January 2009

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Just over a year ago, in one of the first posts that appeared on this site (and one of the very first commentaries I had written for any blog), I directed readers to five short pieces worth checking out that had one thing in common: they were about China but not by China specialists per se. One was a London Review of Books essay by Pankaj Mishra, who we’ve gone on to link to or quote often and who will be represented in our China in 2008: A Year of Great Significance, via a commentary on Tibet that first appeared on The Guardian’s lively and wide-ranging “Comment is Free” site. Now, in today’s New York Times Sunday Magazine he has yet another piece likely to interest readers of this blog, which focuses mainly on the novelist Yu Hua (still best-known in the West as the author of To Live, which became a Zhang Yimou film), but features a cameo appearance by historian and “new left” cultural critic Wang Hui.

Since the LRB essay alluded to above was devoted largely to Wang Hui (a close friend of Yu Hua’s), this latest publication of Mishra’s (which has the catchy title of “The Bonfire of China’s Vanities”) can be read as a kind of more literary-minded sequel to that earlier overview of intellectuals trends in the PRC. It is also interesting for what Yu Hua has to say to Mishra about various issues “China Beat” has addressed before, from the legacy of 1989 to recent upsurges in virulent nationalism.

Readers who come away from “Bonfire of China’s Vanities” wanting to know more about Yu Hua or Wang Hui might want to turn to the following readings: a New Left Review essay on Dushu, the periodical that Wang formerly edited, and this interview with Yu Hua. Better still, there are Yu Hua’s fictional works. I’ve just begun to read around in these, starting with the widely varied tales (there’s even one that plays with the convention of martial arts magical sword stories) collected in The Past and the Punishments: Eight Stories, which comes with a valuable translator’s afterword by Andrew F. Jones that puts the works and the author into context. An interesting discussion of contemporary youthful nationalism to place beside the comments in Mishra’s piece is this Evan Osnos New Yorker article to which we’ve directed readers before.

There will be three China Beat contributors participating in an upcoming conference at the University of Southern California. On January 30, Jeffrey Wasserstrom, Susan Brownell, and Kate Merkel-Hess will all be speaking at the USC Center for Public Diplomacy’s conference, “The 2008 Beijing Olympics: Public Diplomacy Triumph or Public Relations Spectacle?” In part, our participation at USC is an outgrowth of the things we have been writing at China Beat this year, as well as the content of our forthcoming volume, China in 2008: A Year of Great Significance.

There are a lot of China-related events in Southern California these days. As proof, the USC conference will be held on the same day as a fascinating-looking event across town, enormously relevant to the “What Should Obama be Reading” feature that we’ve been running (and makes some of us wish we could be in two places at once). Also on January 30, the UCLA Center for Chinese Studies will be holding “Two Systems, One World: US-China Relations under the Obama Administration.” (Since none of us will be able to make it, please get in touch if you are attending and would be willing to blog about the proceedings for China Beat.)

The USC conference will be the first of several opportunities we’ll have this spring to talk about and promote China in 2008. Though we’ll mention these again when they get closer, there will be a number of the volume’s contributors on hand at the annual Association for Asian Studies meeting, one co-editor (Jeff Wasserstrom) will be speaking in March in Shanghai and Hong Kong, while another co-editor (Kate Merkel-Hess) and contributor Susan Brownell will be participating in the Virginia Festival of the Book in Charlottesville. In case you forget to mark your calendars, have no fear…we’ll mention it again!

A Review of Yasheng Huang’s Capitalism with Chinese Characteristics: Entrepreneurship and the State (Cambridge University Press, 2008)

By Eric Setzekorn

With China’s export-centered economy looking increasingly unbalanced and unsustainable, there has been growing public support for state involvement in the interests of rural development. Yasheng Huang, of MIT’s Sloan School of Management, provides a powerful economic rationale to this emerging movement with his new book Capitalism with Chinese Characteristics. Huang argues that urban biased government policies over the past fifteen years are the cause of skewed proportions of China’s economy and have tremendously hindered stable private sector growth. Huang debunks the consensus view that China’s economy has become increasingly open to private enterprise during the thirty year of the reform period, suggesting an alternative narrative of a resurgent state sector sidelining the vibrant, sustainable and equitable development pattern of the 1980s.

Huang centers his analysis of China’s reform period on the often neglected rural economy of the 1980s, a period he dubs the “The Entrepreneurial Decade.” To Huang, the 80s pattern of rural development of private sector labor intensive production offered the possibility of a “virtuous” development based on a trajectory commonly seen in other East Asian developing nations. The beating heart of this decade’s growth is the dynamic role played by the Township and Village Enterprises (TVE), which provide both mass employment and management opportunities for poor but entrepreneurial residents. To get TVEs off the ground, aspiring entrepreneurs either pooled capital informally or were able to access official sources due to lenient credit policies encouraged by senior party leadership.

In contrast to many observers, of which Huang singles out Joseph Stiglitz as the main offender, these organizations are shown to be functionally private operations cloaking themselves in the necessary legal fiction that they are collective entities in order to register with the government. One of the recurring themes of the book is the extent to which foreign observers continue to grossly misunderstand cultural and administrative terminology and functional differences between China and other nations, in this case misunderstanding TVEs as an organizational identifier rather than merely denoting locality.

To work around the criticism that weak property rights and government policies were still relatively unfriendly to private capitalism in the 1980s Huang articulates the notion of “Directional Liberalism.” This term encapsulates his contention that faith in property rights and recognition of profits are relative concepts, and that, although the business environment in China in the 1980s was nowhere near the standard of the Washington Consensus, incremental positive changes were nevertheless sufficient to encourage hard work and risk-taking by rural individuals when judged from a pre-1978 perspective. The representative Horatio Alger figure in Huang’s narrative of this period is Nian Guangjiu, a rural entrepreneur who successfully brands his sunflower seeds as “Idiot Seeds” and quickly expands from four workers in Anhui to hundreds of employees distributing seeds across China. In 1989, Nian Guangjiu was arrested on vague charges of hooliganism and immoral relationships during the post-Tiananmen crackdown, and like Nian the initial, balanced stage of China’s reform development came to an end and the urban-centric 1990s began.

Where the story of the 1980s was fundamentally about the rural private-sector, the following decade was dominated by a shift to capital-intensive, state-directed urban development described in the chapter titled “The Great Reversal.” It is in the analysis of the 1990s where Huang significantly deviates from conventional narratives of China’s private sector growth, which focus on the private sector’s increasing share of output rather than his preferred method: using measures of capital inputs to determine the policy environment. Per Huang’s interpretation, fears that the economy is moving outside the control of the party’s leadership led the state to increase its role in the setting of investment priorities, for example by shoring up SOEs, building urban infrastructure, and initiating national prestige projects.

This policy shift reflected the post-1989 leadership transition, which saw pragmatic, patient reformers with experience in rural areas replaced by a bevy of Shanghai technocrats and risk-averse party apparatchiks. The result was a steady squeezing of entrepreneurs through more restrictive government regulations and tighter macro-economic policy controls which limited private access to credit. As a consequence of this gradual restricting of opportunity in the countryside, the rural population became a pool of cheap, migrant labor rather than potential entrepreneurs. Locked out of asset appreciation and forced to rely only on unskilled labor positions to supplement their income, rural residents net income growth rates plummeted both in absolute terms and relative to urban households.

The end result of this statist investment bias was the rapid but hollow development of showroom cities, which Huang pointedly skewers in the final substantive chapter “What is Wrong with Shanghai?” In chart after chart, Huang successfully makes the case that the development of Shanghai into a world-class city that receives global praise for its infrastructure and breathtaking development has harmed China’s real economic growth trajectory. Huang’s list of Shanghai’s failings is long and angry: income levels that have failed to match the rapid ascent of per capita GDP, income inequality that has continually widened since the late 1980s, a private sector starved for capital, incredible corruption in land development and infrastructure projects, a bloated, greedy government.

In summing up the city Huang writes “Shanghai represents the political triumph of the Latin American path, anchored on the prominence of statist interventions, huge urban biases, and distorted liberalism in favor of FDI at the expense of indigenous entrepreneurship. Shanghai, as the world’s most successful Potemkin metropolis, is both the sign of and the culprit for what is structurally ailing the Chinese economy today.”(230-231)

As with most works on economics, it is sometimes difficult to bridge the massive gap between common and specialized knowledge, but aside from several paragraphs groaning with statistics Capitalism with Chinese Characteristics should be readable (barely) by a general audience. The genuine outrage at what Huang feels to be an unjust and unbalanced pattern of development gives the work a passion most political economy works lack, although his depiction of some well-respected economists such as David Dollar of the World Bank can be overly harsh. Overall, the conclusions Huang arrives at are cogent and convincing; the 1980s were a vibrant era whose lessons have been ignored; China has significantly deviated from the East Asian model into a Latin American style economy; and although capitalism in China has deeper roots today than in the 1980s, the fruits of development are increasingly falling into the hands of the state or the rich.

In the midst of this depressing account, Huang seems optimistic about China’s future. He approves of the policy initiatives of the Hu-Wen government although he is unsure whether their rhetoric to re-balance and improve the livelihood of poor and rural Chinese will overcome entrenched interests. In this respect I think some of Huang’s optimism is misplaced. The recent Chinese economic stimulus package continues to favor capital intensive government industries like steel that produce prestige goods for the leadership–such as Olympic stadiums and potentially aircraft carriers–rather than rural education or healthcare. In the midst of a turbulent global economy Capitalism with Chinese Characteristics should, and judging by the initial response will make economists and policy makers pause to consider how China got into its current situation and what its proper economic objectives should be.

By Angilee Shah

Akshay Kumar’s last trip west was in the 2007 Bollywood hit Namastey London. He played the provincial but lovable Punjabi boy, Arjun, who eventually won the heart of the British Indian leading lady with his desi values and pride. The movie did very well overseas, making a particular impact in the U.K. and U.S.

Less than two years later, Kumar’s globetrotting is taking a different turn. This time, Kumar’s road west goes through China. Warner Bros. co-produced its first Hindi film, Chandni Chowk to China, and released it to 131 theaters in the U.S. and Canada on January 16. The story is similar to that in Namastey. Kumar plays a silly and superstitious vegetable cutter from the famous Delhi market, Sidhu, who wins the heart of the glamorous heroine Sakhi (Deepika Padukone who made her debut in Om Shanti Om), except this time he does it by learning kung fu.

Gordon Liu, most famous for his role as a martial arts monk in 36 Chambers of Shaolin, is cast as the villain, Hojo, a vicious boss who terrorizes a village by killing people with his hat. The villagers believe that Sidhu is the reincarnation of the mythological warrior Liu Sheng, and bring him to China to battle Hojo. At the same time, Sakhi discovers that Hojo abducted her long-lost twin sister, Meow Meow (also played by Padukone), and that her Chinese father, who becomes Sidhu’s kung fu master, is still alive. In short, the plot is an indulgent combination of every slapstick storyline screenwriter Shridhar Raghavan and producer Ramesh Sippy could think of.

But plot is not really the driving force for the 168-minute comedy. CC2C — Bollywood fans lovingly abbreviate the titles of movies — capitalizes on a growing interest in the over-the-top drama and dance of Bollywood and the universal truth that every great movie has a kung fu training sequence. But the potential for disaster was huge. For how often India and China are put together in sentences about globalization and growing economies, most people in both countries know surprisingly little about each others’ lives. So far, India’s most significant pop culture connection with China is gobi manchurian, the ubiquitous Chinese dish of India that isn’t actually Chinese. So the fact that the CC2C movie poster — which was created before the film — features Kumar wearing a straw paddy field hat in front of a rising red sun did not bode well for China enthusiasts looking for a new perspective on the far far east. CC2C is Bollywood’s first foray into China, but it is not a deep reflection on Chinese-Indian relations. Moviegoers who approach it that way won’t enjoy CC2C any more than they would gobi manchurian.

Still, CC2C paints a decent portrait of Indian people’s day-to-day relationship with their East Asian neighbors: Martial arts are cool, China makes a lot of electronic goods (in this film, they mass produce translating earpieces and flying umbrellas) and the Great Wall is a really big tourist attraction. Then it digs a bit deeper, calling on Wong Kar-Wai-esque Hong Kong glamour (which could be an excuse to put Padukone in a qipao) and creating the Bollywood version of a Forbidden City mega-scene. And for all of the film’s unabashed stereotyping of Chinese villagers and kung fu masters, it is surprisingly not insulting. Even Sidhu is a parody, with his pencil thin mustache and devotion to a potato that looks like the Hindu god Ganesha, and, though there is a character named Chopsticks (Ranvir Shorey), he is an Indian guru hack. CC2C is self-aware of its absurdity, which makes its absurdity forgivable. And often very entertaining, even if it is predictable and long-winded. (For the abridged version, see the CC2C YouTube channel).

CC2C had a disappointing $650,000 opening in North America; Kumar’s last film released here, Singh is Kinng, took in $1 million, perhaps owing to the movie’s repetitive but catchy title tune, a surprising East-West rap collaboration. Notwithstanding the spectacle of Bollywood going to China, maybe the best way west is still through Snoop Dogg.

1. Rebecca MacKinnon yesterday posted a marvelous wrap-up of Charter 08, with many links included. We usually use a rather light touch with these recommendations, but this time…head on over. If you read one thing on China today, it should be this.

2. To follow up, there are a few related readings that are worth a jump, early writings by some of the figures MacKinnon mentions in her piece: “That Holy Word, ‘Revolution’” by Liu Xiaobo, and “Thirsty Dragon at the Olympics” by Dai Qing. For another take on Charter 08, check out the piece we ran at China Beat by Jeremy Paltiel last month.

3. For other quality reading around the web this week, you might check out the newly relaunched Sino-Japanese Studies. Browsers may find the archives, with links to full-text articles, particularly appealing.

4. Regular China Beat readers will recognize Geremie Barme’s name. At ArtAsiaPacific this month in a piece titled “Shock of the Obvious,” Barme reflects on the changes in the Chinese art world since the publication’s debut fifteen years ago:

In 1993, the centenary of Mao Zedong’s birth, the chi-chi Beijing eatery Maxim’s de Paris organized a celebratory buffet for 200. The invitations bore the slogan “Long live Chairman Mao!” and patrons were requested to wear Mao suits. The restaurant was decked out with pictures of the chairman and Cultural Revolution posters. While the food was European haute cuisine, the evening’s entertainment featured an excerpt from The White-Haired Girl, a showcase production of the Maoist era…

5. And finally, here are a few oldies but perhaps new-to-you, in case you have a hankering for book reviews: the book review section at Modern Chinese Literature and Culture and a site of reviews and essays maintained by the Chinese history graduate students at UCSD. Both are well worth some browsing.

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