30 Years After Tiananmen: Western Democracies’ Wishful Thinking On The Rise Of China
In recent months, China has changed in Western perceptions from a major if somewhat unruly trading partner to being seen as a potential threat to Western democracies, seemingly in the blink of an eye. This is something much bigger than Trump’s trade war against China.
I argued back in 2018 that the U.S. – China trade war is not really about trade but has more to do with their strategic rivalry. We are now seeing a new political consensus emerging among the political elite of Western democracies that China’s rise represents a strategic threat. How did it happen? And so fast?
It is no secret that ever since the beginning of its economic opening China has been mercantilist in driving its economic growth; and after joining WTO it has tried to bend the rules to its advantage wherever it could. And yet the Western democracies supported China on every step of the way. Furthermore, if the West wanted to turn against China as a rogue state, then the time to do so would have been 30 years ago in 1989 in the aftermath of the bloody June 4 crackdown of the student protest in the Tiananmen Square in Beijing.
Instead, in the decade that followed, there was increasing acceptance of China in the global economic system, cumulating in China’s entry of the WTO in 1999. The fact is that political leaders in the West, until recently, were perfectly happy to accommodate China’s economic rise in spite of its communist party rule, alleged human rights abuse, and mercantilist policies. The switch from accommodation to antagonism has been abrupt. Why?
At the most fundamental level, it has to do with the recognition that China has proven wrong a long-held assumption by the West, especially by the liberal left of center political elite, that market capitalism and liberal democracy are two sides of the same coin, and that in the long-term it is not possible to have one without the other.
It was a comforting assumption while it held, and trading with China and helping its economy grow was seen as paving the way for an inevitable political liberalization. Hence, in spite of its rising economic might, it was believed that accommodating China in the global economy would help unleash forces within China itself that would set the stage for democratic change. So trading with China was not only about trade, it was also an economic means toward a political end.
This assumption turns out to be just that, an assumption that is a product of both Western hubris and wishful thinking. The hubris is best symbolized by Francis Fukuyama’s “end of history” thesis which sees the collapse of the former USSR as proof that Western democracy is the best political system that there is; it is not only superior to all other political systems, but also a precondition for creating prosperous and peaceful societies.
A plethora of learned treatises with titles like “The Coming Collapse of China” and “Why Xi’s China is in Jeopardy” is based on the proposition that China either becomes a democracy or faces economic collapse. The wishful thinking of the West is its expectation that an expanding and increasingly affluent middle class in China would lead to their demand for democracy, getting stronger over time as they get richer. And the more they could afford to visit countries in the West the more they would be impressed by what they see, and the more they would want China to become like the West.
However, China has somehow managed to demolish this hubristic assumption. There is in fact nothing mysterious about China’s continuing economic rise without democracy. The assumption was actually tested empirically by none other than the late Milton Friedman back in 1988. He analyzed data from 167 countries (excluding oil-exporting countries) over three decades and found only very weak correlation between political rights and economic growth, contrasting with very strong correlation between civil liberties and economic growth.
Political rights are defined as rights to participate meaningfully in the political process, such as rights to vote and compete for public office, to form political parties, for elected representatives to have a decisive influence on public policies, and so on. Civil liberties, on the other hand, are defined as a degree of personal autonomy in terms of education, jobs, travel, the place to live, religion; and rights to private property and business ownership. In fact, the quantitative results of Friedman’s analysis are striking: a one percent change in civil liberties implies a whopping 49% change in economic growth; versus a much weaker 8% change in economic growth coming from a one percent change in political rights. (M. Friedman, “A Statistical Note on the Gastil-Wright Survey of Freedom,” in Freedom, Democracy and Economic Welfare, 1988, The Fraser Institute.)
China’s continuing economic success, therefore, lies in the government’s ability to ringfence social and economic space in which the control over individual liberties have been relaxed gradually and incrementally, without making any concession to the practice and values of Western democracy. It is ironic that 30 years after Tiananmen, many of the liberties that the student protesters yearned for, such as the freedom to travel abroad, to choose their own jobs and careers, to own and run private businesses, are being enjoyed by two generations of younger Chinese that came of age since.
It is the reality of a China that can drive economic growth on its own terms without having to adopt Western democracy that radically changed how the West sees China. It’s a rude awakening for the West to realize that trade as an economic means has failed to achieve the political end of democratizing China. China, on the other hand, has never followed any Western prescriptions for economic reform, nor does it pretend to. It has resolutely marched to its own drum beat. The West has misled itself by its hubris and wishful thinking.