Cool reflections on China fever -- Zhang Jiehai
(Southern Weekend/ESWN)
Updated: 2006-01-11 08:45

1. The just finished year 2005 was no doubt the Year of China for the western media. When the year began, The Times of London published a commentary by its former editor-in-chief titled "This is the China century" and that was the prelude to China Fever. In March, BBC moved its Interview program for one full China week in Shanghai. The American cable television network CNN had a China week in which the host broadcast live from Diaoyutai in Beijing with the a Focus On China special feature and live broadcast from May 14 to May 22. When I was in France in June this year, I came across accidentally a 5-hour program about China on French television.

The print media were also up there. On May 5, the New York Times published an editorial titled "The Rising China. On May 22, the famous New York Times columnist Nicholas Kristof published a column titled China-World Capital with the Chinese headline: "From Kaifeng to New York -- The Past Glory Vanishes Like Smoke." At about the same time, Newsweek had a front-cover story The China Century on May 9, with 21 pages of intensive coverage. On June 20, US News & World Report published an article titled The Rise Of A New Big Country to remind American companies not to miss out on the China Century. A week later, the famous magazine also published a series of special reports about China.

2. Early, in The Wall Street Journal had exclusive interviews with 10 recipients of the Nobel Prize in Economics. Two of the questions pertained to China. The first question was, "75 years after this moment, the largest economic entity in the world is likely to be the United States, the European Union or China?" Here are the responses from the Nobel Prize laureates.

Kenneth J. Arrow: "Unless there are fundamental changes in economic growth situations, China will be the largest economic entity in the world in 75 years' time."

Ronald H. Coase: "China will surpass the United States and the European Union in 75 years' time. I firmly believe that."

Milton Friedman: "China."

Lawrence R. Klein: "75 years later, the largest economic entity in the world will likely be China.

Harry M. Markowitz: "China."

William F. Sharpe: "The probability of China being the top country economically is 50%, European Union is 30% and the United States is 20%."

Robert M. Solow: "Based upon economic value, it may be China."

The second question was: "Which country or region has the most rational economic policies right now?"

Kenneth J. Arrow: "Good policies are one thing, but the effects are something else. We must say that based upon experience, the economic policies in the China-Taiwan area and Korea are against the standards of economics, but their policies are really reasonable."

Harry M. Markowitz: "America's 'Free Market' is the best policy, followed closely by China."

Joseph E. Stiglitz: "Based upon the overall economic performance, China is obviously the best, and its has also show excellent economic management abilities during the East Asian financial crises. From the viewpoint to economic growth rate and flexibility, China has been highly impressive."

3. The Department of Economics at Toulouse University in France is famous worldwide, and economic experts often visit there. The last time, I encountered an American economics professor. At lunch, the American professor presented his latest research result. He discovered, "China is the only country in the world so far that has been able to grow economically without causing increase in wealth inequality. By contrast, it shrunk the gap between poor and rich."

I am supposed to have a pretty good composure and I am supposed to maintain my cool most of the time. But when I heard this astonishing praise, I was stunned.

"What did you say? Can you repeat that once more?

The American professor thought that I did not hear him clearly, so he repeated one word at a time: "Your country is the only country in the world that has been able to grow economically while shrinking the gap between poor and rich."

"Where did the evidence for your conclusion come from?"

"From one of your published statistics."

So that was it.

Similarly, at a recent international academic conference in England, the Chinese scholars and the American scholars had an unhappy debate about the current situation of the Chinese rural villages. The Chinese scholars said that the situation in the rural villages was grim with plenty of problems. The American scholars rebuked them that their research must not depend solely on feelings and they have to have data. "Our conclusions are the exact opposite of yours. The situation in the Chinese rural villages are good. The most adequate proof is that your own research data showed that the sense of happiness of the rural farmers are higher than that of the urban dwellers."

4. The highly complex state of China is not understood by foreigners. Sometimes, even the Chinese do not understand themselves.

On time, an American Chinese delivered a report at our research institute about one of his research projects in China. This Chinese scholars is tops among the Chinese and has already achieved quite a reputation in the academic field in the United States. His research topic was "The major factors that influence the income of employees at state enterprises." We could see that he was very familiar with the academic rules in the United States. He analyzed gender, age, education, work experience and position, and other factors, including even Communist Party membership and whether the father was a senior cadre, and so on. All the other factors are treated as error components. Thus, if two people are of the same sex, age, education, work experience and position, someone who was working in a monopolistic industry (such as bank, telecommunications, railway, postal service, electric power) could be making several times or even more than ten times more than someone in an non-monopolistic industry!

Therefore, there was no way that he could correctly identify the most significant factor that affected the income of state enterprise workers.

5. Here, I wish to solemnly tell everybody -- for any research done by a foreigner on China, you can put up a question mark first. Especially, those foreigners who come to make some short trips in several major cities in China and are greeted and shown around by Chinese people. You might as well as not listen to what they say. That is not because they are stupid, but because the situation of our nation is too special.

Generally speaking, their error was this -- they only paid attention to the development and prosperity of Beijing and Shanghai and they don't know about the poverty and under-development of the rural villages in the central and western parts; they only pay attention to the styles of the hotel lobbies in China and they do not know how many elementary school students did not even have desks; they only pay attention to the super-purchasing power of Chinese tourists, and they do not know that Chinese tourists seldom get to go out of the country and when they do, all the relatives will ask them to buy things -- thus, they are not only spending their savings of many years but they are also spending the savings of many years of other people; they only note the trade imbalance between China and the United States, but they do not know that if we ship a planeload of clothing, we will not get an airplane back; they notice that they see stuff everywhere that is made in China, but they not know that there isn't much that is invented in China.

I am saying all this because while looking at the mainstream of rapid development in our country, it is also necessary the grim side of the problem too. As for the comments by foreigners on China, we do not have to feel humbled and we do not have to be complacent. After all, we are the ones who understand Chinese matters best and we must rely on ourselves to solve China's problems.