1.      It is something of a challenge to
think of contemporary China as a developing country. After all, this nation of
1.4 billion people has a business cycle that is literally shaping
macro-economic conditions around the world. Its growth over the past two
decades has averaged 9.5% a year, one of the most sustained and rapid economic
transformations the world has seen in the last fifty years. (OECD Economic
Survey of China, 2005.)  China’s demand for all manner of commodities is
colossal, and it has become a "price-maker" in everything from steel
to energy. China has developed a huge and increasingly sophisticated military
upon which the government is lavishing billions of dollars worth of new
equipment; its diplomatic corps is active the world round; and its coastal
cities are visibly prospering. How then is one to conceive of China as a genuinely developing country?
2.      In the first place, one must first
come to grips with the sheer enormity of China, both geographically and
demographically. Indeed, most of China is far removed from the bustling coastal
cities that have literally opened this country to the world, although vast
internal migration, commodities demand and a powerful central government still
ensure that linkages among China’s regions remain. The income gap among
Eastern, Central and Western China is wide and growing ever more so. And while
the ranks of millionaires swell in the Eastern cities, the narrative of the
great bulk of those living in the West is of the daily struggle to subsist.Â
The World Bank estimates that more than 100 million Chinese live below the
poverty line, and that 18% of the world’s impoverished people live within China’s borders. (Memorandum IBRD)  At the same time, China’s explosive development has
pulled millions of people out of poverty at an astounding pace, making it a
model for many other impoverished countries. Clearly then the new China is rife with contradictions that can befuddle those casual observers convinced that
they have somehow come to grips with it.Â
3.      Of course, part of the
intellectual problem is that China is a moving target. The pace of economic
and social change in China has been staggering, and while millions have been brought
out of poverty as a result of rapid growth, millions of others have not. This
dynamic, in itself, is highly consequential because it has fundamentally
altered the dynamics of Chinese society and challenged one of the supposed
precepts of the ruling regime’s ideology. Although wealth disparity was a
reality in China even during the worst days of the Cultural Revolution,
contemporary China is characterized by an extraordinary gap between the well
off and the impoverished. China’s Gini coefficient, which measures income
disparities on a scale between 0, or perfect equality, and 1 representing
perfect inequality, had already risen from .3 during the Maoist period to .5 in 2002. (Dreyer)Â This is a level of disparity that many would argue puts China in danger of serious social instability. This socio-economic division has fomented
ideological tensions within the party and among Chinese intellectuals.Â
4.      This inequality has an unambiguous
geographical dimension as well. Income levels and physical and social
infrastructure vary widely between rural and urban areas and between coastal
and interior regions. Workers in regions like Manchuria, the economy of which
is dominated by ageing, "rust belt" state-owned firms, have undergone
mass layoffs. Millions of Chinese rural workers and farmers have fared even
worse, and many in western China continue to live on subsistence incomes.
5.      The Chinese state is perfectly
aware of its genuine development challenge. Ching Li, a China scholar, noted in a recent study of the 22 leaders closest to President Hu Jintao that all
began their careers in rural politics and are therefore viscerally cognizant of
conditions beyond the bustling cities of China’s east coast.Â
6.      Not surprisingly, China’s leaders appear increasingly focused on developing China’s hinterland. Chinese Premier Wen
Jiabao made this the central focus of his address to the National People’s
Congress this past March. In that widely reported speech, the Premier called
for a 14.2% increase in rural spending to $42 billion, promised nine years of
free and compulsory education for every rural child and the abolition of what
is, in effect, an ancient agriculture tax – a decision that if implemented could
save farmers as much as $15 billion a year. Jiabao also pledged a seven-fold
increase in spending on rural health insurance, new outlays on rural flood
control systems, water purification, roads and other infrastructure and a 14.5%
boost to spending on the unemployed. (Browne, March 6, 2006) Mr. Jiabao also
vowed to increase grain subsidies to farmers, spend 20 billion yuan to improve
the badly degraded rural hospital network and double the government’s
contribution to individual health insurance plans. Although food security
remains a top priority, rural income support and environmental concerns are
attracting ever-greater attention. (OECD Briefing to the NATO PA, February
2006)
7.      China’s leaders have called
this initiative the “New Socialist Countryside†and promised that it will have
a rapid and profound impact on life in rural China. The government’s new
policies have already provided a degree of poverty alleviation in some regions,
but some economists worry that this essentially statist approach could also
nourish aid dependencies without providing the micro-economic context for more
sustainable, long-term economic growth. Liu Fuyuan, a government development
expert has argued that the “the only way out of this corner is not to subsidize
farmers but make sure that we have fewer of them.â€Â (McGregor, February 28,
2006)Â The new leadership is not emphasising market solutions to poverty issues
and, in fact, has embarked upon a mass campaign to reacquaint party cadres with
Marxist fundamentals. Some of its proposed policies could further distort some
rural markets, although any advances in global agriculture trade talks could
lead to greater liberalization of these markets. It is also important to
consider China’s producer support as a percentage of gross farm receipts is
only 6% as opposed to an EU level of 34% and US and Canadian levels of 20%. China’s total supports as a percentage of Gross Domestic Product (GDP) are very high relative to the
EU and the US. (OECD PSE/CSE databases 2005)
8.      Poverty is not only measured in
income terms. Social education and health care indicators are also critical.
The health system in rural China has all but collapsed due to large reductions
in central government public health outlays and the inability of local governments
to pick up the slack. China currently spends less than one fifth of the
developed country average on health and education, and in the countryside,
nearly 90% of health care is funded by the patients themselves. Health problems
have become the leading cause of personal bankruptcy in contemporary China. Although China has made huge strides in educating its young people, rural China has not made the same advances as China’s more developed regions.
9.      The new leadership’s focus on
rural China represents a sharp contrast with the previous government of Jiang
Zemin which was highly technocratic, particularly rooted in Shanghai, and
essentially dedicated to reorienting China to the world economy. Some also see
these new development initiatives being borne not only out of genuine concern
for the plight of China’s huge peasant population, but also as a play to
reassert party control over a society which is increasingly claiming its own
degree of autonomy. Chinese and Western economists worry that this rhetorical
dedication to poverty issues might slow down the roll back of a still
ubiquitous state, a move which could ultimately exacerbate rather than remedy China’s still serious poverty problems. The health care, education and farm sectors, for
example, in some respects are hampered by too much bureaucracy.
10.    President Hu Jintao has called
for a more even balance between consumption and investment, more
environmentally sustainable development models and a degree of social justice
in a society that has embraced a growth at all costs mentality. Chinese leaders
now invoke the notion of a “harmonious society†that balances growth with
social fairness and environmental protection. Wen Jibao has announced that the
government hopes to slow growth to 8% this year from the 9.9% achieved last
year, although there is little to indicate that the economy is slowing down at
all. The government is also boosting military spending by 15% to $35.1
billion, the largest increase in four years. The projected budget deficit in 2006
will be $36.7 billion. (Browne, March 6, 2006)Â All this represents a clear
shift in priorities, particularly in comparison with the views of the previous
leadership.Â
11.    This reorientation is partly
inspired by economic logic. Chinese leaders are concerned that the national
economy has grown overly dependent on export markets and lament pervasive
over-investment in some leading sectors. They feel that greater balance might
be achieved by stimulating domestic demand and moving into lower energy intensive
and higher technology sectors. Increasing the incomes of China’s 800 million rural residents would stimulate domestic demand and take some of the
burden off the export sector.
12.    The Chinese leadership also sees
rural development in security terms. This certainly features in its efforts to
squelch potential separatist movements in regions like Xinjiang in the far
West. Although endowed with still unknown quantities of coal, oil and natural
gas, this vast Muslim region bordering the republics of Central Asia is
impoverished and has harboured a separatist impulse. In response, the
government has established an ubiquitous security presence in Xinjiang. Through
the “Go West†policy it initiated five years ago, the state has encouraged the
mass migration of Han Chinese into the region through massive infrastructure
projects, easier bank credit, tax preferences and simpler land development
approvals. Although labour costs in the West are some 25% lower than in the
East, the productivity and skills of workers are lagging behind and so the jobs
being created in the region are often low skilled, labour intensive activities.
Another problem is that the region is so under-developed that there are few
obvious industrial clusters;Â getting final goods to market pose a logistical
nightmare. (Yeh, November 8, 2005.).
13.    That said, the effort has begun
to pay off. China’s far west is showing signs of genuine economic change, and
the separatist movement that so concerns central authorities seems to have
weakened significantly there. The region’s residents both Uighur and Han
Chinese have benefited from growing trade, mining, energy exploration and even
tourism, but there is a sense among some Uighurs that they are being pushed
aside on their own land.
Â
14.    Because 70% of the Chinese
population live in the countryside, conditions in rural China are very likely to have a powerful impact on the country’s broader political
stability. (Gang Lin)Â Still it is misleading to speak in general terms about
rural China. In the first place, the level of development tends to drop the
further from the coast one travels. Rural industrialization in the coastal
regions has significantly bolstered rural and farm incomes in these areas, in
part because of the rise of village enterprises and because of easy access and
good transit infrastructure to move produce to market. Real rural incomes in
2004 grew by 6.2%, while urban incomes last year rose by 9.6 % (The Economist,
March 25-31, 2006).Â
15.    The central belt of China, or
“Agricultural Rural China†including the regions of Hebei, Henan, Shaanxi,
Hubei, Hunan, Anui, Jiangxi, northern Jiansu and parts of Sichuan has grown far
more slowly. These are also the regions that, broadly speaking, have faced the
highest rural tax and administrative burdens, and where the incidents of rural
protest are most frequent. Economic take off has eluded these regions because
of poor market access, the relative dearth of investment capital, poor
infrastructure and social services and meagre natural endowments.Â
16.    Western and south-western China, including Gansu, Ningxia, Qinghai, Inner Mongolia, Tibet, Guizhou and another part of Sichuan are characterized by the Chinese scholar Xiabo Lu, as "subsistence rural China". This broad area has lagged even further behind in developmental terms. For
this reason the government has elaborated an array of unique developmental
programmes like the "Go West Strategy" designed to ease some of the
pressures. The government has lowered fiscal burdens and transfer payments to
these poorer regions while bolstering infrastructure and education spending. Â
17.    Although there are millions of
labourers effectively roaming the country in search of work, restrictions on
labour mobility persist. Bureaucratic registration requirements even for
temporary moves are cumbersome and costly to the economy as a whole.Â
Education, health care and other local services are often not extended to
migrant workers in booming urban areas. When residents of the countryside move
to urban areas, they also effectively forfeit the rights to the land they
worked without compensation. This is a genuine hindrance to labour mobility
and imposes high hidden costs to residents in rural China. The government has
sought to reduce restrictions, but further deregulation and land reform is
needed if the urban-rural welfare gap is to be narrowed. (Economic Survey
of China 2005, OECD) One problem is that the ruling elite state sees rural
land as a social safety net. Their overriding concern is that if it were
possible to do so, farmers might be tempted to sell off land whenever they
needed cash, leaving them with no means of sustenance over the longer term. The
problem with this logic is that the farming sector is so inefficient that
keeping workers on the land, actually impedes China’s productivity growth.
(OECD Briefing to the NATO PA
18.    Indeed, land ownership remains a
sensitive issue in ostensibly Marxist China, and its munificent economic
effects are not always appreciated by the country’s political elites. One
problem is that anything short of land ownership rights tends to hamper
incentives to improve land. In 2003 the government extended leasing rights to
thirty years, but the law has yet to be fully implemented and one might still
question whether this is a sufficient length of time to encourage full economic
utilization of the land—something that either longer leases or outright
ownership would tend to encourage. For over a decade China’s city dwellers have been able to sell their homes on commercial markets; yet rural
land has remained under collective ownership and generally cannot be traded.
Local power brokers, however, frequently seize collectively owned land,
reclassify it as commercial land and sell it off, often leaving the peasants
with nothing. Compensation for those who actually worked the land is
frequently diverted to local and regional bureaucracies where it is skimmed,
leaving nothing for the dispossessed farmers. Thus just as millions of workers
in state-owned firms are losing jobs due to restructuring, many farmers have
also suffered dislocation. (Friedman) Although central authorities have
acknowledged the problem, they fear change that might alter the social and
economic buffer provided by the traditional rural economy.
19.    In post-Mao China, many township and village governments have relied on local taxes and land use fees
in order to finance those basic community services once provided by the
communes and underwritten by the central government. These burdensome fiscal
arrangements have triggered a serious degradation in the political and social
comity between farmers and local authorities. (Lu) The burden on China’s rural population in much of Central China has been ratcheted up since the decollectivization
of agriculture. Villages in particular have lost funds once provided from the
collectives. Fees for service for everything from healthcare to education have
replaced the old revenue stream once used to underwrite basic local services
and local government salaries. But these fees have eroded the incomes of
countless farmers. This system has proven highly intrusive and costly and in
many instances has represented a step back in developmental terms. Indeed, it
is a contributing factor to the great migration toward China’s urban regions as many families are finding it increasingly difficult to make ends
meet in the countryside.Â
20.    The central government has been
trying to remedy the problem and to ease the grave social tension it has
unleashed. For example, it has permitted village council elections, and thereby
taken a first if very tentative step toward democratic local government.Â
Moreover, those wishing to serve as Village Party Secretary must now
demonstrate their local appeal by first being elected to a local Village Committee.
21.    Central government officials are
also demanding transparency in village accounting systems and have implemented
auditing procedures to cut down on pervasive corruption problems. How this
system can be squared with the rise of village elections is still not clear
because the latter implies greater decentralization of decision making while
the former suggests a modicum of recentralization. Some experts also point to
the mounting tensions between the villages and the townships over how basic
services are to be financed. (Jean C. Oi)
22.    The central government's wager is
that increased rural economic activity should eventually generate sufficient
local income to compensate for the financial hardships associated with the
decline of the commune system. Yet, revenue declines in many villages as well
as falling grain prices, rising fertilizer costs and unfair tax burdens have
only generated hardship and continue to foment social tensions on peasants
sparked a precipitous fall in farm incomes from the mid 1990s.
23.    China's population is at once the driving force of its economy and a potential source of
grave problems. According to the UNPD’s projections, between 1975 and 2025, China’s population will have increased by half from roughly 930 million to over 1.4
billion. (Eberstadt) But there is no universal agreement on the rate of China’s demographic growth. The government in Beijing estimates that the population is
expanding by less than 1% a year and suggests that China's population will peak
in 2030. Some demographers, however, argue that official figures are
significantly understating population growth rates. These experts put the
annual rate of increase somewhere between 2 and 2.3%. This rather vast
discrepancy has arisen because of alleged underreporting of births due to the
country’s one child policy. Vaccination data tend to support the more dynamic
growth forecasts and confirm a pattern of systematic underreporting. Although
the government has announced an amnesty on penalties against those having a
second or third child, many Chinese harbour fears of reprisal and instinctively
do not report these births. This is particularly common in rural areas.
24.    These higher growth numbers have
several potential implications. On the one hand, they suggest that the aging
crisis in China may not be as severe as some have suggested. There may be more
young people than expected to help underwrite the pensions and health care of
the retired. The more common view has been that the one child policy has been
a factor in a looming pension crisis that could adversely affect China’s productivity and finances over the long run. The one child policy’s ‘’demographic
bonus’’ will already be lost in next decade as the dependency ratio rises. (The
Economist, March 25-31, 2006) That policy has also skewed the ratio of males to
females. In rural cultures that place a greater value on male children,
statistics suggest that the policy has led to high rates of female embryo
abortions and even female infanticide or neglect. With a male to female ratio
somewhere between 113 and 119:100, social stability is threatened because of
the growing reservoir of single men with few prospects for marriage or
employment. (Dreyer)
25.    The one child policy also became a
rather paradoxical source of revenue for village and township governments that
levy fines on those families that have exceeded the one child limit. Curiously
this deterred local officials from taking other measures to discourage
childbirth simply because the fines had become an important source of income
for cash strapped community governments; there was little interest in drying up
the sources of this bounty. Indeed, local officials continued to exact these
levies even after the central government announced that they should no longer
tax families for having additional children.
26.    The OECD has suggested that the
public pensions system, which only covers 14% of the active population (at
present only one third urban employees are covered, and rural residents enjoy
no coverage at all), could be spared if part of it were transformed into a
fully funded individual account system with balances invested in capital market
instruments. This is happening as a pilot project in several provinces; yet
because the payout to retired workers is already so high, the government has
had to step in to subsidize the equities investment share of the funds. The
OECD is thus also recommending that China both equalize and raise retirement
ages for men and women, phase out early retirement schemes and bring benefits
into line with life expectancy at retirement. The government is committed, in
principle, to deploying proceeds from privatisation to create a fund to help
underwrite the pension system. Because state assets are worth roughly 80% of
GDP, this could help turn around what is, in effect, a broken system, provided
a range of financial and banking reforms are also undertaken. Another set of
obstacles to a market-based pension system are the low domestic yields on China’s bond and equity market. (OECD)
27.    Under Mao, most Chinese enjoyed
access to basic health services and guaranteed employment. This system began to
fall apart once Deng Xiaoping embarked upon a liberal reforms agenda structured
to bolster Chinese productivity.
28.    The health care crisis is most
evident in China's rural areas. Diseases that had been all but eradicated some
forty years ago have reportedly begun to reappear in the countryside. Many
rural physicians, once known as "barefoot doctors", have lost state
subsidies and have moved from public service to private practice. Their fees
are now beyond the means of many Chinese rural workers. Hospitals are also
increasingly compelled to charge high fees for services that were once very
inexpensive. Many Chinese living below the poverty line are impoverished, in
part, because of ballooning medical costs.
29.    China’s health care system is thus
extraordinarily stressed and without major changes could worsen as the society
ages. The public's health care needs will invariably mount just as the working
population wanes. This dynamic is already underway. Government figures reveal
that whereas there was one retired person to 30.3 workers in 1978, by 1999 this
ratio had fallen to 1:3.7 and could reach 1:2.4 in 2030. (Dreyer)Â But as
suggested above, government figures are not totally reliable, and the situation
may not be as compelling as these figures suggest. Still, the trend lines point
to mounting stress on the system.
30.    So far, government efforts to
remedy the situation have met with little success. For urban dwellers, the
government has devised a system of mandatory contributions whereby workers pay
in 2% of their salaries and employers 6% of the salaries for health care.Â
Workers, and employers are together supposed to underwrite individual health
accounts to help cover outpatient treatment and medication. The remainder of
the employee contribution goes into a general medical trust fund. The benefits
of the plan, however, remain limited. Moreover, there are millions of mobile
workers labouring in very precarious circumstances who simply do not have
access to the kinds of benefits enjoyed by those working in firms complying
with regulation. Nor does it cover the millions of unemployed workers, many of
who have recently been laid off from positions in state‑owned enterprises.
31.    The problem is even more dire in
rural areas where old social safety nets are in tatters and where there are few
resources available to reconstitute it. Farmers and rural workers are now
supposed to enrol in health co-ops, and both the central and regional
governments are supposed to pay into the system. But how treatment facilities
are to be staffed and financed in practice remains an open question.
32.    There are other structural problems
complicating public health care management in China. These include the
migration of trained doctors to urban centers and the reluctance of the
national and local government to share public health information – a tendency
that goes a long way to explaining the problematic approaches authorities have
taken to epidemic outbreaks. These deficiencies are not only consequential for China, but have potential global implications. This was made apparent during the SARs
epidemic and could yet be a factor in the growing threat posed by Avian
Influenza.
Â
33.    The increasingly dire situation in
the countryside has been one of the primary factors in the rise of rural
protests about which central authorities have grown terribly concerned. In
2000, the Communist party identified rural unrest as the single greatest threat
to national stability. China's police reported a 268% rise in so called
"mass incidents", from 8700 events in 1993 to 32,000 in 1999. Police in Central China registered a 40% increase between 1999 and 2001. (Tanner)
Zhou Yonngkang, the public security minister, recently reported that the annual
number of “mass incidents†had risen from about 10,000 a decade ago to 58,000 in 2003 and 74,000 last year—involving a total of some 3.6
million people. (Financial Times, September 8, 2005) In the relatively
small south-western province of Guizhou, for example, there were more than 21
incidents engaging a thousand protestors or more in 2001 alone. These protests
are certainly not restricted to developing regions; indeed incidents have
occurred even in China’s richest cities including Shanghai. (Tanner)
34.    The reasons for these
demonstrations vary as do the numbers participating, the sophistication of
organization, the type of demands made and the degree of violence employed both
by the protestors and by the police.Â
35.    One fundamental question is whether
these protests are a natural side effect of China’s development. In other
words, could they simply reflect a crisis arising out of ever higher
expectations among millions who will see only minimal if any improvement in
their material condition despite China’s galloping rate of growth and the rags
to riches narratives that have so captured the imagination of the Chinese
public? That is certainly part of the story; rapid development often can
precipitate a crisis of expectations among people once willing to accept their
lot in life. But, in China’s case, protests are also fuelled by a range of
tangible problems including corruption, pollution, taxation, the closing of
local plants and the expropriation of farmland. The fact that these hardships
seem intrinsically linked to different aspects of China’s growth and
development raises deep concerns about the potential for a backlash.Â
36.    As suggested above, farmland cannot
be bought and sold in China, while commercial land is. The government wants to
prevent peasants from selling farmland that it views as the very heart of China’s rural safety net. Paradoxically, however, a climate of insecurity has become
evident in many rural areas. Expropriations designed to turn farmland into
commercial property can leave the suddenly landless peasants with nothing,
while local real estate brokers stand to make windfall profits by playing the
commercial real estate market. Local officials themselves face conflicting
signals as they are increasingly rewarded for their capacity to generate
commercial economic activity in their area of responsibility; active real
estate markets can help register sharp increases in the local growth even when
they are the product of ruthless expropriations. (“Cultivating the countryside:
Hu takes pains to keep China free from a peasants’ revolt, Financial Times,
September 8, 2005.) This apparent commercial real estate bias, locked in by the
differential treatment of farming and commercial land, could also be a factor
in China’s problem with industrial overcapacity. In other words, there are in China powerful strong legal and financial incentive to develop property for commercial use,
while few incentives exist to upgrade farmland itself. This distortion of price
signals is leading to speculative commercial development that could well
produce a real estate and commercial bubble.
37.    There are also signs that some
protestors are focusing on the lack of democracy in the countryside and are
thus pushing into areas the Communist Party sees as potentially threatening to
its political hegemony. Some influential party members see even discussing
rural land marketization as a challenge to party ideology.  This could be one
reason why Beijing seems increasingly willing to blame local authorities for
derogation of their obligations to rural inhabitants; doing so implicitly absolves
them of responsibility for difficulties in rural regions.
38.    Rural protest has a long history in
China, and peasant uprisings in China’s long history have sparked broader
upheavals that have shaken dynasties. For a leadership with a refined millenarian
sensibility, rural uprisings are not to be taken lightly, although there are
clear indications that the government is approaching them with far more subtly
and flexibility than in the past. Where once these protests were characterized
simply as anti-communist conspiracies to be harshly suppressed with mass
arrests, some protests are now understood as reflecting genuine social
inequities that legitimate the public’s overt sense of grievance. Indeed the
police and national authorities, on occasion, have been willing to meet some of
the protestor's demands. Both now more willingly express sympathy to mass
complaints of corruption, exploitative levies, and blatant disregard for local
environments, poor working conditions and illegal expropriations. Indeed
protestors often appeal to the central government to correct the misbegotten
ways of local government and party officials. (Gang Lin) Calls for
measures against corrupt local officials and even some demands for the rule of
law are no longer simply dismissed at the center. Accordingly, local officials
can find themselves facing pressure not only from the local population but also
from the central government.Â
39.    The central government has also
responded by reducing the tax burdens, bolstering commodity prices, and
encouraging a degree of open political participation through village level
elections. But they are also vigilantly preventing farmers from linking up
either across regions or across social classes (ie. by forging alliances with
workers, students and the urban elite in order to build broader anti-regime
movements). This has helped the regime keep a lid on rural discontent, although
this selective dialogue may constitute more of a holding pattern than an
attempt to resolve these tensions in a more profound manner. (Yawei)Â
40.    Harsh crackdowns are still part of
the government’s policy, particularly when protestors target the central
leadership of the Communist Party. Recently in the fishing village of Dongzhou, security forces killed at least twenty people while suppressing violent
protests over the construction of a nuclear power plant. The village was then
cordoned off and residents were warned that they were to explain the deaths as
the consequence of bombs thrown by the protestors. Family members that complied
were apparently promised 50,000 Yuan or ($6,193), but many were still willing
to speak with the press. The bodies of the dead were withheld from the families
because they were, in fact, bullet ridden. (French, December 19, 2006)
41.    Over the longer term, the
governments' monopoly on political power and the absence of democratic dialogue
will, in itself constitute a continuing source of instability, particularly
insofar as single party government invariably tends to corruption and arbitrary
local rule making. This is precisely why many analysts suggest that only by
achieving a higher degree of pluralism can the system generate genuine
accountability in decision-making, which, in turn, may be one of the
prerequisites to ensuring a more politically tranquil and ultimately a more
prosperous countryside over the longer term.
42.    Foreign direct investment along
with domestic economic reforms have been critical elements of China’s explosive growth since 1978. Foreign investors have financed the construction of
new plants and industries that are capable of competing in the global economy.
They have introduced new technology, generated millions of jobs, spread new
managerial skills and helped finance both imports and exports. All of that
said, Foreign Direct Investment (FDI) inflows to China are still well below
those of the OECD on a per-capita basis. In 2000, FDI to China stood at US$30.1 as compared to an OECD average of US$1,320.9. That year, Argentina attracted US$314.8 per capita and Chile US$241.6. (IMF, October 2002) Moreover much of
this FDI is concentrated along the coastal regions of the country. One of the
keys for broader development in China will involve attracting greater foreign
and Chinese capital to the country’s interior regions.Â
43.    Investors are a fickle lot and
extraordinarily sensitive both to political risk and to the quality of the
policy environment. China has made great strides on both fronts and World Trade
Organisation (WTO) accession promises even more advances on a range of
governance matters. The country is opening up its services and financial
sectors to greater competition, which invariably will spark productivity gains
and new growth opportunities. But risks and governance challenges appear more
problematic in the central and western regions of China. Development here will
partly hinge on the capacity of local officials working with central
authorities to establish rules-based governance systems, coherence between
local and national legislation and regulation, transparency, reduced
corruption, and physical and financial infrastructure needed to attract and to
support investors. China’s vast hinterland suffers from shortcomings in all of
these areas. (OECD Policy Brief, 2003)
44.    The Chinese state, however, hopes
to remedy the situation. Foreign firms operating in China are now offered the
same investment incentives as domestic firms in the impoverished regions of
Central and Western China. So far, this and the fact that wages in these
regions are lower have not been sufficient incentive for many firms to take up
the offer. The problem is the still poor business climate in these regions,
the lack of infrastructure, distance to market, low productivity rates and
relatively lower skill levels in these regions. The Chinese state is also
embarking upon an impressive effort to build up infrastructure in these
regions; this could help at the margins. But the regulatory and governance
issues are more intractable and will be the real measure of the region’s
capacity to attract, absorb and sustain investment.
45.    Of course, regulatory problems
persist at the national level as well although here the improvement has been
greater. The government has categorized investment into four categories: encouraged,
restricted, permitted and prohibited. While the great bulk of
investments now fall under the permitted heading, there are persistent
barriers that are probably impeding investment in Western China. For example, China prohibits FDI in traditional crafts ostensibly to protect their Chinese essence. But
such restrictions might just as well be the death knell of industries that will
otherwise find it very difficult to carve out a place in an ever more
globalized and competitive market. (OECD Policy Brief, 2003) The
Chinese have had to loosen up these categories as a result of WTO accession,
and even the once protected financial sector will be exposed to ever more
foreign competition. Still approval process for FDI projects remains cumbersome,
bureaucratic and opaque. China will also need to open up its domestic market to
international service providers in order to galvanize a vital sector that is
lagging well behind the industrial sector. Domestic and international firms
alike need these services and are penalised when the local offering is so
paltry and the international presence is artificially restricted.
46.    The legal system poses another set
of problems. Chinese judges, particularly in the remote provinces, are often
very reluctant to lay down coherent legal rulings when such verdicts go against
the wishes of local party officials. This is to be expected in a system in
which the Communist Party and the government it ultimately controls, and not
the courts system, are the final arbiters of law. The central government,
however, has recognized at least part of the dilemma, and is seeking to
strengthen the court system in order to provide a more stable investment
climate. The problems mount in more remote regions where such changes are unwelcome
and often openly restricted. The contradictions become even more onerous when
matters of local corruption are involved. Moreover, there are often conflicts
between provincial and national laws. Provincial laws, for example, are
sometimes inspired by anti-market concepts that impede economic development and
contravene national policies. Though conflicts between national and provincial
law are supposed to be settled in favour of national law, this is not always
the case in practice. (Yardley, November 29, 2005)
VI.
China’s Energy Needs
47.    Energy poses one of the primary
constraints to the country’s development. The problem is multi-faceted and
obviously touches upon China’s very serious environmental problems as well as
both its strategic posture and its foreign policy. Currently increasing at
roughly 12% per annum, China’s demand for petroleum is outpacing the rate of
GDP growth. This dynamic has taken hold at a time of global supply
uncertainty, energy price rises (for which rising Chinese demand is partly
responsible), and global warming (a serious threat to a country that already is
suffering from chronic water shortages and desertification). All pose
long-term development challenges to China.
48.    China once met most of its energy
needs with domestic sources. Until 1993 its huge oil field in Daquing ensured
oil self-sufficiency, and China was, in fact, a net exporter of that commodity.
Its extensive coal deposits met two thirds of its overall energy requirements.Â
These endowments, however, were either quickly depleted or insufficient to meet
the energy needs of an economy in the midst of genuine "take off."Â
By 2003, China had to import one third of its oil. This figure will mount
inexorably as the Daquing fields yield ever less oil just as the country’s
overall energy demand is soaring. By 2015 imported energy will account for
more than half of China’s energy use and will likely rise further thereafter.
(Dreyer)Â
49.    For China, this is a very sudden
and consequential change, one laden with developmental implications. In the
summer of 2003, for example, two thirds of China’s provinces were compelled to
announce energy use restrictions. Fearing a replay of that supply crisis, China’s leaders have embarked on a massive effort to achieve a degree of energy security on
both the supply and demand sides in order to power economic development. The
government has announced automobile fuel efficiency standards that are already
more stringent than those of the United States and hopes to match European
standards within the decade. (Chen and Rong)Â Making gains on this front is
critical because China, like many underdeveloped countries, needs twice as much
energy to generate a unit of GNP than does the United States. Its capacity to
reduce this ratio will not only be an indicator of its own developmental
progress but will, by extension, enhance its own national security. (Shanghai
Daily, October 25, 2004)
50.    The burning of low quality coal to
power Chinese industry has contributed enormously to the country’s dreadful
pollution problem. Five of the ten most polluted cities in the world are in China, and it is estimated that the welfare costs of China’s poor environment are between 3% and 8%
of GDP. (Economic Survey of China, 2005, OECD) The last two five year plans
have provided a road map for environmental improvements and some small progress
is evident. Much of this is due to the fact that the Chinese economy is growing
ever more sophisticated and “developedâ€. Sulphur emissions, for example,
increased by only 5% between 1993 and 2003 despite a doubling of GDP in that
same period. Still, pervasive coal burning combined with soaring petroleum use
for automobiles and a high energy to GNP ratio have combined to make China’s
air quality among the worst in the world. In 2003, the government increased the
penalties paid for the emission of air and water pollutants, but many coal
driven plants lack clean technology, and wide scale evasion of regulations is
apparent. This has had incalculably adverse effects on public health.
51.    Environmental degradation is a
problem that respects no borders. China’s contribution to the phenomena of
global warming is growing ever more consequential particularly as it uses far
more energy per unit of output than more developed countries. The consequences
are tangible. Dirty air from Asia, for example, is allegedly affecting the air
quality of North America's west coast and its green house gas emissions, not
yet regulated under the Kyoto Protocol, are doubtless contributing to the
global warming phenomena. Chinese environmental regulators are now warning that
air pollution levels could quadruple over the next 15 years given the growing
rate of demand for electricity and automobile use and the fact that at least
half of currently operating coal fired power plants violate national
regulations. The government is now planning to implement a US style cap and trade emissions control system to encourage further emissions reductions.Â
(Baston)
52.    China’s incredible growth is
coming at a terrible long-term cost to its environment and public health. The
problem is both developmental and political. Although China has passed numerous Western style environmental laws, these are very poorly enforced.
To take one small example, there are some 50 idium factories along the Xiang River in Hunan that have turned the river and the ground water system into dangerous
chemical stew. Nothing is done to correct the problem because many local
officials are also shareholders in these firms. Fines and penalties are often
too low, and even when plants are shut down, they quickly reopen in something
akin to a shell game with national environmental authorities. It is not
surprising that 300 million Chinese have access only to contaminated drinking
water. (McGregor and Harvey)Â Â
53.    On matters related to the Kyoto
Protocol, China flirts with both the American and European positions,
cooperating with the American technology sharing pact and the Asia-Pacific
Partnership on Clean Development and Climate while working with the EU on coal
power emissions reductions. Both sides have sought to win China over to its particular interpretation of Kyoto. Not coincidentally perhaps, China has been one of the largest beneficiaries of environmental funding from developed countries.
It is exempted from the strictures of the Kyoto protocol until 2012, but
afterwards it is likely to face more pressure to accede and to accept
international strictures on emissions. (Harvey, January 27, 2006)
54.    China is also engaged in an all out
effort to meet current energy needs and to insulate itself from a possible
blockade were it ever involved in an international crisis over Taiwan that
closed the sea lanes. (Pala) It is doing so through a combination of new
pipeline construction, such as a proposed 3,100-km line from Kazakhstan’s
Aktyubinsk field to Xinjiang’s Tarim basin in Northwest China, massive
hydroelectric development including the Three Gorges dam, (among the largest
development projects in history), nuclear and coal plant construction and the
aggressive pursuit of oil development deals in Central Asia, Africa, the Middle
East and South America - a strategy that closely linked to and indeed partly
driving China's increasingly ambitious foreign policy. There are political,
financial and environmental stakes in many of these initiatives. The Three
Gorges dam project, for example, is so massive that some scientists are
concerned that it will precipitate localized climatic changes as has happened
with several other hydro projects in China and could have a range of other
unintended environmental consequences. The Chinese have apparently decided
that this risk is worth taking given the potential contributions of plentiful
electrical energy to regional development. Finally, The Russian gas
monopoly Gazprom has just concluded a deal with China to build two major new
pipelines into China that many fear could draw gas away from Europe unless Russia’s capacity is significantly expanded. Moreover, the deal suggests to some that Russia is creating for itself an opportunity to play Europe and China off of each other.
VII.
China’s relations
with the developing world and the International Donor Community
55.    China’s economic rise is not only
a story of that country’s internal economic development. Indeed, it has
implications for much of the developing world as well. China has become a critical commodities consumer, and as suggested above, its demand has
driven up the price of a range of raw materials produced in the developing
world. For mineral, metal and energy exporters this has had a very positive
effect on terms of trade and current account balances. Chinese demand in 2003
drove nickel prices to a 13-year high, zinc to a seven-year high and platinum
to a 23 year high. China has also become extraordinarily active diplomatically
and economically in regions that supply it with much-needed raw materials. But
the news is not all good, at least from the perspective of China’s competitors in the developing world. China’s cost structures are so competitive
that developing country producers, particularly in certain manufacturing
sectors, have faced worrying competition from the Chinese and China has also recently sought to leverage its purchasing power by demanding commodities
price reductions.
56.    China’s relations with the
developing world are thus economically and diplomatically complex and dynamic.
Relations with Africa provide a case in point. Between 2000 and 2005 trade
between China and the countries of Africa increased from $10 billion a year to $28
billion. (Alden)Â Â China is providing increasing amounts of foreign aid to the
region and has deployed troops to several conflict-torn countries like Liberia. Part of this activism is driven by China’s need for energy and raw materials, but
there is more at stake from the Chinese perspective. The Chinese leaders are
also motivated by their quest both for new markets and investment openings as
well as for new strategic and diplomatic opportunities including recognition of
the “One China†principal. Because Africa is relatively under invested, the
Chinese feel that building a presence could ultimately prove financially
rewarding.
57.    Relations with Africa also offer
a field on which China can contribute to development in a concrete way, thereby
validating its claim to be a peacefully ascending great power with global
economic and political interests. Africa has the largest block of states in the
United Nations, and China sees its relations with these countries as providing
important political and diplomatic rewards as well as economic ones. Its
stress on non-interference in internal affairs has a degree of resonance among
some African governing elites and is yet another foundation of this rapidly
evolving relationship. China has also directly appealed to African elites by
constructing new foreign ministry buildings in Uganda and Djibouti, football stadiums in Mali, Djiboutia and the Central African Republic and parliaments in Mozambique and Gabon.  This represents a relatively low cost way both to win approval for the one China policy and to demonstrate in a very tangible manner that China is now a player on the world
stage.
58.    China is also providing more
traditional forms of development assistance, although as a developing country
itself, its own resources on this front are limited. It has nonetheless helped
underwrite the civil service of the Central African Republic and Liberia and provided a range of loans to oil rich Angola. China has developed a range of technical
training programs as well, most notably in the agricultural sector. At the 2003
China-Africa Cooperation Forum, China also announced that it would forgive a
total of $1.27 billion in debt from African countries while providing
additional financial assistance.
59.    Meeting China’s energy and raw material needs however is clearly the top priority for the
government. In Angola, Chinese workers are refurbishing old rail lines,
government buildings and a new airport in Luanda all with $2 billion in credit
from China’s import-export bank. (Reed) The China National Petroleum
Corporation, (CNPC) is playing a very active role in Gabon, Algeria, Angola and Sudan, and the Chinese state has supported this effort through a range of
complementary policies including financial aid, construction projects, arms
sales and close diplomatic ties. Sudan, which has rapidly earned pariah status
throughout much of the world because of the genocide in Darfur, has become
China’s largest overseas investment target, its primary source of off shore
oil, and a base for other oil operations in the region. (Alden)  Sudan is thus a critical link in China’s strategic aspiration to provide an uninterruptible supply
of oil to domestic consumers. A number of oil sector analysts, however, have
noted that China is overpaying for some of the assets it is purchasing. If oil
and gas prices remain very high this may not matter, but a price fall could
expose a degree of financial vulnerability. This suggests that the Chinese are
playing as much a strategic energy security game as an economic one.
60.    China is also concerned about
domestic food security as more and more of its prime farmland is being lost to
industrialization and urbanization.  This has led China to invest in both
agricultural and fisheries industries in Africa. It has, for example, leased
extensive farmland in Zimbabwe, Zambia and Tanzania.
61.    China also sees Africa as a large
and untapped market for many of its basic low cost products. It has sold a
considerable amount of advanced military equipment and light arms to a number
of countries in the region. Chinese companies have set up an array of textile
and agricultural joint ventures with African producers which have been a
vehicle for selling additional product in both the US and European markets.
This has been made easier because of market access granted to African states
through the America Africa Growth and Opportunity Act (AGOA) and the European
Union’s Coutanou Agreement.Â
62.    China enjoys a significant trade
surplus with Africa despite its imports of oil and raw materials from the
continent. Its prices in a range of manufactured goods are very competitive and
this has generated some friction particularly with South Africa. There has
also been some unhappiness with the Chinese tendency to bypass local labour
markets by hiring Chinese contract labour for large Chinese
funded construction projects in Africa.
63.    Chinese investment in investing
in Africa is welcome precisely because the region has had so much difficulty
attracting foreign investment. Moreover, Chinese investment is not focused
simply on government owned enterprises. Smaller firms have also benefited, and
the links to China have had a positive impact. Chinese tourists are also
flocking to a number of African states like South Africa and Zimbabwe, which the Chinese government has officially approved as a tourist destination.
This business is important for a country like Zimbabwe, which has been shunned
by the West because of its appalling human rights record. China is also cultivating energy relations with a number of Latin American states and has readily
exploited poor U.S. relations with Hugo Chavez to sign a number of energy deals
with Venezuela.
64.    China thus offers economic and
diplomatic relations to developing countries without imposing the kinds of
obligations that Western countries and international lending communities
impose. Indeed Prime Minister Wen Jiabao has specifically renounced the notion
of political conditionalities —a genuine contrast to the position taken by the
West particularly towards countries like Iran, Sudan and Zimbabwe. This certainly opens up one pathway for gaining market access, something that
the Chinese have readily exploited in the case of Venezuela which, while the
largest supplier to the United States, is also in the midst of something akin
to a Cold War with its northern neighbour. On the other hand, the Chinese
approach goes against a general current in international relations in which
matters of domestic governance and human rights are increasingly recognized as
legitimate matters for the diplomatic and donor countries. It is certainly a
key part of reigning development paradigm, and many Africans have recognized
this. The New Economic Partnership for Africa’s Development (NEPAD), for
example, makes good governance and human rights central to the development
bargain, and many, although not all African states have accepted this. China’s dilemma could become more daunting if African reformers begin to see its government
as aligned with retrograde status quo forces that have actually contributed to
the impoverishment of the continent.
65.    Because China has grown at such a
rapid pace, because it is becoming something of a donor country in its own
right, and because of its increased spending on defence, there is an important
discussion in the West about the degree to which it should continue to receive
development assistance. Budgetary pressures in the EU, for example, are leading
to a rethink of current aid policy toward China. Since 2000 the EU’s trade deficit
with China has increased from Euro 50 billion to Euro 80 billion in 2004. The
EU provides about Euro 150 million a year in development assistance to China aimed at poverty eradication and environmental clean up. The Commission, however, has
proposed gradual reductions in development and humanitarian aid to China over the next budget period. (Beatty)
66.    China has extensive relationships
with both the World Bank and the Asia Development Bank, borrowing approximately
$1 billion in fY2005 alone from the World Bank and averaging $1.5 billion a
year in loans from the Asia Development Bank. China’s portfolio is the World
Bank’s largest, and the Bank has extended a total of some $39 billion in loans
and credits since China joined the Bank in 1980. It has overseen more than 263
projects in China, with about 90 ongoing projects. The Asia Development Bank
has planned for $4.5 billion in loan assistance from 2006-2008, excluding
‘sub-regional’ projects. Slightly less than half of that aid is earmarked for
transport projects, 20% for agriculture and natural resource development, about
15% for social infrastructure projects, 12% for the energy sector and the
remainder for multi-sectoral projects.Â
67.    Unlike other countries, China’s relationship with the World Bank has never been predicated on conditionality but
rather on ‘persuasion’ and ‘demonstration’. In other words political and
economic matters have been treated separately due to Chinese sensitivities.
While China constitutes the Bank’s largest portfolio, Bank loans make up a very
small proportion of GDP, reducing the amount of leverage that the Bank might
exert over internal Chinese political developments. Even in the year of
greatest Bank assistance, 1994, Bank loans of $3.3 billion constituted only 0.6%
of Chinese GDP. That said, World Bank assistance on poverty relief,
infrastructure development, and environmental protection has made a small but
useful contribution to Chinese development. In 1999, however, China “graduated†from the International Development Association (IDA). “IDA donors had
decided that China was sufficiently creditworthy to dispense with IDA fundingâ€
although Chinese authorities did not welcome their exclusion. International
Bank for Reconstruction and Development (IBRD) loans were also constrained by
the Bank’s limits on the total share of its overall portfolio in a single
country. After 1999 the Chinese government decided to restrict IBRD loans to
poorer provinces officially because their terms were too onerous. This somewhat
complicated the Bank’s poverty reduction strategy. Meanwhile, the Bank has
shifted its strategy from a ‘liberalisation’ phase to a more difficult
structural and institution-building phase, and is now very focused on the
banking sector. The Bank will also devote more attention to infrastructure
development, especially in the energy sector. (IBRD, Memorandum of the
President)
Â
68.    The United States Agency for
International Development (USAID) allocates paltry sums for development in the
PRC. From FY2003 to 2005, aid assistance in the form of grants averaged about
$4.6 million a year, with almost all of those funds earmarked for environmental
and socio-economic assistance in the Tibet Autonomous Region. For FY2006,
there is no money earmarked for Chinese aid.
69.    An engaged China will own a stake in global stability and prosperity and is well positioned to contribute to
both while an isolated and disengaged China would pose a much greater challenge
to regional and global stability. The international community is looking to China to play a positive and engaged role in international relations and the Chinese
leadership claims that this is precisely what it seeks to achieve. But for China to maintain its outward orientation and for it to raise its own stakes in global
order, it will have to ensure that its less developed regions share this sense
of ownership. That is its most daunting development task. If those living in
this vast hinterland come to believe that China’s reform agenda and its
participation in the global economic order have only introduced suffering and
impoverishment, then instability could cause an ever less open China to recoil from what it might come to see as a hostile world. But that retreat in
itself could be destabilizing, and it would hardly produce a more open,
pacific, and democratic society.
71.
International support for China’s development can take many forms. The West and multilateral donors needs to offer
technical support in areas like governance, fiscal and legal reforms as well as
in poverty reduction strategies and environmental clean up. Working with
regional and local officials is particularly needed, as this is where China suffers the greatest deficiencies. These efforts must be extended to the provincial
and township levels and engage non-state actors. The World Bank has already
begun to focus on precisely these areas and in development terms, it may be
here where donors can make the biggest bang for the buck.
72.    For its part, China may need to further amend its overall development strategy, which has placed such a
premium on overbuilding physical capital while imposing terrible burdens on the
environment, the health care system and neglect for the poor. Rising social
tensions in the country are the direct result, and there are yet no democratic
means of expressing the public’s exasperation. Oftentimes legal recourse is
blocked in the muddled court system, and overt discontent is undermining the
government’s legitimacy. The problem is that the ruling elite may fear the
democratic remedy more than persistent public discontent. But hewing to that
logic does not, on the face of it, seem sustainable. China needs to clarify
rural property rights, further liberalize labour markets, upgrade rural
education, health care and social safety nets and find more sustainable
solutions to financing these fundamental services. It should take these tasks
on while its economy is booming rather than when growth slows.
73.    China’s environmental problems are increasingly a global concern, and addressing them must be a
priority for Chinese society, the international development community and China’s international interlocutors. China’s internal stability could partly hinge on the
state’s capacity to cope with these daunting environmental challenges. It is
not coincidental that many protests in China are focusing on this issue.
Chris Alden, “China in Africa,†Survival,
Vol. 47, no.3 pp. 147-164.
Andrew Baston, “China warns of growth’s
effect on air,†The Wall Street Journal, October 25, 2005.
Andrew Beatty, “China faces reduction in
aid from EU,†European Voice, 9-15 February 2006.
Andrew Browne, “China pledges to help
countryside,†Wall Street Journal, March 6, 2006.
“Attracting Investment to China,†OECD Policy Brief, 2003.
Kathy Chen, Cui Rong, “Chinese leaders set
out priorities,†Wall Street Journal, October 12, 2005.
“Cultivating the countryside: Hu takes
pains to keep China free from a peasants’ revolt,†Financial Times,
September 8, 2005.
June Teufel Dreyer, “Democratization in
Greater China: The Limits to China’s Growth, Orbis, Spring 2004.
Geoff Dyer, Rising cost of a symbol of
success, Financial Times, January 27, 2006.
“Nicholas Eberstadt, “Power and Population
in Asia,†Policy Review, No.123.
Economic Survey of China, 2005, OECD.
China’s Rural Poor,
The Economist, March 25-31, 2006.Â
Howard French, “Chinese pressing to keep
village silent on clash,†New York Times, December 19, 2006.
George Friedman, “The Shanwei Shootings and
China’s Situation, December 14, 2005, http://www. Stratfor.com Â
Fiona Harvey, “Beijing finds love in a
changing climate,†Financial Times, January 27, 2006.
International Financial Statistics, IMF October 2002.
“Let the poor own their land,†The
Economist, March 25-31, 2006.Â
Gang Lin, “Introduction†Crisis in the
Hinterland: Rural Crisis in the Hinterland, Asia Report of the Woodrow Wilson International Center for Scholars, No. 108, March 2003, http://wwics.si.edu/topics/pubs/asiarpt_108.pdf._
Yawei Liu, “Crisis without Turmoil: The
Chinese Countryside in the Era of Self-Government,†Crisis in the
Hinterland: Rural Discontent in China, Asia Program Special Report No. 108,
Woodrow Wilson International Center for Scholars
Richard McGregor, “Challenging change: why
an ever fiercer battle hinders China’s march to the Market,†Financial
Times, Â February 28, 2006.
Richard McGregor and Fiona Harvey, “The
Polluter pays: how environmental disaster is straining China’s social fabric,†Financial Times, January 27, 2006.
Memorandum of the President of the
International Bank for Reconstruction and Development (IBRD) and the
international Finance Corporation to the Executive Directors on a Country
Assistance Strategy of the World Bank Group for China.
OECD Economic Survey of China, 2005.
OECD Briefing to the NATO PA, February
22, 2006.
 OECD PSE/CSE databases 2005.
Jean C. Oi, Crisis in the Hinterland:
Rural Crisis in the Hinterland, Asia Report of the Woodrow Wilson
International Center for Scholars, No. 108, March 2003, http://wwics.si.edu/topics/pubs/asiarpt_108.pdf._
Christopher Pala, “China pays dearly for Kazakhstan Oil,†New York Times, March 17, 2006.
John Reed, “China on track to win friends
in oil-rich Angola, Financial Times, 4 March 2006.
Murray Scot Tanner, "China rethinks unrest", The Washington Quarterly, Summer 2004 pages 137-156.
“Taxation, Protest and (In)stability in
Rural China,†Crisis in the Hinterland: Rural Crisis in the Hinterland,
Asia Report of the Woodrow Wilson International Center for Scholars, No. 108,
March 2003, http://wwics.si.edu/topics/pubs/asiarpt_108.pdf._
World can’t afford to ignore China’s growth,†Shanghai Daily, 25 October 2004.
Martin Wolf, “America must worry about
its own actions, not just China’s,†Financial Times, September 28, 2005.
Jim Yardley, “A young judge tests China’s legal System,†International Herald Tribune, November 29, 2005.
Andrew Yeh,
“The Challenge of heading West,†Financial Times, November 8, 2005.
