One of the most consequential events of the past 40 years escaped attention when it happened on Dec. 22, 1978. Only years later would it become evident that China’s decision at a Communist Party meeting to allow farmers to sell excess grain at market prices would reverberate — would, in fact, change the world.
On that day, other things were happening: President Jimmy Carter’s administration reported progress on a nuclear arms treaty with the Soviet Union. Chicagoans learned that John Wayne Gacy had confessed to killing dozens of young men. Meanwhile in Beijing, party officials committed to a new policy of “reform and opening up,” focused on agriculture.
What did China’s experiment with private enterprise mean? Certainly not the rise of a competing superpower. That would have seemed unimaginable. Maybe it signaled the emergence of, oh, another Yugoslavia, a middling state adding some capitalist spice to communism. And yet …
Ernest Hemingway, in “The Sun Also Rises,” wrote that a change in fortune can happen two ways — “gradually and then suddenly.” So it was for the Chinese economic miracle. In 1972, President Richard Nixon’s visit to China started the conversation, but the leadership of Mao Zedong wasn’t ready to move forward. In 1976, China emerged from a disastrous decadelong interruption, the Cultural Revolution. Two years later, Deng Xiaoping endorsed modest reforms to spark economic activity in an overpopulated country that couldn’t feed all its people. Two years after that, the government permitted the creation of privately owned factories in some villages near Hong Kong as part of a special economic zone. All interesting, not earth-shattering.
Today those villages are as good a symbol as any of what China has achieved. Where 30,000 people once lived, the city of Shenzhen has a population of 12.5 million. The region, known as the Pearl River Delta, is China’s original industrial hub.
China’s economy is second in size only to that of the United States. President Xi Jinping rules as Communist Party chief, but the country operates in hybrid fashion: It’s an authoritarian state that embraces free market principles. China has both billionaires and political prisoners. It is a crucial trade and investment partner of the United States. It also is a growing military power in the Pacific, bumping up against the U.S. mission to keep the peace. That means China is both a customer of the United States and a competitor. Friend but possibly foe. The relationship is complex and unresolved.
The lesson of China’s rise is that closed-off countries doom themselves to outsider status and privation. Think: North Korea. Countries that liberalize their economies and engage the world by opening up to competition, investment and trade will become more stable and raise their living standards. Yet that doesn’t necessarily translate into a more democratic state. There was a theory of the immediate post-Cold War era that when a country liberalizes the economy, that leads next to liberalizing its political system.
Why not China too? Because China’s leaders refused. They maintained fierce control of power, believing that providing jobs, wealth and a certain zone of personal freedom would be enough to keep citizens satisfied, and in check. China has the internet, a digital economy and more car buyers than any other country. The lifestyle of many Chinese people, especially in urban areas, looks Western, without democratic rights. In China, the Communist Party retains unchallenged authority. The government also controls religious practice and censors the web. Dissent is not tolerated.
The rise of China does not present an existential threat to the United States. The two countries are entwined economically, dependent on each other to maintain living standards and therefore motivated to get along. The current tariff squabble between the two countries looks menacing but at some point will subside.
The biggest risk factors are China’s lack of democracy and loner status as world power. With its increased wealth and influence, China inevitably will assert itself internationally and seek to protect its position militarily. China’s leadership operates unchecked by independent legislative and judicial branches of the government. What will stop those leaders from overreaching?
It may be China’s destiny to match the United States in wealth and firepower. Those are not reasons to fear China. They are reasons to engage the country today as a partner and challenge Chinese intentions when they appear threatening. Understanding that China is an old country but still an emerging global player is critical to both aims.