from beijing to shanghai: milan to mumbai goes to china

Author's note: Your correspondent recently visited China for 10 days in connection with his ongoing tax research as well as a possible exchange program with a Chinese university. The following is an account of his impressions. For technical and other reasons, the account is being written upon the author's return to the United States, but with sufficient speed that the impressions remains fresh in his mind.


Immediately upon leaving the airport, one senses China is different. For one thing there is the economic achievement which makes it difficult even to speak of China as a developing nation. Rows of ten- and fifteen-story office buildings, none of which appears to be more than 20 years old, line modern expressways with immaculate bilingual signs. Smartly dressed people talk into late model mobile phones. The impression is of a somewhat downscale, but arguably more up-to-date, version of California, with fewer private cars and a higher population density, but less dirt and also less wasted space. Any thoughts that this will be a second India vanish in the first five miles.

But there is something else that one notices on this initial journey. Virtually everyone drives at the same pace, almost no one exceeding the speed limit. There appears to be a police car, or someone in uniform, at every turn. Not that the ride is depressing: sharp-looking billboards advertise soft drinks and cellphones, and pictures of Mao or more recent political leaders are nowhere to be seen. Nor are there any visible signs of coercion, at least not here. But a certain regimentation--a balance between individual and society radically different from that we know in the West--is apparent even before arriving at the hotel.

These twin themes of economic achievementon the one hand, and regimentation on the other, were to stay with me throughout my visit. They were there when I made the rounds of tax lawyers and accountants in Beijing and Shanghai; when I visited a university in a large provincial city; when I went to tourist sights and when I checked in and out of my hotel. It is a combination that seems odd or even contradictory to an American, but it is one we are likely to learn more of, as China slowly but surely overtakes the U.S. to become the world's leading economic power.

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As in all rapidly growing countries, economic development in China is uneven, with the eastern and southern provinces most advanced and the north and west only beginning to catch up. One sees these differences even within the eastern part of the country, where most visitors, myself included, spend their time. Thus Shanghai looks like a nascent New York--one has to search for remnants of the old China amid the skyscrapers--while Beijing still retains some of the life of the old hutongs (alleyways), although these are increasingly falling to development projects along the endless ring roads that circle the capital. By contrast Tianjin, an industrial city about 75 miles from Beijing, still retains much of its older flavor, with large bicycle lanes along the highways and Maoist-era apartment blocks arranged around courtyards within site of the newer highrises. (For that very reason, I found Tianjin more interesting than the capital in many ways, although anyone coming here should bring a good phrasebook or Mandarin-speaking guide: the city is quite friendly but hardly a tourist spot, its emphasis on business rather than pleasure.)

The question often arises how China can mix a booming capitalist economy with what remains a highly centralized, authoritarian political system. One answer is that the country has used a series of intermediaries--overseas Chinese, Taiwan, and above all Hong Kong--to finesse this apparent contradiction. Hong Kong, which retains a separate economic and political structure although officially part of the mainland, is especially important. Almost invariably, the lawyers and accountants that I meant in Beijing and Shanghai had worked previously in Hong Kong or had colleagues who had. The Hong Kong, and to a lesser extent Taiwan, connections enable investment to flow through locations with relatively transparent economic and political rules even when the end use of funds is in areas that remain less scrutable to outsiders. For example, Starbucks China operation apparently began with a Taiwan-based partnership, although I was told the arrangement was currently being modified.

Fueling the economic juggernaut is a work ethic that would be the envy of any Western nation. When I called my contact, a high-level official in the state tax administration, upon my arrival Saturday evening, he immediately insisted that we meet at 9:30 on Sunday to begin discussions of the Chinese tax systems without interruptions from his busy workday. The energy is not limited to executives. On a Beijing bus, the faretaker shouted "Tso le! Mai piao!" (Step lively! Buy your ticket!) with an energy that would have resulted in an immediate transfer to a management training program in the U.S. At the airport on my departure, a porter who had given me mistaken instructions tracked me to the correct line to say "I'm sorry" in English. Can't recall the last time that happened here.

Yet the question inevitably rises what will happen when the initial euphoria of economic growth wears off. China's growth is spectacular, but uneven, and an environmental nightmare is slowly being created as cars and factories clog highly concentrated cities in the coastal regions. (Think Los Angeles with three times the populaton density to get an idea.) What will happen when the party is over, and the bills remain to be paid?

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Anticipating these problems, the Chinese Government has made "harmony" the centerpoint of its program for the next decade. As explained to me by one official, this includes not only the balancing of economic growth with social welfare, but the restoration of an adequate balance in other areas--east vs. west, domestic vs. foreign, environmental vs. development interests--that might otherwise go out of whack because of untamed growth. (Part, although by no means the most important part, of this policy is the equalization of taxes on domestic and foreign business, together with a renewed attention toward progressive individual taxation.) The last 10 years, following this theory, were a period of untrammelled economic expansion. The next ten will be devoted to choosing the right kinds of expansion and directing them where they are neede most.

Harmony is a somewhat mushy term in the West, but it has resonance in Chinese society. Visiting the Forbidden City on one of my rare quiet afternoons, I followed the progression from the palaces of lower and intermediate harmony to the Hall of Supreme Harmony, which the emperor alone was supposed to enter, and which symbolized the harmony between earthly and celestial realms that he was custodian of. (The Chinese do not believe in a Western God, but they do believe in heaven--the "tien" in "tienanmen"--and the inevitable failure of any system that does not have its mandate.) By invoking harmony (he) as a doctrine, the country's rulers are effectively staking a claim to the powers of the old emperors, ruling not in the name of communism but of peace and prosperity, and as the alternative to earthly (and heavenly) chaos. The repression of dissent, which seems so harsh to western eyes, is similarly justified as part of this formula.

While harmony is a powerful concept, one has to wonder a bit about its staying power. Emerging from the Forbidden City under the famous portrait of Mao tse-Tung, I observed a group of elderly tourists, in Mao hats and jackets, talking amicably with one another. Whatever one thinks of Mao and his revolution, these people would plainly have given their lives for it. Would the younger generation, whose questions are more likely to turn to CSI and Prison Break than the Long March or Cultural Revolution, feel the same way? Would they give their lives in order to preserve a harmonious society, or would they be more concerned with their own private advantage? Mao gave us our independence, explained one idealistic person; Deng gave us our economic freedom; now it is what we make of it. Would that be enough?

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Aside from the heavy security presence, one reason for the somewhat mechanical nature of Chinese society is the relative absence of children. Under the "one child" policy, it is a distinctly unpatriotic act to bear (or try to bear) more than one child, and a full range of sanctions is applied to those who do. According to people I talked to, these may include the loss of jobs and social status together with a denial of any benefits, including public education, to the forbidden offspring--no small matter in a society where almost everything is provided by the Goverment. In practice, except for foreigners or a few independently wealthy people, no one tries.

The one child policy is heavy handed and alien to western values, even for those who might make a similar choice on their own. But it also points out the enormity of the challenges the country faces. A more democratic Government would likely repeal the law and allow more freedom to local and national populations. But would this really make things better? How long before wealthy Beijingers and Shanghaiers began wanting larger families of their own and a reduction of payments to poor peasants in Sichuan Province? Could the country as a whole survive this centrifugal force? Would a more liberal China look like the U.S., or like the former Soviet Union, poorer and weaker and divided into its constituent parts?

A history exhibit in a provincial city. After visiting the home of an old aristocrat, we walk quickly by a room describing the contemporary history of the city. Who are those people, I ask the guide? They were two early communists who turned corrupt after 1949. What happened to them, I ask. They were shot. Here is a group of people voting in favor of their execution. In high school I learned that these trails had been staged by communist authorities. But a more disturbing thought crosses my mind: what if the vote really was fair, and the people really did want to kill them? I think of a scandal at my own law school, in which a public official who was courted by everyone is rapidly being abandoned as he faces trial for corruption. He surely wont be executed, but isnt he being purged, nonetheless? Didnt my own contemporaries gleefully employ the most extreme of Maoist slogans (a revolution is not a dinner party, dare to struggle, dare to win) against their adversaries, sometimes long after the Chinese had moved past them? What right do we have to judge these people and their history, and what standards should we apply if we do?

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Last day in China. I skip lunch in order to spend one more hour in a traditional tea house. The tea and snacks arrive in perfect order and are served and consumed according to custom. This is the China that people come for: peaceful, orderly, harmonious, with none of the accomodations to taste and fashion that sooner or later devalue everything in the West. It is the perfect symbol of what the Government, having moved beyond communism to claim the mantle of modern emperors, wants to preserve. My western instincts tell me that the contradictions will eventually catch up with them. But the tea is so good, and the people so patient and kind. I brought three bags home with me, and I havent been to Starbucks since.