Impressions of China and Ex-USSR in 1997
I just got back from three months in China and as much in the ex-soviet countries and am still full of images and impressions. It will take me several weeks to sort them out and to integrate the result into my personal vision of the universe. This readjustment to my earlier perceptions is not over, but I feel an urge to write down my impressions now when are still vivid. Originally this composition was meant to organize and record the images I had received with the ideas they triggered so they would not be lost. However, I got caught up in the game, and I started questioning all those I met so as to get a better understanding of the events of the last two decades. In the end, I decided to post this text on my web site and to ask those who will read it to give me some comments on the points where they feel I have erred (E-mail me at: ). This will prolong the pleasures this journey has given me and will make me meet people that I hope have a greater familiarity with the regions I visited. It will allow me to rectify, if need be any erroneous facts or perceptions I might have recorded.
The believers and the skeptics
To Occidentals used to democracy, free enterprise and rule of law, China and the ex Soviet Empire provoke a real cultural shock. The two giants have engaged in an evolutionary process that takes them away from their recent past. The Marxist-Leninist ideology is truly dead in China and the USSR but the similarity goes no further. Since 1990, China, which has hardly relinquished its political control, has more than doubled its Gross National Product while the ex Soviet Empire which has formally adopted capitalism and democracy has seen its GNP reduced by more than half.
Qualified experts have probably studied this paradox and published scholarly reports on the subject, but as I do not have any of these at hand, I have to develop some answer to satisfy my curiosity now that it is aroused.
In my opinion, the diametrically opposed results of the transformation of these two communist giants may be explained, for the most part, by the great haste with which the Soviet Union threw itself into change and by China’s cautious approach to the modifications going on in that country. In addition, three factors worsen the demise of the USSR; an alarming degree of corruption at every state level, a strong centralization of economic decisions in Moscow, and a high degree of production specialization in the various regions.
To the question: " Why have they both adopted such different rhythms of change?" I would suggest that history has forged the Russian soul into a believing and idealistic mold, while it has given the Chinese a pragmatic and skeptical mind. If the Russians had been less certain that communism’s superior intrinsic value would guarantee their eventual supremacy, they might have been less audacious in promoting extreme centralization and specialization and more vigilant concerning corruption.
Although I have traveled across China before visiting the ex soviet countries, I will first deal with the dreadful situation of the last-mentioned to close on a less pessimistic note with China.
The Russians, believers and idealists
I retain from my trip that the Chinese, who are superstitious and skeptical, are improving their living conditions while the Russians, believers and idealists, are regressing towards underdevelopment.
My impression is that the fact of being believers and idealistic has something to do with the situation in which the Russians placed themselves. To be a believer influences the psychology and behaviour of one in proportion to the extent he has commanded his reason to give precedence to his faith. What is believed in is irrelevant; the struggle between reason and faith is the same weather it concerns Islam in today’s Iran, sixteenth century Catholicism in Spain or the communist faith under Stalin.
Believing in absolute truths has been an essential element of Russian tradition since Kiev’s prince Volodymyr imposed the Orthodox faith on his people in 988. The Orthodox Church, rapidly became a state church and an integral part of Russia’s culture. It loyally fulfilled its role as support to power by maintaining the people docile and subservient to the will of autocrat Czars. For the ordinary Russian people, the forced adoption of the communist faith, which offered hope for equality, replacing Orthodox faith, which sustained the oppression of the rich and powerful, was not as much of a rupture with their tradition of believing in a collective truth with which they identified. They did not have the choice of not believing in the new dogma, no more than they did to reject or Metropolitan Nihon’s reforms in 1650. Of course, those who did not display their new soviet faith eagerly enough were persecuted just as the "old believers" had been when they continued to cross themselves with two fingers instead of three as Nihon decreed. Stalin’s terrible purges did not go against tradition of persecuting heretics established by the Orthodox Church when it held power.
This deep-seated tradition of believing in absolute truths without ever questioning them has marked the Russian mind with a Manichean vision of the world: we, the righteous, are the guardians of the truth while the others are wrong. When Ivan The Terrible put an end to three centuries of subservience to Genghis Khan’s heirs after taking Kazan in 1550, he did it under the ancient Byzantine emblem of the two headed eagle to show that the Czars (Caesar), where the successors of Saint-Peter through Emperor Constantine and that Russia’s destiny was to be a third Rome responsible of preserving the Orthodox truths from pagan and heretic mistakes. The communists benefited from this tendency of the Russian people to believe they hold the truth, to convince them that the moral righteousness of communism justified any excess committed to promote it and that it would ensure its eventual hegemony over the world. Who could forget the image of Mr. Krushchov hammering the podium with his shoe in front of the United Nations in 1961 to emphasize his prediction that communism would bury the Western World by its economic superiority!
Russians believed it, and they did not see the collapse coming. They did not see that the growth of the privileges granted to the "nomenclatura" was moving them away from their ideal of a classless society. They believed so much they were on the right track that they did not want to believe that the development of organized crime could be a menace to their ideal. The Mafia did not suddenly appear. In 1971, I had the opportunity to meet a group of Russian youths in the bar of Moscow’s Metropol hotel. I went with them to an all night party in a girl's apartment who, in the early hours of the morning, bragged about being part of an illegal network importing and retailing western jeans which were highly valued by the children of the nomenclatura at that time. I did not believe her, because I though it was impossible to set up such an organization in a totalitarian regime where everything was tightly controlled. At the time, I thought she was telling stories to get attention or because she was an agitator trying to compromise Westerners. So I stayed on guard and let her talk. She told me incredible things on the underworld such as corrupt civil servants selling forged documents required by Jews that wanted to immigrate to Israel. Today, I think that back in1971, I had met an embryo of what has become organized crime in Russia.
When Yuri Andropov came to power in 1982, he ordered the KGB, of which he was former director, to carry out a series of investigations that eventually showed that the privileges of the nomenclatura had evolved into generalized corruption under his predecessor Brejnev. The KGB reports also indicated that a number of party officials were compromised with various groups of the soviet Mafia that had considerably grown during that period. He chose not to make the reports public, perhaps to protect the guilty or to avoid undermining the communist faith.
Russians wanted to believe at all cost that the communist ideal and Stakhanovist propaganda would be enough to motivate the Soviet worker to achieve greater productivity levels than the norms of capitalist countries. It was hard to believe otherwise, all the media spoke highly of the soviet worker’s superiority. If they had been less believers, the Russians could have seen the negative effects of total control on the people’s moral fibre. They would have perceived the disinterest of workers for a job where effort was paid as much as laziness and where a job well done does not gain more credit than one botched up.
For instance, Bishkek’s downtown white marble buildings are beautiful seen from afar, but close-up, they reveal the sad reality that is common to many sectors in USSR. Coarse saw marks are visible on more than half of the marble plates on which the polishing had been shamefully botched up. One could easily imagine the dialogue of the deaf between the furious project manager and the marble supplier who sends him to hell knowing full well that no one will force him to touch up the poorly polished plates. If the Russians had had less faith in the perfection of the new man they thought they were creating, they could have noticed that the loss of pride in good craftsmanship leads to the loss of self-respect and to a moral decline of which alcoholism is only one of the symptoms.
It is only with the arrival of Gorbachov that it were revealed extensive inefficiency of the empire's productive apparatus, the degree of workers alcoholism, and the importance of high level corruption. For example, embezzlement by the Uzbek Mafia in the cotton scandal was estimated to be over ten billion dollars. Thousands of executives were involved of which Brejnev’s son in law who cashed $ 700 000.00.
The corrective measures, Glasnost and Perestroika, proposed by Gorbatchov in 1985 came too late for the damage was done These measures should have been applied at least twenty years earlier before the cancer of corruption had become generalized. Lacking of transparency the regime lost its credibility. Not punishing severely and publicly the increasing corruption during two decades was equivalent to an approval. It was too late - the fox was set to mind the goose - the Mafia was firmly installed at all government levels including Kremlin when Gorbatchov wanted to clean it out. This is what lead to the coup d’état that could have succeeded had Yeltsine not intervened.
As wherever corruption is well established, a succession of decisions made more in the interest of officials rather than the country's were disastrous for the economy. The Soviet Empire was pushed into radical reforms which, imposed too quickly, worsened the damage instead of being a cure. If they had been less believers, the Soviets could have seen the chasm ahead in time to avoid driving over the edge. I also suspect that the western financial institutions and consultants, who strongly supported the option of radical reform, knew that going to fast could provoke the collapse of the soviet economy. Was it that they saw in their intervention a way to put an end to the Soviet threat? With hindsight, is easy to understand now how these hurried and incomplete transformations turned into a disaster for today’s ex soviet countries.
The fundamental rights of speech, property, and free enterprise were granted overnight without doing away with the administrations that closely controlled everything in that went on in the Soviet Union. The images and statues of Stalin disappeared, but the apparatus for implementing the total control he created are still in place everywhere, in spite of the so-called liberalization of the regime. Today, the ex soviet citizen can say anything he thinks with impunity (less in some republics such as Turkmenistan). He can also change jobs, move, buy a house, and even open a business but only after having asked permission to the various administrations which used to forbid personal initiative in these matters. Permissions are no longer refused, but pursuing them requires lengthy and arduous procedures to obtain reams of formal documents, and to get interior passports stamped. Simplifying the rules would have taken time, and would have resulted in laying-off over half of the bureaucrats. This was not done, and a heavy-handed bureaucracy stifles all attempts of the private initiative, which is desperately needed for economic development.
Public administrations became formidable obstacles to the creation of new business because they have not taken the time to reduce and adapt bureaucratic control so as to allow the exercise of the new freedoms. Business people were forced to either bribe the bureaucrats in order to be functional or to operate illegally in a parallel economy out of reach of any state control. In my opinion, the intense annoyance of being forced to suffer the rudeness of the bureaucrats has been a major factor in the development of the parallel economy. Some estimate that from half to two thirds of transactions are carried out in this gray zone economy without going through banks and obviously without paying taxes.
By the end of the 80’s, almost all the domestic markets were opened up to foreign products. This was done too quickly, without giving the local producers the time to adjust to the competition. The difficult situation generated by this shock treatment was worsened by the sudden breaking up of the Soviet Empire when several countries became independent in 1991. The dismemberment of the USSR was a catastrophe for many industries which, because of the great specialization that had been practiced until then, found themselves cut-off without notice from their sources of supply or from their markets, and in some cases, from both. Several companies were squeezed between some of the old prices artificially fixed by the government which were still current, and the harsh reality of global market prices. It is not surprising that these upheavals caused the shutting down of innumerable plants. Gross national product went into free fall and is still dropping except in the Baltic States who have been under Soviet domination for a shorter period. In some countries (Tajikistan, Georgia, Armenia) the national production fell to less than 20% of what it was in 1990 because of ethnic and religious armed conflicts.
The employer in most ex soviet countries still generally provides lodgings. When workers are laid-off, they keep their apartment and remain assigned to their plant but they receive no pay. However, they do not have the necessary mobility to seek employment elsewhere because of the bureaucratic controls on residency. It should have been easy to predict that the discharge to the streets of millions of unemployed, without adequate social assistance, would result in a sharp increase of urban criminality. The rapid reduction of the military, accompanied by insufficient compensatory measures, has had the same effect. Today, city streets are not safe after sundown in most of the ex soviet countries
The lack of adequate distribution channels and retail outlets coupled with the difficulty of creating new businesses has generated a marketing bottleneck - particularly for imported goods. The rare individuals who have dared to get involved in imports and speculation - more or less legally - have been able to impose outrageous profit margins without real competition, and have amassed phenomenal fortunes in very short time. The occidental press has presented these new Russians as examples of the success of the radical reforms advocated by the West.
Petty corruption of bureaucrats, increasing street crime, a huge parallel economy operating out of reach of the law, and more importantly large-scale corruption visible everywhere have generated an environment were illegality is accepted as a norm. Petty thievery is commonplace. Now, one must verify restaurant checks, and count returned change everywhere including in the subway, where I have been cheated of a few pennies twice in a row buying tokens. In Central Asia and Caucasus museums, I noticed two or three different tricks used by ticket attendants to misappropriate picayune entry fees. I can imagine how practicing these petty thefts every day must be devastating for self-esteem. It is probably to bolster up their ego that bureaucrats are so nasty and rude behind their small wickets
I remember hearing at a party a few years ago a Russian immigrant from Ukraine maintain, after having too much to drink, that only the weak and imbeciles respect the law, and that it is normal to take all one can and to do whatever one likes as long as you do not get caught. At the time, my friends and I had though that these excessive words were meant to provoke us, but now that I have seen where he came from, I realize that he was sincere. It is difficult, without hearing a large number of testimonies locally, to realize how badly public morals have been damaged in the last years of the regime and during the break up of the empire.
Hasty and poorly prepared privatizations were as many temptations for large-scale misappropriation that many high ranking members of the party and of the administration could not resist. Colossal fortunes were garnered overnight by ex communist leaders who now show off their capitalism with impunity in the most ostentatious manner. (Huge houses and million dollar dachas, luxury cars, bodyguards, etc.).
This environment of general illegality is fertile ground for the development of an open gangsterism, which surpasses in audacity and violence the worst episodes of the prohibition years in Chicago. Crime pays well and feeds the growth of a rich class now called "new Russians" in the ex soviet countries.
The radical reforms, engaged without having sufficiently analyzed the possible consequences, are also responsible for the galloping inflation that reduced everybody except the new Russians, to living conditions under the poverty level. The middle class has disappeared and the average Russian has stepped back into the traditional misery of the poor moujik of yesteryear.
This catastrophic situation prevails at different levels in all the ex soviet nations. There is regression towards underdevelopment. With a few exceptions such as the Baltic countries, there has been little new construction, buildings are old and crumbling, and collective infrastructures are aging and deteriorating without maintenance.
Today, these countries look like a routed army, their economic structure disorganized, their society disoriented and their population discouraged. Seven decades of strict control has destroyed people’s will. The vast majority of ex Soviets dare not undertake anything and passively endure the economic catastrophe that affects them.
This passive attitude is astonishing to the western observer. Anywhere else, there would have been series of demonstrations, strikes, and even riots. The Russian people is however familiar with the role of "the victim that suffers in silence to deserve being saved". It is a role they have learned under three centuries of Mongol domination until 1550, and since then, under a series of oppressive regimes (the Czars with the secret police and the Orthodox Church, and the Communists with their own secret polices from the Cheka to the KGB). Russians have not had the opportunity of experiencing freedom since the abolition of serfdom in 1860, little more than a century ago. Failing a tradition of free individual development, the ordinary Russian identifies with a collective myth that, depending on circumstances, toggles between the glorious image of the new man, citizen of the third Rome, and today's depressing image of a hopeless looser. Everywhere there is great bitterness. The man in the street feels he was betrayed and does not understand how it could have happen as expressed in the following statements:
" Before it was better. It is true that you had to be cautious of what you said. It is also true that you could not find all the necessities, and that you often had to wait in line for meat, butter and even for bread, but at least you could buy the products that were available. Now you can find anything you would like in stores, but you can not buy much for everything is too expensive. Before we ate better, and we could go out. Now it is misery and it gets worse every year"
"Before the nomenclatura formed a privileged class that never went without anything and that could do whatever they wanted, even travel out of the country. It was a little shocking, but it was the system. There were a few corrupt officials who asked for bribes to do their job, but the vast majority of people had principles and remained honest. Now the socialist ethic is dead and everybody is for sale… cheaper and cheaper as misery increases. Before there was a little corruption, now it is everywhere. That a woman prostitutes herself has become socially acceptable, as long as she does it with style and that she gets well paid for it"
"Nobody knows why everything changed, and why everything is so bad today. Nobody thinks about these questions. We don’t have the time, and it wouldn’t change anything. Everyone is busy surviving day by day without thinking of the future".
The acceptance of illegality, the loss of self-esteem and the lack of initiative have created such a gloomy social climate that it is difficult to imagine a reversal towards law and order and economic growth. In my opinion, the situation is much worse than is presented by the western press. Reading the local press in the countries where it is relatively free confirms me in that opinion.
I can easily imagine the glee of the staff in the military headquarters of some western countries at the decay in which has fallen the enemy that made them tremble during the cold war. Today the dismembered Soviet empire is no longer a threat. Not any more than the bankrupt and inflation devastated Germany was before the election of Adolph Hitler. It is hard to imagine where it could lead.
It contrasts greatly with the situation in China where each and everyone dreams of improving lot by creating his own business, which would be prosperous like all the others he sees around him. Optimistic and confident in a better future for their children, the Chinese invest trustingly as they follow the example of the government which is building now the infrastructures of the economic giant that China will become tomorrow.
The Chinese, skeptical and pragmatic
Yesterday’s China is impressive for the great age and refinement of its civilization but today’s China is astonishing for its dynamism and its extraordinary growth. The prediction that the twenty-first century will see China’s hegemony becomes increasingly respectable although backwardness in some areas appears beyond remedy.
The Chinese civilization is so different from all others that I wonder what that hegemony will be like. I suspect that China will find the orientation of its future in the deep values of its ancient civilization rather than in the tumultuous episode of the last fifty years of communism. Half a century of communist regime leaves a trace, but it will not erase three thousand years of the traditions that have shaped the Chinese mind and the language it uses.
The communist party apparatus still controls the country, but it is transforming itself to stay in power because the communist ideology is now dead, having burnt itself out in the excesses of the Cultural Revolution. Most Chinese now feel ashamed of the collective madness that seized everyone under the influence of the communist faith during that period. Now they have freed themselves of this faith, but they do not reject totally all the principles of the communist system. They are attracted by capitalism, but they are not disposed to adopt all aspects of this ideology for having observed some of its disastrous consequences in the ex Soviet Empire. They are not trying to develop a new theory somewhere between these contradictory orientation, because today’s frantic economic growth is a forward rush that allows them to avoid confronting the country’s structural contradictions.
At this point, the Communist Party represents some sort of outdated clergy whose mission of preserving the communist faith has been made obsolete by the failure of this ideology. The party can not justify its power through the ideology since there are no more believers. Now it has to produce results to keep the people's support. So far, it is doing it.
The existence of such a clergy (communist or other), was anyway contrary to China’s millennial traditions where power was never based on the support of a church as was the case in most, if not all other great civilizations. Confucius spared the Chinese Emperors the dependence on a state church for the justification of their power. The lay political philosophy he developed five centuries before our era postulated that a multi level pyramidal hierarchy of authority with an Emperor at the top was the best way to guarantee social harmony and prosperity. This social ethic was based on human logic without reference to a supernatural entity to confer it the status of a divine truth. The acceptance of Confucian ethics at all levels of society allowed the Emperors to build their power without basing it on religious beliefs. Had it not been for these well-accepted lay ethics, Taoism could have supplied the required religious beliefs. (Half a century before Confucius, Lao Tse invented a Chinese religion, Taoism, which gradually superimposed itself on older Animist beliefs without replacing them around the same period that Confucius ethics were being recognized. Without Confucius ethics, Taoism would probably have become a state religion.)
In China, the role of guarding the truth on which civil authority is based, assumed elsewhere by various state religions, was entrust by the Zhou dynasty (300 BC) to the mandarins. The mandarins were selected according to their knowledge of history, literature and the arts through a system of imperial exams open to everyone. There has never been a state religion in China. The Chinese dynasties have usually tolerated other religions because their power did not depend on the support of one of them.
In this lay context, truth guarded by the mandarins was the sum of all knowledge at the time. These were relative truths that could be replaced, modified or enriched as new discoveries became known. The recognized knowledge never had the status of "absolute truth" as those asserted by all state religions. In China, they never were a dogma that the people had to adhere to on pain of death, as was the case at some time of the history of almost all other great civilizations.
It is thanks to the absence of state religion guarding the "true faith" that China did not suffer the religious wars that ravaged Europe, nor the jihads that opened the way to the expansion of the Islamic Empire. The Chinese have never had to face the option "believe or die", neither have they had to sacrifice their lives to defend their faith, or to assume its expansion (except for the recent communism episode). This difference with other populations is so fundamental that it is reflected in the Chinese way of thinking.
Buddhism seems to be a flourishing religion in today’s China, but for the man in the street, it is little more than an innocuous superstition similar to the Santa Claus superstition in the West. The Chinese people are nominally Buddhist, but they also recognize the precepts of Taoism as well as those of the Confucian ideal society. These great trends of though are perceived to be useful rules of conduct rather than beliefs leading to "salvation". In fact, the average Chinese know very little about Buddhist metaphysics, they go to the temple to pray for health, fortune, and children, a bit like tourists throw coins in Rome's fountain of Trevi. They entertain a great deal of superstitions of this kind whose origins go back to Shamanism: dragons, good and bad spirits, auspicious or inauspicious days, geomancy, etc. The concept of an "absolute truth", well known in the west, is foreign to the Chinese mind that has always been skeptical and pragmatic.
The episode of communist faith will only have been a fleeting aberration, as was the pseudo-Christian faith of the Taiping revolutionaries in the last century, a temporary aberration contradicting the fundamental skepticism of the Chinese
After the failure of the communist dogma, China has quickly rediscovered its own genius. The Chinese pragmatic tradition resurfaced in Deng Xiao Ping’s saying: "It does not matter if the cat is black or white, if it is good at catching rats, it is a good cat". Implementation now by Jiang Zemin of the policy "one state, two systems" demonstrates their capacity of using two contradictory systems without believing in the underlying principles of either one. I think that tomorrow’s China will not be defined through an ideology, it will not be communist, nor capitalist, nor even socialist, it will grow on its contradictions, remaining opportunist and pragmatic.
It is important however not to forget the well established tradition of arbitrary decision making at the level of every day operations in China. It seems that the refusal to believe in any fixed principles prevented the development of the rule of law that occurred in countries were clerical power established a belief in transcendental truths and principles on which civil power based its legitimacy. (4). The absence of such beliefs led the Chinese to prefer the wisdom of the mandarins whose case per case decisions should, in their opinion, be able to take into account all the circumstantial elements of a situation better than would the cleverest legal code. This was certainly appropriate when the mandarins were honest and sincere, but human nature being what it is, this option favouring personal power lead inevitably to excesses, and when these became intolerable, to revolts that often signalled the end of a dynasty.
The system of arbitrary decisions has nevertheless endured more than twenty-five centuries and it is the one that the Chinese know best. Arbitrary decisions are an integral part of the Chinese tradition. Communist party cadres replaced the mandarins during the Communist episode but the tradition of decisions that are arbitrary rather than constrained by a legal code based on principles or by common law based on usage, was maintained until today. The transformation of today's totalitarian China into a democracy therefore seems unlikely because I don't think that the Chinese can believe in the absolute value of any political theory, especially now after the failure of the communist dogma. Furthermore, rule of law, which is a prerequisite to real democracy, is contrary to the deep-rooted tradition of arbitrary decision making in China.
I think that China will momentarily borrow from time to time some elements of the rule of law and some aspects of democracy, not by principle but rather in an opportunistic manner when it will offer enough advantages, such as improving economic relations with the rest of the world.
I predict that tomorrow's China will not be totalitarian or democratic, it will not be constrained by principles, it will tolerate its own contradictions and will first aim efficiency in the pursuit of its objectives.
China has many assets in the race for economic leadership, they are hard workers, they have initiative, and they are numerous.
Chinese tradition gives higher priority to possessions than to ideas. It is pragmatic and places a high value on hard work. The Chinese are industrious and not much inclined to dreaming. These qualities explain how they have come to occupy a strong position, out of proportion to their number, in several Asian countries where they migrated.
The Chinese have been less damaged by their communist experience than the citizens of the ex soviet countries have been. The seventy years long period of total control they were subjected to, where the only acts that were not forbidden were those that they had to do, has badly damaged the capacity of initiative of three generations of Soviet citizens. This did not happen in China because the communist episode was shorter but also because China chose, for strategic reasons, to decentralize as much as possible after the withdrawal of soviet advisors and technicians in 1966.
In 1973, I spent three weeks travelling across China with a Canadian economic mission to develop technological exchanges in the oil industry. We were greeted everywhere by "Revolutionary Committees" which were decision making centers for all geographic levels (province, district, city, subdivision, etc.) and sectors (oil industry, oil fields, pipelines, refineries, oil equipment plants, etc.) Each Comity described us their responsibilities, their results to date, and their objectives insisting on the leitmotiv: "maintain independence, and develop initiative (of our work unit). At that time, China feared a military intervention from the Soviets. Consequently, it had decided to disperse operational decision making between a multitude of centers responsible for day to day economic activities, and to centralize the political orientation of these activities at the top Party levels. The purpose of such a decentralization was to allow the maintenance of a high level economic activity in the regions that would remain free in case of foreign aggression. Everything was produced everywhere. For instance, the oil village of Daqing in Heilongjiang operated a small nuts and bolts plant, although economies of scale were in favour of concentrating such productions in large plants. The resourcefulness and initiative fortuitously developed thanks to this policy were priceless when China decided later to allow private enterprise.
In the meantime, the Soviet Empire confident of its power and destiny, continued to optimise costs by concentrating the production of most goods in a few giant industrial complexes. (Cars in Toggliati, trucks in Kharkov, tractors in Minsk, harvesters in Kherson, synthetic rubbers and tires in ------, etc.) The inter dependencies generated by this policy undoubtedly reinforced Moscow’s control over the different regions, but they turned out to be disastrous by cutting off businesses from their sources of supply and their markets after the dismemberment of the Empire.
Finally, the third major advantage, the Chinese are numerous. A billion two hundred million individuals, that means 500 million households that need refrigerators, stoves, microwave, air conditioners, televisions, sound systems, etc. That market is larger than the combined North American and European markets. All the major multinational corporations know that there is no hope for them to maintain their share of the world market if they do take a piece of this gigantic market. The Chinese Government authorizes the penetration of foreign firms against the transfer of technology and capital to Chinese partners who keep control over the local operations. In parallel to these foreign investments in the production apparatus, the Government freezes wages to ensure a high level of collective saving and investment in the infrastructures needed by tomorrow’s China.
Should China maintain this course, it could pass America and become the world's first economic power sometime in the 21st century if it manages to avoid mistakes that could slow its advance. In my opinion the most evident of these would be to neglect the legal framework, scientific research, the financial discipline of state companies and the fight against corruption.
To become first, China will have to become a member of the World Trade Organization. This would require it to adopt a legal framework compatible with international trade and corporate law. A Chinese lawyer met in Beijing explained to me that foreign businesses that invest in China take tremendous risks since corporate and commercial law are in an embryonic state at this time. Only audacious companies commit themselves because joint-venture contracts signed today are little more than the letters of intention in which parties express the general grist of their accord before entering into the step by step negotiation of a real contract. Few companies are audacious enough to invest in these conditions. To neglect the development of an adequate legal framework would be a major obstacle to the development of the economic potential of China.
In order to take first rank, China will have to self- generate a technology that is superior to that of the West. The development of China will quickly reach its upper limit unless it follows the example of the four Asian tigers that owe their growth largely to the application of their own high technology. China could do as well but it will have to give a higher priority to teaching and academic research than it does today. Presently, most teachers and researchers earn less than specialized workers do. Consequently, there is a great brain drain, not towards foreign countries since immigration is controlled, but towards other activities with better pay in the country such as commerce.
To neglect the financial discipline of state companies is not defensible on long term. The recent economic growth of China came especially from the 700 million peasants since the abolition of communes in 1978, and from the countless new businesses created by private initiative. State companies have participated in this growth, but the real profitability of most of them was negative if we discount the huge subsidies that keep them afloat. Restructuring State enterprises by the fusion of complementary units and by the elimination of irretrievable elements through bankruptcies will lead to the loss of millions of jobs but it is necessary to avoid an eventual financial crisis. The reform of their presently inefficient operating practices will also be required to achieve a responsible financial discipline.
Finally, I think that the worst threat is corruption. It is so because a society managed by arbitrary decisions is more vulnerable to corruption than a society subjected to the rule of law. It is normal in China to use the network of personal relations to obtain from officials small favours, which are the repayment of services rendered either directly or family to family. This "small corruption" is part of the culture and is probably not harmful, as long as the influence remains weak and it affects only minor decisions. This traditional corruption may however become disastrous when it grows and becomes excessive, as the country’s history has shown. The actual Government seems to be conscious of the danger judging by the number of executions for embezzlement and economic crimes. The western press mentions cases of corruption but nobody really knows the level it can reach in this country nor weather the government's apparent struggle against it is sincere or only cosmetic.
I think that the future of China will be decided in the next few years during the implementation of the recent decision to privatize over 100 000 small and medium size state businesses. The example of privatizations in the ex Soviet Empire shows us how these complex operations offer multiple possibilities for embezzlement and corruption. The stake is high because successful privatizations give the country tools for growth while fraudulent privatizations enrich a few corrupt individuals and leave behind insolvent and irretrievable wrecks of businesses that are a brake to development.
My thesis can be resumed as follows: the ex- Soviets are in deep trouble because they have tried to prove that their ideology was right at the expense of their citizens' well being while the Chinese good star is ascending because they have disregarded ideology to pursue concrete objectives since the end of the Cultural Revolution.
The Chinese will not become idealists any more than the Russians will discover the advantages of pragmatism overnight. These profound traits of their respective make-ups will continue to influence their orientation and acts. It would be vain to attempt to predict the events that could change the course of China and Russia. I therefore have not much to say on all the factors that will influence their trajectories except on that of corruption which is the scourge of the ex Soviet countries and a menace that weighs heavy on China's future.
Ill-advised would be the one who tries to bribe a Chinese policeman; today he would go straight to jail. It seems that lower and middle bureaucrats generally tend to be honest, although not beyond the influence of acquaintance networks and of the traditional small debts. Nobody really knows the real level of corruption in China. The Government publicizes the sentencing and shooting of corrupt officials that it discovers from time to time. It knows the negative effects that scourge has had on past dynasties and that it could cost China the leading role in the world economy, that could be its destiny in the 21stcentury. For China, the issue is a matter of preventing the occurrence of a known evil.
The problem is much greater in the ex Soviet countries where the issue is curing a cancer that has become generalized at all Government levels. It is not at all certain that a cure can be achieved at this advanced stage. I even have the impression that it is improbable without recourse to a dictatorship.
This attempt to understand what brought the once powerful and threatening USSR to its knees and why the same did not prevail in the other giant communist country has brought me to more fully understand the crucial importance of corruption in government. It has become obvious to me that decisions made under the influence of corruption are rarely optimal for a nation. Moreover, the corruption of a Minister of natural resources can have negative effects not only in his country but also in other places where the concerned commodity is traded. In this era of global free trade, corruption warps the rule of market forces and can lead to worldwide anti-economic decisions.
This has led me to realize that there is a need for a non-governmental international organization modelled on Amnesty International whose role would be to expose the corruption by international corporations, of politicians and government officials in any country in the world. The anti-corruption organization that I propose would concentrate on denouncing corruption everywhere like Greenpeace denounces crimes against the environment wherever they occur.
I can easily imagine that such an organization would gradually acquire such a moral influence that it would inspire legislation in the more advanced countries that would forbid and provide for adequate punishment for any form of corruption carried out by its nationals, even when committed in a foreign country. There is only a small step to imagine an international tribunal in charge of trying the crime of international corruption, similar to the international tribunal for crimes against humanity.
It would be great, and would benefit everyone but unfortunately, it is not for tomorrow… If such a tribunal existed and if had adequate means of action, its intervention in the ex Soviet countries might help extract them from the dead-end they are in. It could possibly save them from the violent upheavals towards which the twin cancers of corruption and organized crime will probably lead them. The intervention of such a tribunal could also help China’s in its pursuit of accelerated development. It is easy to see that the face of the Earth would be changed for the better if a global struggle against corruption were conducted efficiently. However, the forces of status quo might not like the change and that is why the clean up is not for tomorrow.