Thursday, November 03, 2005
Other side of China's rise
China's rapid rise in past couple of decades is undeniable. The country's spectacular success in embracing atleast some of the ideology of free markets is a lesson to many other developing countries like India. However, most of the success of China as a rapidly rising power can be attributed to its unique situation of having a "benevolent dictatorship". Chinese leadership had long ago realised that if it has to maintain its stronghold on power and prevent social unrest then they have to make a serious dent into poverty. It has certainly managed that task extremely well by embracing its own version of capitalism but advances in the free market ideology has not brought commensurate progress in the form of a modern legal and politicial system. Government still is the law, police, judge and jury. This system certainly makes building up infrastructure or bringing about big policy changes much easier than it is in a democracy like India but it also has a huge cost on the ordinary citizens or people who fall on the wrong side of China's all pervasive government. The story of David Ji, a Chinese born american citizen is a case in point . David Ji founded the hugely successful Apex Systems, an importer of Chinese made DVD-players. He ran into a contractual dispute with his chinese supplier Changhong, a government owned company masquerading as a publicly traded one. Ji made the grave miscalculation by deciding to travel to China for settling the dispute even when advised against it by his executives. He was confident that his US citizenship, money & status in US and Chinese connections will guarantee his personal safety. On arriving in China , he was arrested, detained for months without any charges being filed, humiliated and made to sign papers handing over the controls of his company to Changhong i.e. the government (more about this appears in NYtimes ). Ji's is not an isolated example of government high-handedness in China in matters of legal disputes. China's legal system is a far cry from what it should be for a modern , business friendly society. Government rarely loses a case, trials are dispensed with in a day or even less, police routinely tortures citizens to extract confessions and abuses by government officials are rampant. India, for all its flaws in the legal system, still has an independent judiciary and check & balances against the abuse of government power. There is atleast one count on which China can learn from its formidable neighbour, which is how to have a rule of law not rule by law.