There was a long-held myth that the only manmade object visible from space was the Great Wall of China. Yet astronauts have since confirmed that Chinese cities at night are easier to spot than the great barricade. But when myths turn into beliefs, to question their veracity is to risk being called a heretic. Today, to question the economic stability of a country with the largest foreign-currency reserve in the world borders on blasphemy. But when the ideological bases of the free market and export-led growth are under growing stress, it is difficult to remain sanguine about the future of the production workshop of the world.
It seems the more that is written about the Chinese miracle, the less the world actually knows about what is really happening behind the bamboo curtain. But things are not as rosy as depicted – the Asian Development Bank has predicted that the Chinese economy would grow by seven percent in 2009 – in a country almost completely dependent on export. When banks are not lending and consumers are not spending in the US, where will the Chinese sell their wares in quantities large enough to keep factories humming in Shanghai? This is a question that the mandarins in Beijing have succeeded in hiding below stacks of trade surpluses over the past two decades.
With a slowdown of the Chinese economy, the resulting layoff would push workers out into the streets, as a social system capable of enduring unpredictable upheavals has been replaced with the capitalist creed of 'greed is good'. Collectives in the countryside were broken up or privatised to increase productivity. Families have become nuclear, individuals atomised. By all accounts, China today is not the Japan of the 1970s in terms of blending tradition with modernity; it is more like the American Wild West of the 19th century, with only the wiliest able to survive. Even wilder chaos will ensue if an all-out recession – not an unlikely possibility if the credit crunch in the US and Europe continues – sets into a polity based on the barter of prosperity-for-stability between the ruler and the ruled.
Deng Xiaoping is credited with kick-starting the economic recovery in China with his famous quip about the irrelevance of the colour of the cat and primacy of its utility value in catching mice. A victim of Mao Tse-tung's purge, Deng was not satisfied with rewinding the Great Leap Forward once he consolidated power; rather, he introduced a Cultural Revolution in reverse to give birth to 'Market Maoism', a form of state capitalism in which executives-in-business suits are soldiers without uniform. These entrepreneurs and managers function with the full backing of the party-military elite, at least as long as they serve the 'national interest'. And since businesses are nationalists in service of the motherland, whosoever comes in the way of their freedom of operation are enemies of the people. No wonder that multinational companies often claim that hire-and-fire rights for factory owners in China are better than almost anywhere else. That is why foreign direct investment has flowed in torrents to a country that continues to call itself communist.