China on the J Curve

The J Curve essentially maps a country8217;s transition from closedness to openness. There are two types of stability, says Bremmer: one that accrues because a country is closed, and the other precisely because it is open. 8220;Yet,8221; he writes, 8220;for a country that is 8216;stable because it8217;s closed8217; to become a country that is 8216;stable because it8217;s open,8217; it must go through a transitional period of dangerous instability.8221;

This phase instability can come unforeseen 8212; a natural catastrophe, act of terror, famine, or political unrest because people have managed to communicate between themselves sufficiently in order to dodge official censors. To regain stability, the leadership would have two options: to manage instability and the transition to openness on the right side of the curve, or to quickly revert to that old stability born of closedness on the left side of the curve.

This explains why the swoosh has a more gradual arc on the right: 8220;The left side of the curve is much steeper because a little consolidation and control can provide a lot of stability. It8217;s more efficient to reestablish order by declaring martial law than by passing legislation that promotes freedom of the press.8221; But, of course: 8220;In any left-side-of-the-curve state, it is easier to close a country than to open it. But once mature political institutions are fully constructed and embraced by a nation8217;s people, they are a lot more durable and do far more to protect the viability of the state than any police state tactic can.8221;

Bremmer draws foreign policy tips from the J Curve: 8220;The developed world should neither shelter nor militarily destabilize authoritarian regimes 8212; unless those regimes represent an imminent threat to the national security of other states. Developed states should instead work to create conditions most favorable for a closed regime8217;s safe passage through the least stable segment of the J Curve 8212; however and whenever the slide toward instability comes. And developed states should minimize the risk these states pose the rest of the world as their transition toward modernity begins.8221;

So, where does this place China, with its capitalist economic orientation and its Communist Party rule? 8220;Is it too economically open for the left side? Or is it too politically closed for the right?8221;

Opinion is divided. On Chinese new year 8212; that is, within a span of 24 hours 8212; in February 2005, for instance, 11 billion text messages were sent within the country. By the end of 2005 China was estimated to have 120 million internet users, and now 350 million Chinese own mobile phones.

And with the process of economic reform, first started in the late 1970s, China has become integrated in the global economy. For instance, between 1978 and 2004, 563.8 billion worth of foreign direct investment flowed into China. This is, concedes Bremmer, more than 10 times the total FDI that came into Japan between 1945 and 2000. Also, foreign funded enterprises produced 55 per cent of Chinese exports in 2003, a percentage far in excess of that in the Asian tigers. Also, now foreign-owned firms account for two-thirds of new FDI in China. According to Bremmer, the CCP 8220;believes its political capital is replenished by rising Chinese living standards8221;. And with those standards intimately connected to FDI, the Party accepts 8220;an extraordinary level of foreign influence in the establishment and enforcement of its economic rules of the road8221;.

With such levels of connectivity and economic integration, a country cannot be on the left, closed side of the curve, can it?

Bremmer demurs: 8220;The CCP refuses to tolerate political dissent and has resisted virtually any meaningful political reform. The party makes its political and economic decisions in secret. It views China8217;s citizens 8212; particularly its ethnic and religious minorities 8212; as risks to be managed rather than as political contributors to China8217;s development.8221; As evidence, he cites Beijing8217;s total control on the media and other forms of communication for instance, the Great Wall, whereby consumers8217; internet usage is strictly monitored, suppression of spiritual organisations like the Falun Dafa, its attempts to limit news of epidemics like SARS, its policies in Xinjian Province, and rural unrest.

What the Communist Party would like to do is move from the left-side stability to right-side stability without the pain of the dip in the middle. For instance, he says Chinese leaders now speak less of 8220;rapid growth8221; and tend to dwell on 8220;harmonious, coordinated, sustainable development8221;. Watch China, at stake is much more than the simple 8212; at times, even simplistic 8212; hypothesis of the J Curve.