How Far Can China Rise?

Will China’s future economic success hinge on its willingness to democratize? Or will U.S. debt make the country a superpower sooner than we think?
  • Transcript

TRANSCRIPT

Question: Will China need to adopt Western-style democracy in order to keep its economy growing?

Edward Tse:  It is hard to predict precisely how the evolution is going to sort of evolve, but if you look at the steps of today and look at you know how the Chinese people are looking at the government I say you know while obviously you know just like you know people in any other country, many of the Chinese people will have criticism towards the Chinese government, but by and large you know with respect to the development, in particular economic development, that you know Chinese… that China has gone through in the last couple of decades I would say you know the Chinese people have been very supportive of the Chinese government’s policies and you know what they have been able to achieve in terms of lifting the living standards of the Chinese.  Over time you know one will expect that as the Chinese people become wealthier and many of them will you know go outside of China to become more worldly you know you will expect that there is going to be some more feedback from the Chinese people on how the Chinese government ought to be conducted and in fact, within the Chinese government they also do recognize that in fact things cannot be sort of stagnant or it cannot be just you know stay where it is today and there is always a lot of discussions within the Chinese government as to how the government ought to be changed over time, but unlikely we’re going to see a drastic change overnight.  We’re probably going to see a gradual evolution and in fact, right now within the communist party there is quite a bit discussion about a so called internal democracy.  In other words, creating some competition within internally within the party on certain key posts of the assignments and we expect this evolution will continue to happen.

Question: Will debt to China pose a serious problem for the U.S.?

Edward Tse:  Yeah, certainly.  Anytime you owe money to other people is always […].  I think it goes without saying at the country level as well.  From the Chinese standpoint Chinese obviously see that, you know, as a way to invest their money.  At the same time China is also a bit concerned whether or not, you know, we’re putting too much within you know one basket, but at the same time you know are there are other sort of better alternatives one also needs to argue, so it’s a bit of a tenuous situation, but China is also sort of revealing or monitoring, you know, how we should be making our investments. 

Question: Will China rival the U.S. as an economic superpower in the 21st century?

Edward Tse:  I think most of the Chinese will expect that, you know, China will continue to rise in the next couple of decades overall speaking, economically and perhaps geopolitically.  For the Chinese, you know, we believe that, you know, for centuries in the past we’ve been in the center of the world.  In fact, you know, China in Chinese means the middle kingdom that we are in the middle of the world.  Rightly or wrongly that is the belief and so this is a… you know, this current or recent rise of China is for many Chinese it is just the way that we get back to where we ought to be, but the relationship between China and the U.S. will in particular U.S., need to be kept within a context of what I talk about in my book, which is open China.  China actually is a relatively open society.  China has tremendous motives of wanting to integrate into the rest of the world and the relationship with the U.S. for example I think, you know, is a very different type of relationship compared to let’s say the U.S. and the Soviet Union relationship in the Cold War era or even you know when Japan was also rising in the ‘80s the relationship in the U.S. and Japan.  I think today if you look at China and the U.S. a lot of interests are quite intertwined.  There is a lot of mutual interests.  Of course there are differences as well and that a reason… that is to be expected, but at the same time there is a tremendous amount of intertwined interests between the two countries, in particular, in terms of businesses that in fact as China continues to rise China will have to learn about, you know, how to play more effectively in the global geopolitical world, but at the same time it’s not like China will have to sort of threaten or sort of rival itself with the U.S.  I don’t think that is the motive.