On a song

When Deng Xiaoping convinced the nation 30 years ago that a new direction in development with greater openness and reliance on market mechanisms was needed, China was a small factor in the global economy. Today it is a key trading partner of many countries around the world and one of the key drivers of global growth.

In fact, it is at the center of what future historians may call the greatest economic transformation the world has ever seen. International trade flows, capital markets and even development assistance programs are changing dramatically as a result of China's growth and successful economic transformation. Once the largest recipient of World Bank assistance, China has become a donor to the International Development Association and recently formed a partnership with the World Bank to provide development assistance to Africa.

So far the economic reforms and opening up that were started 30 years ago have yielded great benefits for China and for the rest of the world. What will the next 30 years bring? Will the existing superpower resist the emergence of a multi-polar world? Will rising protectionism in the US and Europe combined with rising nationalism in China overturn free trade philosophy? Or will wiser heads prevail and collaborate to ensure that the world, including the poor, can continue to benefit from rule-based globalization?

Economic statistics and models describe the enormous changes that have taken place in China and its role in the world only very partially and imperfectly. Economists often forget that the essence of development lies in its human, social and cultural dimensions, which are hard to quantify. Allow me to use an example from the world of music to explain what I mean.

While preparing for my assignment as chief of the World Bank's resident mission in China (1993-1997), I learned about the visit of Isaac Stern, the violinist, to Beijing and Shanghai in June 1979, only six months after the historical Third Plenum of the 11th Central Committee which started the opening up process. Stern was one of the first major Western musicians invited to perform and teach master classes in China after Mao's death. He was impressed by the level of technical proficiency he encountered in music conservatories in both cities, but disappointed at the low level of understanding of Western classical music and the poor quality of musical instruments that were used.

In Beijing Stern found only one piano of sufficient quality for his performance in a violin-piano sonata. In Shanghai he could not find one single high-quality piano. He wanted to ask for the one from Beijing to be brought over to Shanghai, but was afraid that such a request would embarrass his hosts.

Contrast Stern's experience in 1979 with the music scene in China today. In September 2007, while visiting Beijing for economic research, I attended a concert in the Poly Plaza, one of many excellent concert halls in China today, featuring Lang Lang as soloist in Beethoven's second piano concerto. He was accompanied by the Berlin Staatskapelle, one of Germany's finest orchestras, which was conducted by Daniel Barenboim. It was a magnificent performance - it brought tears to my eyes. The audience loved it and couldn't stop applauding.

After the concert I went to a reception that was also attended by Deng Rong, Deng Xiaoping's youngest daughter, co-founder and chairwoman of the Beijing International Music Festival which celebrated its 10th anniversary. The symbolism of the events that evening was striking. China's miracle is certainly not limited to the economic arena. The country has reached out and opened up in many areas of human, social and cultural development. The Olympics in Beijing later this year will showcase this globally.

Opening up is not only good for business, it also serves cultural development.

Perhaps like never before, China has become part of the international community and not just as a trading partner. China is changing the international community while being changed by it, often in subtle, unpredictable ways. After 30 years of economic reforms, Chinese musicians - from opera singers to instrumentalists - are in high demand in concert halls the world around. Similarly, international concert artists and orchestras are keen to include China in their itinerary. Chinese-made violins - a craft that was lost during the "cultural revolution", but re-learned since the opening up, are in high demand. Chinese-made pianos are also exported in large numbers and their quality is improving. Yet the piano on which Lang Lang played at the Poly Plaza was a Steinway, of course!

For most foreigners and perhaps for many Chinese as well, one of the most intriguing aspects of the economic reforms since 1978 is that they were inspired and guided by the CCP. Now that the most critical economic reforms have essentially been completed, the question that naturally arises is: will the Party be as successful in transforming the political system as it has been in transforming the economy? The challenges facing China today are no less daunting than they were 30 years ago, but they are different in nature. The way in which they are tackled will have enormous domestic and international consequences. China is now facing what might be called the challenge of a second transition: transition to rule of law (not by law), social fairness and reduced inequality, transparency and accountability of government, and better protection of the environment. If I am allowed one suggestion in this context it would be to strengthen fiscal programs and policies in support of China's social and environmental objectives.

China's successful pursuit of development through incremental market reforms and openness to foreign trade, investment and ideas, has become a source of inspiration for developing countries in other parts of the world. It has also changed my own thinking about what is important for development. Investment capital, of course, will always be important, but what is even more critical is what money cannot buy: vision, courage and good leadership supported by competent and honest government responsive to the needs of the people.

The author is an international economist, China scholar and consultant. He taught as an adjunct lecturer at Harvard University's Kennedy School of Government, and as an adjunct professor at Georgetown University's School of Foreign Service. Dr. Bottelier has been an adjunct professor at Johns Hopkins University School of Advanced International Studies since 1999 and was recently named associate professor. He worked at the World Bank between 1970-1998, serving as senior advisor to the vice-president for East Asia, 1997-98, and was chief of the World Bank's resident mission in Beijing, 1993-97. The views expressed are his own.

(China Daily 03/03/2008 page6)