China Opens Up to the Market

By Pierre Bessard

Equipped with several pairs of Nike shoes freshly purchased in Hong Kong, I landed in Beijing, China's capital. The Syracuse University summer program in which I was taking part, "Global Entrepreneurship: Experiencing China's Emerging Market," was due to start there the same night. The reasons for my participating in the program were the two formal courses it offered, namely, International Financial Management and Global Entrepreneurship, as well as the opportunity to learn first-hand about a market of increasing strategic importance. The five-week program was true to its promise. It combined practical financial knowledge, studies in global entrepreneurship and cross-border transactions, and fascinating experiences through direct observation, close contact with Chinese students, and talks with Chinese managers and officials. China's cultural treasures, such as the Great Wall, the Forbidden City, and the Summer Palace were also on the agenda, but the bulk of the program took place in Shanghai, a metropolis with a Western heritage assertively regaining its former position as the country's leading commercial and financial center.

Market economic reforms in China began in the late 1970s, after the death of the old revolutionary Mao Tsetung. His successor, Deng Xiaoping, who took over the Communist Party, recognized that after decades of Marxist policies, poverty, starvation, and barbarism were spreading like deadly epidemics throughout China. He therefore initiated the country's transition, still in progress today, from a planned to a market economy. Deng's economic policies have more than quadrupled China's output since 1978, a fact that has had an enormously positive impact on the citizens' standards of living. Consequently, Deng, once dismissed by the socialist mass murderer Mao as "an arch unrepentant capitalist roader and harbinger of the right deviationist wind," has achieved a cult-like status among many Chinese. Nevertheless, the Communist Party, anxious to retain its power, is only gradually opening up the country, and every student is still forced to learn Marxism and Leninism as sole "philosophy." The result is that the current level of development in China, as measured by indicators such as literacy, output per head, or life expectancy, is equivalent to that of the United States about 100 years ago. Who said leftist ideas were progressive?

Since the Communist Party came to power in 1949, 65 million citizens have been slaughtered by the government, most notably during Mao's "cultural revolution." Not even communism's sister ideology, Adolf Hitler's national socialism, claimed as many lives. For these reasons, many well-intentioned people in the West, confusing liberty with democracy, believe that Western nations should punish the Chinese government with embargoes and trade restrictions, thereby condemning millions of people to continued poverty. They fail to see that economic liberty, not democracy, touches human lives in the fullest possible way. What is the alleged right to vote compared with the real right to start a business, draw wages according to our productivity, keep the fruits of our labor, feed a family, save for the future, contribute to a civilization? These are the components of capitalism, the only system truly compatible with the first and most important of human rights: the right to own and control what is ours. Real democracy is in the countless free choices we make every day in our private lives and as consumers and producers. Whether the Chinese government calls it "market socialism" or "Marxism with Chinese characteristics," the truth is that China's emergent capitalism is giving the Chinese people more freedom, more dignity, and more prosperity. From a Western perspective, China-bashing and protectionist thinking are not the answers. Free trade and peace are.

Working at the level of people to people, and business to business, we can support Chinese efforts to rebuild their great country with inspiration from the ancient Taoist body of thought. With its emphasis on individualism, non-aggression, and voluntary exchange, Taoism is central to the rise of the market economy and the decline of socialism in China. The Tao, developed by Lao Tzu, a contemporary of Confucius, teaches that individual happiness is the basis of a good society. Lao saw the state, with its "laws and regulations more numerous than the hairs of an ox," as the persistent oppressor of the individual, "more to be feared than fierce tigers." Not surprisingly, our great Western classical liberal tradition owes some to him.