[INSIGHT]Of Chinese Illusions and Other Matters

If you were dying to have something, you might see an apparition. Speaking in a refined way, we call that an optical illusion. Just like a scene in the old movie "Gold Rush," starring Charlie Chaplain, in which one man looks like a roasted chicken to another man who is starving. When I read an article titled "China is more capitalistic than South Korea," carried in the July 20 edition of JoongAng Ilbo, I thought I might see an apparition. The article said that comment came from Deputy Prime Minister Jin Nyum. I must have read it incorrectly and blamed my age for the misreading.

But Mr. Jin really said it in a breakfast lecture, and moreover he didn't utter it by surprise with an unsteady mind driven by a peculiar mood. As the article stated, Mr. Jin spoke what he has been contemplating. Thus, I stopped worrying that I had experienced a senile illusion.

The context of Mr. Jin's remarks were aimed at a less capitalistic South Korea rather than at China. Let's shelve any value judgments on the relative merits between more capitalistic and less capitalistic.

An ideological argument can mess up my story. Anyway, Mr. Jin cited 10 times the pay difference in a Chinese company as one of the grounds for his contention.

But that extent of pay differences is not unusual in Korean companies. So there is nothing to envy in China's "roasted chicken" illusion at this moment.

Mr. Jin complained that while even China, a communist-converted state, endures this kind of inequality, the unique egalitarianism in South Korea, a pure bed of capitalism, grabs the nation's economy by the scruff. If he means it, ask workers who are trembling with fear of being laid off and businessmen who are reluctant to invest even when the real interest rate nears zero, what they think. Whether Korea has less difference in salary than China renders our economy sluggish.

Mr. Jin took it as another grounds that in China there is no controversy over compradore capital blaming foreign capital inroad as the outflow of national wealth.

Compradore refers to local employees who were hired and acted as a cat's paw by English consulate and businessmen staying in China during 18 century.

So Mr. Jin's complaint is that while there is no controversy over compradore capital in China where the word "compradore" originated. Yet criticism of the national wealth outflow, which appeared to fade shortly after 1997 financial crisis, crops up again in South Korea. This time the roasted chicken is compradore capital. Mr. Jin's illusion looks serious.

Capital doesn't need any compradore because there is no restrictions on money's activities in this globalized world market. If anything is necessary, it may be "compradore government."

Professor Paul Krugman of Princeton University cited the non-exchangeability of Chinese currency yuan as the reason why the international hot money, which turned East Asian countries into ruins, couldn't conquer China.

In other words, the international hot money merely looked as though it wanted to sweep China because it could not exchange Chinese currency into a key currency freely.

The reality was unexpectedly "shabby" and the "shabby" reality protected China from international hot money. Who cares if only foreign capital sets up another Samsung Electronics Co. or POSCO in Korea? Instead of setting up new ones, if foreign capitals engulf them, that stack up worries over compradore.

I fully understand Mr. Jin's fretfulness when he said, "If Deng Xiaoping was born 30 years ago, Korea could have found it difficult to have its own place in world economy" and "China is changing into 'world's factory' with the speed of light." Yet I am really worried about his illusion. He said, "I am horrified at the mere thought of our economic stance in five to 10 years if our industry could not improve its competitiveness drastically."

Mr. Jin has passed through key positions from authoritarian regimes to Kim Young-sam administration to today's Kim Dae-jung administration. What do the people trusting and following his words have to do when he says he is horrified with our economic future?

When Mr. Jin, who has power and rights to control our economy as Deputy Prime Minister for Economy, is just complaining of people's sentiment for egalitarianism, what could happen to nation's economy? Mr. Jin should be the last to make such remarks.

Who else could improve competitiveness if Mr. Jin himself could not? He may be dissatisfied with political practices which was difficult to make "roast chicken" as he likes. But business circles, which he cooked his own way, bitterly spoke out, "It's OK if you cannot help us. But please, don't stumble us" toward him.

It is not pay difference or compradore capital that we should learn from China. We can learn from China that how the government and companies go hand-in -hand to survive in the fierce world market. It is very urgent to correct government's optical illusion.

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The writer is an editorial writer of the JoongAng Ilbo.

by Joseph W. Chung