How China thinks

We know a lot about the Chinese economy - but how do the Chinese think? What do they discuss? Are they all Maoist automatons, or is there a lively debate occurring which Western observors are barely aware of? Veteran think tanker Mark Leonard favours the latter view, which he puts forward at some length in his new book, What does China think?

This is also the lead story in the March 2008 issue of Prospect magazine. Leonard makes some inteersting points in his cover piece, China's new intelligentsia. He documents the shift away from Deng's 'growth at any price' approach, as 'new left' views gain ground. Here are some excerpts from the article:

I had imagined that China's intellectual life consisted of a few unbending ideologues in the back rooms of the Communist party or the country's top universities. Instead, I stumbled on a hidden world of intellectuals, think-tankers and activists, all engaged in intense debate about the future of their country. I soon realised that it would take more than a few visits to Beijing and Shanghai to grasp the scale and ambition of China's internal debates. Even on that first trip my mind was made up—I wanted to devote the next few years of my life to understanding the living history that was unfolding before me.

Over a three-year period, I have spoken with dozens of Chinese thinkers, watching their views develop in line with the breathtaking changes in their country. Some were party members; others were outside the party and suffering from a more awkward relationship with the authorities. Yet to some degree, they are all insiders. They have chosen to live and work in mainland China, and thus to cope with the often capricious demands of the one-party state.

We are used to China's growing influence on the world economy—but could it also reshape our ideas about politics and power? This story of China's intellectual awakening is less well documented. We closely follow the twists and turns in America's intellectual life, but how many of us can name a contemporary Chinese writer or thinker? Inside China—in party forums, but also in universities, in semi-independent think tanks, in journals and on the internet—debate rages about the direction of the country: "new left" economists argue with the "new right" about inequality; political theorists argue about the relative importance of elections and the rule of law; and in the foreign policy realm, China's neocons argue with liberal internationalists about grand strategy. Chinese thinkers are trying to reconcile competing goals, exploring how they can enjoy the benefits of global markets while protecting China from the creative destruction they could unleash in its political and economic system. Some others are trying to challenge the flat world of US globalisation with a "walled world" Chinese version.

Paradoxically, the power of the Chinese intellectual is amplified by China's repressive political system, where there are no opposition parties, no independent trade unions, no public disagreements between politicians and a media that exists to underpin social control rather than promote political accountability. Intellectual debate in this world can become a surrogate for politics—if only because it is more personal, aggressive and emotive than anything that formal politics can muster. While it is true there is no free discussion about ending the Communist party's rule, independence for Tibet or the events of Tiananmen Square, there is a relatively open debate in leading newspapers and academic journals about China's economic model, how to clean up corruption or deal with foreign policy issues like Japan or North Korea.

Although the internet is heavily policed, debate is freer here than in the printed word (although one of the most free-thinking bloggers, Hu Jia, was recently arrested). And behind closed doors, academics and thinkers will often talk freely about even the most sensitive topics, such as political reform.

The Chinese like to argue about whether it is the intellectuals that influence decision-makers, or whether groups of decision-makers use pet intellectuals as informal mouthpieces to advance their own views. Either way, these debates have become part of the political process, and are used to put ideas in play and expand the options available to Chinese decision-makers. Intellectuals are, for example, regularly asked to brief the politburo in "study sessions"; they prepare reports that feed into the party's five-year plans; and they advise on the government's white papers.

So is the Chinese intelligentsia becoming increasingly open and western? Many of the concepts it argues over—including, of course, communism itself—are western imports. And a more independent-minded, western style of discourse may be emerging as a result of the 1m students who have studied outside China—many in the west—since 1978; fewer than half have returned, but that number is rising.

However, one should not forget that the formation of an "intellectual" in China remains very different from in the west. Education is still focused on practical contributions to national life, and despite a big expansion of higher education (around 20 per cent of 18-30 year olds now enrol at university), teaching methods rely heavily on rote learning. Moreover, all of these people will be closely monitored for political dissent, with "political education" classes still compulsory...

And there's plenty more in his piece. Fascinating.

Comments

[spencer]

Thanks for this interesting article.

[Angry African]

My problem is with the Olympics and China. The Olympic Committee should be consistent with how they implement and execute their decisions on who gets the Olympics. If China is okay – should Zimbabwe get it next? It will be consistent with what they call “the Olympic” values. Or maybe we should have a closer look at their values – if we can find it. More on this in my blog at

[Mita]

Do we really know how we Americans think? So how can we know how China thinks? Our thinking has become so discursive, confused, scattered, superficial and polarized that may be it is time to sit quiet and not talk so much. Just a thought!

[Louis Cheung]

Thanks very much for the interesting article. I live in Hong Kong, and probably an "outsider" of China in a certain sense. It is hard to know what the policy makers in China think. But then, I don't really know what the policy makers in Hong Kong think about too.

[Octavian]

What you'll really have to look for, in my opinion, is how the Olympics go in 2008. China has been waiting for this moment to show their "modernity" to the world. Its success or failure will provide clues to the future of the mainland and CCCP rule.

[David Heigham]

Mark Leonard's reporting of Communist Chima's intellectual life sounds awfully like the most productive periods in the intellectual life of Imperial China. In which case we can expect much of the currently important argument to be in disguised, allusive form. Even if we learn to read Chinese fluently, we will need to also pick up a good deal of cultural background to understand what is going on.

[Gabriel]

Post! Post! Post!

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China's award to host the Olympic games was a political test set by the west to see if China would become more democratic and if China did not the countries leaders would be humiliated in front of the whole world ending their rapid growth.
There is no way China can carry on the course it is heading unless they (the people) are allowed proper freedom and the west knows that China's wealth depends upon it's foreign trade which will be hit massively if by the summer they are not democratic and visibly so.
This is why I think handing China the Olympics is a good idea as they either change for the better or be utterly exposed and ruined.

[Professor Bill Rao (Sydney)]

I am new to these pages but found that New Economist is an excellent forum. I didn’t read any books by Mark, but will do so soon. He seems to be a promising essay writer.

There is a big difference between the thinking foundations (?) of the mainstream European thinkers and in the rest of the world. This difference is not white and black. There are many gray categories depending on how close some are to the aforesaid “Mainstream European Thinking Foundations (MSETF)”. There is nothing European about this concept—it is universal. By that I mean the non-Europeans can think excellently provided they digest the essence of MSETF.

What is this MSETF? It is simply their (European) theory of knowledge (epistemology) based on reasoning and thinking about the abstracts to make societies and individuals to progress by solving their problems (which are often abstract) rationally without invoking the supernatural. The great philosopher Popper often said that all life is solving problems.

It is this type of theory of knowledge that doesn’t exist in the Orient, including Japan, and also in many parts of the rest of the world. That is, there is no theory of knowledge in these societies comparable to MSETF. While the European philosophers have addressed and thinking about “the relationship between man and the state” since two thousand years, many in the Orient still think about “the relationship between man and GOD” .even now. I am reminded of the frequent trips by several university professors, scientists and politicians etc (in India) to a popular GURU (see GURU BUSTERS of Channel 4 (?) documentary) to seek salvation and solutions to their problems. Also in India (and the Orient) there are many who believe in astrology (and luck) to solve their problems.

This doesn’t mean there are no thinking people (and philosophers) in these countries. We come across many Indian, Japanese and Chinese etc doctors, engineers, scientists and car mechanics who are top class. They can solve problems which are physically tangible. But I have doubts on their ability to grapple with the abstract and speculative issues/problems.

Again, it doesn’t mean that they cannot learn MSETF quickly. They can. However, they are (by and large) not aware of what is there (useful) to learn from the Western and the mainstream European way of thinking to solve problems. I am reminded of a great Indian philosopher (he was at Oxford) who became a great defense advocate of the Indian philosophy instead of exploring what we can learn (that is useful) from the European philosophers, especially from their theory of knowledge. I said once (in one of my essays) that we (Indians) only learnt (from the West) how to eat Idlieies, Dosa and Samosas with a fork and spoon instead of their way of thinking and problem solving. Once again I am aware of an Indian writer who used to wear a tie and a tweed jacket in Calcutta and roam the streets in the midday humid weather!

Can we (Orientals) think? Yes, we can. But it needs a rational and logical framework. Not the literary style of romantic philosophical approach.

Western thinkers, who praise everything in the Orient, are also oblivious to this missing foundation. Academics in many Western universities think that the problem with the students from the Orient is that they cannot speak and write well in English.

I suspect that Mark might have also missed to notice the missing link MSETF.

BR

[Hank Jestor]

Professor,
I think Joseph Campbell's writing on the Occidental and Oriental belief systems drive the underlying differences. I feel the issue can be better categorized as problem solving approaches that underly philosophical beliefs. The western occidental approach is a change the world to fit to my way versus a more passive patient approach associated with the oriental beliefs.

[Economics student: YU Tuotuo]

Professor Bill Rao (Sydney) wrote:

"I am reminded of a great Indian philosopher (he was at Oxford) who became a great defense advocate of the Indian philosophy instead of exploring what we can learn (that is useful) from the European philosophers, especially from their theory of knowledge."

Did European scientists try to learn from Indian philosophy? If this is not true, I'd like to say that your conclusion is totally based on double standards and cultural arrogance. I suggest you to read "Race and History" by Claude Lévy-Strausse in order to understand and to appreciate each civilization in the context of their own history. The so-called modern society was invented just several centuries and ago and it's still too early to consider MSETF as the universal axiom. Moreover, as an agnostic, I think your exclusion of supernatural elements from your philosophy system a little too premature and arbitrary.

In my mind, the strength of orientals' thoughts lies on their differences from those of their western counterparts, not on the similarities. It's perhaps time for westerners to open up.

[Arthur Eckart]

YU, I tend to agree with professor Rao. Western Civilization learned more useful information from European philosophies, including the Greeks and Romans, than from Asian philosophies, including the Chinese and Indians. In economics, the most successful Asian economies adopted Western methods. However, for example, China still arrogantly believes it's exempt from universal laws, which Western civilizations revealed. Consequently, it seems, China is working for free:

To spur export growth, China received smaller gains of trade (which implies the U.S. received larger gains of trade), and to maintain exports (e.g. through a weaker dollar and diminishing U.S. marginal utility), China received increasingly smaller gains of trade.

China had to sell its goods more cheaply than its Third World competitors to spur output and employment growth, and gain global market share. Also, it had to invest its dollars in the U.S. to maintain output and employment. Consequently, China paid high prices for U.S. Treasury bonds, received low returns, which were negative returns after inflation, and had to exchange more dollars for fewer Yuans from those returns.

Most of the goods offshored to China by U.S. multinationals were heavy goods with declining prices, which required more energy (that were offset by wages) and more volume (to offset falling value). However, China didn't take into account its enormous social costs, which is why it had a profit boom and consumers were able to buy more.

Chinese social costs is a one time "expenditure," which can no longer be used to outcompete other Third World countries. China will need to use some of its gains of trade to pay or "clean" its social costs. So, it seems, China has been working for free, or slightly above or below true costs.

[Gary]

Great article. For readers' possible interest, here is a link to a newly-released research bulletin which examines China's economic outlook:

http://www.globalsecuritieswatch.org/PRC_Sovereign_Risk_Review.pdf

[kraloyun]

China had to sell its goods more cheaply than its Third World competitors to spur output and employment growth, and gain global market share. Also, it had to invest its dollars in the U.S. to maintain output and employment. Consequently, China paid high prices for U.S. Treasury bonds, received low returns, which were negative returns after inflation, and had to exchange more dollars for fewer Yuans from those returns.

[gebur]

Wertpapieren kaufen
von Raivo Pommer-Eesti-raimo1@hot.ee raimo.pommer@wippies.fi

Investoren tun daher gut daran, auch das Kleingedruckte in den Preislisten zu studieren, bevor sie ein Depot eröffnen. Eine Faustregel beim Wertpapierkauf ist unumstritten: «Wenn man viel handelt, ist es in der Regel günstiger, Wertpapiere im Internet zu kaufen», sagt Roland Aulitzky von der Stiftung Warentest in Berlin. Eine aktuelle Untersuchung für die Zeitschrift «Finanztest» ergab zum Teil deutliche Unterschiede zwischen den Kosten bei Filial- und Online-Banken.

ORDER- ODER PROVISIONSGEBÜHR: So lassen sich zum Beispiel Aktien zum Kurs von 50 000 Euro über das Internet schon für eine Provisionsgebühr von 9,90 Euro ordern, ergab die Untersuchung. Bei einer vergleichsweise teuren Filialbank zahlen Anleger für die gleiche Aktienorder am Schalter 500 Euro - also rund das 50-fache.

Besonders teuer wird die Wertpapier-Order, wenn hohe Werte ins Spiel kommen. Denn bei vielen Filialbanken ist die Gebühr abhängig vom Wert der gekauften Aktien. Online-Banken dagegen bieten oft eine einheitliche Gebühr unabhängig vom Kurswert. Allerdings hätten sie kein Filialnetz und auch nicht immer alle Wertpapiere im Angebot, wie Niels Nauhauser von der Verbraucherzentrale Baden-Württemberg in Stuttgart sagt. «Das gilt zum Beispiel für direkt an der Börse gehandelte Exchange Traded Funds.» Die «ETFs» zeichnen sich durch niedrige laufende Kosten aus, deshalb empfehlen Verbraucherschützer sie immer wieder.

DEPOTKOSTEN: Für die Order benötigen Anleger vorab ein Depot. Vor allem Online-Broker bieten sie inzwischen teilweise kostenlos an. «Allerdings sollte man darauf achten, dass das nicht an Bedingungen geknüpft ist», sagt Aulitzky. Neben Verkaufsprovision und Depotkosten stehen im Kleingedruckten vieler Banken noch weitere Gebühren. So lassen sich einige Anbieter den Service bezahlen, dass der Anleger eine Order wieder streichen möchte. Andere halten die Hand auf, wenn der Investor ein Limit setzt. Diese Gebühren sind nach Angaben von Hartmut Strube von der Verbraucherzentrale Nordrhein-Westfalen in Düsseldorf auch zulässig: «Es gilt die Faustregel, dass die Gebühren immer dann rechtmäßig sind, wenn es sich um eine Anforderung des Kunden handelt.»

FONDSKAUF: Beim Kauf von Fondsanteilen kommen zwei Gebühren auf den Anleger zu. Der Ausgabeaufschlag wird von der Fondsgesellschaft erhoben. Üblich sind 5,0 Prozent. Freie Fondsvermittler und einige Banken bieten Rabatte von bis zu 100 Prozent. Noch wichtiger beim Fondskauf ist laut Nauhauser allerdings die Management-Gebühr. Sie wird jährlich erhoben und versteckt sich im Kurswert. Und sie macht über die Jahre eine viel höhere Summe aus als der Ausgabeaufschlag, wie Nauhauser erklärt: «Man sollte sich daher vor allem an der Management-Gebühr orientieren und erst im zweiten Schritt am Ausgabeaufschlag.»

[lohns teuer]

Kriselohnsteuer
von Raivo Pommer-raimo1@hot.ee raimo.pommer@wippies.fi

Die monatliche Lohnsteuer lässt sich durch die Nutzung von Freibeträgen verringern. Darauf weist die Bundessteuerberaterkammer in Berlin hin. Freibeträge gibt es für Werbungskosten, Sonderausgaben und außergewöhnliche Belastungen.
GA-Leserreise 2009 nach Dresden

Wer sie eintragen lässt, könne verhindern, dass er im Jahresverlauf mehr Steuern bezahlt, als er eigentlich müsste - und dieses Geld erst nach der Steuererklärung zurückbekommt.

Ein Freibetrag kann den Angaben zufolge über ein Formular beim Finanzamt beantragt werden. Darin geben Arbeitnehmer die erwartete Höhe ihrer Werbungskosten an. Diese müssen nach Ablauf eines Jahres bei der Steuererklärung belegt werden. Wenn sich die Verhältnisse im folgenden Jahr nicht ändern, genüge für die erneute Eintragung des Freibetrags ein vereinfachter Antrag mit Verweis auf das Vorjahr.

Damit Werbungskosten geltend gemacht werden können, müssen sie laut der Kammer allerdings die Grenze von 1521 Euro pro Jahr übersteigen. Die Summe setzt sich zusammen aus 920 Euro Arbeitnehmerpauschbetrag und einer Antragsgrenze von 600 Euro. Eine gesetzliche Obergrenze für die Freibeträge gebe es dagegen nicht. Für das Jahr 2009 lassen sich auch die Kosten für die Fahrt zum Arbeitsplatz wieder ab dem ersten Kilometer als Werbungskosten anrechnen

[nicht]

Österreich Erste Bank

von Raivo Pommer-raimo1@hot.ee

In der Nacht zum Freitag ist die börsenotierte Erste Group mit der Republik Österreich zur Staatshilfe handelseins geworden. Demnach wird die Bank im April insgesamt 2,7 Mrd. Euro Kernkapital aufnehmen. Bis zu 1,89 Mrd. Euro werden davon vom Staat kommen, voraussichtlich über Partizipationskapital (PS), für das 8 Prozent Zinsen im Jahr bezahlt werden. 30 Prozent der Gesamtsumme will die Erste Group privat aufbringen, entweder über PS-Kapital oder über eine Hybridanleihe. Dividendenbeschränkungen gibt es nicht.

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