THE ONLY GAME IN TOWN:

Interdependency Theory: China, India, and the West (Simon Tay, September/October 2010, Foreign Affairs)

A major factor in the Chinese-Indian competition -- and in its perceived significance for the wider world -- is that the two countries have such different political systems. Their trajectories, therefore, offer insights into the prospects for development under authoritarianism and under democracy. In addressing this point, Bardhan rightly cautions against the simplistic conclusion that authoritarianism is superior to democracy with regard to growth. Yet he echoes simplistic characterizations of the subject, writing, for example, "India's experience suggests that democracy can also hinder development in a number of ways" and "in China, there is more decisive policy initiative and execution than in India." The real debate, especially in the wake of the recent crisis, is over what mix of democratic jockeying and authoritarian decisiveness makes economies most robust.

The challenge for Beijing and New Delhi is to combine power and legitimacy. Only then can the Chinese and Indian governments take measures that may be unpopular in the short run or damaging to some politically connected sectors but necessary for long-term progress: stimulating job growth, alleviating poverty, protecting the environment, or other vital tasks.

One hears often of a "Beijing consensus" but rarely, if ever, of any Indian model of governance. Indeed, India's case appears to be sui generis, especially since the modern Indian state was born a democracy -- unlike other postcolonial states, such as South Korea, which were or remain autocratic. Moreover, New Delhi has not traditionally sought to influence the political practices of other Asian states (lest its own domestic issues become vulnerable to intervention by foreigners). Asia therefore lacks a strong homegrown exemplar of successful economic development under democracy. Indonesia might become such a model, as it has been transitioning to democracy since Suharto's fall in 1998 and now has annual growth rates of four to six percent. But, for now, autocratic China remains Asia's lodestar.

This concerns many in the West who warn against China's model of state capitalism, criticize its human rights abuses and censorship, suspect Beijing of pursuing a manipulative currency policy, and generally see China as a risen dragon seeking domination. According to this view, China's economy has opened and globalized but its politics remain frozen around the Communist Party. This, in turn, suggests that the Chinese state will remain radically different from, and even opposed to, the liberal states of the West.

WESTERN RULES

Edward Steinfeld's book Playing Our Game: Why China's Rise Doesn't Threaten the West offers a different perspective on China's rise. The changes in China's economic and political systems are not contradictory, Steinfeld argues, but are more or less in sync. This, he argues, is because of "institutional outsourcing" from the global system: globalization brings with it commercial discipline and requires states to institute rules in order to foster change and anchor progress.

Having been influenced by foreign investors and experts, the Chinese government and business community have deliberately altered China's commercial environment, especially with regard to legal institutions and industrial-labor relations. For example, in 2007, the National People's Congress enacted a labor contract law that provides individual workers with far more job security than they had under the preexisting laws, which dated back to 1994. China remains a far cry from having the sort of labor unions and collective bargaining that are taken for granted elsewhere, but, as Steinfeld correctly argues, Chinese labor practices are moving away from their revolutionary roots and are increasingly consonant with Western standards.

Meanwhile, argues Steinfeld, the role of the Communist Party within China's political system has changed radically in recent decades. Today, politics are primarily determined not by contests for power between the party and different segments of society but by partnerships between government forces and reform elements outside the party. Ordinary Chinese people, Steinfeld argues, have gone from being mere subjects to being citizens. Because of this, the Chinese government has to proceed cautiously: to preserve the party's central role, officials must find allies outside the party, including among activists and civil-society elements, that could otherwise threaten the party's monopoly on official power. To Steinfeld, this means that China is evolving in much the same way that other modernizing nations did, including not just South Korea and Taiwan but also the United Kingdom and the United States. Increasingly liberal politics are ahead, he argues, even if the Communist Party will remain central and there will be ebbs and flows along the way.

"China today is growing not by writing its own rules. . . . It is playing our game," Steinfeld writes. That game is globalization, and its dominant rules are set predominately by the West. If this is correct, China will increasingly become a responsible stakeholder in the existing global order. The country, then, does not need to be contained; globalization will take care of that.