A Brief History…

Reader and commenter, Allan, has written a review of a book on China titled, The Changing Face of China: From Mao to Market, by John Gittings. Here is his review of the book:

As one who spends a great deal of a time studyingstock charts and investment reports, I’ve found thatsometimes it pays to back away to get a larger senseof the global backdrop. Which is how I came to pull off the shelf a book titled The Changing Face of China: From Mao to Market by John Gittings. Heavier on the Mao than the Market, the theme of this work is focused on the transition from the peasant-centric world of 1949 to a nation that, by 2004, is as capitalistic as any western economy around. It’s a progression from an agrarian economy woefully inefficient, to a rumbling and awkward giant beset by corruption, pollution, growing discontent of the rural and urban poor, and long unfinished business with Taiwan, along with the Tibet and the Uighur Autonomous Regions.

For those who desire an insider’s view of this transition, Gittings glides in and out the parade of individuals who came to the forefront, often to be crushed by the constantly shifting personal and cultish politics of the Communist Party under Mao. And, although much emphasis is placed on the elites, he does not ignore the peasant classes who evolved into urbanized factory workers, technicians and engineers on one hand, and those who became the left behind illiterate laborers and rural poor on the other.

Gittings himself lived for years in China, having set up the Shanghai bureau of the Guardian while serving as that paper’s editor for China and East Asia from 1983-2003. The author to his credit avoids injecting his personal life experience into the narrative, yet the reader benefits from a modicum of quotes and anecdotes from a spectrum of everyday Chinese that are obviously derived from Gittings’ interviews and personal associations. One comes away from this book realizing that Communist China is not the authoritarian monolith as much as an ever evolving project. Even their classification as communist is blatantly erroneus. Their transition to a market economy is in its early stages despite the already global waves they create in global markets as producers and consumers. Since the last pages of the book toward the end of 2004, there’s been a China stockmarket boom and subsequent halving some would foolishly deem a collapse. There’s been massive foreign capital infusions greatly eclipsing what was once thought to be just as massive only at the beginning of the decade.

And with their country flung open there’s been concomitant strife and discontent skyrocketing along with the widening gap between the haves and the rest. The Chinese are out capitalizing the capitalists in even that regard. A market economy is a competitive beast. The SOE (state owned entreprise) as a production unit has been gutted and rejected, although a number limp along still in order to assure a more peaceful demise of this socialistic device, carrying with them mounds of bad debt that remain on the books of the state banks. And worse, the disassembling of hundreds of smaller, provincial SOE’s created much corruption as managers stripped them of assets and sold off the pieces for personal gain. While at the same time, tossing thousands upon thousands of workers into unemployed status.

Which also exposes a major problem for China going forward, as the Party, having buried the communist central planning model and turned their back on even the SOE’s, now faces a new onslaught of domestic issues from healthcare to education to enviroment, which Gittings enumerates at length in the final chapters. In essence, the Chinese were only trying to catch up with the world by transforming their government and their economy, but found themselves on the verge of overtaking all but the mightiest of the world leaders. Reading this book makes you wonder if they are anywhere near ready for all that entails. They are winging it, in my opinion. And rushing through stages that nations like the US spent decades working out.

Thanks, Allan.