The Sleeping Dragon is Stirring

Senior Beijing officials now face the dilemma of all reforming authoritarians: economic success endangers their continued control. - Gordon G. Chang

I first went to China in 1997 for several weeks and fell in love with the country. Although China had been attracting tourists for about 15 years by then, the industry was still clearly in its infancy. Westerners were still somewhat of a curiosity in the sub-urban areas, yet many people spoke rudimentary English. Everywhere I went I found friendly people who routinely would invite me to participate in their activities, whether it was Tai Chi at dawn or practicing the er hu [traditional Chinese 2-stringed instrument] at an after-school program. Many eagerly sought us out just to use the few English words they knew – most humorously in Gui Lin, where “just looking” was believed to be a response to “hello.”

These were ordinary Chinese citizens who were genuinely curious about the world outside of China. But perhaps the most remarkable thing, no matter where in China I went, Capitalism was flourishing. In every store, shop, or street-cart that was not owned by the government, the owners were quick to negotiate and try to entice you away from their competitor next door. As soon as they perceived you were interested in some item, all vendors in the immediate vicinity would grab their version of the ware and start a bidding war to get you to buy. Virtually every owner not only accepted, but in fact preferred American dollars (most often at the street value of 10-1, about 25% better than the official exchange rate).

That is the reality of China. The pace of economic reform is staggering. When rules on direct investment in the mainland were relaxed in 2003, companies flocked to rural China to build their factories. Tens if not hundreds of thousands of jobs were created (and contrary to the liberal myth, were not created at the expense of American jobs) in the “Special Economic Zone” around Hong Kong and Shanghai. Free trade is the rule, not the exception and the Central Committee has no interest in stopping it.

In the mid-1980s as the Soviet Union started to fall apart, Mikhail Gorbachev tried something quite radical for a totalitarian regime. He gave his people some freedoms. The populace was so disenchanted with the system that he sought to distract them from the problems by granting what he thought were relatively minor concessions. What harm could come from that? As the Soviet Union imploded around him, Gorbachev learned a valuable lesson – once the people taste a little freedom, they want more.

Perhaps intentionally or perhaps by calculation, the Chinese Central Committee has so far avoided the same fate by relaxing its control of the economy but not of the social and political lives of the citizens. However, economic freedom is no less desired than political freedom, and even now there are a few tiny fractures starting to grow unnoticed.

As more and more Chinese are exposed to Westerners through the intermediary of the factories, as more are able to access uncensored information through the use of Internet annonymizing services such as TOR, and as more take advantage of the free market system, China is slowly but steadily reforming. The China of today is very different from my first visit almost 10 years ago, and the future is almost unimaginable.

In 2008, when the world's attention is focused on this beautiful country for the Olympics, the tide of democracy is likely to be unstoppable. Countless infrastructure and technology projects need to be completed, and the infusion of capital will drive further economic reforms as the need to invest it starts to increase. Every passing day sees more of the old-guard Communists dieing and increased decentralization.

Even if they wanted to do so, the Central Committee could do nothing to stop the locals from a growing sense of what it means to be part of an ownership society. As Gorbachev learned, seemingly innocuous concessions can have drastic consequences to the one-party system. Regardless of what they might be taught in school, the Chinese seem to have almost a genetic memory of the relationship with America in the 1800s, and that more than free trade, is what scares the Central Committee. Democracy can come to China within the decade if Congress adopts a policy of encouragement. It's best not to provoke a sleeping dragon.