For eBay, It’s About Political Connections in China (NYTimes, 12/22/06)

December 22, 2006
For eBay, It’s About Political Connections in China
By KEITH BRADSHER
HONG KONG, Dec. 21 — EBay’s decision to close its Web site in China and take a 49 percent stake in an e-commerce venture with a Chinese company is the latest sign that local knowledge and connections matter in the Chinese market.
While eBay’s new partner, TOM Online Inc., has suffered a series of commercial setbacks in the last three years, no one questions that it knows the Chinese market and has political influence.
TOM Online has been a fairly small, struggling company until now. It earns nearly 90 percent of its revenue from providing cellphone services, mainly sending the latest entertainment news and weather in short text messages or multimedia messages to cellphone users. Most of the rest of its revenue comes from advertising on a Yahoo-like Internet portal that specializes in Chinese entertainment news.
The company’s heavy dependence on value-added cellphone services, without actually being a cellphone service provider, has made it especially vulnerable. Over the last couple of years, Chinese regulators have stepped up their policing of the industry to crack down on certain billing practices and what officials call “inappropriate” content and other unwanted services.
Last summer, to ensure that customers really wanted a value-added service, all companies were required to offer free trials and to require two customer confirmations before starting a service.
TOM Online had to adjust its subscription services, and so it was especially hard-hit because such wireless service accounts for so much of its revenue. Profits at TOM Online promptly plunged 59 percent in the third quarter from a year earlier as a result, to $5.28 million, while revenue dropped 15.2 percent, to $38.95 million.
The company’s reliance on such services has prompted some experts to question how it will fare in electronic commerce. “TOM Online’s line of business is not compatible with eBay’s,” said Liu Bin, an analyst at BDA China, a technology and media consulting firm in Beijing, and “they will need some time” to learn to work together.
But while TOM Online may be struggling now, it has the political connections that remain crucial in China. Li Ka-shing, Hong Kong’s wealthiest tycoon and a man who has cultivated close relationships with top Communist leaders on the mainland for decades, controls the company. Wang Lei Lei, the chief executive of TOM Online and now the chief executive of the joint venture, is the grandson of a People’s Liberation Army general and known for his political connections.
Mr. Wang presented the broad reach of TOM Online’s cellphone services — the company says it serves 70 million subscribers — as an asset. “TOM Online brings tremendous expertise in wireless and reach in China to the joint venture,” he said at a news conference Wednesday in Shanghai.
Shares of TOM Online are traded on the Growth Enterprise Market in Hong Kong and on Nasdaq. But the company itself is based in Beijing, which is crucial at a time when Chinese leaders are starting to become more cautious about welcoming foreign investment.
“The central government must maintain absolute control over industries that concern national security and economic safety,” said Li Rongrong, the director of the Chinese government’s powerful State-owned Assets Supervision and Administration Commission, at a news conference in Beijing on Tuesday. He cited telecommunications as well as civil aviation, shipping, power transmission, coal, petrochemicals and armaments.
EBay has already run into problems in China from not being a Chinese company. By requiring domestic control over financial services companies, Chinese regulations have limited the financial transactions that eBay’s payment mechanism, PayPal, can offer. The Chinese government plans to issue 10 licenses next year for online financial services, but is widely expected to grant them only to companies in which Chinese partners exert a high degree of control.
Meg Whitman, eBay’s chief executive, acknowledged the issue during the same news conference in Shanghai that Mr. Wang addressed. “We will see what happens over the next few weeks and months,” she added, “but we are very committed to PayPal here in China.”
Ms. Whitman also suggested that TOM Online was a natural partner for eBay because TOM Online already owned 51 percent of the Internet phone service Skype China while eBay owned the rest. The joint venture, TOM-Skype, formed in September 2005, has more than 15.5 million registered users, and is gaining new ones at an extremely rapid clip.
With decisions made in China and California, eBay also reacted more slowly in China than its rival, Alibaba. Three years ago, Alibaba set up a rival electronic commerce site, Taobao, which has since passed eBay to dominate the market through steps like taking the lead in eliminating user fees.
This week Alibaba welcomed eBay’s new approach. “We have long expected that eBay would change its model in China, and a dramatic change would be a great thing for eBay and Alibaba, because rather than competing, we would rather focus on cooperation between eBay U.S. and Alibaba’s international Web site,” said Porter Erisman, a vice president at Alibaba.
“More and more eBay power sellers buy in volume on Alibaba and sell on eBay U.S., but the competition between Taobao and eBay in China has always prevented deeper cooperation. So any new deal where eBay changes its model in China would be great for both companies because we now can work out ways to cooperate,” he added.
The TOM Online alliance could help eBay move more quickly, as Mr. Wang has a reputation for decisiveness and blunt words. In one of TOM Online’s many efforts to find a winning formula, the company set up a unit in 2003 to offer multiplayer online video games, only to shut it down the next year when it failed to gain market share.
Duncan Clark, the chairman of BDA China, said the contrast between TOM Online’s quick commercial reflexes and eBay’s slower moving search for consensus among executives in China and California was easily apparent at two recent meetings.
When eBay managers gathered at the Grand Hyatt in Shanghai, they rented a large room to hold what they labeled as a “town hall meeting” for a discussion of business plans by a large group of local managers and executives flown in from California, Mr. Clark said.
But when Mr. Wang recently attended a separate investor conference also held in Shanghai and was asked what happened to employees in the online game division when it was closed, he bluntly said that he fired them, Mr. Clark recalled.
A TOM Online official said that some employees may have lost their jobs then, but that the company tried to find jobs for the employees in other divisions.
To be sure, the initial size of the joint venture between eBay and TOM Online is tiny: eBay is contributing $40 million and its fledgling Chinese operations in exchange for a 49 percent stake in the joint venture. TOM Online is contributing $20 million and its management expertise and relationships with Chinese regulators and other officials in exchange for 51 percent of the joint venture. Having occupied a commanding position in the Chinese e-commerce market as recently as 2004, eBay is now in the position of being a global Internet giant reaching out for local help to what is, by comparison, a small Internet player.
But Ms. Whitman was careful to present the deal in more positive terms.
“We don’t see it as a failure,” she said. “We see it as an evolution of our strategy here in China.”
Howard W. French and Rujun Shen contributed reporting from Shanghai.

Chinese Success Story Chokes on Its Own Growth (NYTimes, 12/19/06)

December 19, 2006
Chinese Success Story Chokes on Its Own Growth
By HOWARD W. FRENCH
SHENZHEN, China — When Zhang Feifei lost her job in this booming Chinese factory town, she was not terribly concerned. Jobs had always been plentiful in Shenzhen’s flourishing economy.
Then Ms. Zhang, a 20-year-old migrant laborer, lost her identity card and was shocked to find that no factory would hire her without a bribe that she could not afford. Desperate for money, she ended up working in a grimy two-room massage parlor in a congested alley here, where she has sex with four or five men each day.
“I was terrified at first, and I was really embarrassed not even knowing how to use a condom,” said the soft-spoken young woman, casting her eyes downward as she spoke. “I didn’t have any choice, though. Little by little, you have to get used to it.”
Few cities anywhere have created wealth faster than Shenzhen, but the costs of its phenomenal success stare out from every corner: environmental destruction, soaring crime rates and the disillusionment and degradation of its vast force of migrant workers, Ms. Zhang among them.
Shenzhen was a sleepy fishing village in the Pearl River delta, next to Hong Kong, when it was decreed a special economic zone in 1980 by the paramount leader Deng Xiaoping. Since then, the city has grown at an annual rate of 28 percent, though it slowed to 15 percent in 2005.
Shenzhen owed its success to a simple formula of cheap land, eager, compliant labor and lax environmental rules that attracted legions of foreign investors who built export-based manufacturing industries. With 7 million migrant workers in an overall population of about 12 million — compared with Shanghai’s 2 to 3 million migrants out of a population of 18 million — Shenzhen became the literal and symbolic heart of the Chinese economic miracle.
Now, to other cities in China, Shenzhen has begun to look less like a model than an ominous warning of the limitations of a growth-above-all approach.
While grueling labor conditions exist in many parts of China, Shenzhen’s gigantic plants, employing as many as 200,000 workers each, have established a particular reputation for harshness among workers and labor advocates. Monthly turnover rates of 10 percent or more are not uncommon, labor groups say.
The tough working conditions, in turn, have helped spawn one of the most important labor developments in China in recent years: large-scale wildcat strikes and smaller job actions for better hours and wages. The Guangdong Union Association, a government-affiliated group, said there were more than 10,000 strikes in the province last year.
Among Chinese economic planners, Shenzhen’s recipe is increasingly seen as all but irrelevant: too harsh, too wasteful, too polluted, too dependent on the churning, ceaseless turnover of migrant labor.
“This path is now a dead end,” said Zhao Xiao, an economist and former adviser to the Chinese State Council, or cabinet. After cataloging the city’s problems, he said, “Governments can’t count on the beauty of investment covering up 100 other kinds of ugliness.”
As the limits of the Shenzhen model have grown more and more apparent, other cities in China’s relatively developed east are increasingly trying to differentiate themselves, emphasizing better working and living conditions for factory workers or paying more attention to the environment.
“Some inland cities have started to provide migrants social security, including pension and other insurance,” said Wang Chunguang, an expert in class mobility at the Chinese Academy of Social Sciences in Beijing. “In Chengdu, in Sichuan Province, residency controls are loosening up and education for migrant children is getting more attention.”
Migrants do still arrive here, of course, drawn by the promise of work and undaunted by stories of the difficult life that awaits them. Some, like Ms. Zhang, who come here for the $100-a-month sweatshop salaries, end up trapped, literally too poor to leave. But many others quickly become disillusioned and return home.
Increasingly short of workers, factories recently have increased assembly-line wages by as much as 20 percent. But even so, critics say, Shenzhen’s boom has spread little wealth.
While the city is dependent on migrant labor to keep its factories running, onerous residency rules discourage migrants from settling here permanently and make it difficult for them to obtain public services from education to health care.
“The government has evaded its responsibilities toward migrant workers,” Jin Cheng, a member of an influential local civic forum, Interhoo, said bluntly.
The resulting rootlessness has fed a wave of crime of a sort hardly ever seen elsewhere in China. Gunfights, kidnappings and gang warfare are rife, and crime rates are skyrocketing.
Although the city does not publish crime data, the Southern Metropolitan News, one of the most reputable Chinese newspapers, reported that there were 18,000 robberies in 2004 in Baoan, one of six districts in Shenzhen. By comparison, in Shanghai, a city of around 18 million, there were only 2,182 reported robberies for all of 2004, according to figures compiled by the city.
Near the gates of Foxconn, a huge electronics assembly plant that is one of the city of Shenzhen’s largest employers, a half-dozen former factory workers lounged in the shade on a recent afternoon.
Asked if it was their day off, one of them, a 20-year-old, explained that he had been fired when he developed lesions on his arms from exposure to paints and asked to switch jobs. Now, he said, he and his friends survived by “beating people up for a living.”
In addition to shakedown crews like this one, prostitution, usually thinly disguised in karaoke joints and massage parlors, but increasingly in the open, ranks as one of the city’s biggest industries. In Shenzhen’s blue-collar neighborhoods, thick with fetid workers’ dormitories, the frustration with hard labor, merciless factory bosses, low pay and miserable living conditions is palpable.
“I’ve changed jobs many times,” said one man, a onetime factory floor manager, who was lying on a bunk bed in a stiflingly hot room jammed with other workers. “The pressure is very high in these jobs. They don’t give you weekends, or breaks — especially the Taiwanese companies.”
Migrant workers describe the city’s labor market as a predatory environment filled with unscrupulous job brokers, fraudulent training courses and a multitude of other scams aimed at cheating the most disadvantaged part of the population.
Yu Di, a 19-year-old from Hubei Province with a junior high school education, said he worked in a grimy watch-casing factory, loading and unloading heavy boxes from a truck 11 hours a day, six days a week. With a salary of about $80 a month — and no benefits — Mr. Yu has to borrow money from his parents just to cover his living expenses. He lives in a dim and filthy dorm room, crammed with 12 bunk beds and mattresses made of bare springs covered with cardboard. “The only thing I regret is not working hard in school,” he said.
In the room next door, Zhou Hailin, 20, who grew up in Guang’an, the hometown of Deng Xiaoping, seems better off. Mr. Zhou, who came to the city four years ago, earns about $120 a month as a machinist in the same watch factory.
To do so, though, he must work eight-hour shifts, plus three or four hours of mandatory overtime, six days a week. A typical workday, he said, ends at 10:30 p.m., when he often goes to visit a sister who works in another factory nearby.
Asked if he ever visited downtown Shenzhen, which bristles with skyscrapers and shopping malls, he said he had never had time. “I have to work every day,” Mr. Zhou said. “All the factory jobs here are the same. That’s what it’s like being a migrant laborer.”
Mr. Zhou calmly accepts his lot, but for many the merciless grind of factory life is too much. Their health failing, or their dreams of amassing sizable savings broken, these workers opt to return home to simpler lives in the countryside.
“Shenzhen may seem prosperous,” a worker said, sitting in his bunk in a steamy dormitory, “but it’s a desperate place.”

In Chinese Boomtown, Middle Class Pushes Back(12/18/06)

December 18, 2006
In Chinese Boomtown, Middle Class Pushes Back
By HOWARD W. FRENCH
SHENZHEN, China — When residents here in southern China’s richest city learned of plans to build an expressway that would cut through the heart of their congested, middle-class neighborhood, they immediately organized a campaign to fight City Hall.
Over the next two years they managed to halt work on the most destructive segment of the highway and forced design changes to reduce pollution from the roadway. It became a landmark in citizen efforts to win concessions from a government that by tradition brooked no opposition.
And it was no accident that the battle was waged in Shenzhen, a 26-year-old boomtown that was the first city to enjoy the effects of China’s breakneck economic expansion and that has served as a model for cities throughout the country.
Increasingly, though, with its growing pains multiplying, Shenzhen looks like a preview, even a warning, of the limitations of the kind of growth-above-all approach that has gripped much of China.
Shenzhen’s 28 percent average annual growth rate since 1980 is likely to stand as a record in China for some time, but the price of this phenomenal success is painfully evident. Throughout most of the year its skies are thick with eye-burning smoke. Street crime is high. And the workers it has drawn so effortlessly in the past from the countryside are becoming harder to recruit, as their options increase elsewhere.
But Shenzhen may also herald more promising changes. Possibly the greatest force taking shape here is the quiet expansion of the middle class, thicker on the ground here than perhaps anywhere else in China. This middle class is beginning to chafe under authoritarian rule, and over time, the quiet, well-organized challenges of the newly affluent may have the deepest impact on this country’s future.
“Many people laughed at me, because they don’t have confidence in the government,” said Qian Shengzeng, a 62-year-old former rocket scientist who led the movement against the expressway. “They think the government is hopelessly rotten. However, our view is that maybe there is a remaining sliver of hope, and the government needs to be pushed.”
In newly rich Shenzhen, as in much of China, social change is being driven by economic transformation and, more than anything else, property ownership.
Red-hot real estate markets have given birth to a new class of people, known as mortgage slaves, because the financial burden of buying into the middle-class dream of home ownership has suddenly become so great. The new property owners have poured their energy into everything from establishing co-op boards to spar with landlords, to organizing real estate market boycotts to force down prices.
Others, meanwhile, have begun running for office in district-level elections, where they hope to make the city government more responsive to their needs, though, like governments at every level in China, the ultimate power here rests with Communist Party officials.
Shenzhen has also spawned a local research group known as Interhoo, an independent association of civic-minded professionals who discuss municipal policy issues, publish position papers and quietly lobby the government over development strategy and other issues.
“In the past five or six years there are signs that new politics, economics and culture are emerging in Shenzhen,” said Jing Chen, a scholar with the China Development Institute, a local research group, and a member of Interhoo. “There is an awakening of awareness on public issues. The 6,000 members of Interhoo discuss these issues and have published books that have had a great influence over the government.”
Academics and others who study the city’s development say it is no surprise that Shenzhen is emerging as the cradle of movements like this. From the start, its proximity to Hong Kong has made it unusually open to outside influences. The city is also new, founded in 1980, and populated by migrants who contribute to a culture of greater individualism and risk-taking than anywhere else in China.
Even with all of this political activity, China is a long way from participatory democracy, even at the local level. Yet a survey by the Chinese Academy of Social Sciences says that Shenzhen’s expanding middle class now accounts for about 10 percent of the city’s population of 12 million — a higher percentage, most here believe, than in any other city in China, though reliable figures are hard to come by. As the middle class grows, civic leaders say they expect to see a steady growth in citizen involvement.
“This is a process of struggling for our interests,” said Jiang Shan, a computer software expert who works in advertising. “It’s difficult, with serious obstacles from the administration and pressure from the powerful. In the long term, to have a good outcome we have to speed up education about law, including election law.”
More than most, Mr. Jiang knows how hard that fight is. Together with a small number of other middle-class Shenzhen residents, he has been at the forefront of a battle to turn what has been a symbolic neighborhood elective office into a real force in people’s lives.
It started when Mr. Jiang filed a series of lawsuits to try to resolve a number problems related to property management. After a string of defeats, he sought help from his local representative, only to discover that the man was a party to one of his lawsuits.
“It was only then that I realized that according to the election law, if I could get enough votes in the community, I could become a representative myself,” Mr. Jiang said. Or so it appeared.
Mr. Jiang began sending out hundreds of short messages with his cellphone to seek backers for his candidacy. He printed campaign cards, which he distributed in the neighborhood to encourage residents to vote.
When he had enlisted enough support he tried to register his candidacy, but he was turned away by officials who told him he was not a Shenzhen resident and therefore could not even vote locally.
On the eve of the election, Mr. Jiang filed suit over the denial of his voting rights. Three days before the trial was to begin, registration officials tried to force their way into his apartment. He agreed to meet them outdoors, whereupon the officials informed him that they would allow him to vote. Minutes later, court officials showed up telling him he could be a candidate if he dropped his lawsuit.
Mr. Jiang refused, saying the process was too tainted for him to participate, and his lawsuit was later dismissed. In another part of town, another resident sought election to the local district council, only to see the number of eligible voters double after the close of registration. Saying it was a clumsy attempt to fix the outcome, the candidate, Ma Jinhua, withdrew in protest.
“If I continue to participate, I will lose,” said Ms. Ma, the owner of a local gardening business. “By quitting at least I can send a warning to the government so that in the future things can be done in a more fair and reasonable way. It’s a reminder that says, ‘Pay attention, you can’t get away with this again.’ ”
Others in the city’s bulging middle class have taken their activism into other arenas. Zou Tao, a Shenzhen golf equipment supplier, recently won national attention when he started a home-buyers’ boycott aimed at reining in real estate prices that have been increasing at a clip of 30 percent a year.
“Prices have been stirred up by speculators stockpiling houses, and by officials and businesspeople joining hands,” Mr. Zou said. “The government hasn’t done its job well in supervising the market.”
From Shenzhen, Mr. Zou’s boycott quickly spread to other large cities, allowing him to collect more than 100,000 signatures. He has also earned the ire of the authorities, who he says have tapped his telephone and barred the press from writing about him or using the words “housing boycott.”
But Mr. Zou has refused to back down, prompting the government to bar him from television and to block Web sites that he operates. “Facing boiling public opinion, the first thing the authorities think of is not ‘maybe we should listen,’ but repression,” he said.

Before Visit to China, a Rebuke (NYTimes, 12/12/06)

December 12, 2006
Before Visit to China, a Rebuke
By STEVEN R. WEISMAN
BEIJING, Tuesday, Dec. 12 — In a rebuke to China on the eve of a high-level visit by American officials, the Bush administration formally accused Chinese leaders on Monday of failing to meet commitments to open the nation’s economy and crack down on piracy of foreign goods.
The criticism came in a 100-page report to Congress by Susan C. Schwab, the United States trade representative. The report, issued in Washington, was required by American law on the fifth anniversary of China’s joining the World Trade Organization.
While praising China for making progress in some areas, the report said that the country’s efforts in other crucial areas had recently stalled, despite repeated promises from Beijing. It cited continued limits by China on sales of financial services by foreign banks, including credit cards, and limits on some sales of farm goods.
It also accused China of engaging in counterfeiting or piracy of software, videos, pharmaceuticals and other goods, sometimes with open encouragement of Chinese officials, and of failing to stiffen punishments on those engaging in these practices.
The report said that “some Chinese government agencies and officials have not yet fully embraced the key W.T.O. principles of market access, nondiscrimination, national treatment and transparency.”
China announced Monday that it would begin to take formal steps to allow foreign banks to offer some retail banking services, like credit cards, and to buy shares in domestic banks. But the announcement came too late to affect the report’s overall conclusion that the Chinese have fallen short in meeting their trade promises.
Much of the report echoed criticisms of China’s trade and economic practices long heard from Bush administration officials and even more loudly in Congress. But the report was likely to roil the atmosphere this week as Treasury Secretary Henry M. Paulson Jr. engages in a high-level effort to get China to cooperate on these issues.
Mr. Paulson is due to arrive Wednesday in Beijing with a team of six Cabinet members and Ben S. Bernanke, chairman of the Federal Reserve, for what is billed as a “strategic economic dialogue” to bring about cooperation with China and convince Congress not to pass anti-Chinese protectionist measures.
Trade officials maintained that Congress required that the report be issued when it approved China’s accession to the trade organization in 2000, and that it was not timed to coincide with the Paulson mission. A senior trade official said he did not think the report would disrupt Mr. Paulson’s efforts.
“I think the message in this report is consistent with our messages previously,” he said, adding that its contents would not surprise the Chinese or adversely affect the talks later this week.
But at the Treasury Department, officials were holding back a separate Congressionally mandated report that was also due at this time and that is expected to fault China for its failure to allow its currency to float in open markets. The delay in the release of that report appeared intended to improve the atmosphere for Mr. Paulson’s trip.
Besides Mr. Paulson, Mr. Bernanke and Ms. Schwab, the American delegation will include Commerce Secretary Carlos M. Gutierrez, Energy Secretary Samuel W. Bodman, Health and Human Services Secretary Michael O. Leavitt, Labor Secretary Elaine L. Chao and Stephen L. Johnson, head of the Environmental Protection Agency.
As for what the Bush administration intended to do to get China to correct its practices — whether, specifically, the United States would commence specific legal actions under the World Trade Organization — the report said the United States would “continue to seek cooperative and pragmatic resolutions through bilateral dialogue with China.”
If dialogue fails, however, the United States “will not hesitate to exercise its W.T.O. rights” to settle disputes “as it would with any other mature trading partner,” it said. American officials indicated that such a step would be a last resort and was not likely to happen while the “strategic economic dialogue” was under way.
The Bush administration has, however, filed for relief with the trade organization for some items, including automobile parts. The United States charges that the Chinese have kept foreign auto parts out of their markets.
In addition, the United States has charged that China is deliberately overproducing highly subsidized steel to employ vast numbers of workers emigrating from the countryside. That has led to “dumping” of inexpensive steel in American markets, the United States contends, damaging the steel industry.
In a speech earlier this fall, Ms. Schwab made clear that “if we are not able to succeed using dialogue” in resolving trade disputes with China, “then we can and we must and we will resort to dispute resolution” under the World Trade Organization as the United States did in the auto parts issue.
“We have this continuum of options,” Ms. Schwab said in a speech to the National Committee on U.S.-China Relations, a private group that sponsored the first visit of Chinese ping-pong players in 1972. “We will, as the Chinese do, quite frankly, take that tool which is most likely to resolve the problem,” Ms. Schwab added.
The report by Ms. Schwab’s office on Monday said the Bush administration would continue to use “a dual-track approach.”
“The administration remains committed to working cooperatively and pragmatically with China,” the document said. “When bilateral dialogue is not successful, however, the administration will not hesitate to employ the full range of enforcement tools available as a result of China’s accession to the W.T.O., whether it be the dispute settlement procedures at the W.T.O. or the strict enforcement of U.S. trade laws to ensure that U.S. interests are not harmed by unfair trade practices.”
The report cited myriad cases in which it said China had fallen short on its commitments. Trade officials said China had actually “backslided” and “stalled” in its efforts in recent months.
For example, it said that China had promised to open its banking sector to allow foreign banks to provide credit cards and bank accounts in Chinese currency to customers in China. Recently, China issued regulations intended to end discrimination against foreign banks in these services, but American officials say they fall short of that goal.
As for pirated goods, the report said that a substantial percentage of counterfeit or pirated goods seized by United States Customs officials were of Chinese origin. In the past, trade officials have said these included designer labels and high-technology goods.
The report also said that foreign companies found it harder to distribute wholesale and retail petroleum and petroleum products in China than domestic companies.

China, Shy Giant, Shows Signs of Shedding Its False Modesty (NYTimes, 12/09/06)

December 9, 2006
China, Shy Giant, Shows Signs of Shedding Its False Modesty
By JOSEPH KAHN
BEIJING, Dec. 8 — China’s Communist Party has a new agenda: it is encouraging people to discuss what it means to be a major world power and has largely stopped denying that China intends to become one soon.
In the past several weeks China Central Television has broadcast a 12-part series describing the reasons nine nations rose to become great powers. The series was based on research by a team of elite Chinese historians, who also briefed the ruling Politburo about their findings.
Until recently China’s rising power remained a delicate topic, and largely unspoken, inside China. Beijing has long followed a dictum laid down by Deng Xiaoping, the paramount leader who died in 1997: “tao guang yang hui,” literally to hide its ambitions and disguise its claws.
The prescription was generally taken to mean that China needed to devote its energy to developing economically and should not seek to play a leadership role abroad.
President Hu Jintao set off an internal squabble two years ago when he began using the term “peaceful rise” to describe his foreign policy goals. He dropped the term in favor of the tamer-sounding “peaceful development.”
His use of “rise” risked stoking fears of a “China threat,” especially in Japan and the United States, people told about the high-level debate said. Rise implies that others must decline, at least in a relative sense, while development suggests that China’s advance can bring others along.
Yet this tradition of modesty has begun to fade, replaced by a growing confidence that China’s rise is not fleeting and that the country needs to do more to define its objectives.
With its $1 trillion in foreign exchange reserves, surging military spending and diplomatic initiatives in Asia, Africa and the Middle East, Beijing has begun asserting its interests far beyond its borders. Chinese party leaders are acting as if they intend to start exercising more power abroad rather than just protecting their political power at home.
“Like it or not, China’s rise is becoming a reality,” says Jia Qingguo, associate dean of the Beijing University School of International Studies. “Wherever Chinese leaders go these days, people pay attention. And they can’t just say, ‘I don’t want to get involved.’ ”
Itself a major recipient of foreign aid until recently, China this year promised to provide well over $10 billion in low-interest loans and debt relief to Asian, African and Latin American countries over the next two years. It invited 48 African countries to Beijing last month to a conference aimed at promoting closer cooperation and trade.
Beijing agreed to send 1,000 peacekeepers to Lebanon, its first such action in the Middle East. It has sought to become a more substantial player in a region where the United States traditionally holds far more sway.
At the United Nations Security Council, China cast aside its longstanding policy of opposing sanctions against other nations. It voted to impose penalties on North Korea, its neighbor and onetime ally, for testing nuclear weapons.
Officials and leading scholars are becoming a bit less hesitant to discuss what this all might mean. The documentary, on China’s main national network, uses the word rise constantly, including its title, “Rise of the Great Powers.” It endorses the idea that China should study the experiences of nations and empires it once condemned as aggressors bent on exploitation.
“Our China, the Chinese people, the Chinese race has become revitalized and is again stepping onto the world stage,” Qian Chengdan, a professor at Beijing University and the intellectual father of the television series, said in an online dialogue about the documentary on Sina.com, a leading Web site.
“It is extremely important for today’s China to be able to draw some lessons from the experiences of others,” he said.
The series, which took three years to make, emanated from a Politburo study session in 2003. It is not a jingoistic call to arms. It mentions China only in passing, and it never explicitly addresses the reality that China has already become a big power.
Yet its version of history, which partly tracks the work done by Paul Kennedy in his 1980s bestseller, “The Rise and Fall of the Great Powers,” differs markedly from that of the textbooks still in use in many schools.
Its stentorian narrator and epic soundtrack present the emergence of the nine countries, from Portugal in the 15th century to the United States in the 20th, and cites numerous achievements worthy of emulation: Spain had a risk-taking queen; Britain’s nimble navy secured vital commodities overseas; the United States regulated markets and fought for national unity.
The documentary also emphasizes historical themes that coincide with policies Chinese leaders promote at home. Social stability, industrial investment, peaceful foreign relations and national unity are presented as more vital than, say, military strength, political liberalization or the rule of law.
In the 90 minutes devoted to examining the rise of the United States, Lincoln is accorded a prominent part for his efforts to “preserve national unity” during the Civil War. China has made reunification with Taiwan a top national priority. Franklin D. Roosevelt wins praise for creating a bigger role for the government in managing the market economy but gets less attention for his wartime leadership.
Government officials minimize the importance of the series. He Yafei, an assistant foreign minister, said in an interview that he had watched only “one or two episodes.” He said the documentary should not signal changes in China’s thinking about projecting power, saying that colonialism and exploitation “would go nowhere in today’s world.”
But Mr. He also hinted at a shifting official line. He emphasized China’s status as a developing country. But he allowed that others may see things differently.
“Whether a country is a regional or a world power, it is not for that country to decide alone,” he said. “If you say we are a big power, then we are. But we are a responsible big country. We are a maintainer and builder of the international system.”
China has in fact emerged as a major power without disrupting the international order, at least so far. It has accepted an invitation by the Bush administration to discuss becoming a “responsible stakeholder” in the American-dominated international system.
Beijing places importance on many world institutions, especially the United Nations, where it holds a veto in the Security Council. It professes a strong commitment to enforcing the Nuclear Nonproliferation Treaty.
Last month Margaret Chan of Hong Kong became the first Chinese to head a major United Nations agency, the World Health Organization. She vowed to build a “harmonious health world,” echoing the slogan of harmony promoted by President Hu.
Yet critics say China is prepared to emerge in a less amicable fashion, if necessary. The Central Intelligence Agency says that China’s military spending may be two or three times higher than it acknowledges and that it allocates more to its military than any other country except the United States.
Beijing has cultivated close ties to countries that provide it with commodities and raw materials, regardless of their human rights records. Sudan, Myanmar and Zimbabwe have all escaped international sanctions in large part because of Chinese protection.
China’s increasing international engagement has also stimulated a more robust academic discussion about its global role and the potential for tensions with the United States.
Yan Xuetong, a foreign affairs specialist at Qinghua University in Beijing, argued in a scholarly journal this summer that China had already surpassed Japan, Russia, Britain, France, Germany and India in measures of its economic, military and political power. That leaves it second only to the United States, he said.
While the military gap between China and the United States may remain for some time, he argued, China’s faster economic growth and increasing political strength may whittle down America’s overall advantage.
“China will enjoy the status of a semi-superpower between the United States and the other major powers,” Mr. Yan predicted in the article, which appeared in the China Journal of International Politics.
He added, “China’s fast growth in political and economic power will dramatically narrow its power gap with the United States.”