Monday, July 25, 2005

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中国-东盟自由贸易区1.2万亿美元大市场凸现

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http://finance.sina.com.cn 2005年06月26日 12:24 和讯网-《财经》杂志

  被寄予经济和政治双赢希望的中国-东盟自由贸易区的建立,是中国加入WTO后在区域合作上迈出的最重要一步

  张蕴岭/文

  7月1日,中国-东盟自由贸易区《货物贸易协议》开始实施,近7000种商品将按商定时间表降税。这意味着一个拥有17亿人口、国内生产总值达2万亿美元、贸易总额为1.2万亿美元大市场的历史性开局。中国在加入WTO以后重视区域合作,中国-东盟自由贸易区的建设是最重要的一步。

  2000年,朱镕基总理在新加坡首先提出创建中国-东盟自由贸易区的动议。随后,中国与东盟联合专家组于2001年递交了研究报告,提出用10年时间建成中国-东盟自由贸易区。2002年计划进入前期筹备阶段。

  考虑到东盟一些国家对建立与中国自由贸易区的担心,双方首先启动的是“早期收获”(Early Harvest)计划,即在达成自由贸易区协定之前,先期给予东盟国家一些现实的贸易利益,不对等地开放农产品贸易,使东盟国家感到与中国建立紧密经济关系以及开放市场大有裨益,以减少东盟诸国的疑虑。

  应该说,“早期收获”计划是对传统自由贸易区的一个创新。

  泰国是第一个与中国订立“早期收获”计划的东盟国家,马来西亚、菲律宾也随后加入。“早期收获”计划从2003年开始实施,为期四年。“早期收获”计划选择对东盟400种农产品实行零关税,而不要求互惠让步——这在发展中国家是没有先例的。

  到2004年底,中国-东盟自由贸易区的货物贸易谈判完成。货物产品开放分为两步:第一是对较发达国家,用不到10年时间实现大部分产品零关税;第二是对欠发达的东盟新成员,给予三至五年的过渡期。由此,中国—东盟自由贸易区的建成时间为2010年至2012年。

  实际上,在自由贸易协定安排下,7000种产品绝大部分将实现零关税,而部分敏感产品则将分步进行。开放的产品约占目前中国和东盟贸易产品总额的95%。

  产品开放将带来积极的效应,这会进一步改善中国与东盟之间的整体贸易氛围,加强经济联系。尽管在中国与东盟的贸易中,资源产品和中间产品占的比例很大,它们的实际税率已很低——自由贸易区将大大减少管理成本;同时,中国经济发展带来的需求增长,将使双方既有经济联系进一步加强。近几年东盟对中国出口增长迅速,年平均增幅在30%以上,自由贸易区会加强这种势头。同时,这会为中国对东盟的出口提供新机遇。目前中国在与东盟的贸易中处于大量逆差,且呈上升趋势。但东盟市场仍是有机会和有潜力的,中国企业可利用零关税和低成本优势加大对东盟市场进入的力度。另外,亦可利用东盟内部的自由贸易区,到东盟投资生产。

  中国对东盟出口产品的主要优势,一是零关税,二是低成本。东盟市场结构不仅在很多方面适应中国,更重要的是作为一个整体市场,东盟内部存在自由贸易区,到东盟投资生产可利用零关税使产品在所有成员国市场进行销售。

  国内企业过去一直存在一个误区,认为东南亚太穷,不在其出口扩大战略考虑之列。实际上,东盟每个国家都可能是某一类消费产品的大市场。以柬埔寨为例,中国制造的摩托车,21、25英寸彩电有着现实的需求。东盟国家不同的发展状态,恰恰为不同档次的同类产品提供了商机。东南亚放开市场可能为中国某些面临倒闭的劳动密集型中小企业带来机遇,小批量、技术含量偏低的产品将找到自己的市场。

  货物贸易谈判结束后,将是投资和服务类谈判。投资谈判有三个重点:一是开放保护领域;二是投资保护;三是贸易便利条件。

  这方面的谈判仍在进行准备,估计需要1年时间。开放投资领域意义重大,有些国家对电信业限制较多,有的则对某些制造业过度保护,还有的对当地资源进行投资的存在股权比例和投资规模等限制。投资谈判主要是为促进投资创造一个更有利的环境。过去东盟到我国投资较多,今后中国到东盟的投资亦会大幅增加。

  服务领域涵盖广泛,包括劳务、运输和金融等。一旦谈判完成,此前已有合作协议的旅游业也将实现更大自由度,比如我国可多方开办旅游公司,直接办理旅游业务。

  中国-东盟自由贸易区最重要的特点是中国把东盟作为“一个整体”来考虑。发展与东南亚关系是中国周边战略中最重要一环,同时涵盖政经领域。同时,把东南亚作为一个整体市场,也有利于中国企业“走出去”。作为离中国最近的一个市场,东南亚便于国内生产能力转移及资源开发。此外,东南亚也将是中国最重要的一个能源供应地。

  在政治上,中国希望通过密切经济关系改善与东南亚整体关系。中国与一些东盟国家,如印尼、越南、柬埔寨等过去有很多冲突,如今通过密切经济关系来改善政治关系,效果非常明显。

  总体看来,区域合作是一个大趋势,与全球化具有互补关系。我国对自由贸易安排采取了先易后难、由近及远的战略,东盟亦吻合这一思路。现在货物贸易自由区安排开始生效了,现实的利益和未来的潜力都很大,亟需把握。-

  作者为中国社会科学院亚太研究所所长


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《财经》:关注处于十字路口中的行政许可法

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http://finance.sina.com.cn 2005年07月01日 09:49 和讯网-《财经》杂志

  要打破目前困局,扭转法律边际效益递减的趋势,确实需要借助外力,需要来自中央政府高层的更强有力的持续政治支持。但从长远看,最缺乏的正是法律的自我实现机制

  □ 周汉华/文

  中国改革开放的政府推动特点,决定了中国法治现代化的进程属于典型的变法过程。几乎每一部重要法律的制定,都是政府强力推动的结果,以政治推动法治,构建法治权威。法律实施中,如果政治与法治能够找到契合点,变法模式可以迅速启动与发育社会内生自发机制,使法律由外而内成为人们普遍自觉遵循的行为准则。如果政治与法治不能有效衔接,变法模式的优势可能转化成为劣势,甚至会使法治进程陷入两难之中。


  一方面,随着政治推动力由于施政目标的多元化而必然出现的逐步弱化,新制定的法律会迅速呈现边际效益递减的趋势,使法律面对各种形式的违规行为无能为力,法治权威面临巨大挑战;另一方面,如果在法律实施环节简单地求诸政治权力的再次介入,通过运动式执法或监督检查等行政手段在短时间内达成特定状态,不但不能避免法律周期性的边际效益递减现象,还会抑制法治的内在生成机制,使法治始终无法作为独立的力量发挥规范、指引与制裁的作用,破坏人们对法治权威的信仰和信心。如此循环,难以走出困境。

  从中国法治现代化的这一大视野看,2004年7月1日开始实施的《行政许可法》正处在关键的十字路口,其未来走向值得关注。

  《行政许可法》出台之时,学界普遍认为该法的制定体现了许多先进的观念或原则,如赋予行政许可财产权属性的权利观念,个人自主、市场竞争、行业自律、事后机制能够解决的不再设立行政许可的有限政府观念,许可与监督并重的有效政府观念,权力与责任结合的责任政府观念,许可过程与结果公开的公开政府观念,等等。《行政许可法》的制定,也被视为政府自我革命的一个重要环节。

  然而,从《行政许可法》实施一年来的情况看,它所体现的先进观念或原则,在实践中面临着各种各样的问题与挑战。这种挑战,有的来自于法律规范与社会发展之间的不同步;有的来自于法律规定的统一标准不能充分顾及不同地区及不同性质许可之间的巨大差异;有的来自于法律规定本身的一些漏洞或不足,法律在实践中缺乏可操作性;有的来自于立法技术的限制,法律规定的原则缺乏实现的技术手段;有的来自于政府不同政策目标之间缺乏协调,使法律规定的原则被其他政策目标所覆盖;有的来自于体制改革与政府管理方式创新的滞后,制约了法律原则的实现。当然,无庸讳言,有的挑战则直接来自于既得利益集团的有意识抵制与规避。例如,个别部门以审批、核准、登记等概念,实际上架空了《行政许可法》所规定的许可概念;少数地方为了逃避《行政许可法》对于听证会的严格规定,将听证会改名为座谈会、论证会。类似的做法,不一而足。

  法之不行,自上犯之。相比地方政府,由于一些中央宏观管理部门的权力过大,真正能使《行政许可法》的立法原意无法完全实现甚至被架空的力量,只能来自于这些部门。《行政许可法》的边际效益递减,在中央宏观管理部门表现得更为明显,遇到的阻力也更为直接。这种局面一旦持续,肯定会产生相互攀比效应,出现由点及面、自上而下、由条条向块块蔓延的趋势,从目前的偶然性法律规避、相互观望向大规模的集体有意识违规转化,对法律的实施带来更为全面、系统的冲击。

  本来,法律实施之初遇到各种困难和问题都是正常现象;但是,对于《行政许可法》而言,症结在于,由于上述这些问题的复杂性和根本性,法律所设计的自我实施机制,已经无法独立应对这些问题与挑战。实际上,《行政许可法》甚至根本没有设计一个权威、统一的法律实施机关。因此,要打破目前困局,扭转法律边际效益递减的趋势,确实需要借助外力,需要来自中央政府高层的更强有力的持续政治支持。但从长远看,最缺乏的正是法律的自我实现机制。

  为有效实现中央政府的改革意志,取信于民,有必要迅速自上而下对行使审批权的国务院部门普遍进行一次实施《行政许可法》的检查和评估;通过自评和第三方评价机制,清理不符合行政许可法的做法与措施,维护法律的尊严。在此过程中,甚至需要从国务院自身做起,清理一些部门以国务院名义发布的与行政许可法规定不一致的文件,以解决政出多门、文件之间相互打架的现象。

  然而,在借助政治力量破解《行政许可法》的实施困局时,我们必然会遇到另外一个十字路口。从长远看,《行政许可法》的实施,最缺乏的也许并不是现在急需的来自中央政府的政治支持,而是法律的自我实现机制。有力的政治支持有可能固化传统的行政管理手段,间接抑制法律自我实现机制的生成,使法律始终寻求政治权力的庇护而无法自立,始终难成机制。

  因此,推动法律实施过程中,需要把握好政治权力介入的力度与方式,慎重使用宝贵的政治资源,尤其需要处理好规则实施与体制改革之间的关系。与其仅仅在行政手段上做文章,一遍又一遍地监督检查法律的实施,不如同时全面启动结构调整与体制改革,以找到法治与政治契合的生长点。惟有一手抓法律规则的实施,一手抓体制改革,两手都硬起来,才能充分发挥变法模式的优势,使《行政许可法》走出由两个甚至多个十字路口所组成的连环套,朝向终极目标一往无前地走下去。

  从清末开始,“变法”就是国人强国之梦的代名词。实际上,就词源意义而言,清末所谈论的变法不仅仅是规则的制定或修改,更重要的是体制与制度的革故鼎新与价值的重构。《行政许可法》目前所面临的局面,其实是整个中国法治现代化的一个缩影;中国法治现代化的进程,何尝不是正处在一个大的历史十字路口?因此,从《行政许可法》的下一步走向,我们应该能够管窥中国法治现代化的未来和整个国家的命运。

  作者为中国社会科学院法学研究所研究员

  评之评

  法治应该靠自身机制完善自己

  □ 江平/ 文

  《行政许可法》刚满周岁。对于刚满一周岁的孩子,不能用苛求的眼光去审视他;但是,我们完全可以用理性的头脑来分析其所折射出的法律现象。

  首先,法律有善法和恶法之分。审视任何一部法律,首先要从善法、恶法角度去看;知其善恶,辨其利弊,才能从中完善,得到法治的进步和完善。善和恶的标准是什么?总的说来可以有两条:对政治社会性质的法律来说,保障和发展人权的法律为善法,限制和剥夺人权的法律为恶法;对经济性质的法律来说,符合市场经济规律的法律为善法,逆向市场经济规律的法律为恶法。从这个角度来审视《行政许可法》,可以说,无论是一年前或今天,它都是一部可以充分肯定的善法,正如周汉华教授在其文章中所述,这部法律体现了许多先进的观念和原则,它是在现有政府审批市场行为泛滥的状况下,规范和限制政府审批市场行为的法律,而不是扩大和滥用政府审批市场经济的行为。在今天其现实和重大的意义、作用都是应当充分肯定的。

  其次,市场经济面临公权和私权的冲突问题。公权和私权冲突在计划经济时代是不突出的,那个时代,只有“个人利益绝对服从国家利益”,在国家利益绝对权威下,谁还敢提私权?公权和私权冲突在西方国家自由经济状况下也不突出,因为在市场行为中,国家干预的范围和程度都比较小,且法律对国家行为行使的程序有严格的规定,私权救济的手段也相当充分。只有中国现今市场经济状况下,一方面给予了私权越来越多的自由,另一方面又保留了国家干预的巨大空间,公权和私权必然要发生碰撞,甚至是激烈的碰撞。如何解决好这种私权和公权的碰撞,是今天市场经济法治建设的一项重要任务。

  《行政许可法》规定了一条重要原则,即市场行为能由当事人意思自治自己去解决的,不需要国家权力的许可;当事人自己不能解决的,尽量由行业自律,中介机构去解决;只有在前二者都不能解决时,再由国家权力来干预、审批。这里提到了三种权力——私权(靠当事人意思自治)、社会权力(靠社会组织的自律)、国家权力(靠国家的强制力),而且明确了市场行为中三种权力(利)的关系,即私权是基础,社会权力辅之,国家权力在前二者手段穷尽后再使用。这是一个解决公权和私权冲突的最高原则。然而,社会现实中往往是国家权力无所不在,导致国家权力全方位、多层面、直接与私权的碰撞。

  再次,法治建设面临立法与执法的鸿沟问题。立法和执法本就有鸿沟,有法不依是世界性问题。中国立法多年来早已进入了“快车道”,而执法囿于体制缺陷及执法水平滞后,仍在“慢车道”行进,这无疑又加大了立法与执法的距离。执法者是公权力机关,如果一部法律是加强公权力的地位,加大公权力带来的利益,更容易实现权力与利益的交换,那这部法律的执行就会遇到极少的障碍,法律的“可执行度”就比较高。反之,如一部法律是削减公权力的地位和作用,执行后带给执法机构是权力的削弱和利益减小,那这部法律的执行就会遇到极大的阻碍,法律的“可执行度”就很低。

  我们不妨可以笼统地说,一部善法的执行,要比一部恶法的执行难得多。《行政许可法》就是典型的一例。我们可以比较《行政诉讼法》与《行政许可法》,二者都是限制和制约行政专权的法律,但又有所不同:前者是通过行政权力体制外的办法(法院司法权对行政权的监督审查),后者则是通过行政权力体制内部的办法(当然,对违法的行政许可仍然可以提起行政诉讼)。由此我们也可以看到,“权力迷恋”的现象,是公权领域内的一个普遍现象和普遍规律。打破“权力迷恋”,必须由一种行之有效的权力自身系统以外的力量去解决。

  最后,法治和政治的问题。周汉华教授的文章中提出了法治与政治的关系以及政治如何与法治找到契合点的观点,这无疑是对中国推进法治的深层次又极具现实意义的关键问题。

  对此,我非常赞同。法治应该靠法治自身的机制来完善自己,前面所说的行政权力(公权)的抑制也是要靠体制去解决;要靠行政权力自身以外的力量去解决(如司法审查制度,违宪审查制度等),而不是靠政治力量去解决。如果法治自身的机制不能解决而要靠它以外的政治力量去解决,那么,就等于又回到了“人治”。-

  作者为中国政法大学教授


http://finance.sina.com.cn/review/essay/20050701/09491748635.shtml

Thursday, July 14, 2005

Home >> Opinion
UPDATED: 11:21, July 09, 2005
A dialogue and exchange between civilizations



This year marks the 600th anniversary of Zheng He's western voyages. China and concerned countries will commemorate the occasion with grand activities and research into these largest maritime expeditions in Chinese history.

For later generations, history is always reconstructed through written records and relics. It therefore leaves behind many blanks and secrets, which can only be approached, but never be exhausted. Perhaps that is where the fascination of history lies.

Few full and accurate records can be found in official history as to the decision-making process of Zheng He's western voyages. There is a folktale of Overseas Pursuing of the Exiled Emperor Jianwen of the Ming Dynasty in unofficial history, which seems to be the only footnote.

There was a flaw in ancient Chinese's study of history - they tended to recount history as if it was just the history of struggles for power among emperors and kings. And it was customary in folk literature to explain away major events with trivial and private motivations.

Trivial motivations were offered as explanations for Qin Shihuang (First Emperor) building the Great Wall, Emperor Wu of the Han Dynasty pushing frontiers and Emperor Yang of the Sui Dynasty digging the Grand Canal. However, what they lacked were explanations against the broad setting of the society.

Today's studies compensate for this by offering more elucidation on the economic and technological development, foreign trade and exchange and maritime passages of the early Ming Dynasty.

For example, the starting place of Zheng He's western voyages - Taicang, had become an international port early in the Song and Yuan Dynasty. It was also a training base for the navy.

During the late Yuan Dynasty Zhang Shicheng stationed as many as tens of thousands naval forces here and a coastal guard fleet was founded during the early Ming Dynasty. These born testimony to the need of the Chinese society for navigation and even the navy.

Also, Zheng He's seven western voyages, with their scale and time span (28 years from the third year of Emperor Yongle's reign to the eighth year of Emperor Xuande's reign in the Ming Dynasty), could not simply be explained with the "pursuing" theory.

Zheng He's western voyages were almost a hundred years earlier than those of Vasco da Gama, Christopher Columbus and Ferdinand Magellan, making him the pioneer of the great era of navigation in human history. His fleets were several times that of the latter, with crews tens and hundreds times more. China was indisputably a sea power and the Chinese at that time were very sea-conscious as these have proved.

After the Xuande reign, however, the rampancy of Japanese pirates in the coastal regions forced the Ming authorities to a timid policy of closing the country. "Not a inch of plank is allowed to go to sea", "not a single sail is permitted to go out" -- the ban on seafaring lasted from Ming to Qing Dynasty.

China's seafaring went downhill fast and the spiritual state of the Chinese grew close. Following this there were several invasions by way of the waters by the powers, coupled with the defeat of the Sino-Japanese War of 1894 on the sea, leaving one filled with sorrowful feelings toward history as if it were engraved on one's bones and heart.

Recent reading of news report said China's shipbuilding industry has entered the world's top three places and is showing an encouraging trend. The symbol of China's modern industry -- Shanghai Jiangnan Shipyard will be moved to a new modernized site.

Since the reform and opening up China's foreign economic ties has been growing closer. Foreign trade is making up rather large proportion in China's economy and the shipping industry has made great progress. The history of the reform is, in some sense, the history of the great development of China's seafaring.

In an era of economic globalization enhancing sea consciousness and fostering sea culture should be part of the rejuvenation of the Chinese culture. For people living 600 years ago the sea meant more of expedition and exploration while for people living today the sea means more of exchange and communications. To be more open to the sea will bring the Chinese civilization a more open mind and a stronger desire to explore.

Among the historical materials about Zheng He one fact is rather intriguing. Zheng He himself was an Islamic follower. He not only conducted grand religious activities in Ceylon (now Sri Lanka) during the western voyages, but also accomplished his Mecca pilgrimage. The historical fact illustrates that the Chinese civilization is indeed very comprehensive and has acquired a cultural pattern of multiple co-existence and interdependence.

The process of Zheng He's western voyages was in, a sense, one of dialogue and exchange. In today's world, cultural conflicts have become a theoretical topic as well as an aspect of life. This situation all the more accentuates the necessity of cultural dialogue. The history of Zheng He's seven western voyages, the Chinese nation's humanistic concept of Harmonizing All States should be of reference value and help to addressing this question.

Zheng He's seven western voyages, embodying an exploratory spirit, lasted a span of 28 years bearing testimony to his tenacity and persistence, which are two basic elements of the Chinese national spirit to be advanced and enriched.

As the old saying goes, it all depends on human effort and man will triumph over nature, which embodies enterprising aspect of the Chinese culture. Sima Qian (an outstanding historian in the Western Han Dynasty) said: "only the unconventional and extraordinary ones are worthy of mentioning", which shows his value orientation of understanding people and discussing the society in his study of history. The seven western voyages by Zheng He were an example of extraordinary practice by extraordinary people that merits great spaces in the writings of historians.

Today, as China makes for the rejuvenation of great nation, inheriting Zheng He's innovative spirit to be the first in the world is of practical significance.

By People's Daily Online

People's Daily Online -- A dialogue and exchange between civilizations
Home >> Opinion
UPDATED: 08:25, July 12, 2005
People's Daily calls for peaceful development in spirit of ancient navigator



People's Daily, China's leading newspaper, will carry an editorial on Monday, calling on the Chinese people to carry forward ancient navigator Zheng He's spirit of patriotism in promoting present-day peaceful development.

The editorial said the "peaceful voyage" of Zheng He, as the forefather of world navigation, in the 15th and 16th centuries, will be enshrined in people's minds.

China's commemoration of the hero today is significant because people should carry on his spirit of patriotism to undertake the country's reform and to convey the idea of peaceful development to the world, as well as to establish friendly ties with other countries, the editorial said.

The country thus decided to make July 11 China's "Navigation Day" to mark the historical moment that Zheng He launched his fleet 600 years ago.

Zheng He, the first ethnic Chinese sailor to circumnavigate the globe in the Ming Dynasty (1368-1644), traveled to West Asia and East Africa from 1405 to 1433.

Pioneering the first express sea-route through the western Pacific and Indian Ocean, Zheng He's voyages were 87 year earlier than the voyage made by Columbus, 92 years earlier than Vasco Da Gama and 114 years earlier than Magellan.

Historical records show that Zheng, commanding a fleet with 28 ships and 27,800 people, did not colonize any newly discovered areas or set up any military fortresses. On the contrary, he provided local inhabitants with silk, chinaware, calendars and agricultural tools, his seven voyages are considered early demonstrations of China's peaceful diplomacy.

Source: Xinhua


People's Daily Online -- People's Daily calls for peaceful development in spirit of ancient navigator
Home >> Opinion
UPDATED: 08:33, July 12, 2005
Voyages reflect desire to grow peacefully



Even at home, Zheng He, the Ming Dynasty (1368-1644) eunuch who led China's most successful seafaring adventures in the 15th century, was relatively unknown compared to Christopher Columbus, Vasco da Gama, or Ferdinand Magellan.

Six hundred years ago yesterday, Zheng started out on his first overseas expedition that involved 27,000 people and 200 ships.

That was 87 years prior to Columbus' voyage across the Atlantic.

In six later voyages, his fleets sailed across the Pacific, Indian and Atlantic oceans, reaching more than 30 countries and regions as far away as the east coast of Africa.

In his book "1421: The Year China Discovered The World," retired British submarine captain Garvin Menzies concludes Zheng and his fleets were the first in the world to draw a nautical chart, to sail to America, to pass the strait that was later named after Magellan, and the first to round the Cape of Good Hope.

Zheng He led a sixth overseas expedition in 1421.

Amid yesterday's fanfare marking the country's first Navigation Day, chosen to coincide with Zheng's historic maiden overseas voyage, the authorities were apparently preoccupied with rebuffing outside questions about modern day seafaring capabilities, which trail far behind contemporary marine powers.

The sudden prominence of Zheng represents a burning desire to drive home the non-aggressive nature of our strength.

In Zheng's time China had no close rival. The nation was the first in the world to have developed the might to possibly conquer, occupy, or colonize on foreign shores.

We did not harm others then, so why should we do so now?

This is exactly what the country's public relations managers desperately want to ask the world to ponder.

It is not difficult to convince other countries that China has a traditional fondness for peace and harmony.

Yet the rise of the Western powers was reminiscent of the merciless law of the jungle applied to the human world. How could China be an exception when it regains strength?

There is no way to tell whether or not China will become a threat as it has been described, except by examining pledges that a peaceful rise will be favoured, as well as a persistent insistence on democracy, peace and equality in international relations.

Looking back on the country's past may help one understand some unchanging threads that weave through the evolution of the nation's view of the world.

Chinese vessels arrived at the Gulf, the Red Sea, and the east coast of Africa as early as the Tang (AD 618-907) and Song (960-1279) dynasties.

Along with Zheng's legendary voyages, this is evidence that China chose to be a bringer of peace when it had the potential to be a bully.

Unlike later Western explorers driven by greed for gold, diamonds and fragrances, the mammoth fleet of the world's strongest navy at the time brought to foreign countries presents and advanced technology, and even helped mediate conflicts between indigenous clans.

One can see the difference in the firearms used by European explorers and the china presented as gifts by the Chinese that are displayed side by side in some African museums.

Six hundred years after Zheng, China cherishes a similar desire to befriend the world.

But regrettably its goodwill is demonized because established powers fear a resurgent China.

Talking about the frenzy over the alleged threat from China, then Malaysian Prime Minister Mahathir Mohamad once said that if China wanted to carry out aggression against foreign countries it could have done so 600 years ago.

While the country's strength could have prevailed anywhere within its reach, Zheng brought the Chinese emperor's wish to "share the blessing of peace" with overseas hosts.

Now it is up to the world to decide if it wants to share peace and prosperity with a friendly China.

Source: China Daily


People's Daily Online -- Voyages reflect desire to grow peacefully
Home >> China
UPDATED: 09:54, July 12, 2005
Anniversary highlights China's peaceful growth



Vice-Premier Huang Ju Monday used the platform of a conference marking the 600th anniversary of Chinese navigator Zheng He's voyages to reiterate the country's peaceful development.

"China has been working to develop while safeguarding world peace and promoting world peace by developing its economy," Huang said.

The voyages being celebrated contributed a great deal to the world's understanding of navigation as well as promoting economic and cultural exchanges, he said.

Zheng's fleet, comprising more than 300 vessels and manned by about 27,000 sailors a number unrivalled in the world at that time visited more than 30 countries and regions in Asia and Africa between 1405 and 1433.

Zheng (1371 -1435) is believed to have been the first man to establish a direct sea route between the Western Pacific and the Indian Ocean. His voyages predated Christopher Columbus' discovery of America by 87 years and were 114 years before Ferdinand de Magellan's round-the-world voyage.

According to Vice-Foreign Minister Zhang Yesui, the voyages promoted the peaceful co-existence of various civilizations, demonstrating China's cultural tradition of friendship in international relations.

Monday marked the 600th anniversary of Zheng's first voyage and from this year the day will become China's Navigation Day.

A series of events have been organized in honour of the navigator, who is considered an ambassador of peace, trade and Asian solidarity and co-operation.

Following an international marine expo which opened in Shanghai last Friday, a ceremony marking the publication of a book called "Zheng He's Route" was held Monday in Suzhou, East China's Jiangsu Province. An eight-episode TV documentary featuring Zheng's epic voyages started Monday on China Central Television.

Zhang Chunxian, the communi-cations minister, urged companies in China's shipping sector to carry forward Zheng's spirit to build a strong marine economy.

"The shipping industry is of great importance to the nation's economy and opening-up drive as well as furthering integration in economic globalization," Zhang said.

According to Zhang, water routes account for 60 per cent of the nation's cargo transport, and more than 90 per cent of all imports and exports are handled by sea.

"The rapid economic growth will push for closer business relations with other countries, giving momentum to the development of the marine economy," Zhang said.

While strengthening port construction in the Yangtze River Delta, Pearl River Delta and the Pan-Bohai Gulf, the nation will develop further offshore, coastal and inland transport, Zhang said.

Source: China Daily


People's Daily Online -- Anniversary highlights China's peaceful growth

Tuesday, July 12, 2005

Los Angeles Times: Driven to Be Made in China
http://www.latimes.com/news/printedition/la-fg-angst11jul11,1,5811103.story

COLUMN ONE
Driven to Be Made in China
The young have things their parents only dreamed of. But there's a lot of hand-wringing. They want wealth, and they want it now.
By Mark Magnier
Times Staff Writer

July 11, 2005

BEIJING — Across Chinese society, signs of stress and restless energy are everywhere.

Jiaolu, or anxiety, a new buzzword, produces nearly a million hits on Google China. A recent survey by the newspaper China Youth Daily found that 66% of young people considered themselves under heavy pressure and fewer than 1% felt stress-free.

Youngsters have little time for anything but class and homework, and as jiaolu builds, teen suicide rates rise. "Dear parents, I can hardly express my gratitude for bringing me up," read a note left by Tian Tian, a 12-year-old girl in the northern province of Shanxi. "But I feel under such pressure. There is too much homework for me. I have no choice but to die."

Late last year, the southern city of Shenzhen opened the mainland's first hotline for students feeling left behind, in a nation where parents often sit in on their children's intense college prep classes to urge them on. "Help for Underachievers Just a Phone Call Away," blared a headline about the new service, first detailed in the Guangzhou Daily.

When Shanghai-based Want Want Co. ran an ad recently with the tag line "If you eat this cracker, you'll get rich," demand for the snacks skyrocketed until government watchdogs pulled the plug. Their move followed complaints by consumers worried that turning down a Want Want might undercut their shot at wealth.

Young urban Chinese enjoy a lifestyle their parents only dreamed of. Car and apartment ownership is at an all-time high, and conspicuous consumption is all the rage. Many people are earning huge sums through job skills that would have landed their parents in reeducation camps during the Cultural Revolution — such as a global mind-set, a command of foreign languages and an intuitive understanding of capitalism. The Communist Party's grip on their lives is weakening as Beijing increasingly supervises rather than controls the roaring economy, allowing those with talent to get ahead.

So why is there so much angst?

Experts say the very forces that provide unprecedented opportunity for young people in the new China are also delivering unprecedented stress, particularly though not exclusively in urban areas. Common among young Chinese is a feeling that they're living in a once-in-a-few-centuries era when dynasties topple and individual fortunes are made — and that they're missing out.

"The whole society is impatient, especially the young people," said Zhou Xiaozheng, a professor of sociology at People's University in Beijing. "President Hu Jintao said recently we Chinese must be modest and cautious and avoid arrogance. Of course, that means we're none of these things."

Though pressure to do well is evident almost everywhere in the world, experts say it's greater in China in part because people here think the nation has arrived late to the global economic party and needs to make up for lost time. Catching up economically with rich neighbors such as Japan and South Korea is seen as a way of "regaining" China's rightful place on the international stage.

Insecurity among young professionals, often manifest in frenzied job-hopping, is fueled by media coverage of the super-rich, such as online-game mogul Chen Tianqiao, worth an estimated $1.05 billion at age 31. Or Huang Guangyu, founder of electronic retailer GoMe, estimated to be worth $1.3 billion at 35. Or thirtysomething Ding Lei of Internet portal NetEase, at $668 million.

By most measures, Wang Sujun is doing well. The 32-year-old has a master's degree from Peking University, China's Harvard, and a prestigious job with Beijing Mobile, a major telecommunications company. He says he's happily married and in March welcomed the arrival of a healthy daughter, Zizuo. In a country where the average annual salary is less than $1,000, he's making more than 11 times that much.

But Wang doesn't feel successful.

"Life is so stressful, I feel enormous pressure on my shoulders all the time," he said, his words tumbling out in a series of rapid bursts. "If I could only do better somehow, I might become rich and happy."

When he meets with his three best friends, they talk about what they need to be more successful. Wang wants more money, and he worries that his peers have better jobs, nicer apartments, fancier cars.

"Each dog has its barking day," he said. "I keep asking, when is my day? I'm older and older. I know I should catch up. But I worry there isn't much time left."

Three wrenching transitions are battering Chinese society, and experts say that any one would be enough to jolt people's mental equilibrium: The economic system is in the midst of a 180-degree turn from communism to a market system. Hundreds of millions of people are migrating to the cities from the countryside. And where stability and duty once reigned, risk-taking is now the order of the day.

Most Chinese are far better off than they were before the government opened up the economy. Hundreds of millions have been lifted from poverty; they have more choice as consumers and greater opportunity for education. About 350 million people own cellphones and 95 million can access the Internet. But where once everyone suffered together, today they are watching the gap widen between the haves and the have-nots.

"Many people our age are psychologically unbalanced," said Zhou Pei, 48, a truck driver in Beijing. "What's so great about letting a few get rich while so many more are dragged into poverty? I really miss the Mao period when things were equal, and wish we could bring back the good old days."

Sociologists have a name for this syndrome: relative deprivation.

"This is especially true when it's personal — people see a neighbor get rich even though they used to be classmates and just the same," said Wang Zhenyu, a sociologist with the Chinese Academy of Social Sciences in Beijing. "Chinese impatience is perhaps most pronounced when it comes to money."

Aware of the potential for political instability, the current leadership of Hu and Premier Wen Jiabao has placed a priority on balanced economic development.

It's easy to see what they're afraid of. Multibillionaire Bill Gates consistently ranks at the top of the list when schoolchildren are asked to name the person they most admire. Relatives used to burn fake money to mourn the dead and help them in the afterlife, but now they add modern status symbols to the pyre: mock credit cards, paper replicas of luxury cars and cardboard cellphones. Seductive images of wealth and status blanket the airwaves.

Young people looking for some way to balance the materialism find little comfort from a society that defines success in dollar signs, with few nods to personal contentment, scholarship or ethical behavior. Religion, a counterweight in many other societies, is discouraged by a Communist Party wary of its potential to galvanize political opposition.

China's get-rich-quick obsession has taken drastic forms. A 15-year-old girl recently kidnapped one of her relatives and demanded a $25,000 ransom before she was caught. "She sought to earn the most money in the shortest time," explained the Eastern Morning Post.

In a study of the sex industry in rural China, sociologist Zhou found similar dynamics. "A lot of young girls want to get rich so badly and want to make use of their beauty before it slips away. They consider working hard a waste of time and feel their looks are a waste if they don't take advantage of them immediately," he said. "People want to become fat in one bite."

Added to the mix are the drive and energy that Chinese families have passed down through generations, a prodigious force that is easily seen in the prosperity of overseas Chinese communities around the world.

Family experts say that drive to succeed is particularly strong in China now, as more parental frustration, wealth and expectations are channeled to the young. This is because many parents, sometimes referred to as the "tragic generation," had their most promising decade stolen when the Cultural Revolution threw society into chaos, shuttering schools and destroying careers.

In many cases, China's one-child population policy has meant more money for young people. But these single offspring also have two parents and four grandparents focused like laser beams on their success, projecting collective insecurities, fears and hopes on them in an effort to live through the younger generation.

"My mother says, 'If only I was born in this age, I could be someone,' " Wang Sujun said. " 'I could have even been a college teacher. Instead I was forced to be a common laborer.' "

As such pressures bear down, many young people feel they have already failed at a tender age.

"Where's my dream?" media planner Anan, 25, said on the Shenzhen News Net website, speaking on condition that her first name not be used. "Where are all the expectations I had just two years ago? I don't know how to go on with my life."

*


--------------------------------------------------------------------------------
Yin Lijin in The Times' Beijing Bureau contributed to this report.

Monday, July 11, 2005

LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

June 23, 2005 Thursday
London Edition 1

SECTION: COMMENT; Pg. 19

LENGTH: 757 words

HEADLINE: 'China's century'is still a long march away ARTHUR KROEBER

BYLINE: By ARTHUR KROEBER

BODY:


Every few months seems to bring fresh news of a Chinese company buying up a piece of some famous European or American manufacturer. Last year it was TCL, the Chinese television maker, acquiring control of the television business of Thomson SA, the French electronics company. Then Lenovo, the Chinese computer maker, bought IBM's personal computer business. Earlier this month, Siemens of Germany paid BenQ, a Taiwanese company, to take over its ailing mobile telephone business. And this week, Haier, China's top appliance maker, announced a Dollars 1.3bn (Pounds 710m) offer for Maytag, the troubled US white goods maker.

More such deals are likely as western companies discover the difficulty of competing with China's rock-bottom manufacturing costs. This will cause many to trumpet - or decry - the coming "Chinese century."

But what these transactions really show is how far off the "Chinese century" is. When they take over moribund western manufacturers, Chinese companies do so on far less favourable terms than their Taiwanese cousins. This reflects serious weaknesses in Chinese companies.

In the Lenovo and TCL takeover deals last year, the Chinese companies acquired established (if unprofitable) foreign brands and distribution channels by selling their equity very cheaply. TCL acquired Thomson's TV assets for virtually no cash down, but Thomson retained a one-third stake in the TV business with an option to convert it into TCL shares. Lenovo paid IBM Dollars 1.75bn in combined cash and debt-assumption and also gave IBM a 19 per cent stake in Lenovo.

In both deals, the western companies got out of unprofitable business lines at no cost and gained a low-cost option enabling them to profit if the Chinese companies managed to turn the businesses round. Both deals were excellent bargains for the western companies. For the Chinese buyers, they had the air of a desperate gamble.

The BenQ-Siemens deal is different. Siemens is getting out of the mobile-handset business at a fairly stiff price, and gaining only a token share in any turnround that BenQ may engineer. Siemens will pay BenQ Euros 250m (Pounds 166m) to take the unit off its hands, and an additional Euros 50m for a 2.5 per cent stake in BenQ. In addition, BenQ gains rights to all patents held by the Siemens mobile handset unit. By contrast, when TCL acquired Thomson's TV business, the highest-value bit - tube production - was left out of the deal.

In short, the Taiwanese company was in the driver's seat, while the Chinese ones were taken for a ride. Why? The main reason is that Taiwanese companies have hard-earned strengths that translate into a real international competitive advantage. This is not so in China: for all the ballyhoo about "manufacturing competitiveness", China's big manufacturing companies are trading groups that have exploited temporary arbitrage opportunities.

The chief strength of Taiwanese electronics makers is supply-chain management. Taiwanese equipment manufacturers rely on dense networks of highly specialised component suppliers. Both these suppliers and the ultimate assemblers such as BenQ operate on fast turnround times and high flexibility. This enables the Taiwanese companies to bring new designs to market rapidly and to move into new product lines as electronic gadgets are invented. Since the mid-1990s, the Taiwanese have added to these advantages by moving most low-end production to China, where labour costs are lower.

Companies such as TCL and Lenovo, by contrast, prospered mainly because of low purchasing power and inefficiencies in the Chinese market. They offered ultra-cheap versions of desirable electronic items when most Chinese could not afford the higher quality but more expensive foreign models.

But as China's markets liberalise and its consumers grow richer, these advantages vanish and profits shrink. Because of low profit margins, companies such as TCL and Lenovo cannot afford the research and development capacity that became an enduring competitive advantage for their Japanese and Korean predecessors. And because they are essentially arbitrageurs, they have not developed the manufacturing and supply-chain management efficiency of their Taiwanese competitors.

China has both dynamism and a powerful comparative advantage in manufacturing. But its entrepreneurial companies are immature and hamstrung by government policies that favour state-owned behemoths and hinder private companies. The Chinese century is still a few decades away.

The writer is managing editor of China Economic Quarterly

LOAD-DATE: June 22, 2005
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 1, 2005 Friday
London Edition 1

SECTION: COMMENT; Pg. 19

LENGTH: 1042 words

HEADLINE: The promise of riches blinds the west to China's problems

BODY:


A small admission. I am bored by the China speech. You know the one. It has become the standard text of politicians and business leaders on the international conference circuit. When it is not being delivered from the podium of some cavernous hotel ballroom, it is there on the front cover of a glossy news magazine.

The formula is beguilingly simple. A rush of statistics, an occasional nod to history, a Confucian aphorism or two and, hey presto, we can all grasp the vast meaning of the Middle Kingdom's re-emergence as a global power. Or rather we can all pretend to.

At first telling, the raw figures do generate a certain amount of shock and awe. As I recall, China is now the largest consumer of copper, tin, aluminium, lead, zinc, platinum, steel, iron ore and of a lot of other things I have forgotten. Its thirst for energy is second only to that of the US. It makes two-thirds (or is it three-quarters?) of the world's DVDs, television sets, watches and other domestic electronic gadgets. And lest we forget, it is also a market with 1bn consumers.

I admit that until I first heard the speech a couple of years ago I had forgotten that China was a global economic power during 18 of the past 20 centuries; and that, as recently as 1830, China and India together accounted for more than half of world output. Nor had I appreciated that today's China educates more engineers every year than there are overweight teenagers in the US.

All right, I made that last one up. But you see the problem. By the umpteenth telling, the striking becomes the banal. I can recite by heart China's output of digital cameras, the number of communist millionaires in Guangdong and how many billions Wal-Mart spends in renminbi. After a while, though, the senses are dulled. The news that China manufactures more digital radios than McDonald's sells quarter-pounders-with-cheese is no longer enough to drag me from that after-lunch conference slumber. What does it all mean?

More sophisticated versions of the speech do touch on the relationships and networks now being built around China's voracious appetite for raw materials. Whether it is through oil deals with Iran and Venezuela or mining joint ventures in Australia and Africa, China is recalibrating the geopolitical compass. We all know the central place that competition for raw materials and secure supply routes played in the building of past empires.

The standard narrative, though, is two-dimensional. The speech assumes that the world travels in straight lines. The Chinese economy has been growing by 7 per cent-plus annually since the 1990s. Ergo, it will continue to do so into an indefinite future. By the close of the next decade, its gross domestic product will be second only to that of the US.

That seems to me a fair probability. Business executives with operations in China speak of the raw energy of the place. The explanation may lie in the country's demography. By 2020 the population will be ageing fast - 400m will be over the age of 65. This generation seems determined to get rich before it gets old.

For all that, it seems equally plausible that something will happen in coming years to disrupt, if not derail, China's ascent. Doesn't every economist agree that the financial system is an accident that is bound to happen? How would the economy fare in the event of a slump in the US triggered by global imbalances? Even China must admit the economic cycle.

And what about the politics, the risks of conflict with Taiwan or of confrontation with Japan? All those statistics and clever Confucianisms too often seem a comfortable cloak for blissful ignorance. The speech invariably glosses the difficult bits. We look elsewhere for clues. The controversy in Washington over Chinese takeover bids for US companies is a small pointer to the turbulence in the geostrategic system that will accompany China's emergence as a great power and a likely rival to the US. Meanwhile, the fact that Microsoft is obliged to ensure that "democracy" and other dangerous words do not appear on computer screens in Beijing reminds us of the grave tensions inherent in a system seeking to combine liberal capitalism with authoritarian politics.

To raise such issues, I acknowledge, is to pose questions without obvious answers. Who knows whether China's Communist party can retain a monopoly on power in the face of rising prosperity and a fast-growing middle class? Scholars of China's politics tend to doubt that the present Hukou system of citizen registration and entitlement, which rigidly defines the rights of individuals and buttresses the country's social hierarchies, can survive intact the flight from the land to the cities. Logic would say that urban prosperity will greatly intensify demands for political participation. And if China does intend to be a global player, censoring the internet cannot shut out indefinitely the outside world.

The signs are that the existing leadership is awake to the strains. With customary diligence, party officials have been travelling extensively to see what, if anything, might be gleaned from western political models. Only this week, the Foreign Policy Centre in London hosted a seminar for a delegation studying Tony Blair's third way politics. There were few hints of what they would take away from the presentations given by the prime minister's officials. But the visitors left the impression that this was part of a much wider search.

We can be sure, though, that everything else - from its economic power to the way it shapes strategic relationships with the rest of the world - depends on China's success or otherwise in resolving these internal contradictions. The less confident the political leadership is at home, the more aggressively nationalist it is likely to be abroad. Perhaps it can adapt the status quo; perhaps there is indeed a Chinese third way; or possibly, the leadership will give way to pressure for greater pluralism.

Social unrest, growing income disparities or unexpected economic dislocation could force its hand. What does seem obvious is that we will only begin to understand the meaning of China's rise if we have a stab at understanding how economics is transforming the political dynamics. It is time to rewrite the China speech.

LOAD-DATE: June 30, 2005
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 6, 2005 Wednesday
USA Edition 2

SECTION: LETTERS TO THE EDITOR; Pg. 12

LENGTH: 183 words

HEADLINE: China must succeed, for everyone's sake

BYLINE: By GILES CHANCE

BODY:


From Mr Giles Chance.

Sir, As the growing volume of China-related articles and correspondence in the FT indicates, it is becoming incumbent on all of us to attempt to understand China.

The starting point is to recognise the huge burden carried by the Chinese government of providing food, shelter, education and jobs for nearly one fifth of the world's population. If China continues to succeed in raising its people's living standards, the global impact, now on resources and later on everything, is inevitable.

It is also inevitable that China will become in time a larger market and a larger economy than the US.

This happens as a natural consequence of China's size and development, not because China is anti-US.

If China fails, the consequence will be an increase in poverty and disease and a much higher risk of social disintegration, unrest and war, which again would have a global impact. Therefore let us hope that, in the current debate taking place about China, the voices of wisdom prevail over those of isolation and protectionism.

Giles Chance, Evolution Securities China, Shanghai 200121, PRC

LOAD-DATE: July 5, 2005
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 9, 2005 Saturday

SECTION: FT WEEKEND MAGAZINE - Feature; Pg. 16

China's Long and Winding road

LENGTH: 4160 words

HEADLINE: The road obscured New left or "neo-comm"? Capitalism or social democracy? Co- existence or containment? The routes open are many - but no one, least of all China, seems to know which way it will go

BYLINE: By MARK LEONARD

BODY:


It is pre-modern, the kind of scene that westerners visit and photograph or encapsulate for later conversation: on Hainan Island, off the Leizhan Peninsula and a 50-minute flight south from Hong Kong, Chinese peasants toil in paddy fields. They wear straw hats and use water buffalo to plough the fields.

Then, suddenly, the paddy fields stop and the tropical resort of Boao begins. Hotels stretch out to form an archipelago of luxury with palm trees, manicured lawns, landscaped gardens, swimming pools and golf courses so perfect that they look like computer animations. On the one side not surrounded by the paddy fields and the toiling peasants, sparkles the glorious, emerald South China Sea.

Boao has been, for the past four years, the site of the Forum for Asia, China's attempt to create a Davos-style World Economic Forum for Asia. Its air-conditioned, artificial reality is designed to show that China has made it: that it can reproduce the nowhere- everywhere splendour of the international high-level conference. George Bush Snr was among the guests in 2004; in April this year, it welcomed a slew of world leaders near, if not at, the top of the global hierarchy, including John Howard, the Australian prime minister; Austrian chancellor Wolfgang Schussel and ministers and former leaders from France, the Philippines, Malaysia, Nepal, Kazakhstan, Iran and Korea.

They were there to gaze, with varying degrees of anxiety, upon the new China. What they saw would have depended in part on what they were looking for; but in greater part on what they are given to look at. The China hype coursing through western political and business classes is based on a virtual China: the promise of what the People's Republic could become, rather than what it already is. And there are many promises. The Communist party of China rules, but it is not a monolith; and the battle of ideas for the future has contributed to a long process of hedging, now turned into an art form. This has meant projecting Chinese power while reassuring its neighbours of its peaceful intent; adopting laissez-faire capitalism while maintaining a strong state and talking about equality and green development; encouraging grass-roots democracy and opening up the Communist party while strengthening its grip on society. In an essay published last year, the scholar Joshua Cooper Ramo argued that a "Beijing Consensus" will replace the "Washington Consensus" as the dominant model of global development. That might happen, but not until there is consensus on the Consensus. If the rest of the world doesn't know where China is going, neither does China.

In Boao this year, one possible direction for China was given apparent pride of place. On the day before the conference, a select group was invited to debate the Orwellian-sounding "peaceful rise of China". The theory of heping jueqi (literally, "emerging precipitously in a peaceful way") is the brainchild of Zheng Bijian, a man who stands over 6ft tall, with a manner at once gentle and that of a natural leader. A former vice-chair of the elite Central Party School (when the president of China, Hu Jintao, was its chairman) and a former minister for propaganda, he is as well connected as it is possible to be.

Zheng breaks his plan down into three strategies. First, he calls for a national transcendence of old-style industrialisation and a move to "high technology input, economic efficiency, low consumption of resources, low pollution to the environment, and full play of our advantage in human resources". Second, transcending the old development strategies of rising powers, "China will not take the road of Germany in the first world war, or Germany and Japan in the second world war - using violence to pillage resources and seek world hegemony." Third, China would "go beyond outdated social management modes" to develop a better balance between the rich and poor, and economic and social development in Chinese society.

The theory isn't made up as he goes along. Zheng worked on some 40 case studies, commissioned by the Politburo and carried out by PhD students from Shanghai. Their consensus was that rising powers "which chose the road of aggression and expansion" ultimately fail. But Zheng has given point and force to the conclusion, and made it into a direct rebuttal of the talk of a "China threat", moulding it into the basis for a charm offensive designed to counter the US strategy of encircling China with military bases in central and east Asia, and deepening security relationships with Pacific powers such as Australia, Indonesia, Thailand and Singapore. First launched at the Boao Forum in 2003, the "peaceful rise" theory was met with acclaim. China's president and prime minister picked up the phrase and set off on a tour of Asia preaching its gospel. Chinese policy-makers developed a new grand strategy, based on reassurance.

But since the official adoption of the strategy, Zheng has been under attack. The term "peaceful rise" has been quietly dropped, following bureaucratic in-fighting in the Communist party, and has been replaced with "peaceful development" or "peaceful co- existence". Part of the attack on Zheng's idea came from people who felt that it was wrong to talk about China rising at all, because it fuels ideas of a Chinese threat: as Deng Xiaoping had said, China should "hide its brightness". But the real attack has come from a quite different quarter - that of assertive nationalists in Beijing's universities. These are China's neo-cons: or, considering their formal affiliation, neo-comms.

One of the most vocal of the neo-comms is Professor Yan Xuetong, director of the Institute of International Studies at Tsinghua university, whom I met after this year's conference. "Peaceful rise is wrong," he says, "because it gives Taiwan a message that they can declare independence and we will not attack them." He tells me about the increasingly bitter academic debates between liberal internationalists who support ideas similar to Zheng's, and his colleagues in the realist camp. When I tell him that he has been labelled a Chinese neo-con, he does not demur: "I do not feel very angry about being called a Chinese neo-con, but I prefer to be called a 'realist'."

The reason the neo-con label will stick is because there are so many parallels between Yan Xuetong and his analogues in the US. Yan is almost the mirror image of William Kristol, the editor of the Washington-based Weekly Standard and founder of the "educational" Project for the New American Century. Where Kristol is obsessed with a China threat and convinced that US supremacy is the only solution for a peaceful world order, Yan is obsessed with the US, and convinced that China's military modernisation is the key to stability. Like Kristol, he is a keen admirer of Churchill. Like Kristol, he presents himself as a lone voice in the wilderness. Like Kristol he is media savvy - propagating his ideas through magazines, such as World Affairs, and tapping into a deep seam of popular nationalism.

Yan is angry at the influence that liberal internationalists have had on Chinese foreign policy: "The basic difference between us and them is that they emphasise appeasement and we want containment," he says. "This applies to the US, Japan and Taiwan. Their basic argument is that because China is weak we should make concessions. We think that if you make concessions, they will just ask for more. The problems we are having with Japan and Taiwan are a direct result of two years of appeasement."

He sees the root of the current problems in his belief that Chen Shui-bian, the president of Taiwan, is plotting a timetable for independence - a move Yan blames on the influence of liberals. "People like Churchill and me are always in a minority because appeasement always has high gains and little cost in the short term. The problems then build up and when disaster beckons they turn to us to sort things out. Now things are moving towards containment."

Between these two poles, the political leadership hedges, testing China's new power but trying to reassure the rest of the world at the same time. It has put one of its ablest diplomats, Cui Tiankai, in charge of devising a strategy of Asian regionalism, and has backed up its commitment to multilateralism by authorising the former foreign minister, Qian Qichen, to serve on Kofi Annan's High-Level Panel on UN reform. Yet, at the same time, in its private diplomacy the leadership undermines many of the panel's recommendations. It has authorised double-digit increases in defence spending and an anti-secession law that threatens Taiwan with war; at the same time it has ratcheted up diplomacy, persuading Taiwan's main opposition leader to make an official visit to China for the first time. It shows the same flexibility towards Japan by allowing nationalist flames to be fanned through internet petitions and text messages opposing Japan's bid for a Security Council seat and then, when these things appeared to be worrying the rest of the region, it switched them off and resorted to diplomacy.

The 2005 Boao Forum is a celebration of global capitalism - and China's place in it. Speaker after speaker goes up to the podium to revere China's vital statistics and its tonic effect on the global economy. The forum's sponsors this year include western corporate giants such as TNT, Merrill Lynch and BMW, jostling with a new generation of Chinese companies such as Lenovo (which last year bought the PC-hardware division of IBM) and the Chery Automobile Company, soon to launch several of its models in the US. In booths around the hotel, deals are being forged.

For some Chinese, this is not all good. The rump of orthodox Marxists who opposed Deng Xiaoping's "opening-up policies" have been marginalised, but there is an increasingly influential movement called the "new left" that broadly supports the policy. However, it is critical about some of the side-effects: it wants China to develop its own variant of social democracy, remaining true to its Marxist roots.

Its most high-profile thinker is Wang Hui, professor of literature at Tsinghua and co-editor of the journal Du Shu. He set out his stall in a recent interview with the Seattle journal NPQ: "China is caught between the two extremes of misguided socialism and crony capitalism, and suffering from the worst of both systems... I am generally in favour of orienting the country toward market reforms, but China's development must be more equal, more balanced. We must not give total priority to GDP growth, to the exclusion of workers' rights and the environment."

For 50 years - until the era of "household responsibility", which gave families the chance to manage their own assets - any inequality was (officially) considered a problem. But with the coming of household responsibility in 1978, some people rapidly got richer than others. Deng Xiaoping explained that if the country was going to become rich, the Chinese wouldn't suddenly wake up with lots of money: "Some people must get rich first." This was true of individuals; it was also true of regions. Deng kicked it off by giving a head start to the coastal regions and special economic zones. The net result is that China went from being one of the most equal countries in the world to one of the most unequal. It has a Gini index - a way of measuring economic inequity - of 45, almost on a par with the US score of 46.5. A Chinese Academy of Social Sciences study of the problem identified 12 different social strata - a fourfold increase on the old tripartite division among peasants, workers and intellectuals. China's 786 million peasants comprise 70 per cent of the population, but with average incomes of Dollars 318 a year they make up only 39 per cent of domestic consumption.

The new left thinks that China's ongoing economic liberalisation has exacerbated such social inequality by allowing party bigwigs to carve up and plunder the nation's assets under the cover of privatisation. Property that was once taken from the rich and given to the peasants is now confiscated and given to developers. The focus on export-led growth means that more money goes in tax rebates to exporters than on health and education. The new left has put forward a concrete reform agenda that emphasises principles such as abolishing the export tax credit, which skews production away from the domestic market; full-cost pricing, so that producers pay environmental and social costs; dismantling the tax loopholes that benefit the rich; and developing new wage structures to give workers a share of profits.

The new left has a showcase town (though many now think of it as an artefact, not a model): Nanjie, in Henan province. Its leaders have created a synthesis of the market and collectivism as they have moved this town of 3,000 people from agriculture to industry. They have built 26 factories that make everything from instant noodles to plastic wrappers. And the way the place is run is resonant of experiments in ethical capitalism such as Robert Owen's New Lanark in 19th-century Scotland. The workers are paid above-average wages of Dollars 50 a month and everyone is given free housing, free healthcare, rations of meat and eggs, and a daily bottle of beer. The authorities also look after the moral welfare of their citizens, with compulsory study-sessions of Mao's philosophy and regular "criticism and self-criticism" of each other's behaviour.

As public anger over the cost of reform grows - with protests by laid-off workers coming together with concern about illegal demolitions, corruption, and unpaid wages and pensions - the ideas of the new left are becoming increasingly influential. President Hu and prime minister Wen Jiabao have taken up much of its rhetoric. Early on in their rule, they interceded on behalf of workers who were not getting paid. They have also tried to slow growth in some of the coastal regions, and to divert investment into the north and west of China.

It's another example of the hedging strategy. Hu and Wen are also trying to move China up the value chain - to create world-beating companies that can take on the west. China is already establishing the same dominance in the PC market that it has in textiles and footwear. And Ma Kai, the powerful leader of the National Development and Reform Commission, has spoken about China trying to become a service economy. These ambitions can only be realised in the coastal regions - as the leaders know. Behind the deployment of new-left rhetoric seems to be a populist tactic - at once a legitimisation of the leadership, and a rationale for a suppression of pro-democracy liberals, which included a concerted crackdown on intellectuals earlier this year.

Democracy is, in fact, the one topic barely mentioned at Boao. Western investors are too polite to mention it, and in any case they are more immediately concerned with the protection of intellectual property and the rule of law. Many of the guests of honour do not themselves have great democratic credentials. One such is the King of Nepal, fresh from ousting the Nepalese government in a military coup. (His spokesperson, Kirti Nidhi Bista, rattles off CPC slogans: socialism with Chinese characteristics; one country, two systems; five principles of peaceful co-existence - then says that "China's growth is a momentous moment for all of Asia. China has been led by a long line of visionaries that started in 1934 with the long journey of Mao Zedong and Zhou Enlai.") Another is the Kazakh deputy prime minister, representing a government whose democratic credentials included shutting down the main opposition party in January, as well as turning a blind eye to the deaths and disappearances of critical journalists.

Yet democracy is becoming an increasingly important cause at a local level in China. When I get back to Beijing, I go to a publisher's office in a slightly down-at-heel neighbourhood. Across the road a grocery store selling fruit and vegetables pours out on to the street; a Chinese greasy spoon is full of local workers breakfasting on red-bean dumplings and eggs. But the shabby exterior contains a powerhouse of innovation: Professor Yu Keping.

Yu is a rising star. Spoken of as an informal aide to the president, he has an easy manner and a formidable command of English, picked up on his many visits to the west (including a spell as a visiting fellow at Duke University). In 2003, he was made head of Beijing University's new Centre for Chinese Government Innovations - part university, part think-tank, and part "McKinsey" for government reform. Its flagship project is an award programme for "innovations and excellence", promoting innovations in local governance and, yes, democracy. Since the programme started, 600 projects have been nominated and 20 prizes handed out. The winners of 2004's awards included "market-oriented reforms of public utilities" in Shenzhen city; "direct election of a township leader" in Buyun township, Sichuan; and "democratic consultation" in Wenling city, Zhejiang.

Yu explains the centre's mission. "Many think-tanks and groups of experts are brainstorming on reform in China, whether inside the Communist party or within government institutions. However, local and spontaneous initiatives are also numerous. We try to survey, assess and compare them. The best ideas are rewarded by prizes. Reform can be carried out in various fields, such as the partial privatisation of a local public service, the grouping of services in neighbouring agencies, or emergency units and improvements in real-estate management by local government."

Yu is a pragmatist - which is why he has not been swept away in any of the crackdowns on liberal intellectuals. At a conference a couple of years ago he argued that too much critical spirit could only lead to failure. He used an old Mao metaphor: "intellectuals are the hair on the skin" - in other words, they rely on the party to deliver their ideas. The pressure for western-style democracy has been on the retreat since Tiananmen Square, when protesters constructed a papier mache Statue of Liberty. China's rising nationalism has been coupled with an anti-Americanism that has further delegitimised Chinese liberals.

Yu's big idea is "incremental democracy", which he distinguishes from both orthodox Marxism and liberalism. In an important article written in 2000, he argues that incremental democracy "is not pre- occupied with one theory or doctrine on democracy... it pays full understanding to the universality of democracy with a good understanding of the particular Chinese situation and traditional culture." Yu argues that it has five characteristics: it holds that democracy is a set of institutions and procedures to guarantee a citizen's freedom, equality and other political rights through a process of participation; it sees an autonomous civil society as a pre-requisite for democracy; it believes in "rule by law rather than rule of man"; it affirms the critical role of government in promoting democracy, rather than seeing democracy as a way of minimising the functions of the state; and it tries to build democracy on the basis of co-operation between governments and citizens, so that the pressure for economic development at a local level comes both from central government and local people.

Lai Hairong, one of Yu's colleagues, conducted a ground-breaking study of elections in Sichuan which found that about 40 per cent of its townships now choose their leaders through semi-competitive elections. In the past, a single candidate would emerge for the position of township governor or vice-governor - but these elections have shaken things up by providing multiple candidates for the post. The vast majority of the elections are, to be sure, restricted to the party's nomenclature, with an electoral college of 150 to 300 making the decisions; plus the candidates have to be party cadres, so that ordinary citizens could neither stand nor nominate candidates; campaigning was forbidden; and candidates had to have a minimum level of education (usually a university degree) and be younger than 45. Yet this is an improvement on the old system which saw five to 10 party cadres making all the decisions, and seems to suggest a movement towards a more popular voting system.

One township on Lai's list was special. Buyun township had a direct election. The citizens were allowed to select the candidates for township leader by direct votes, and the nominees were later submitted to the township people's congress for final voting. The candidates' photos were printed on ballot papers to help illiterate voters, there were secret ballots with booths to protect voter privacy, and a full campaign was run, with public meetings addressed by all the candidates. Yu argues that this election has had a profound impact on local life: "Village voters have clearly recognised their democratic rights... the township leader has a much improved sense of responsibility and accountability... promises made when running for election have largely been realised by the time of the term election." Every month in Buyun there is a "township leader reception day" when people can raise concerns on local issues, and every year - on the eve of the lunar New Year - the township leader gives a progress report to all the citizens of the town.

As we speak, Yu is called out of the room to take part in a political education programme called "Vanguardness of Party Members". Yu's colleagues are allowed to stay behind; one jokes that "they haven't got down to our level yet", as the stated purpose of the movement is to put the party back in touch with its roots - to remind party cadres that they are there to serve the interests of the workers and the peasants, rather than themselves. Zhou Hong, a scholar at the Chinese Academy of Social Sciences, told me later that "many Communist party members are losing their faith in communism. If that happens the system will collapse. The movement is designed to refresh people's faith through courses in Marxism and daily criticism and self-criticism in the work place. It is designed to ask how people work together - and whether their work reflects their principles." Every member of the party is expected to ask themselves each day whether they are thinking of things from an altruistic perspective: whether they are worrying enough about the development of ordinary people's living standards, or comprehensive national power, or the promotion of production force.

Another party member, who asks to remain anonymous, is much more blunt. "Self-criticism and criticism are there for one reason alone: to remind you who is in charge. People mock it and complain about it, but they all turn up. The party wanted to remind people that they are not really in charge of their lives by taking the thing they value the most, the thing which is most precious: time. There was a feeling that people didn't value their party membership enough, so this is designed to make them sit up and take notice. The point of the exercise is not to pass on knowledge but to remind people that they owe their jobs to the party and that what has been given to them can be taken away."

This is the paradox of political reform. On the one hand, the leadership is trying to open up the party and make it more meritocratic - inviting business people to join, creating more open selection procedures and making the party subject to the rule of law. But at the same time, the leadership is trying to increase its grip on society - and rejects attempts to separate the party from the state.

Everyone now knows that China is important. No one knows where it will end up. China's scale means that any changes in its internal politics have vast implications - from global poverty to pollution. China has become so integrated into the global economy that its prospects have immediate effects on the US current account deficit, Japanese growth and the surge in oil prices. But, above all, China is a model for the rest of the world. Its dizzying levels of growth, without liberal democracy, create the biggest ideological threat the west has felt since the end of the cold war.

As the Beijing Consensus threatens the Washington Consensus around the world, people will be studying the fates of Zheng Bijian, Wang Hui and Yu Keping. The battle for China's future could see it become an Asian United States (minus the democracy), with spiralling inequality, resurgent nationalism and unilateral instincts; or an Asian social democracy that is committed to peace and regional integration. But as China's power moves from the realm of the virtual to the actual, the leadership's hedging strategy will be increasingly difficult to follow.

Mark Leonard is director of foreign policy at the London-based Centre for European Reform and author of "Why Europe Will Run the 21st Century".

His next book will be on China.

LOAD-DATE: July 8, 2005
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