[Outlook]Those ‘Chinese characteristics’

As the year 2008 begins, China is now at the center of the world. This year is the 30th anniversary of China’s reforms and opening of its doors, and the country is drawing attention from around the world as the host of the Olympic Games and the world’s third-largest economy. With a strong will to prosper and develop more, China is certainly rising as a superpower. The Chinese economy has become one of the three yardsticks, along with international oil prices and the U.S. economy, for making predictions about the world economy. China is also accused of human rights abuses and environmental damage but no one can deny that the country has become an important player in the global market.
However, last year, inflation reared its head in China, doubts grew about the safety of products made in China, the Chinese stock market fluctuated, Chinese real estate prices escalated; the country enacted a new labor law and new laws on corporate income taxes and monopolies came into effect, supplementing regulations on foreign companies.
This series of events revealed another aspect of China. China had drawn up measures to attract investment in industries that help the country while putting limits on investment in industries that will not be of much help to the country. This year, China introduced an environment tax all of a sudden. In short, China has changed significantly these days.
China justifies all these measures with a theory of “Chinese characteristics.” The country has consistently followed its logic. For instance, Mao Zedong’s socialist revolution can be seen as a process in which Marxism-Leninism was transformed to fit China’s circumstances. Deng Xiaoping’s “socialism with Chinese characteristics” allowed China to implement reforms and open its doors, sparking the engine that now drives China’s explosive growth.
Jiang Zemin added to Deng’s transformed socialism and devised a theory of the “Three Represents” to legitimize the increasingly influential role of capitalists in society and governance, including membership in the ruling Communist Party. The Hu Jintao regime formed its second lineup of leadership late last year as it pursues balanced development (shifting resources to poor interior regions left behind by the initial concentration of development in coastal regions).
These are examples of how the theory of “Chinese characteristics” is applied in reality.
As a socialist country, China needs to sustain the socialist regime for political reasons while it needs a market economy to fuel growth. This situation gave rise to a socialist market economy. Thus, China simultaneously practices tolerance of a market economy for economic development, and rigid socialism to sustain the regime.
A market economy leads the entire society in general but still, the Communist Party of China takes absolute control over everything. Many emphasize that China was able to rise to its current status because of the Communist Party. However, they also say the despotic rule of the Communist Party is the biggest obstacle to China’s further development.
The theory of “Chinese characteristics” is the Communist Party’s paradigm to address this situation.
Many problems that China is facing these days are political and social problems which accompanied the introduction of a market economy. The period of Deng can be said to be a period that saw the clash between socialism and a market economy. After Deng, under Jiang and Hu, the conflicts within the market economy have constantly come to the surface.
As China needs to resolve the contradictions, resolve the side effects of reform and opening, and sustain growth, it has no choice but to sustain pragmatism. The idea of adjusting policies depending on its own situation is based on the theory of “Chinese characteristics.”
But its arbitrariness is the problem. If China changes policies as the situation changes, foreign companies in China will be victimized. Foreign companies have learned through experience that they cannot do much if China says it will enforce regulations on environment and labor issues.
The Hu Jintao administration has begun working to narrow gaps between the rich and the poor and among different regions. It is highly likely that the administration will pass economic burdens to foreign companies to achieve social harmony inside the country.
There is a bigger possibility that a hostile environment for foreign companies will be created, for instance, through administrative procedures and business permits. Korean companies that have gone to China with “Chinese dreams” must be prepared for arbitrary policies with “Chinese characteristics.”

*The writer is a professor at the Graduate School of International and Area Studies, Hankuk University of Foreign Studies. Translation by the JoongAng Daily staff.

by Kang Jun-young