was to abolish the hukou, or pass system, and all other obstacles to rural migration to cities. Cities would spread outward in huge suburban sprawls of 50 million or more inhabitants. (He cited “greater” London as an example.) Logical though this appears, it ignores the horrendous problems of congestion involved in creating such conurbations. The preferable alternative would be to reduce people’s incentives to migrate to the cities by mobilizing domestic savings to create social and transport infrastructure outside the coastal provinces. But mistrust of the central state is probably too great to support such an ambitious program of rebalancing China’s lopsided economic growth.
So to return to the final question: Will China’s entry into the global economy make the world more Chinese or China more Western? The latter seems more likely, not just because China lacks hegemonic ambitions but because it has little distinctive to contribute to the governance of the world. To adopt Thomas Mann’s distinction between Germany and France, it is a “culture,” not a “civilization.” The values and rules by which the world lives are overwhelmingly Western, whichever country emerges as their chief carrier. The first “China Forum for the Globalization of Traditional Chinese Medicine” was held in Beijing on November 4. But the truth is that the science, the medicine, the mathematics, the economics, the law, and the political theory that Chinese students learn and that their rulers are constrained to use are all of Western (albeit partly Arabic) provenance. In time, Chinese people will start demanding more protection against bad rulers than Confu- cianism offers. There is a “Confucian” economics, but I doubt that the twenty-first century will see it taught in universities—at least in departments of economics and in business schools. The Chinese are surely right to want their economic and political development to take full account of “Chinese characteristics,” because culture is more important in the life of a people than civilization. But in the end will these Chinese characteristics amount to much more than the strange and beautiful decorations which adorn some of the hundreds of skyscrapers rising in Pudong in homage to Western architecture?
—This is the second of two articles.
 See the review of the listed books by Clyde Prestowitz and Ted C. Fishman in the first part of this article, “The Chinese Shadow,” in The New York Review, November 17, 2005.
 Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000).
 Paul Krugman, “The Myth of Asia’s Miracle,” Foreign Affairs, November/ December 1994, pp. 62–78.
 Cited in my article “Where Import Controls Came In,” New Statesman, October 22, 1976.
 Paul Samuelson, “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization,” Journal of Economic Perspectives, Vol. 18, No. 3 (Summer 2004), pp. 135–146; see his interview with Steve Lohr, “An Elder Challenges Outsourcing’s Orthodoxy,” The New York Times, September 9, 2004.