PQSIB syndrome in China (Part 1)

By Lacille de Silva

Dong Zhongshu, 2000 years ago, as Chinese historians believe, had advised the enlightened men at the time, against the pursuit of quick success and instant benefits, or ‘PQSIB’. It has however,now been revealed, that the majority in modern times, approach life with the PQSIB mind-set. PQSIB is the most hackneyed phrase being used by people presently in China. Let me discuss the positives by leaving out the few negatives. 

Have the Chinese benefitted from the PQSIB syndrome? Yes. Analysts believe that Chinese culture, compared to other cultures, in all levels in society, namely; personal, work, business, Government etc., whatever the status, downward from the first citizen to the lowest, in every institution, processes are accelerated, unlike in other countries world-wide.

China has the longest continuous civilisation and had once been the most advanced country in the world. Foreign invasions and domestic problems had plunged this country into turmoil. How did China thereafter, after having failed to make any headway in achieving progress for centuries, achieve rapid growth in several decades?

After the establishment of the People’s Republic of China in 1949 by Mao Zedong, China, ‘the sick man of East Asia’, marked a new era, and re-emerged on the world stage as a united and independent power. Initially, Mao’s Communist regime had become popular and achieved significant accomplishments by having established order and stability in Chinese society. Unfortunately, Mao rapidly plunged China into endless political turmoil. After Mao’s death in 1976 and Deng Xiaoping’s courageous and far-sighted policy reforms, China went through sweeping changes.

Socialism with Chinese characteristics

When Deng rose to power, China being such a vast country, there had been complex issues full of contradictions. Deng introduced one reform after another and was not willing to turn back.He had insisted that they drop the political ideology and called on the nation to embrace economic development as the topmost priority. 

He also began to replace the old Soviet model of a centralised, planned economy with practices that were more characteristic of a market economy, such as competition, pricing based on supply and demand and incentives for good performance. He abandoned Mao’s policy of self-isolation and introduced an ‘open-door’ policy designed to encourage the inflow of foreign investment, technology, and managerial expertise into China. Deng called his new policies ‘Socialism with Chinese characteristics’.

Deng’s economic reforms have changed the country vastly for better. China at present is a comprehensively transformed dynamic society. Nonetheless, the political system does not permit similar freedom as in the case of America, even to date. The Chinese however, are much better off today than they were nearly four decades ago, both economically and politically.

The average Chinese person had been convinced that the reforms would lead to improvement in their living standards. Reforms have now been introduced in socio-political areas too. There are increased investments in education, information technology and science. Universities in China presently are continuously growing, changing and developing. Universities and colleges, exceeding 2000, boast more than six million student enrolments annually. 

These reforms produced immediate material benefits that were felt in the daily lives of people in cities and distant villages. Subsequently, there had been strong support for reforms and the thrust by the Deng leadership for effective reforms became a relentless nationwide pursuit of economic growth.

China’s march towards economic reform had been greatly fuelled by strong leadership and popular support. Deng had no blueprint for reforms in China, unlike reforms undertaken in Russia and many other countries. Deng and his successors had always carefully chosen an incremental approach to push forward reform programs.

Crossing the river

Deng had once said that the reform process was like a person who wanted to cross a river but was unsure of the depth of the river and before taking a step, would carefully uses his toe to gauge how deep the water is. Deng said that since there had been no precedents, reforming a country was a difficult task. However, according to economists David Hale and Lyric Hughes, China’s economy had simply “taken off”.

Deng had always insisted that the reform process should only proceed with one step at a time. He told the Chinese hierarchy that they should muster the support of the people only through improving living standards; and that was the utmost priority. He had further ensured that economic reforms should be given precedence. Deng had also recognised that China’s political system too had been flawed, and hence a trial and error method had cautiously been applied.

Deng had believed that the system that existed needed comprehensive modifications to prevent tragedies like the Cultural Revolution. He had therefore taken steps to eliminate lifelong tenure for Communist leaders and to establish rule-of-law in China. During this period, the Chinese Government also took stringent steps to crush the famous Democracy Wall Movement and launched a campaign to suppress numerous other demands. 

Simultaneously, Deng attempted to push through economic reforms instead of more radical reforms such as large scale privatisation. They preferred the so called ‘dual track system’. Under this system, the State permitted the development of the private sector and the use of market mechanisms, such as supply and demand, to determine prices.

Deng thereafter had focussed more on a systemic effort to formally accept private ownership as a legitimate part of the economy by comprehensively building a true market economy. He had encouraged the private sector to become the dominant force in China’s growth. Deng gradually saw to it that necessary reforms were also carried out in the socio-political, labour, capital, real-estate market areas etc. to provide a level playing field to enable the flow of foreign investments and a strong competition to integrate China into the global economy. 

The barriers to free trade have been removed since China’s entry into the World Trade Organisation. China thereafter became a much sought-after country for foreign investment and trade. Since 1997, China has received more direct foreign investments than all nations except the United States. How did China become a world power? After two and a half decades of growth, averaging more than 8% annually, China’s economy by 2003 had become the second largest in the world. From 1990 to 2003, China’s total exports had grown eight-fold. Changes had taken place almost every day.

What’s good for China

Having adopted progressive market economic policies, within a few decades, China has transformed itself to a global economic powerhouse. China thereby achieved the status of a fully-fledged member of the international community, having been able to return to the United Nations. China also got accession to the WTO. China now is the second-largest trade partner of the United States. China is also the largest creditor, with $ 1.305 trillion in US in Government securities. Internationally, China could now either help or hinder American foreign policy in the United Nations.

China, for good reason, has considered USA the most important country, not because it was the most developed economy, but due to unrivalled military might and advanced science and technology. They had then felt that the American political and value system had been their attraction. The mere fact that every year there has been tens of thousands of young men and women applying for visas to study in the United States proves a point in that regard.

I firmly believe if we also need to increase foreign investments to achieve economic growth to upgrade the living standards of the people, could we do that without making vast improvements in several key areas? We have not, so far, analytically studied why most of our overseas investors had to shut their businesses and leave the country. After having gone back, the reports they had issued are also causing untold damage to our country’s reputation.

Our future descendants, no doubt, will hold us responsible. Our leaders and their actions and policies have eventually carried this country to a disastrous plight. We now have a moral obligation towards our future generations. Scientists have proven that we will run out of our resources, including water. 

Furthermore, our post-colonial leaders have been mired in the pursuit of selfish personal goals at the expense of broader national needs or interests. Our infrastructure and public sector reforms to attract investors need vast improvements. For the past several decades only those in the corridors of power have benefitted, and they had worked for their personal benefit because they have been selfish, repressive, corrupt and undemocratic. 

In other words, politics in Sri Lanka is the struggle for power and wealth, the use of depleted state resources for personal gain, corruption. Why couldn’t these politicians adopt PQSIB syndrome policies in Sri Lanka, for the benefit of the Sri Lankan populace?

(To be continued)