www.china-inc.com - economic development in China - Statistical Data Included

International Economy, The, Jan, 2001 by David Hale

Although it will be essential for China to establish a democracy to insure genuine rule of law in the long-term, it is questionable whether a democratic regime today could preside over economic upheavals on the scale of those now occurring. Since economic liberalization is producing large increases in unemployment and other forms of social hardship, it could easily encourage populist political movements rather than parties committed to a market economy and true democracy. China will therefore pose a complex challenge for Western countries monitoring its progress. They will want to encourage human rights and democracy but they also do not want to promote leadership struggles and political conflicts that could jeopardize one of the most far-reaching programs of economic liberalization in human history. A premature experiment with democracy could produce an environment more comparable to the French revolution of 1789 than the incremental transition to democracy that Britain experienced in the run-up to the Reform Bill of 1832. Indeed, the West should recognize that since China's government is now staking its whole political legitimacy on the success of the economy, it is unleashing forces that will evolve inevitably into powerful agents for political transformation.

David Hale is Global Chief Economist at the Zurich Group and a TIE contributing editor.