Will China Survive The Newly Rich Oligarchs?
In China, a new power is slowly emerging: Rich oligarchs who test the state’s limits to control the economy from Beijing. And Western expats are only happy to get along with them.
Foreign observers commenting on China are often accused of “ethno-centrism”: The judgment of foreign customs through a Western lens.
It is argued that we from the West simply do not understand that democracy is not a universal value, and that a political system that we characterize as a “dictatorship” might resemble a “planned, coordinated economy” for others. According to this line of thought, it is not our job to criticize. Last year, we were informed by a retired Microsoft COO in the “Wall Street Journal” that the Chinese do it better in any sense and meaning. In relation to freedom of speech, our view is that China has much work to do. But the Chinese wonder why we would not block pornography or anti-government propaganda to protect our youth and citizens. Or, of course, you can safely dismiss these words as personal travel notes after the COO’s trip “from Los Angeles to China to attend a corporate board-of-directors meeting in Shanghai, as well as customer and government visits there and in Beijing”.
But in July of last year, “Time Magazine” also informed us that Chinese income polarization, inequality and speculative bubbles were nothing to be scared of, as “none of these issues is incompatible with substantial expansion for years to come. Headline GDP numbers won’t tell the real story, even if that number is 8% or 9%. The growth rate in many cities is well above that, in the range of 15% to 20%, and that is what matters for the global system.”
Yet one could say that if analysts in Europe and the US are biased towards a Western world view, expats in Shanghai may also resent another distorted view: The corrective glasses prescribed by the opticians of the Chinese Communist Party. Maybe it is not the expats’ fault, and maybe the commies’ tactics are not so deliberate, yet it is understandable that people living in a place that has managed to increase its economy by some 800 billion dollars per year may feel excited about it - especially if some chunk of this amount lands into their pockets.
Beneath wealth and believing, one should avoid both the distortive glasses of Western conservatives as well as the tinted glasses of post-socialist PR. This is not to say that China is a model to condemn - there are many elements that could serve as inspirations to Europe and the United States. But China’s model has its limits, and they should be pointed out before it is too late, for them and for us.
The point is that we have seen many of these expat stories before that praise other political and economic models. In the years before 1975, the Shah’s Iran was booming and Westerners praised the “authoritative” rule of the monarch. In 1977, even President Jimmy Carter toasted with the Shah calling his country as “island of stability in one of the most troubled areas of the world”. At the time, some 30.000 enthusiastic US expats had found a new home in Iran. The 1979 revolution brought to the surface that economic cannot always provide cover for political deficits. Similar stories (albeit on a smaller scale) unfolded from Africa to South America: In Brazil, Angola, Argentina, Libya, and recently Dubai. In all cases, enthusiastic expats praised the countries’ economic performance but had to pack and leave when political downturns impacted their dividends.