Inside Out India and China: Local Politics Go Global

3. China: Promised Lands, Heartlands, Badlands

37 CHAPTER THREE CHINA: PROMISED LANDS, HEARTLANDS, BADLANDS TODAY’S CHINA IS a crowded three-panel landscape painting. The first panel is a vibrant entrepreneurial coast. The second is a rising, inland region, where most Chinese live and where stateled economic growth dominates. The third is a remote, restive, but resource-rich west. Given this diversity, China’s leaders are obsessed with preserving unity—or perhaps more accurately, creating it. Knitting together very different economies, societies, and even political cultures is among the top leadership’s hardest jobs. It is particularly hard because many of China’s great successes—and also failures—have come from allowing greater local control. The stock phrase “state-led capitalism” fails to capture this massive project. Across China the government plays an important role. But that role differs from region to region, province to province, and even city to city. From this varied context, leaders in Beijing struggle to weave a unified narrative. China’s coast—with which most of the world is familiar— has become the manufacturing epicenter of the planet. Thanks largely to the coast, in 2012 China became the global leader in world trade, surpassing the United States.1 Hundreds of millions of Chinese found work in coastal provinces, making inexpensive goods consumed around the world. Partly as a result, nearly half CHINA: PROMISED LANDS, HEARTLANDS, BADLANDS 38 of China’s economy is in industry—a higher share than in most wealthier countries such as the United States or even Korea, as well as in poorer countries such as India (see figure 3-1). But coastal China’s fast growth is also straining world trade and finance. Many countries assert that China keeps its currency artificially low, making its exports competitive. Inland China anchors the nation’s political stability. Six of ten Chinese live in provinces west of the coast. Keeping the anchor secure requires enormous wealth transfers from the east. Industry is also becoming a bigger part of these economies, but very little of it is exported or even made for consumer goods. Instead, most economic activity in the interior has been in construction and other “fixed assets”—where China also leads the world (figure 3-2). That heavy emphasis on investment is becoming a global concern. 90 80 70 60 50 40 30 20 10 FIGURE 3-1. Sector Share of GDP by Country, 2011 Source: Figure created by author based on 2011 data from Central Intelligence Agency, “CIA World Factbook” (www.cia.gov/library/publications/the-world-factbook/), respective country pages. Percent China Services Industry Agriculture India Korea Mexico United States Germany CHINA: PROMISED LANDS, HEARTLANDS, BADLANDS 39 Many worry that Chinese local governments have created a real estate and public infrastructure bubble, having spent so wildly that they cannot possibly produce a return on the investment.2 In an interdependent world economy, a hard landing for China’s economy would lead to slumps in other parts of the world that depend on selling raw materials, parts, or finished goods to China. Finally, China’s remote west has produced a resource bonanza for the country. The west has abundant coal, oil, natural gas, and minerals. Mining of an unprecedented scale is helping fuel growth in the interior and coast, and potentially links China’s west to a dozen countries in Central Asia. But the road west has not been built without considerable human and environmental tolls. Restive 70 60 50 40 30 20 10 0 FIGURE 3-2. National Economies by Expenditure Type, 2011 Source: Figure created by author based on data from Organization for Economic Cooperation and Development, “OECD StatExtracts” (http://stats.oecd.org/Index.aspx?DatasetCode=SNA_ TABLE1). Percent China Household consumption India (2009) Korea Mexico United States Germany Government consumption Investment Trade balance CHINA: PROMISED LANDS, HEARTLANDS, BADLANDS 40 populations in the hinterland have been at the center of major protests and uprisings in each year of China’s great rise. And those restive lands border even more troubled neighbors—from Pakistan to Afghanistan to Mongolia. It is easy to think of China as a monolith—partly because China’s insistence that others respect its unity has meant that the country often portrayed itself in a single hue. With that in mind, it is critical to state what should be obvious: different regions have very distinct commercial histories and views of authority. Since Deng Xiaoping’s time, implementation of central policy has...