Dialogue April-June, 2010, Volume 11 No. 4
China During Mao and After
B.B. Kumar*
The Chinese emperor Shangtang of Shang dynasty (1766-1122 B.C.) decided to sacrifice himself by self-immolation on a pyre of firewood as the preferred manner of his death when the country suffered seven years of draught and there was famine. The emperors in China were considered to be the sons of heaven (tian zi), the link between the earth and the celestial authorities controlling the rain, wind and the temperature; the people viewed the natural disasters – draughts, floods, famine, etc. – as the loss of heavenly mandate (tian li) and therefore withdrawal of its favour from its son. It often led to rebellion. The emperor Shangtang, of course, did not die, the celestial powers took pity, there was rain when fire was lit, it was extinguished, the draught ended and also the famine. The case with Mao was just the opposite. The Chinese people continued to suffer throughout his rule.
Mao’s Megalomenia
Throughout his life, Mao promoted himself by (i) pursuing Superpower Programme and (ii) offering generous food aid to Socialist nations, especially after Stalin’s death, aiming at the leadership of the Communist world. Mao, through his Superpower Programme was pushing his country towards industrialization and developing the war machinery. He pursued the path of making China a superpower, so that his voice is heard globally. While trying to meet these objectives, Mao was keeping his country starved. As per Chinese government figures by 1960, average Chinese was eating about 1500 calories a day – a diet equivalent to that of slave labourers at Auschwitz. About 70 million Chinese died due to wrong policies of Mao, out of which at least 25 to 30 million died only during the Great Famine caused by the Great Leap Forward (1959-61). Mao Tse-tung feasted on specialty of food while his people suffered. He alone could speak unfeelingly when millions died: “Having only tree leaves to eat? So be it” and “‘Oh, peasants’ lives are so hard’ – the end of the world! I have never thought so.”
Mao’s Character
Mao, throughout his life, lived a life of self-fulfillment, a life to fulfill the duty towards him and he wrote so at the early age of 24: “People like me have a duty to ourselves; we have no duty to other people.”1 Mao was a thoroughly self-centered and selfish man. His indifference to the sufferings of the Chinese people, his absolute lack of feeling and cruelty not only towards common man, but even towards his nearest and dearest ones –his four wives, children, colleagues with life-long association – is unbelievable and hardest to grasp. His egotism was shocking. As the facts in Jung Chang & Jon Halliday’s Mao: The Unknown Story vividly come out, he was lazy, callous, self-indulgent, clever, not wise, and careless of his children, wives and the Chinese people.
Myths about Mao and the Reds
There are many myths centered on Mao. The reality about his ‘Long March’, contrary to what is generally known, is that Mao succeeded in the ‘Long March’ not through his heroism, but due to the fact that Chiang Kai-shek knowingly chose to allow the Red Army a safe passage.2
Another myth, devoid of truth and which brought tens of thousands to the Communist fold, was that the CCP (China’a Communist Party) was the most dedicated anti-Japanese force. In reality, Mao never wanted the Reds/PLA to fight Japanese. Mao’s role in anti-Japanese struggle was so dubious that even Stalin suspected him to be an agent of Japan when he found his complicity in kidnapping of Chiang Kai-shek, who was fighting a battle against Japan. Mao used to conceal many facts by even altering the inner-party documents. As for example, he instructed Lin Piao to delete the mention of the fact even from secret inner-party documents that the Reds were receiving ‘gigantic assistance’ from Russia, North Korea and Mongolia.3
Collaborators in Myth-making
Many persons, even from unexpected corners, collaborated and helped in myth-making and positive image building of Mao and the Reds. American journalist Edgar Snow was one such person who was commissioned by Mao to help sway the Western opinion about him and the CCP. The Mao Tse-tung Autobiography (1936) largely consisted of the Mao’s interview with Snow. Snow’s book Red Star Over China was also based on his interview with Mao and some other Communists. Stories of a Journey to the West was published in Chinese. Impressions of Mao Tse-tung also used Snow’s unused material.
It needs mention that Mao’s encounter with Snow was not accidental; Snow and a Lebanese American doctor George Hatem were invited only after Mao’s careful vetting. Their names were suggested when Mao asked the Shanghai undergrounds to find a foreign journalist to publicize his story, and a doctor. Snow, an American journalist, used to write for Saturday Evening Post and New York Herald Tribune. Dr. Hatem brought top-secret documents from comintern in his medicine case. Detailed instructions on handling Snow’s visit were dictated by Mao himself, which included: ‘Security, secrecy, warmth and red carpet’. Snow’s statements that Mao ‘never imposed any censorship on me’ and that in the Chinese version of his book that he found Mao’s words ‘honest and true’ were certainly not true. In fact, Snow used to submit questionnaire and the politburo coordinated the answers carefully. Snow used ‘a mixture of valuable information and colossal falsifications provided by Mao in toto. Mao, in order to befool the Westerners completely suppressed his links with Moscow and clamed American friendship. Snow labeled Mao and CCP ‘direct, frank, simple and undevious’. Years of torture and murder were covered up; stories of battles and heroism were invented.4
Even Shao, the media chief of Chiang Kai-shek assisted Snow in promoting Mao and Reds. Shao was, of course, sacked by Chiang, but only after Mao and Reds sanitized their image and damage was already done.5 These are only few examples. In fact, numerous Communist intellectuals throughout the world actively worked in myth-making and falsification of facts aiming at providing positive images of Mao, Stalin, Lenin and other Communist leaders.
Mao’s Superpower Programme
Mao, just after the Korean War, launched his Superpower Programme aiming at making China a military and industrial world power within ten to fifteen years i.e. within his own life-time, so that to have the world listen when he spoke. Being in rush for his arsenal, he sent Chou En-lai with his shopping list for the First Five Year Plan (1953-57) to Moscow, viewing which Stalin remarked: “This is a very unbalanced ratio. Even during war time we didn’t have such high military expenses.” Officially stated expenditure on military and arms related industries during that period came to 61 percent of the budget. Real expenditure on those heads was higher and it continued to increase later on.6
Mao’s longing for the atom bomb continued ever since the US dropped the same on Hiroshima in 1945. When the US president Eisenhower, in his State of the Union address on 2 February 1953, suggested that he might use the atom bomb on China, the threat, rather than frightening Mao, was music to his ears, as it gave him an excuse to ask Stalin for the nuclear weapons, which he desired most. Just after Eisenhower’s statement, Mao, taking advantage of the Russia’s mutual defence pact with his country, dispatched China’s top nuclear scientist Qian Sanqiang to Moscow to convey to the Stalin to give him nuclear bomb so that to enable Russia to avoid being drawn into a nuclear war with the US. Stalin was in no mood to help China and decided to end Korean War. However, he had stroke soon after and died. A factor responsible for the stroke is said to be Mao himself. The new Russian leadership, under Premier Georgi Malenkov, conveyed to Chou Enlai their decision to end Korean War. They declined to transfer nuclear technology to China. Keen to ease tension with the West, they wanted to reward China with a large number (total 91) of arms enterprises, if Mao co-operated in stoppage of war. But Mao was not satisfied. He wanted the nuclear bomb. The opportunity came soon after, when in June 1957, Molotov, Malenkov and a group of old Stalinists wanted to dislodge Khrushchev and they needed Mao’s help and agreed to provide nuclear technology as a price. Yet another opportunity came for him The greatest Communist Summit of the world was to be held on 7 November 1957 to mark the 40th anniversary of the Bolshevik Revolution and Moscow needed Mao to be on the board to enable the summit to go smoothly. Mao, as a price, asked for the renegotiation of the technology transfer agreement before the summit. The deal was signed on 15 October 1957;
According to the deal, Moscow agreed to provide Mao with a sample Atom-bomb and the Russian ministries were instructed to supply the Chinese whatever they required to build their bomb. Yevgenii Vorobyov, a top Russian nuclear scientist, was deputed to supervise the construction of Chinese bomb, over-ruling the objection raised by Igor Kurchatov, the ‘father of the Russian bomb. The number of Chinese nuclear scientists under his supervision increased from 60 to 6,000. China received two R-2 short-range ground to ground missiles also. The Chinese copied the same. As reported, the number of missile experts transferred to China was very large. In June 1958, Mao asked for technology and equipment to manufacture nuclear submarines and aircraft carriers. He created second Taiwan Strait crisis by heavy shelling of Quemoy Island. This was the same strategic technic to twist the arms of its ally, USSR as was done in 1954-55 during first Taiwan Strait crisis to secure Atom-bomb from Russia. The end result of this second crisis was the signing of a high-end technology deal on 4 February 1958 by which Khrushchev agreed to transfer the whole range of equipment needed for A-bomb delivery. Strangely, the heavy costly shelling of the rocky island of Quemoy continued for 20 years till the establishment of diplomatic relations between US and China. It ended on New Year’s Day of 1979, a couple of years after Mao died. The Army Chief of Staff, who opposed it, was accused to be of ‘right wing’ and removed by Mao.7
For Mao, Steel was the yardstick for superpower status. He, therefore, wanted the entire Chinese nation to produce steel. Steel production in the year 1958 was targeted at 10.7 million tons. A year earlier, it was only 5.3 million tons. It was difficult to meet the target even when the existing steel mills and related industries were ordered to go flat out to maximize production; rules and common sense were cast aside, equipments overworked to the point of breakdown. As a result, serious accidents took the toll of 30,000 workers. The construction of backyard furnaces were ordered where 90 million people worked to bridge the gap in steel production. Everything, including cooking utensils, door handles, water wagons, farm tools, even women’s hair-clips, were melted. In one place shipments of high quality Russian alloys were hijacked and melted. Peasants’ houses were pulled down for the thatch and timber to be used as fuel for steel furnaces; hills became treeless and barren causing floods; 10 billion work days were lost to agriculture. The ultimate result was that only 40 percent of the steel produced was of good quality; more than three million tons was completely useless.8 China’s steel production increased the demands of scrap in other countries. James Kynge has quoted the statement of a foreigner thus: “the appetite of Chinese steel mills for scrap was so voracious that some of the manhole covers in his neighbourhood had started to disappear.”9
The difficulty with Mao was that he was in a hurry; breakneck speed, unplanned execution of work; lack of proper infrastructure, electricity, coal, cement and steel worked against what he wanted. By 1958, only 28, out of 1,658 large arms-centred industrial projects, were completed. Mao produced ‘a rust-bowl at the start of the industrialization rather than at its end.’ The country ‘ended up with planes that could not fly, tanks that would not go in a straight line…, and ships that were almost a greater hazard to those who sailed in them than to China’s enemies. Mao wasted much of the technology, equipments and the skill brought from Russia.10
The four-year Leap of Mao resulted into monumental waste of natural resources and human efforts. The experiment of bringing entire rural population under 26,000-plus ‘Peoples Communes” was also a gigantic failure resulting into ‘Great Famine’ bringing tremendous sufferings for the people. In the labour camps of the communes even food was subjected to regimentation. Mao even tried to replace the names of the people by numbers.11 Mao’s ‘Four Pests’ campaign, though dropped later on aimed at total killings of the sparrows and dogs.12
Cultural Revolution (1966-76) was another dreadful destructive phase of Mao’s rule, during which the students fought against their teachers, children against their parents, wives against their husbands and so on. The total fight aimed at Mao’s endeavour to re-establish his authority over the party and the government.
Man-made Famines, Starvations and Deaths
With only seven per cent arable land and 22 per cent world population, China did not have enough land to raise livestock. Therefore, most Chinese had no dairy products and too less meat; that country’s grain production was also woefully inadequate. China, traditionally, used to import large quantity of grain. Unfortunately for the Chinese people, especially for the peasants, Mao decided to export food, which resulted into perpetual, starvation, mal-nutrition, famine and death throughout his rule. This happened even before that during the years 1947 and 1948 in the Red occupied areas of Yenan before the establishment of People’s Republic of China.. In Yenan, according to Mao’s logistics manager 10,000 peasants died of starvation in 1947. Civilian deaths from starvation in Manchuria were in hundreds of thousands in 1948, where even Communist troops were often half-starved. Situation was so bad, and Mao himself witnessed it, that ‘village children were hunting for stray peas in the stables of his entourage, and women scrabbling for the water in which his rice had been washed, for the sake of its driblets of nutrients.’ Even his guard chief reported to him about starvation and death and that too just after harvest.
Chinese Reds received massive assistance from USSR, North Korea and Mongolia in their fight against Marshal Chiang Kai-shek. Mao, in order not to take obligation of Stalin and to feel free to ask for more assistance, offered twice – in August and again October 1946 – to pay for the same with food. The offer was declined by the Russia’s trade representative in Harbin. After that Liu Ya-lou, one of the most dependable acolytes of Mao, was sent to Moscow to insist for the payment in food. As a result, a secret agreement was reached. Accordingly, the Chinese Communist Party sent one million tons of food every year to Russia.13
The practice of paying back by export of food continued throughout Mao’s reign resulting in the Great Famine, continued starvation, mal-nutrition and deaths.14 It is most unfortunate that over 70 million Chinese died during 27 years of Mao’s rule due to Mao’s megalomania and utter insensitivity towards sufferings of the Chinese people, especially the peasants. The fact that such situation was man-made is least known to the people. Jung Chang and Jon Halliday wrote:
“Few knew that the famine in Red areas in those years was largely due to the fact that Mao was exporting food; the shortage was put down to ‘war’. Here was a foretaste of the future Great Famine, which was likewise Mao’s creation: again the result of his decision to export food to Russia.”15
The Great Famine during Mao’s Great Leap Forward (1958-61) was the largest famine of the world during twentieth century in which about 38 million people died;16 another 30 million births were postponed due to mal-nutrition and the shortages during that period. The hungriest years of China were between 1973 and 1976 after the visit of Nixon till Mao died. An added factor for the same was the undeserving largesse of Mao.17
Mao’s policies were severely criticized by Liu Shao-chi, his second in command in the huge gathering of 7000 top delegates of the CCP. He said:
“People do not have enough food, clothes or other essentials…agricultural output, far from rising in 1959, 1960 and 1961, dropped not a little, but tremendously…there is not only no Great Leap Forward, but a great deal of falling backward.”18
It is most unfortunate that a total of over 70 million Chinese died during 27 years of Mao’s rule due to his megalomania and utter insensitivity towards sufferings of the people. Food was squeezed out of the starving farmers for paying not only the cost of bombs, missile development, etc., but also for industrial purposes. 4.74 million tons of grain, costing US$935 million was exported from China in 1959. Other foods, especially pork, were also exported. It needs mention that Chinese bomb was estimated to cost US$4.1 billion at 1957 price-level. This was enough to provide wheat to every Chinese for two years to provide each of them extra 300 calories and thereby save the life of about 38 million Chinese, who died due to starvation on that count.19
A Virtual Prison for the Peasants
China, during Mao’s rule, was virtually a prison and peasants were the worst sufferers. Persons registered as peasants, along with their children and grand children, when his regime started, were subjected to total geographical and social immobility. They were not allowed to move to the urban areas or to change their status. Their starvation, mal-nutrition and death remained mostly unreported. The peasants’ immobility of such a scale was a new phenomenon. Chinese rural people/peasants suffered tremendously due to notorious practice of shourong (custody and repatriation) process, if they came to cities.20 An Investigation of China’s Peasantry provides detailed information about the sufferings of the peasants. The saddest part was also that the People’s Republic of China (PRC) under Mao ignored the development of Agriculture the most.
Mao’s Personal Agenda
There was none in China who came in the way of Mao and did not suffer. The only agenda of Mao was to promote himself either through the Superpower Programme launched by him or latter on, after the death of Stalin, the largesse towards other Communist countries with an eye on the leadership of the Communist World. Any person who opposed Mao in any way suffered. Liu Shao-chi and Chou En-lai were labeled ‘Rightists’ for opposing re-launch of the Superpower Programme. Mao used to abuse most senior colleagues in front of provincial chiefs. Mao’s terror was such that one of his ministers died without facing him.21 Unable to face Mao, Lin Piao fled from China and died in Mongolia in a plane crash. Yeh Jian-ying, who spoke against Cultural Revolution was put under house arrest.22 Wang Ming, a potential challenger, was poisoned. Deng Xiaoping, who opposed Mao’s Cultural Revolution and who forced Mao to back down in campaign against Chou En-lai, was put under house arrest on Chou En-lai’s death. Chou En-lai was allowed cancer operation only after Mao ascertained that he would die earlier than Mao.
Sabotaging Stalin’s ‘Fight Japan first’ Policy
Wang Ming, the champion of Stalin’s line of ‘Fight Japan First’ policy and most loyal Chinese acolyte of Stalin, was sent from Russia to Yenan, the region under Mao’s control, in special plane in November 1937. He was to convey to Mao to fight with Japanese jointly with Chiang Kai-shek. Stalin thought that Chiang, if left alone may divert the Japanese to USSR. Japan’s huge army in North China and its swift gains made Stalin uncomfortable. Tokyo’s forces were in a position to move to the North and attack USSR. He, therefore, wanted through a long term Communist agent in Nationalist army, a general called Zhang Zhi-zhong (ZZZ) to provoke war between the Japanese and the Nationalist army in Shanghai region. Chiang, however, did not accept the advice of ZZZ to attack the Japanese. Mao, on the other hand, did not want Reds to fight Japan. He wanted Japanese to defeat Chiang, which, according to him, would inevitably draw Stalin to fight against the Japanese and thus ultimately helping the Reds. In an interview to American journalist Edgar Snow, Mao said that ‘Soviet Russia can not ignore events in the Far East. It can not remain passive. Will it complacently watch Japan conquer all China and make it a strategic base from which to attack USSR? Or will it help the Chinese people…? We think Russia will choose the latter course.’23
Contrary to what Stalin wanted, Mao’s plan was to avoid war, preserve Red forces and to expand the sphere of the Chinese Reds. Such telegrams were sent by him to his commanders: “Focus on creating base areas…not on fighting battles…” He ordered them when the Japanese were sweeping across the Sanxi province: “Set up our territory in the whole of Shanxi province”. His attitude, as he said years later, had been: “The more land Japan took, the better.” Although Mao was against Red army’s participation in the war, his commanders wanted to fight it. As a result, in spite of Mao’s refusal to authorize action, a few cases of skirmishes took place, one of which was when a unit of the Red army under Lin Piao ambushed the tail end of a non-combat unit of the Japanese transport convoy, who were mostly sleeping at that time, at the pass of Pingxingguan near the Great Wall in northern Shanxi. Mao, fully exaggerated Pingxingguan, the only battle by the Reds. He used it for propaganda purpose for deriving benefit by showing that Reds also fought the Japanese.
Although under the pressure of politburo, Mao accepted Stalin’s line of fighting under unified command under Chiang, but he continued to sabotage the move. Wang Ming, who under the Scheme of Stalin was to succeed Mao, suffered tremendously and was even poisoned.24
China during last days of Mao
In the 25th year of the Mao’s reign, while Deng was trying to undo the practices of the Cultural Revolution and improve the standard of living of the Chinese people, most of whom were living in abject poverty. Most of the people in the countryside were living on the verge of starvation; adult women in places had no clothes to cover themselves and therefore had to go naked. In urban areas, families of three generations were often crammed into one small room as very little housing had been built to provide housing for the 100 million population increase during Mao’s time. Severe rationing of food, clothing and virtually all daily essentials was still in the force in so called privileged urban areas. In fact, urban upkeep (water, electricity, transport, sewage, etc), health and education were not the priority areas for Mao. During eleven years (1965-75), only four per cent of the sum spent on arms-centric industries was invested on urban up-keep; health and education received half of the tiny percentage allotted at the onset of the Mao’s rule. The tragedy was that Mao knew about the rampant poverty in China. He told visiting Communist Party Chief of Vietnam, a country suffering the impact of 30 years of non-stop war and US bombings, in September 1975: ‘Now the poorest nation in the world is not you but us’. And yet he opposed Deng’s efforts of raising standards of living; incited media to oppose him with slogans such as: ‘The weeds of socialism are better than the crops of capitalism.’25
China under Deng Xiao-ping
China’s Primier, Chou Enlai passed away on 8 January 1976. The public, in general, had a positive and favourable image of him and therefore, there was a mass mourning during 1976 Qingming Festival falling on 5 April. The mourners were transformed into demonstrators when the wreaths laid around the Martyrs’ Monument in Tiananmen Square of Beijing were removed by the police. The mourners were protesting against the denial of popular grief; the protests turned into a mass demand for more humane and moderate manner of governance. Mao, as advised by his closest advisors – the Gang of Four – took it as an incipient and dangerous counter-revolutionary movement; the demonstration was brutally suppressed; people were killed. Deng Xiaoping was dismissed from his post, as he was suspected of having fomented the incident known as Tiananmen incident. Incidentally, it may be mentioned that Deng Xiaoping had never finished his elementary education. He, like other Chinese suffered through the Great Famine of the Great Leap Forward, survived by eating grass.26
Chairman Mao Zedong died on 9 September 1976. Hua Guofeng, Mao’s chosen successor, continued to adhere to the unpopular Gang of Four line that incidents of 5 April 1976 had been a counterrevolutionary movement. An editorial published in the major newspapers – People’s Daily, Liberation Army Daily and in the monthly Party journal Red Flag – summed up and highlighted the policy of maintenance of ‘whatever’ mechanisms and policies were followed in the Mao era. That policy of “two whatevers” was criticized by Deng’s faction. In May 1977, Deng openly expressed the view that “whateverism” was unMarxist. Hua, emboldened by his advisors arrested the ‘Gang of Four’ –Mao’s widow, Jiang Qing and three of his courtiers; Wang Hongwen, Yao Wenyuan and Zhang Chungqiao. This gave the impression of the end of the Cultural Revolution; the blame of the excesses was shifted on a small tight clique; it signaled the end of the control of the old guards. Jiang Quing later on committed suicide. Mao’s Cultural Revolution era officially ended in 1976. The pressures on Hua, and others owing their career to Mao, however, became irresistible; Deng was reinstated to his previous position by the Third Plenum of the Tenth Central Committee of the Chinese Communist Party held on 16-21 July 1977. Deng Xiaoping replaced Mao’s successor Hua Guofeng. Deng Xiaoping took steps to open up China to the world in 1979. According to Deng, “one important reason for China’s backwardness after the industrial revolution in the Western countries was its closed-door policy” and opening of the door was necessary to enable China “to make use of capital from foreign countries and of their advanced technology and experience in business management.”27 Needless to say that the opening of the Chinese economy has brought miracles.
Chinese Economy: Miraculous Developments
Deng brought in Chen Yun, an expert at defusing economic crises, to formulate new strategies. Chen knew of the long suppression of 700 million Chinese farmers under Mao during years of Great Leap Forward who forced them to go for huge collective farming. Now, the collective farms were broken up into small farms managed by individual families, though the farms were still under collective ownership. Introduction of market competition and profit incentive in agriculture yielded positive results. Apart from agriculture, China has made enormous progress in all other fields also.
During 25 years since 1979, four hundred million people in China have been lifted out of poverty (at $1 per day expenditure level).28 Mal-nutrition and child death rates (below the age of five) have been significantly reduced, according to the UNICEF.29 Unlike Mao’s China, the country is no more a great prison; peasants now move freely to the urban centres resulting into growth of urban population from 17.9 percent in 1979 to 41.8 percent in 2004.30
A beginning was made in 1979 by opening the door and welcoming the foreign investors, especially the ethnic Chinese residing in the neighbouring Hong Kong, Taiwan and South East Asia in the special zones located on the Southern coast. Products manufactured in the factories owned wholly or partially by the Chinese were exported. Rigors of international competition brought qualitative change in the products. Attracted by cheap workers and many other factors, as discussed hereafter, many foreign companies shifted their production units to China. By late 1990s, China was able to join WTO (World Trade Organization). The country opened up its markets; its average tariff rates dropped from 56 percent in 1982 to 11 percent in 2003; it became the third importer of goods only behind US and Germany. Its volume of foreign trade multiplied 25 times between 1978 and 2001.
The country has become the leading producer and exporter in many fields. In total factory output, the country is only behind US and Japan. The manufacturing plants of China produce two thirds of the photocopiers, microwave ovens, DVD players, and shoes of the world. It has become leading exporter of information technology products like mobile telephones, laptop computers and digital cameras in the world replacing US. The country is the largest producer of steel today.
It is heartening that China’s records in the public welfare field are also heartening. As for example, China, like India, has taken lead in slum rehabilitation.31 The country is loosening its grip on the persons/groups expressing genuine grievances.
Problems ahead
But the picture is not only rosy. There are many grave problems which the country may not postpone indefinitely. The gap between rich and poor is increasing day by day. State-run health-care system is collapsing; life-threatening environmental problems are stirring popular discontent and violent protests.32
Factors behind China’s Economic Success
China’s capacity to produce cheap products gave it competitive edge. The country was able to capture world market. Many foreign firms shifted their production units to China; outsourcing has taken place not only in the field of manufacturing but even in such fields as weaving. Apart from the cheap labour, emerging entrepreneurship, economics of scale, transfer of technology with33 or without R&D34 and some other factors, mentioned hereafter, sharpened the competitive edge of the Chinese economy. Although China paid tremendous human and environmental cost for its capitalist style development.
And yet, there are other factors which sharpen the competitive edge of China and, of course to a lesser degree, to that of India. The Chinese state expenditure, as a percentage of its gross domestic product, is lesser than that of the West of European countries; it is less than half to that in Germany during 2004. The taxes levied are lower. The Chinese currency is kept undervalued against the US dollar, giving greater competitiveness to their exports. Low safety standards, cheap credit by Chinese banks to state companies, state companies defaulting without consequences, lax restrictions on industrial emisions without any regard to environmental pollution, subsidizing industries by artificially keeping the inputs such as electricity and water low (generous value added), tax rebates to the exporters were the factors giving further edge to the Chinese exports. China spent far less on R&D (Research and Development); stealing of foreign intellectual property by Chinese companies used to be a routine and frequent affair as Chinese courts were either complicit or under government control.35
China’s economic rise has also taken place at huge human cost. During two decades since the economic reforms, mining accidents had taken the lives of 10,000 to 40,000 coal miners annually. That means, every thirty minutes, on average, a coal miner perished in China’ in a gas explosion, cave-in, or flooded shaft.’ Thus for every million tons of coal produced four to five miners perished in China; on the other hand, the fatality rate in India and Russia was less than one and that in the US and Britain was less than 0.05. Such high human cost was only possible due to authoritarian Communist rule in China.36 Unplanned industrialization at huge environmental and human cost has given short time gains to China.37
Shifting Industrial Locations/Out-sourcing to China
As James Kynge writes, 10,000 jewellery manufacturers of Northern Italy, most of whom were small-scale artisan outfits, taken together, made up the largest gold jewellery industry of the world. The Chinese entrepreneurs and designers descended every year on the big jewellery fairs of Vicenza and other Northern Italian towns, purchased specimens, took them home and reproduced them at less than one tenth of the Italian price. As a result, the competition from China and Turkey was threatening to wipe out the jewelry industry of Italy. The fact that Italy’s demand for refined gold, during last 4-5 years, came down from 600 tons annually to 350 tons, confirms the fact.38
The working population of Western Europe produced too little, was compensated too generously. As a result, the commodities produced by them became costlier, leading to stiff Chinese competition and shifting of production sites by the companies in China to places such as the Pearl River or Yangtze deltas, or to move to the cheap labour sites of Eastern Europe in Poland, Hungary, Czech Republic, etc. Naturally, there is loss of job and unemployment. As reported a few years ago, the unemployment rate in European Union was around nine per cent and wages in such sectors as manufacturing was falling. 12 per cent of the workforce, i.e., five million Germans, is unemployed. This is not to say that China did not suffer on this count. That country ‘was able in the five years from the onset of the Asian financial crisis in 1997 to lay off more than 25 million workers from its inefficient and heavily subsidized state-owned enterprises. Needless to say that the ‘fruits of that stern therapy are now evident in the competitive shock that is hitting Europe and America’.39
Anther factor which makes the labour cheap and China more competitive is the fact that ‘China today is a great deal less socialist than any country in Europe; the 120 million or so migrant workers, for instance, receive no welfare at all.’ When Chinese workers rioted, protested, petitioned or dissented they were answered with well-honed authoritarian tactics. In less than a decade, state-financed social welfare have ceased for the corporate sector. The welfare benefits – housing, schooling, health-care and pension obligations – which 300,000 state companies used to provide their employees have been eliminated, reduced or privatized. This is, however, not the case in most of the European countries. Democracy, unlike authoritarian rule in China, comes in the way of drastic steps mentioned above. Socialist welfare has been transformed from boon to burden when even slight increase in work-load (as for example, referendum on increasing one hour work of the college teachers;40 is resisted.
As mentioned above, the Chinese workers are less costly (costing a fraction of that in Germany, France and Italy; roughly from one sixth to a quarter that in Eastern Europe’s EU members), even manufacturing units are shifting to China. An Italian company, Seves SpA, manufacturing heavy glass insulators in its two factories, one in Italy and other in St. Yorre in France, had to decide to close one, as its management was convinced that manufacturing in Europe was not sustainable due to competition from China. As the workers of the factory in France were 57 per cent more expensive than those in Italy and they worked 19 per cent fewer hours, the management decided to close the factory in France. The management built a new plant near Shanghai in China; the starting salary for a production line worker there was 2,600 euros annually, as compared to 17,000 euros in France. The company’s offer, to rehire the French workers to make the trip to Shanghai, was refused by one and the all.41 It only exemplar of what happened across the board. Such cases are too numerous to mention and are increasing everyday. Schiess, located in the East German town of Aschersleben, a more than 140-year-old maker of the heavy-duty lathes and boring machines, typifying ‘Mittelstand’ machine tool makers, are the backbone of the German economy. When Shenyang Machine Tool bought Schiess in early 2005, it decided to shift many of its jobs to China, due to the simple reason that the wages, even in East Germany, were far higher than that in China. Incidentally, it may be mentioned that a skilled worker in China gets only $400 a month or less, whereas a worker of similar ability in Aschersleben gets $2000 to $2,600. The Swiss engineering giant, ABB, planned to hire 5,000 new employees in China by 2008, of which more than 50 per cent were to be engineers. This was to be in addition to 7,000 already employed and working in different divisions of the company in 30 large cities of China. The company, it needs mention, did not have any plan to hire any employee in Europe. IBM, another company planned to lay off 13,000 workforce in Europe.42
Communist China: its brave and the timid face
There is always a system in China showing its brave and timid face internally or externally. Internally, the Communist leadership is highly timid; at a time it shows nervous over-reaction even when people try to mourn the death of their leaders. The examples are:
(i) The Tiananmen massacre of pro-democracy students in 1989,
(ii) The leadership, being unnerved even on seeing the meditating Falun Gongs, a group of persons performing breathing exercises/pranayamas.43
(iii) Curbing/limiting the public mourning of the dead leaders. Not allowing the announcement of even popular dead leaders/Zhao44
(iv) Mao, on one hand expressed bravado on the possibility of
nuclear war; on the other hand, he used to occasionally hide
himself in safe nuclear bombardment-proof buildings/hide-outs.
(v) The country’s handling of its minority affairs is always subjected
to timidity and nervous over-reaction leading to suppression of
even peaceful demonstrations.
China’s attitude towards US, Japan and India
Externally, China does not show the same face to strong America, and to the countries it considers relatively weak, such as India, Japan and Vietnam. It dared to teach lessons to Vietnam, and unprepared India; attacked and captured Tibet; allowed state-sponsored demonstrations against Japan, but learnt to keep the head down and smile while facing the US. Lee Kwan Yew, former prime minister of Singapore, once said:
“I believe the Chinese leadership have learnt: If you compete with America in armaments, you will lose. You will bankrupt yourself. So avoid it, keep your head down, and smile, for 40 or 50 years.45
China knows fully well that arms race shall destabilize that country as has happened to the USSR. China also knows that the economic downturn in the US shall be costly for them.46 Mao created first and second Taiwan Strait crisis; heavy shelling of Quemoy Island continued for many many years, but he never dared to attack Taiwan due to backing of strong America.47
Jiang Zemin, unlike Mao and Deng Xiao-ping, did not have so much confidence as a leader. As a result, he promoted nationalism to promote his standing. Patriotic education campaign was also initiated. But, as Susan L. Shirk observes: “the patriotic education campaign targeted Japan instead of the United States because the risks of conflict with the United States were just too high. The Chinese leaders learnt the balancing act between its harsh media and its flexible diplomacy.48
President Hu Jintao and his premier Wen Jiabao, after occupying their office in 2002, proclaimed “peaceful rise” as their policy statement. This, however, did not ease the situation for India.49 China continued to back up North-East militants and Maoists.50 The country is spreading its reach around India. While Nepal’s army chief Chhatraman Singh Gurung was being feted with honorary rank of General in the Indian Army during third week of December 2009, his deputy was quietly signing a deal with the visiting Chinese military delegation in Kathmandu. While India was engaging itself in Nepal in the sphere of an aid for ‘non-lethal’ military equipment; it was shy of courting military junta of Myanmar because of its political support to the democracy movement leader Aung San Suu Kyi and the fear of international opprobrium, China was everywhere in Myanmar, investing in oil fields, ports, highways and industries.. By the time, India understood the need of help from Myanmar and its improving relation, even supplying field guns and maritime surveillance aircrafts to Myanmar, it was already late. The loss of goodwill in Nepal, Myamnar and Sri Lanka indicates the loss –militarily and otherwise. Pakistan, which received Chinese help in nuclear and missile technology, is at a point of no return.51
Needless to say that the source of greatest threat to India is from China. That country is pushing India to a corner; waging a psychological war. Off and on the foreign policy of this country is compromised under diverse pressures, either political or due to intra-party lack of cohesion or pressure from heterogeneous political partners of coalition politics. Reports of India targeted by Chinese hackers, supply of fake products/medicines, issue of stapled visas, China’s continued colonial occupation and claim over Indian territories, its arrogance towards India, does not assure us of a better relation with China in near future. The saddest thing is that China selects wrong time for conveying its mind to us. It attacked Vietnam when Vajpeyi, the then foreign minister of India, was in China; issued stappled visas when present foreign minister was in that country.
The Great Recession and the China
Undoubtedly China has relatively doing well during the present Great Recession. Its economy is expected to grow this year (2010) at nine percent; its economy, measured in US dollars, may soon surpass that of Japan. The strength of the economy comes due to the expanding market of the cheap Chinese products. However, this may not continue if American pocket shrinks, and the domestic market of China does not grow, as it has happened uptil now. Moreover, China is growing and the working hands are going to be fewer. Another fact that China was just the least bad loser in the recession, should also not be ignored.52
References
1. Jung Chang & Jon Halliday, Mao: The Unknown Story, pp. 15-17; referred
hereafter as ‘Chang & Halliday’.
2. Ibid, pp.160-62, 166-68.
3. Ibid, pp. 464-68
4. Ibid, 234-35; pp. 464-65.
5. Ibid, pp. 233,235
6. Ibid, pp. 464-65
7. Kumar, B.B., Dialogue, 11.1, Editorial..
8. Chang & Halliday, op. cit., pp.525-27.
9. Kynge, James, China shakes the World: The Rise of a Hungry Nation, p. 102.
10. Chang & Halliday, op. cit., pp. 527-28.
11. Ibid, pp.528-29.
12. Ibid, p. 525.
13. Ibid, pp. 364-65.
14. Ibid 164-65.
15. Ibid, p. 365.
16. Ibid, pp. 164-65.
17. Ibid, 579.
18. Philip Pan, Out of Mao’s Shadow; The Struggle for the Soul of a New China;
pp. 248-51.
19. Chang & Halliday, op. cit., p. 514).
20. Ibid, p. 514.
21. Ibid, p. 534.
22. Ibid, p.683.
23. Ibid: p. 249.
24. Ibid: p. 319.
25. Ibid: p. 751-52.
26. Philip Pan, op. cit., pp. 123.
27. Shirk, Susan L., China: Fragile Superpower, quoted, p.19
28. China Promoting Growth with Equity, World Bank, 15 October 2003, ii.
29. New York Times, May 3, 2006
30. Barry Naughton, The Chinese Economy: Growth and Transition, Cambridge,
Mass.; MIT Press, 2006; p. 127.
31. Hindustan Times, April 10, 2010.
32. Shirk: op. cit., p. 18.
33. Kygne, James, p. 154.
34. Ibid, pp. 110-11.
35. Ibid, pp.104-05.
36. Philip Pan, op. cit., pp. 116-17.
37. James Kynge, op. cit., p. 123.
38. Ibid, p. 89.
39. Ibid, p. 94-95.
40. Ibid, op. cit, pp. 89-90.
41. Ibid, p. 93.
42. Ibid, pp. 93, 95.
43. Shirk, op. cit., p. 270.
44. Philip Pan, pp.3-5.
45. Der Spiegel, August 8, 2005, service. spiegel.de/cache/international/Spiegel/
0,1518,369128,00.html.
46. Shirk, op. cit., pp. 212-22.
47. B.B. Kumar, op. cit.
48. Susan L. Shirk, op. cit., pp. 219-222.
49. Shirk, op. cit., p. 108
50. Nagaland Post, 5 January 2010.
51. Sujata Dutta, The Telegraph, Calcutta, 22 December 2009
52. Minxin Pei, Why China Won’t Rule the World, Newsweek Special Issue