You Can't Get There From Here

Will Hutton reports on the waters China has to navigate as it gets ready to choose its next generation of leaders:

…only three in 100 corrupt officials is caught, largely because the anti-corruption campaigns are run by officials who themselves are corrupt. Worse, nobody believes in the underlying moral purpose of communism; old habits, including the imperial system of concubinage, are returning with a vengeance. And this is generating a contrary pull. A growing proportion of the Chinese nomenklatura – like the Soviet Union’s before them – knows that the system, for all its successes, is running out of time.

There is the environment, where up to 750,000 people a year die of air pollution. There is the chronic and rising inequality between town and country with the Ministry of Labour and Social Security warning that if inequality continues to rise, it refuses to guarantee social stability after 2010. Then there is the economy, over-reliant on exports and investment and dependent on vast peasant savings and cheap peasant labour. China registered only 0.3 per cent of the world’s ‘triadic’ patents (valid in Japan, the EU and US) last year.

It is an elephantine subcontractor to the West, dependent for its competitiveness on forcing its currency to be linked to the dollar. That means it is acquiring a stunning and unsustainable extra $500bn of foreign exchange reserves a year, which has helped drive Chinese inflation to a 10-year high.

Daunting. Hutton claims what China needs is a Gorbachev — but we all know what he did for the Soviet Union. China, it seems, will always be the “next” superpower.