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China’s America-Facing Modernizers Signal Change on the Horizon

As we noted in an essay this morning, modernizers within China’s elite are open to economic liberalization. The Chen Guangcheng case has consumed media attention, but American officials have been quietly working with their Chinese counterparts on a range of economic issues. And according to the Wall Street Journal, the Chinese have been unusually willing to discuss the possibility of easing restrictions on foreign ownership of financial-sector firms, limiting export subsidies, and reducing tariffs and taxes on consumer goods. These and other changes could radically reshape the U.S.-China trade relationship, boost U.S. exports, and enable the Chinese economy to develop a stronger consumer base and reduce the influence of its powerful state-owned enterprises.

As today’s VM essay noted, however, there are powerful interests within China that will fight this trend. “Hardliners” and nationalists hold powerful positions in the armed forces, provincial governments, state-owned corporations, and various government departments. They do not want political reform to reduce their power and will fight this reformist agenda.

The Chen incident is a heaven-sent opportunity for these folks to try and obstruct what might otherwise be a very promising set of negotiations. Given that many of the issues China and the US want to discuss would lead to support for China’s private economy and reduce the power of the state owned enterprises, it’s not surprising that the hardliners want a fight.

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  • Anthony

    WRM in line with some of your commentary on China, this Quick Take implies enhance policy of Chinese integration into capitalist economy; what some have described as America’s liberal belief that via economic engagement China will become both prosperou and democratic – how would realist categorize Hardliners?

  • Luke Lea

    “support for China’s private economy and reduce the power of the state owned enterprises”

    It’s not clear that these are two different sets of people: state owned enterprises are looted and become private enterprises, private enterprises corruptly secure financing from the state owned banking system and bank billions.

    Of course we — some of us — are making billions too, so our eyes are blinded.

  • Anthony

    Correction @1: …China will become both prosperous and democratic….

  • Mrs. Davis

    Economic liberalisation with China has really worked out well so far. Let’s have more.

  • Luke Lea

    Look on the positive side. Capital being the accumulated crime and sacrifice of centuries, plus interest, China is augmenting the world’s total stock of capital.

  • Luke Lea

    For those wanting an education in some of the background anthropological issues relating to China see here:

    Scroll down for China.

  • Kris

    “the Chinese have been unusually willing to discuss the possibility of easing restrictions on foreign ownership of financial-sector firms”

    So corrupt American financial firms will take over Chinese ones and bring the Chinese system crashing down. That’s great news!

    This analysis brought to you by thibaud and Luke.


  • thibaud

    There’s money on the line. These aren’t “hardliners,” they’re bandits.

  • Brendan Doran

    Walter what makes you think our Diplomats weren’t conned? I see…Liberals everywhere.


    “Inside every g**k there’s an American waiting to get out.” No. They just really like the money and don’t want to starve anymore.

    Good faith? If they had good faith they’d be dead, in a camp, working to death in a FOXCONN factory or if lucky working in Chinatown, NYC.

  • Brendan Doran

    PS. A certain slur was used to remain faithful to the quote, it was deleted in part to avoid offense.

  • Luke Lea

    The Chinese leadership have been making liberal democratic noises for thirty years now but nothing has come of it: no elections, no separation of powers, no freedom of speech, no independent media, no transparency, no property rights, no rule of law, no independent judiciary, no economic freedom really at least for the natives. Has any ruling class ever voluntarily surrendered power? Isn’t that what we are naively hoping for?

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