Will Xi become China’s New Deng Xiaoping?

November 7, 2013
August 27, 2013
By Elizabeth Pond

Will Chinese President Xi Jinping be another Deng Xiaoping? Or, as he fears, might he become another Mikhail Gorbachev? The answer may lie as much with China’s nouveau middle class as with the fallout from the sensational trial of deposed Chongqing party boss Bo Xilai.

So far the wager among analysts seems to be that Xi, who assumed the presidency in March, aspires to emulate Deng’s feat. The one-time “paramount leader” suppressed the 1989 Tienanmen pro-democracy demonstrations in order to carry out his market reforms with a unified party and convert an overwhelmingly peasant China into the world’s new economic powerhouse. The very success of Deng’s transformation of China makes any repetition of this achievement much harder today, however.

Xi’s hints that he will restart economic reforms this fall—after they stagnated at the start of the 21st century, state enterprises clawed back powers from the private sector, and party corruption ballooned—echo Deng’s rhetoric. Similarly, Xi’s actions in recent days in apparently authorizing police detention of prominent critics like Chinese-American businessman Xue Manzi (who tweets to 12 million followers) parallel Deng’s enforcement of party orthodoxy.

Yet at this stage of China’s economic and political development, Xi will have much more difficulty repeating Deng’s successful prevention of a split in the top Communist leadership . The feared example that Chinese think-tankers cite again and again is Soviet leader Mikhail Gorbachev, who believed he could reform the one-party system, but instead ended up destroying it as rivals ousted him, renounced Communist ideology, and broke up the Soviet Union.

In his time Deng achieved what many Western China-watchers at first deemed impossible. A generation after Chairman Mao Zedong’s forced collectivization led to mass starvation of some 45 million peasants, Deng’s changes lifted more than half a billion peasants out of a subsistence economy in the largest and fastest poverty alleviation in history. The reforms quickly spawned as well a middle class much larger than America’s total population. Yet Deng effected this transformation by establishing a social contract with the rising half billion-plus that gave them an ever better consumer life as long as they remained apolitical.

As the new system stabilized, Western observers dropped their earlier analysis that a modernized economy would prove to be too complex for the rigid Communist Party to steer—and that the burgeoning middle class would follow Western and East Asian precedents to become a vanguard in demanding more political as well as economic participation. An American consensus then evolved that China had molded an “adaptive authoritarianism” that repeatedly made just enough tactical concessions to prevent discrete local protests from escalating to any broader political challenge.

The five-day show trial of Bo Xilai for alleged bribery, embezzlement and abuse of power suggests that it’s time to revise such revisionism. No one seems to doubt that the court, at the party’s behest, will declare the former high-flying Politburo member and party secretary of Chongqing  guilty as charged. Indeed, independent of the verdict, after the earlier conviction of his wife for murdering a British businessman and apparent subsequent complicity of Bo in a cover-up, few doubt Bo Xilai’s guilt. Nor does anyone seem to think that a jailed Bo will be able to revive the campaign he once waged for rule by iron fist, populism, and Mao nostalgia. But Bo’s own spirited defense in the dock last weekend and the unprecedented information about the trial that has been made public will make the administration of adaptive authoritarianism far trickier.

For a start, revelations of Bo’s extravagant lifestyle invite cynicism about how many other senior party officials are enriching themselves in a society that preaches equality but practices extreme inequality between elites and the proletariat. It also raises tantalizing questions about Xi’s reliance on a court of justice to sweep his 64-year-old fellow “princeling”—both men are sons of party elders who were comrades of Chairman Mao—off the political stage forever. The trial has lent approval to the unfamiliar precept that the accused should have his say in court—and that someone who has previously confessed to party interrogators can retract that confession in court.

This point is sure not to have been lost on China’s more than 200,000 licensed lawyers and 800,000 students of the post-Mao discipline of law. A significant number of them are already advocating a more fundamental rule of law that differs sharply from the Communist version of “rule by law” that the party creates for its own purposes.

Moreover, the pressures on Xi are growing as the maturing Chinese economy decelerates and the credit bubble threatens to burst. The population’s rising expectations risk disppointment, many in the new streams of university graduates face unemployment, and the age of the microblog provides a handy forum for spreading discontent.

Already intellectuals in China’s party-related think-tanks are urging reforms that go beyond what Xi may think are compatible with continued one-party rule. They want to introduce real rule of law with independent courts and to scrap Mao’s outmoded hu kou residence registration that bans villagers from the cities that now hold half of the country’s population. They also call for overhaul of  a woefully inadequate tax system that forces local governments to fund their communities’ modernization almost exclusively by expropriating adjacent farmland, thus stoking farmers’ resentment of local Communist authorities.

These conditions provide increasing possibilities for an eventual coming together of malcontents among villagers, intellectuals, youths, entrepreneurs, party factions, and the hitherto apolitical middle class against today’s still highly centralized rule. More participatory models of governance are already available for an increasingly well-traveled and sophisticated population – not only in the West, but also in Hong Kong’s more open blend of Chinese and British political tradition and in Taiwan’s emergence decades ago from one-party Kuomintang rule to real democracy.

So far Xi Jinping has kept the Chinese together by nationalist assertiveness in the South and East China Seas. Among Chinese who feel that their new national strength is finally avenging the West’s humiliation of China in the 19th and 20th centuries, that may serve to help him avoid the fate of Mikhail Gorbachev. If this is his price for becoming the new Deng Xiaoping, though, it will exact a high cost from both China’s citizens and its neighbors.

Elizabeth Pond is a Berlin-based journalist.

World Policy Journal
© Elizabeth Pond

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Confluence of China’s Foreign and Domestic Policies

February 19, 2013
By Elizabeth Pond

Let’s consider the yin and yang in the confluence of China’s foreign policy and domestic politics—and the parallel yin and yang in the challenge of China’s precipitous rise to America’s hegemony in the South China Sea.

On Chinese foreign policy, the narrative is clear. After two centuries of humiliation at the hands of the West, it’s pushback time. China has declared its determination to convert its new power as the world’s largest trader and second-largest economy into political clout.

Strategically, Beijing is pushing back against a United States it sees as trying to prevent China’s reassertion of the regional hegemony the Middle Kingdom once rightfully enjoyed. Tactically, it is pushing back especially vigorously against Japan, the World War II occupier of China, the post-war local surrogate for the developed West, and now the globe’s third-largest economy. By such intimidation as “painting” a Japanese destroyer with pre-strike targeting radar, Beijing is contesting Tokyo’s century-old administration of the uninhabited Senkaku/Diaoyu islands. It is gambling with triggering impulsive local escalation up to an inadvertent war that could ultimately draw in Japan’s 60-year American ally and democratic patron.

On the domestic side, the Chinese dynamic seems murkier to Western onlookers. Chinese diplomats—when peppered with advice to act less belligerently and accept more responsibility for the common good of open seas and regional peace and stability—tend to plead inhibiting internal weakness that some Westerners find risible. Beholding the giant that has so abruptly ended America’s unipolar moment, skeptics dismiss Chinese protests of vulnerability as Beijing gives priority instead to the urgent domestic task of avoiding the middle-income trap in their development.

In this vein, foreign cynics point out that the Chinese Communist Party (CCP) has been uniquely successful over the past quarter century at revolutionizing the country’s economy with market reforms—conducting the largest and fastest poverty alleviation in history and creating a middle class larger than America’s entire population—while still preserving authoritarian one-party control. Western cynics note that their own faith that every new middle class will inevitably demand democracy has been confounded by Beijing’s “adaptive authoritarianism”—a  mix of reflex suppression of protests, occasional concessions, and a social contract that has steeply raised the well-being of the apolitical middle class over three decades of 10 percent-a-year economic growth.

Yet the fear that haunts party leaders is very real to themselves—and to indignant bloggers and the Chinese think tanks that have sprung up in recent decades. It echoes Chinese rulers’ historical anxiety about peasant uprisings that have toppled dynasty after dynasty. For the first time in eight years, the central authorities have just released embarrassing official figures that tally 180,000 rural and urban “mass incidents” (demonstrations with 100 or more protesters) last year. For the first time in over a decade, authorities have also just released (understated) official statistics that peg the Gini coefficient of social inequality at 0.474, a level exceeding even the ur-capitalist American gap between top and bottom social strata. And popular anger over corruption by billionaire senior party officials has been fueled in the past year by lurid scandals and exposure of top-tier wealth that make a mockery of the party’s post-Mao claims to legitimacy through raising everyone’s boats.

As the new leadership for the next five years settles in, then—CCP chief Xi Jinping will assume the country’s presidency next month—it feels beleagured at home but empowered abroad. These contrary instincts could interact in either negative or positive ways.

At worst, there could be a replay of the slide into World War I in 1914 as the rising power of Germany challenged the naval hegemony of Britain. A hot-shot Chinese pilot—like Wang Wei in 2001—might again nick the wing of an American spy plane in mid-air and force it to land on Hainan island or ditch into the ocean. In the absence of reliable hotlines or agreed rules of conduct for close shadowing, mid-level Chinese navy officers might lock missile-firing mechanisms as well as radars on rival ships next time. Japanese captains might respond in kind. In a tense standoff there could be a hair-trigger exchange of fire that no one ever intended.

Popular anti-Japanese chauvinism would then flare up again in China and tempt the top Politburo Standing Committee of imbalanced factions to fall back on the unifier of ultranationalism. Analagous anti-Chinese chauvinism would exert the same pressure on a receptive Tokyo government, which might then summon help from the American guarantor of its defense.

At the same time, volatile North Korea might further exacerbate tension by conducting yet another missile or nuclear test in defiance of United Nations censure. Or the U.S.-Chinese confrontation over Taiwan, which calmed down in the past two decades as Taiwanese and Japanese investors poured well over $140 billion into China, could erupt again. This time around, there would be even more risk than in the last showdown in the 1990s. The People’s Liberation Army and Navy can now bring formidable new firepower to bear on the Taiwan Straits. American commanders, acutely aware that time is on China’s side, might well call for a robust application now of the Pentagon’s bold “Air-Sea concept” to disrupt Beijing’s acquisition of “anti-access/area-denial (A2/AD)” capacities. In a chain reaction, both South Korea and Japan might themselves go nuclear.

Yet a more benign conjunction is also conceivable. The geostrategic tradeoffs may not be as obvious as they were in the Cold War, when Richard Nixon and Henry Kissinger sought reconciliation with a China that sought American reassurance against Soviet military incursions to the north.  At this point, however, both sides would benefit from regular military-to-military contacts, agreed rules for ship encounters, and a clear system of signalling red lines. And China might even come to appreciate Washington’s restraining influence on Japan, as most recently exercised by last month’s sudden dispatch of a high-level US team to Tokyo to urge caution in Senkaku waters.

Surely it would be insane for China and the West to subject their trillion-dollar-plus trade and investment in each other to the vagaries of some uncontrollable momentum toward war. Instead, wary joint management of the epic confrontation could eventually profit all players by leading to such win-win outcomes as joint mining of seabed minerals, perhaps on the Svalbard model—even before rival island claims have been resolved, and even before the resistant U.S. Senate has followed China in ratifying the Law of the Sea Convention. The 1920s’ Svalbard treaty grants Norway sovereignty over the island but allows any signatory of the treaty to engage in commercial activities there, including mining.

In parallel—perhaps after a five-year truce between CCP factions that might agree on more economic reforms now but not on political liberalization— a more productive domestic dialogue between rulers and ruled could evolve in China to smooth some of the rough edges of Beijing’s headlong pursuit of manifest destiny. Much as Beijing’s lethal smog is internalizing the demand for pollution control in a way foreign hectoring never did, so might the facts on the ground of 200 million migrant factory workers finally obviate the discriminatory hukou ban on peasants’ settling in cities as a dysfunctional relic in the 21st century. Already the incoming Chinese leaders have hinted at hukou reform.

If the next succession of leadership in 2018 does bring more “Communist Youth League” politicians onto the Politburo Standing Committee to balance today’s more hardline “princelings,” as the Brookings Institution’s Cheng Li anticipates, better treatment of China’s own citizens could follow. Tax laws could be introduced to give cities other sources of revenue than expropriation of contiguous farmland for lease to rich commercial developers. Courts might eventually be compelled to accept suits by farmers against land grabs—and to enforce existing laws guaranteeing peasant lessees’ 30-year tenure on their plots. The expanding coterie of Chinese lawyers might eventually begin to defend and develop rule of law. Party censors might eventually admit that they are no match for the ingenuity of  bloggers who deploy Chinese homonyms in infinite variations to evade Internet bans.

The examples of proto-democratic Hong Kong and democratic Taiwan show the way. So does the current fad in some party circles for reading De Tocqueville’s l’Ancien Regime and identifying their own system, remarkably, with that doomed regime rather than with the French revolution. So does the approval Chinese reformers accord the example of Jiang Jingguo, son of the autocratic Chiang Kai-shek, in democratizing Taiwan from the top down in the 1980s.

With some common sense and a bit of luck in Beijing, Tokyo, and Washington, perhaps the complementarity of yin and yang can triumph after all over the duality’s inherent confrontation.

Elizabeth Pond, a Berlin-based American journalist and author, first visited rural China by bicycle 29 years ago.

World Policy Journal
© Elizabeth Pond

Democracy in China: The Popularity of Alexis de Tocqueville in the Middle Kingdom

October 12, 2012
By Elizabeth Pond

First there was Confucius. Then there was Mao Zedong. And now Alexis de Tocqueville tops the must-read list for avid Chinese intellectuals and bloggers.

The French aristocrat who limned the definitive political sociology of the United States almost two centuries ago might seem an unlikely crux of controversy in 21st-century China. But it is Tocqueville’s other classic, L’ancien régime et la Révolution—with its thesis that revolutions come not when masses are downtrodden, but when there lot is improving—that has sparked today’s hot debate.

After all, China arguably offers the ideal test of Tocqueville’s thesis. As one Chinese blogger puts it, “Don’t you feel that China now is nearly a copy of France in those [prerevolutionary] days?”

Or, as Cheng Li, director of Chinese research at the Brookings Institution, puts it, Chinese developments today seriously challenge the Western academic consensus that the Chinese Communist Party has somehow found the magic wand of “resilient” (or “adaptive”) authoritarianism to maintain its power indefinitely.

To be sure, this is a country in which the Chinese Communist Party (CCP), by contrast to its Russian counterpart, has largely privatized and transformed a centralized state economy, while still preserving its own political monopoly. The land’s 10 percent annual growth over the past 30 years has not only made China the second biggest economic power in the world, but has also lifted half a billion peasants out of poverty and spawned a new middle class larger than the entire US population. Along the way, it weathered the 2008-09 financial crash better than most Western economies. So far, its citizens have been grateful for this miracle in their lives.

Torrid growth is now decelerating, though, even as expectations continue to rise. Simultaneously, the egalitarianism of Deng Xiaoping’s market reforms—which shrank the huge Mao-era gap between city and country life—has been superseded by a growing domestic divide between top and bottom social strata that surpasses even America and Russia’s notoriously high inequality.

This is no abstract concern. Just as the CCP heads into next month’s tricky once-a-decade turnover of party chiefs, the vast new class divide has been spotlighted by public revelations about corruption and lavish elite lifestyles in the bizarre case of the murder of British businessman Neil Heywood in a Chongqing mountain hotel. Already the scandal has led to the expulsion of Chongqing political baron Bo Xilai from the Communist Party and the conviction of his wife for murder. The affair will probably end with the jailing of Bo himself on criminal charges—and with rising popular disillusionment.

For Brookings’ Cheng Li—who grew up in a rural backwater during the cruel Cultural Revolution, knows many party officials at various levels, and has a sixth sense of factional politics—this year’s conjunction of scandal, widening social inequality, and political stagnation adds up to a crisis of authority for the CCP that is overpowering its touted “resilience.” The party’s original legitimation by ideology vanished after Chairman Mao died. Its current legitimation by history’s fastest economic growth and trickle-down enrichment is now under threat as growth lags behind expectations, China tries to escape from the middle-income trap by scaling the value-added ladder, and powerful state-owned enterprises have resurged to block needed reforms and provide slush funds for officials’ private investments abroad and their mistresses’ villas at home. In this atmosphere, efforts by political reformers to give the party a renewed source of legitimacy by opening it up to greater citizen participation have also been thwarted for the past ten years.

Significantly, the party’s crisis of authority is playing out against the backdrop of the stellar example of democratic Taiwan. There one-party Kuomintang rule morphed two decades ago into a robust democracy that has already generated per capita income surpassing European Union levels. This voids the CCP’s mantra that self-government is alien to Chinese culture. So does the protodemocracy of a Hong Kong that takes seriously the autonomy it was promised on reverting from British to Chinese rule 15 years ago. In the most recent exercise of autonomy, when tens of thousands of Hong Kong citizens took to the streets to denounce as “brainwashing” Beijing’s attempt to force ideologically correct “moral and national education” on their schools, Beijing withdrew its diktat.

Little wonder, then, that in a 4,000-year-old nation whose dynasties repeatedly turned decadent and were toppled by angry peasant uprisings, today’s think tank mandarins worry about Tocqeville’s relevance to 2012 China. One cyberspace debater, alluding to both disappointed popular expectations and erosion of CCP legitimacy, wrote, “Without doubt people’s living standards are far above what they were years ago, but, on the contrary, people’s discontent with society is greater than ever.”

Other bloggers “see China as stuck between an unsustainable present and the probability that reform will only unleash pent-up demand for immediate democratization,” comments Boston University’s Joseph Fewsmith. He notes the surprising flip in Chinese self-identification with the French revolution in earlier years, but with the French ancien regime today. He concludes, “[T]he French Revolution, which used to be held up as an exemplar precisely because it was bloody and decisively ended ‘feudal’ society, has given rise to a new conversation about not only the need for [Chinese] self-government, an independent judiciary, and a constitutional government, but also about the difficulty of reform at the current time.”

The opposing theory to Tocqueville’s thesis, of course, is the rather newer Western paradigm of resilient authoritarianism that Cheng Li contests. This evolved after the 1989 Tienanmen massacre as an explanation for the puzzling CCP success in effecting tumultuous economic and social change while still perpetuating one-party rule. In this analysis, the CCP has deployed enough violence by police and hired thugs to keep scattered protests from spreading—but has on rare occasions also conciliated irate demonstrators against land seizures in Wukan or construction of a polluting copper alloy plant in Shifang, in order to provide a safety valve and keep tempers from boiling over.

So far Western proponents of the adaptive-authoritarian school of analysis can cite ample supporting evidence. China’s new middle class has stayed conspicuously consumerist rather than turning political. And peasants who protest municipality land grabs still tend to blame injustice on local officials rather than venting their anger on a distant Beijing that routinely ignores China’s own laws and rewards local injustice if it leads to commercial wealth.

Yet the outgoing CCP leadership seems far less impressed by its own adaptability than by its fragility, as its nervous ban over the past ten years on public release of Gini coefficient statistics on the widening rich-poor gap suggests. This fall, the two main CCP factions have made common cause against the danger that Bo Xilai’s escapades might stoke cynicism about why the party tolerated Bo’s behavior before his police chief tried to defect to America. The party factions have not gone beyond damage control, however, to make the fundamental choice between extending the past decade’s stagnation in economic and political reform or starting a new reform wave that might put their Leninist party at risk. Nor have the new president- and premier-designates tipped their hands in a collective leadership that at times of succession favors the bland.

At this point, the policy tug-of-war within party ranks, in part through the surrogate controversy over Tocqueville, is the crucial debate for China’s future. Cheng Li identifies at least three strategic (and not just tactical) party reformers in outgoing Premier Wen Jiabao, Quangdong party chief and conciliator of the Wukan protesters Wang Yang, and head of the Politburo Organization Department Li Yuanchao. “Wen, Li and Wang have argued explicitly that democracy reflects universal values and should be the shared aspiration of the Chinese people,” Cheng Li points out.

This trio is supported by an array of intellectuals in both party and semi-autonomous think tanks. They are opposed by those senior officials who have successfully stalled further reforms in recent years.

What the two camps are feuding about is, in essence, the verity of de Tocqueville’s apercu that revolutions erupt not when people suffer the most, but rather when their lives start improving, as the lives of today’s young generation have done spectacularly. Both camps tacitly see today’s China as an ancien regime that is in crisis. Hardliners contend that the only way the Chinese Communists can hang on to power is by suppressing dissent. Reformers argue instead that the only way the party can stave off being swept away by the gathering storm is to loosen its tight bureaucratic control voluntarily and invite outsiders into the political game gradually.

For his part, Cheng Li thinks that time is short, but reform now could still forestall revolution by soliciting support from the 200,000 lawyers and other newcomers in China’s increasingly pluralist society. “If the CCP wants to regain the public’s confidence and avoid a bottom-up revolution, it must embrace genuine systematic democratic change in the country,” he contends. “[Like Taiwan in the 1980s] the CCP must now either make changes to be on the right side of history or be left behind.” Even if there is no “real consensus for the rule of law” in the party now, “sometimes the development of the rule of law happens through necessity, not due to the noble ideas of political leaders.”

Elizabeth Pond is a Berlin-based American journalist and author.

World Policy Journal
© Elizabeth Pond

Urbanism on the Steppe

THE  INSTA-CITY  IN INNER MONGOLIA

World Policy Journal Winter 2010-2011

BY ELIZABETH POND

KANGBASHI, Inner Mongolia, China — At first sight, this remote outpost in Inner Mongolia looks like a mirage on the windswept, semi-arid desert. It has all the accessories of a real city. The planners have thought of everything–a grid of six-lane roads, an opera house, a theater, a brown, potato-shaped museum, a library that looks like a stack of toppling books, a convention center, a stadium that hopes to host the Asian Games and a central square even larger than Beijing’s Tiananmen and, thus, ideal for flying kites. There are also enough high-rise apartments to house the one, or two, or maybe 5 million people who are expected to live here in one, two, or maybe five years. All that might distinguish this city from scores of others in rapidly modernizing China are the outsized statues of Genghis Khan and rearing stallions.

What’s missing, so far, is people. At mid-day, Kangbashi’s purported 30,000 citizens are scarce. Its six-lane streets are empty. Here, amid the fastest urbanization in history, which has catapulted China’s city-dwelling population from 17.5 percent to 47 percent in a single generation, the great migration appears to be stuttering.

Zhang Penglong explains the paradox. If the gigantism of six-year-young Kangbashi shows the top-down face of China’s emergence as the world’s second largest economy, 29-year-old Zhang shows the face from bottom-up. “Allen,” as he likes to be called by English speakers, is the new yuppie–a first-generation university graduate and the first from his family to move from the village to the city. Now, Allen has to figure out, as a newlywed, how to navigate his way in this strange new world. He’s a good interpreter of the Inner Mongolia Autonomous Region. He sees things from both inside and out.

Allen attended university in the regional capital of Hohhot and settled down there. He therefore looks at the surreal Kangbashi and its founding fathers in surrounding Ordos Township with the eyes of a man from the capital. Yet he is also a seventh-generation Inner Mongolian. His forebears came here 200 years ago, from land-poor Shanxi Province. He is part of the nearly 80 percent Han Chinese ethnic majority in the region. His parents still tend their sheep in a nearby mountain village after they balked at moving to inferior housing on the plains, during a recent campaign to halt grazing on eroding hillsides. Allen’s introductory tour for a visitor is brief. “There are 15 Bentleys in Ordos,” he declares.

Indeed, Inner Mongolia as a whole has already made its own ascent out of poverty. Today it is China’s only inland province with a per capita GDP matching that of the bustling Hong Kong-Shanghai corridor. And the Ordos tycoons, who created the instant city of Kangbashi—which is no self-governing municipality, but only a district of Ordos—have risen even faster.

Blessed by coal mines and the rare earth minerals that the world craves for its mobile phones, hybrid cars, and missiles, Ordos tops the Inner Mongolia pecking order, with a per capita GDP that locals say exceeds even Beijing’s. “Rare earth,” Allen clarifies, “is the monosodium glutamate of high-tech industry. If you add it to steel, it makes the steel strong. It makes a cellphone vibrate. It’s important for aiming rockets to outer space.” The rare earth Neodymium, used in everything from wind-turbines to iPhones, is mined here, as is the extremely profitable Lanthanum— which sells for more than $45,000 a ton on the international market, and just $4,500 a ton within China.

So, of course, as night follows day, the Ordos millionaires built a new city. They had loose change left over from the export of close to 80 percent of the rare earths that China produces—accounting for 97 percent of the total produced globally. Instead of stuffing their aggregate billion dollars or so into a mattress, they put it into Kangbashi—their trophy and investment. Nor are they resting on the laurels of coal, lanthanides and a skyscraper city conjured up from the steppe. Whatever their past profits in a region that produces a sixth of the nation’s coal, the Ordos fathers can hope too that by the time Kangbashi gets into full swing, renewable energy will be curbing China’s voracious appetite for smog-inducing coal. Already, China is the world’s largest producer of solar panels. And Inner Mongolia’s 2010 jump in capacity nudged China past the United States to become the world leader in harvesting windpower.

“Here the wind blows twice a year,” Allen deadpans, “and each time it lasts for six months.” He adds that Inner Mongolia is just starting to manufacture its own turbines and blades. Traditional American, German and Danish suppliers are bracing themselves for the competition.

To be sure, generating surplus electricity in the sparsely populated north is still uneconomical, as there is no transmission grid in place to carry it to the energy-hungry factories in the southeast. Yet proof of the seriousness of the Chinese quest can be seen every day on local highways, in trucks loaded with generator parts—and even in the $1,500 mini solar panels and wind turbines that perch on the top of each streetlight along expressways still under construction.

The Golden Goose

In the Chinese context, the notion that if you build a city in the wilderness, people will flock to it, is not at all far-fetched. If Dubai could become the glittering entrepôt on the Arabian sands, why couldn’t Kangbashi become the glittering entrepôt on the fringes of the Gobi? If legendary Shenzhen could expand from a tiny fishing village near Hong Kong to become, in just 25 years, a metropolis of 14 million and the nation’s third-busiest container port, then why couldn’t Kangbashi partake equally of China’s stunning growth? If Beijing is now building a chain of inland factories and cities to spread the country’s coastal prosperity to the hinterlands (and gain from a new pool of low wage factory workers even as strikes begin doubling labor costs in Guangdong), why couldn’t Kangbashi too become a trailblazer?

After all, Kangbashi’s pattern follows the recent model of every self-respecting Chinese city. As many as 200 million young migrant workers have already breached the half-century-old barrier of residence registration—hukou—that previously blocked second-class peasants from drifting into cities. Their target factories and cities have been hard pressed for the funds to expand housing, transport, sewerage and other infrastructure to accommodate this “floating population.” Tax revenues in a transforming and frenetically improvising system have not kept up with budgetary needs—but cities have discovered the golden goose: land.

Land is owned by the government. Therefore it can be exploited easily by city governments, either by buying out contiguous rice paddies cheaply from gullible long-lease farmers, or by outright confiscation. In the latter case, since the central government has barred all property suits from the courts at present, compensation is often determined by the loudness of protests and by the effectiveness of holdout lessees in appealing over the heads of local officials to persuade higher provincial or central authorities that there is a risk of dreaded “instability” if buyout offers are not sweetened.

Once land has been acquired, there is virtually no financial risk, at least so far. In an economy that has been growing relentlessly at an average of almost 10 percent for 30 years, real estate and rental prices have gone in only one direction—up. Nor is there much political risk. The Communist Party still maintains national political control, but it practices administrative decentralization. It encourages various cities to experiment with local governance, in what some westerners deem a search for the functional equivalent of democratic dissent in keeping policies honest. After a few years the party draws conclusions and modifies national best-practice campaigns accordingly.

Moreover, the Ordos grandees could trust that their personal connections with Beijing elites would guarantee links between their infant city and the bullet-train and divided-highway network now spreading across Inner Mongolia. On this topic, Allen points out the shrewdness of widening the “median” between the parallel one-way strips of highway to several hundred meters, to discourage southbound drivers from veering into northbound lanes against the flow whenever they encounter traffic jams. Last summer such behavior by China’s rookie drivers contributed to the spectacular 11-day, 50-mile gridlock of bumper-to-bumper coal trucks on the Baotou-Beijing route.

Finally, Ordos investors were not bothered by having to invent some new public relations approach that would justify their pet project within the grand narrative of China’s 21st-century return to world history. That was ready-made. All the potato-shaped Kangbashi museum would have to do, once its doors opened, would be to pick up the well-polished stories in the nearby mausoleums of Genghis Khan and of the renowned Chinese beauty Wang Zhaojun. In these accounts, the many battles with Mongol and Turkic tribes that led the Chinese to build the Great Wall against the northern marauders are muted. The meeting of the Han and the tribesmen is portrayed essentially as a forerunner of international peace—especially after Wang Zhaojun, the paragon among Emperor Yuandi’s concubines, agreed to become the queen of Xiongnu Chieftain Huhanye to ensure tranquillity between the two peoples for the next 60 years.

In this retelling, even Genghis Khan’s 13th-century conquest of four-fifths of the then known world redounds subliminally to the greater glory of the Chinese. And it finds echoes in the 1950s offer by the Mongolian nomads to contribute their western grazing lands to become the campus for China’s nascent space program. Already in Kangbashi’s statuary, the tough little ponies that propelled the mobile Mongol archers to the very gates of Hungary have become huge rearing stallions. The city fathers are savvy in embracing this heroic version of civic history.

To be sure, there would be an environmental downside to such monumental urban construction. Kangbashi straddles the ever-shifting line between the cornfields to the south and the grasslands to the north—between China’s watered southeast and arid northwest. The loess is fragile, as all the fresh arroyos show. Already desertification and erosion, and to a lesser extent overgrazing by cashmere goats, have devastated more than 1 million square miles of rangeland. All the poplar and willow saplings planted by soldiers along the highways in the government’s massive reforestation drive have done little to stem the encroachment.

Urbanization and rising living standards will only make new demands on the scarce water that remains. The aquifers are dropping. Together, Kangbashi and Hohhot and Baotou could soon reduce the Yellow River to a seasonal trickle. Dust storms that periodically blot out the sun in Beijing— and, according to Allen, ten years ago left a layer of fine sand on streets as far away as Korea, Japan and Taiwan—originate here. Kangbashi, despite its dearth of cars, is already surrounded by its own pall of smog. Such long-term arguments about degradation did not trouble the Ordos city planners, however, who simply added green goals to all their other targets. For them the decision to build Kangbashi by fiat was a no-brainer.

Allen’s Demur

Not surprisingly, the Ordos sense of manifest destiny is not fully shared by Allen. He has already puzzled his way through some novel life choices that would have been unimaginable to his parents and grandparents in their traditional village. But the idea of moving out of the regional capital to a brand-new, undefined city was not an option that appealed to him. His first major decision was to borrow an annual 40,000 yuan ($6,000 at today’s exchange rate) from his parents and relatives to finance his studies at the University of Inner Mongolia. A second was to apply, along with other university strivers, to join the Communist Party. (He was pleased to have made the cut, though he never found that membership helped him especially.) A third was to focus on mastering English, a language that first gripped his imagination when he was in the fourth grade.

This preparation eventually landed Allen a job as tour guide that, at least in the warm months of the year, pays decently. He accompanies the occasional foreign tourists who arrive here and, more frequently, the growing number of Chinese who now lavish discretionary yuan on trips to their nation’s exotic peripheries. His preparation also won Allen a trip abroad, making stops in South Africa, Egypt, Dubai and Turkey as an interpreter for officials visiting Chinese construction sites. This sparked no wanderlust in him, though, and he turned down the offer of a high-paying two-year assignment in Africa. He rejected as well the alternative many of his classmates chose, and did not join the brain drain to the bright lights and warmer climates of Beijing or Shanghai. Instead, he set about acquiring a coveted permanent hukou (and not just a temporary student residency permit) for Hohhot. This he accomplished by buying a 78-square-meter apartment—its one drawback is the absence before midnight, in summer, of running water—in a new sixth-floor walkup. Such evidence of affluence qualified him for the permit.

Purchase of the flat required, of course, a long-term financial commitment. As soon as he had paid his family back for his university loans, he made a down payment of 100,000 yuan ($15,000) to lock in the price before the cost of Hohhot apartments shot up any more. He then took out a bank mortgage of 200,000 yuan ($30,000), to be paid back in monthly instalments of 1,248 yuan ($190) over 20 years. These financial obligations limit the personal choices he and his accountant wife are now making. They are postponing starting a family for two or three years to save first as much as they can. And they intend to stop at one child so they can give him or her the basic urban middle-class advantages that are getting more expensive every year.

To be sure, Allen sees drawbacks in raising a single child. “China is developing so fast, but people’s minds change very slowly. Look at all the bad behavior,” he reflects. “The children from the one-child policy are now growing up. They are very selfish and spoiled. They aim high, but they don’t work hard.” Still, he is determined to bring up his only child to be civilized and well-behaved, not to throw trash onto the street, and certainly not, as a teenager, to smoke in public.

Allen’s two brothers—Deng Xiaoping’s one-child policy was not enforced in the ethnic autonomous regions—followed quite different paths. His middle brother studied engineering, but has been unable to find any job except a low paying one at a telecom customer call center. To make ends meet, he still has to rely on extra help from his parents. Their kid brother, who chose not to continue his studies beyond secondary school, but to apprentice as a mechanic, will presumably always find work in what is now the world’s largest automobile market.

A Mongolian Gamble

In retrospect, did the Ordos movers and shakers err in their gamble? How much of a future can a city have that doesn’t convince Inner Mongolia’s very new yuppies—who can easily vote with their feet—that Kangbashi is the modish place to be?

Various visitors have answered these questions with a negative. One Beijing writer who ventured north of the Great Wall in 2008 started the trend by pouring scorn on this “ghost town” and “vacuum of the future.” Al Jazeera followed with more of the same in 2009. The more politically correct American media in 2010 preferred polite skepticism about the grandiose city that everybody loves to hate. Only a few dissenters—among them Bank of America-Merrill Lynch economist Ting Lu—judged instead that Ordos is actually avoiding the natural resource curse by investing its windfall gains intelligently.

Of course, China’s economic dynamism might decelerate in the next few years as the demographics change and the labor force slows its explosive growth. The real-estate bubble might burst at long last. Inner Mongolia could lose many more thousands of square miles to desertification. China could choke in its own smog.

But on the other hand, perhaps the Chinese speculators who have almost tripled the market prices of all those unoccupied apartments in just three or four years are onto something. Whoever thought, until it happened, that China could grow nearly 10 percent every year for three decades to become the world’s second largest economy, or that China would account for 75 percent of poverty reduction in the developing world in the past two decades, or that Beijing would rescue Greece by scooping up its bonds?

Maybe the question should be reversed. What fool would gamble against Kangbashi and the energies of all the Allens in Inner Mongolia?


 

Elizabeth Pond, a writer on international affairs, was a foreign correspondent for The Christian Science Monitor from 1967-1988 and the Editor of the quarterly Transatlantic Internationale Politik from 2000-2006. She is the author of Endgame in the Balkans: Regime Change, European Style; The Rebirth of Europe; and other books in the field of foreign policy and international affairs.

© World Policy Institute