May 19, 2006

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  Small World, Big Stakes
  
  The U.S. and China are intimately linked–for better or worse. Can we make room for each other?
  
  By MICHAEL ELLIOTT
  
  June 27, 2005
  
  
  

  Liu Li has never met anyone who wears the clothes she makes.
  For nearly two years the 20-year-old rice farmer’s daughter has
  worked at the Chaida Garment Factory in the steamy southern
  Chinese city of Kaiping, stitching seams on winter jackets for such
  companies as Timberland. Amid the clatter of sewing machines,
  surrounded by mountains of down vests headed for the U.S., Liu
  tries to imagine the people whose wardrobes have given her a job.
  “They must be very tall and very rich,” she muses. “But beyond that,
  I really can’t picture what their lives are like.”
  

  
  

  Almost certainly, that feeling is mutual. Last year Americans bought
  clothes “Made in China” to the value of $11 billion and additional goods
  worth $185 billion. Yet for all the ubiquity of Chinese products in U.S.
  stores, to most Americans China remains a mystery. For both nations,
  that is unfortunate; though it does not have to, a mystery can all too easily
  metamorphose into a threat. Most Americans don’t realize the extent to
  which China’s future and that of the U.S. are linked. It isn’t just down vests–
  or toys or shoes–that bind the U.S. and China together. China holds billions
  of dollars of U.S. debt; its companies increasingly compete with U.S. ones
  for vital resources like oil; its geopolitical behavior will affect the outcome
  of issues of key importance to U.S. policymakers, like North Korea’s nuclear
  arms capacity. Although their political cultures are radically different, in many
  ways and many areas both countries essentially want the same things.

  
  

  Will the U.S. come to think of China as a friend or a foe? This year, after a
  period of placid relations while Washington was absorbed with the war on
  terrorism, there have been indications aplenty that some high U.S. officials–
  and many ordinary Americans–find China’s rise to be a source of anxiety.
  China, critics say, manipulates its currency to keep its goods cheap, hence
  destroying American jobs. China steals intellectual property from U.S. firms.
  China is engaged in a crash program of modernization of its armed forces.

  
  

  Within the Bush Administration, there are signs of dissonance on how to deal
  with China. “We have the best relations [with China] that we’ve had in some
  time–perhaps ever,” said Secretary of State Condoleezza Rice on her recent
  tour of Asia. Yet on June 4 in Singapore, Defense Secretary Donald Rumsfeld
  made headlines with a hawkish speech, asserting that “China’s defense expenditures
  are much higher than Chinese officials have published.” Rumsfeld continued,
  “Since no nation threatens China … why these continuing large and expanding
  arms purchases? Why these continuing robust deployments?” The next day,
  Rice tried to square the circle. “I think that both happen to be true,” she said.
  “Relations are at their best ever, and the Chinese are engaged in a major
  military buildup, and that buildup is concerning.”

  
  

  Of course, to say that China is both an economic partner and a rival is no
  revelation. There has been so much talk, for so many years, about the
  potential of China’s “opening up” to the West. Still, the extent of its rise
  somehow managed to sneak up on the U.S. “You have an emergent
  power and a dominant power,” says Richard Haass, president of the
  Council on Foreign Relations and former director of policy planning at
  the State Department. “The question is, Will we inevitably be enemies?
  No, it’s not inevitable.” The goal for Washington is to manage China’s
  rise in ways that peacefully incorporate a new force into the global system.
  The goal for China is to protect itself from yet another false start on its
  quest of modernization. Neither nation will satisfy its objectives unless
  there is a clear-eyed sense of where China has been and where it is going.
  That is not simply a matter of understanding China’s formal centers of power.
  What matters in China today is happening on the ground–in the lives of
  people like Liu Li.

  
  

  What does it mean when Wal-Mart has become a major force for change
  in China, as a buyer and seller of goods but also as an employer?
  What does it mean when several Chinese city governments hire pollsters
  to gauge their effectiveness and a district leader conducts town-hall
  meetings and answers thousands of e-mails from the public? How should
  the West understand a society in which environmental protests are
  common and underground churches thriving–and yet in which information
  is tightly controlled and long prison sentences are handed out for those
  who transgress dimly defined laws on state secrets? Chinese officials bristle
  at American finger wagging and warn that how the U.S. treats China will
  affect Beijing’s posture. For each side, finding–and maintaining–
  common ground will require understanding what’s truly happening on
  the other side of the globe.

  
  

  If China’s rise looks scary to some Americans, from Beijing’s perspective
  it seems very different. At last, think China’s rulers, the world is being put
  into proper balance. After 500 years during which China fell asleep,
  it is once more taking its rightful place among the great powers. But most
  casual observers outside China don’t understand that even as the nation
  gains respect, its people are haunted by a deep sense of past slights. China’s
  long journey toward modernity began not because the dragon gently flexed
  its scaly muscles but because others prodded it with a sharp stick. When
  China began to open up to the world 150 years ago, it did so because gunships
  of the British Royal Navy, working in the service of opium smugglers, forced
  the imperial government to accept foreign trade. As China sees its history,
  the country was subjected to foreign humiliation for the next century, its
  territory invaded and dismembered, its people raped and massacred.
  Along with the foreign interventions came homegrown catastrophes:
  rebellions, revolutions, civil wars, famine and unspeakable cruelty. Luan,
  the Chinese word for chaos, is perhaps the single most important concept
  that the outside world needs to grasp about the new China, for the memory
  of the long years of chaos continues to have a profound impact on Chinese
  thinking today.

  
  

  The opposite of chaos is stability, and for the 16 years since the massacre
  near Tiananmen Square in 1989, China has enjoyed more stable leadership
  and prosperity than at any time in the past 150 years. Incomes have grown,
  and millions of lives–like that of Liu Li–have improved beyond imagination.
  To be sure, China is not one big, bucolic Iowa; all sorts of tensions over land
  use and workers’ rights and free speech and endemic corruption and environ-
  mental despoliation loom, and they come into view in a startling number of
  riots and protests–big ones too. But compared with what China has been
  through in living memory, these are good times.

  
  

  Hu Jintao, the President and (a more important position) General Secretary
  of the Chinese Communist Party, wants to keep it that way. He came to
  power in November 2002 in the first political succession in modern China
  that took place without purges, late-night arrests or blood in the streets.
  That alone is a measure of China’s new stability. The government’s main focus:
  balancing growth between the go-go coastal areas and a sometimes shockingly
  poor interior, easing the movement of millions from farms to cities and ensuring
  that local officials do not succumb to corruption.

  
  

  So far, so good. But three years after Hu took power, the way in which
  he intends to secure stability has become apparent–and it is not what
  many foreign observers expected. Many hoped he would be a reformer,
  allowing alternative sources of power, like the media, regional governments,
  independent judges and prosecutors, to balance central control. As head
  of the party’s school for top cadres from 1993 to 2002, he had encouraged
  the study of other societies going through profound dislocations. In power,
  however, Hu has come across as more of a communist traditionalist. Within
  the past six months, the party has started something of a crackdown on both
  traditional and new media.

  
  

  In speeches to the party faithful, Hu has said Western democracy is a
  “blind alley” for China, and he has excoriated the path to reform, with all
  its attendant chaos, taken in the Soviet Union by Mikhail Gorbachev.
  Hu’s key policy initiative so far has been to strengthen, not weaken, the
  role of the Communist Party in Chinese life. “They believe the party is
  the only way that China can maintain political stability,” says a China
  watcher in the U.S. government. “Political institutions outside the party
  are not to be trusted.” In essence, the thinking goes, party discipline
  guarantees stability, which in turn breeds national strength.

  
  

  The great question now is whether internal pressures or external forces
  will somehow throw China’s rise off course. Outside its borders, the
  new China has plenty of friends. How could it not? Its growing markets
  and voracious appetite for the world’s goods are making companies and
  their workers wealthy, from Latin American cattle ranchers to French
  vineyards. In the U.S., the ever increasing flood of low-priced Chinese
  products has enabled rising standards of living for years (even as it has
  made job security in some areas more tenuous).

  
  

  China’s well-being is predicated on continuing that flood of exports, so
  the U.S. has some leverage over China’s policies. But beyond that carrot,
  the U.S.’s tools have become limited. When Jiang Zemin, Hu’s predecessor,
  visited the U.S. in 1997, Washington could still block China’s accession
  to the World Trade Organization (WTO), of which it is now a member,
  campaign against China’s hosting of the Summer Olympic Games (which
  will be held in Beijing in 2008) and tie access to the U.S. market to
  improvements in human rights (unlawful under WTO rules). Now, says
  Chu Shulong of Tsinghua University in Beijing, “the U.S. is no longer so
  important for China’s national interest.” (For those skeptical of that claim:
  between them, members of China’s Politburo Standing Committee have
  made 36 trips to 77 countries since Hu took over; only one of those trips–
  by Premier Wen Jiabao in 2003–was to the U.S.)

  
  

  China’s position could certainly change. In the past six months, a series
  of rows with Japan have reminded Asians that the two giants, with a bitter
  shared history, have never been at ease with each other. Even more potentially
  worrisome is China’s determination to bring Taiwan back into the fold. The
  island to which defeated Nationalist forces retreated at the end of the civil
  war in 1949 is now a thriving, culturally rich democracy–the freest society
  that Chinese people have known in their long history. But to Beijing, Taiwan’s
  status is a constant memory of the years of foreign humiliation. The National
  People’s Congress, China’s docile parliament, recently passed a resolution
  authorizing military intervention if Taiwan declares formal independence, but
  the U.S. has pledged to defend Taiwan from unprovoked attack. In the past
  few months, relations between Beijing and Taipei have improved after a
  dangerously frosty winter, but the tensions across the Taiwan Strait will
  require constant–and subtle–engagement by the U.S. if they are not to
  flare up again.

  
  

  Perhaps the greatest risk to China’s continued rise–and to the way it
  behaves internationally–comes from within. The extraordinary changes
  in the past 20 years have brought prosperity to many, but to scores of
  millions, the wealth so evident in cities like Shanghai and Beijing is a prize
  continually being yanked out of reach. Economic reforms have reduced
  the entitlements to a steady job and basic health care that were enjoyed
  by earlier generations. “Life in China is much more uncertain now,” says
  Li Yinhe, a sociologist at the Chinese Academy of Social Sciences in
  Beijing. “Economic instability can cause social instability.”

  
  

  That is why the most important figure for China’s future and in many
  ways for the Sino-U.S. relationship is not Hu–nor Rice, Rumsfeld
  or any other U.S. leader. It is someone like Liu. If her life continues
  to get better, the extraordinary challenges facing China’s leadership
  will be ameliorated. The best news possible for high policymakers
  in Washington is that a 20-year-old girl in Kaiping is happy. Between
  bonuses and overtime, Liu makes as much as $120 a month, nearly
  twice what she says she would have made if she had stayed closer to
  home, and she saves more than half of it. It’s a tough life, but Liu and
  her friends in the factory talk about their “coming out” from the villages
  as their chance to see the world. She shares a room with five other
  women, and at night in the dorm she and her friends test the freedoms
  of life away from their parents: wet towels snap, clusters of card players
  shriek and giggle. Liu doesn’t expect to sew seams forever. In two years
  she hopes to save enough to study for a better job and move on.
  “Who knows,” she says, gazing at a Timberland vest, “someday maybe
  I’ll meet someone who wears one of these.” If that ever happens, perhaps
  they will be friends. –Reported by Hannah Beech/Shanghai, Chaim
  Estulin/Hong Kong, Matthew Forney/Beijing, Susan Jakes/ Kaiping
  and Elaine Shannon/Washington

  
  

   

  
  

  Photo Essay

  
  

  
  
  • China’s New Reality
    In Beijing and Shanghai, the shapes of things to come

  
  

   

  
  

  China’s New Heights

  
  

  CHINA BY THE NUMBERS

  
  

  •Mobile-phone text messages sent last year: 218 billion

  
  

  • Percentage of the world’s ice cream consumed: 20%

  
  

  • Percentage of Chinese with a positive view of U.S.-China relations: 63%

  
  

  • Communist Party officials disciplined for corruption last year: 170,850

  
  

  • Percentage of counterfeit goods seized at U.S. borders that come from China: 66%

  
  

  • World ranking in automobile deaths: 1

  
  

  • Percentage of urban Chinese with a college education: 5.6%; Rural: 0.2%

  
  

  • Estimated rural Chinese who have never brushed their teeth: 500 million

  
  

  • Estimated ballistic missiles pointed at Taiwan: 700

  
  

  • Smokers: 350 million

  
  

  LIVING LARGE

  
  

  China has more than four times the population of the U.S., nearly all of it concentrated in the eastern half of the country

  
  

  China – 1.3 billion

  
  

  U.S. – 295 million

  
  

  Sources: Access Asia, TIME research; map data from LandScan/UT-Battelle

  
  

  $859 > Annual disposable income of a resident of Lanzhou. A Shanghai resident has more than twice that: $2,010

  
  

  63,900 > Number of retail outlets opened in Chongqing, 1998-2004

  
  

  1.3 million > Number of private cars in Beijing, up 140% since 1997

  
  

  300+ > Number of skyscrapers in Shanghai. In 1985 there was just one

  
  

  620% > Shenzhen’s population growth since 1990, from 1.67 million to 12 million

  
  

   

  
  

   

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