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Monday 21 Aug 2017 | 00:04 | SYDNEY
Monday 21 Aug 2017 | 00:04 | SYDNEY

James Fallows on China's take-off (4)

Below is the fourth in a series of email exchanges with James Fallows, author of China Airborne. You can find part 1 here, part 2 here and part 3 here.

Q: One of the reasons your aviation case-study is so telling is that modern civil aviation can only truly flourish within a system of rules governing air safety, security, air traffic control, customs, you name it. As you illustrate, Americans have had some success at inculcating a rules-based culture into China's aviation community.

Yet China is not, by our standards, a nation of rules, and this is a facet of Chinese life that is causing increasing friction. You quote a foreign professor at a Beijing university as saying that what infuriates ordinary people is not so much the wealth of the ruling class but their privilege. The rich and powerful get to ignore rules by which the masses are meant to abide.

Developing the rule of law is clearly a crucial component of building China to its true economic and human potential. But this clashes with the interests of the ruling class. Do you think it's plausible for China's rulers to quarantine a rules-based order to discrete areas such as aviation, or will the need for a rules-based society become so irresistible that it will eventually threaten the core interests of China's elites?

A: Thanks for this question and its three predecessors. It has been stimulating and instructive to me to observe the way perceptions of China's development align and converge, as seen from my perspective as an American reporter (though one well familiar with Australia) and yours as an Australian strategic analyst (though one well familiar with the United States).

As you rightly note, I finally argue that the next stage in China's economic, technological, and political progress really depends on these 'rule' and 'system' issues. Overwhelmingly impressive as the achievements of the past thirty years in China have been, in a sense they have been simpler than what lies ahead.

Deng Xiaoping and his successors shrewdly decided to keep launching experiments in liberalisation, and expand the ones that seemed to work. They opened China to outside investment, and it came flooding in. They did the physical infrastructure work necessary to create a first-rate system of ports, rail connections, roads, and now of course airports, and they allowed foreign and Chinese entrepreneurs to build their factories on this platform.

Throughout, 'rule-based' operation, as opposed to arbitrary or subjective granting or withholding of favour, has been the weak part of the system. Rule-of-law has of course steadily increased, mainly in areas where necessary for economic efficiency. The Chinese Customs Service must operate reliably if high-tech exporters are to exist in China. The multi-billion dollar daily financial flows in and out of China require a banking system that, at least in its external dealings, accords with normal financial standards. Safety and production standards are more and more important. But every expansion of rule-of-law is contested. In different ways that is the significance of the Bo Xilai and Chen Guangchen episodes.

Everything about China's next stage of development seems likely to intensify these pressures. Or, as any remaining Marxists in China might put it, everything about China's growth is likely intensify the contradictions! The more extreme the polarisation of wealth and opportunity in China, the more the left-behinds are likely to wonder about the rules for success. The more sophisticated the commercial and technological ambitions of Chinese firms, the more they will care about improvements in transparency and rule of law. Two examples I describe are the desired expansion in air-travel systems, blocked now mainly by unpredictable, opposite-of-transparent opposition from China's security-state forces; and the bogged-down nature of China's internet connections with the outside world.

It is appropriate to end this exchange with your identification of the central question and tension in China's next phase. That there's a contradiction between the Chinese Government's range of ambitions for China and its reluctance to give up control is the fundamental starting-point truth.

How that contradiction will be resolved I wish I could say, but can't. I look forward to returning to this topic with you over the months and years, when we have more evidence about which of these forces is gaining strength. And for your colleagues in Australia, I hope these exchanges are at least a useful leaven to the next round of discussion on the impending China-centric age.

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