Posted on 13/12/2001
Cassandra
Chang?
China expects its recent admission to the World Trade Organisation
to
propel its economy to new heights, but a new book says the move
could
produce the opposite and spell the beginning of the end for
Communist Party
control over the world's most populous nation. Chang could be
playing
Cassandra to the WTO's hype, then again, he could be looking
at the way WTO
affects national economies and be issuing a prudent warning.
First-time author Gordon Chang holds nothing back in his book,
"The Coming
Collapse of China," whose title says it all, as far the author
is
concerned, even though many academics say he is overstating
the case. China
has long sought admission to the WTO, believing that membership
will bring
unprecedented access to other countries' markets. But membership
will also
force China to open its own markets, accelerating reform of
its business
and financial practices. Negotiations over China's entry to
the WTO had
been under way for the past decade when Beijing and Taiwan were
granted
admission to the multilateral trading system last week.
In his book, Chang, a US attorney who lived in Asia for 15 years
before his
recent return to the United States, argues that WTO membership
will
accelerate a process of opening in China that will ultimately
undermine its
Communist Party and economic system and lead to their collapse.
While not
widely accepted by US academics, who maintain a more moderate
outlook,
China experts say Chang's work is well researched. "The book
points out
that once China joins the WTO, it crosses the line," Chang said
in a recent
interview during a tour to promote the book. "The overriding
thesis is
this: China is not prepared for accession to the WTO." Chang
argues that
WTO membership will severely limit China's ability to regulate
its economy
by forcing it to play by a new set of rules designed to facilitate
the flow
of goods and services between WTO member nations. He says applying
those
rules in China will only fuel discontent with the ruling Communist
Party.
Chang says many state-run factories, long considered the country's
"iron
rice bowl," already teeter on the brink of failure.
Credibility collapse
Chang predicts that unemployment and unrest will spiral out
of control as
companies from other WTO member states grab unprecedented access
to Chinese
markets and drive state-owned enterprises out of business. He
says the
failure of state-owned enterprises will also bankrupt China's
already shaky
banking system, where lenders more often than not make loans
based on
Communist Party directives rather than sound lending practices.
"There will
be economic failure, which will lead to political collapse,"
Chang says.
"The party's basis of legitimacy is to be able to deliver prosperity.
When
that fails, all they'll be able to deliver is nationalism."
Other China experts have adopted more moderate views, though
most agree the
country will face some major growing pains before and if it
eventually
emerges on more sound economic footing. "There's certainly plenty
of
alarming things going on in China," said Richard Baum, director
of the UCLA
Center for Chinese Studies. "Nobody who looks hard can be devoid
of worry
about China's future. But to put all those worrisome points
together ...
and say China is on the verge of collapse - such a conclusion
is not
warranted by the richness of the evidence.
Baum, who listened to Chang discuss his book at a recent seminar
in Los
Angeles, said he believes that China will likely "muddle through"
many of
the problems it now faces on the road to economic development.
"The odds on
any extreme possibilities - a sudden collapse or some kind of
democratic
breakthrough - are less likely, 20 percent or less," Baum said.
"The
remaining 60 to 70 percent would be various muddling through
scenarios."
Chang, meanwhile, admits that his view is decidedly downbeat.
"People say
it's a very negative view," he said. "It's negative if you like
the party,
positive if you don't. There is so much instability in China
today, but
much of that is sloughed off by foreign experts." Chang said
one of his
main reasons for writing the book is to show the public how
dire China's
situation really is. "I wrote the book because I was concerned
we weren't
seeing China in a proper light," he says. "We should see it
as a country
that's quite unstable, and the trends in motion tend to undermine
that
state."
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