Trade between China and the West has failed to make it more liberal

Dr James Kierstead
NZ Herald
14 March, 2024

2015 was almost a decade ago. But it seems like a century.

That was the year that Xi Jinping enjoyed a sumptuous banquet at Buckingham Palace, part of a state visit organized by David Cameron.

It was also the year by which John Key had pledged to double trade between New Zealand and China – a goal that was, in the end, reached a year early.

It’s easy to see why Western countries were keen to be friends with China. China had become the world’s largest exporter in 2009 and overtook the US as the world’s largest economy (adjusted for purchasing power) in 2016. China overhauled Australia as New Zealand’s largest trading partner the same year.

If trading with China was clearly in Western countries’ interests, though, it was also helped along by the belief that trade would help China. And not just in an economic sense. Trade, it was widely believed, would change China for the better, making it more open, liberal, and even democratic.

Almost a decade on, that belief now looks naïve. Xi has cemented his place as a modern-day emperor, while China continues to persecute ethnic minorities like the Uyghurs and deny its citizens some of the most basic freedoms, including the freedom of speech.

Far from democratising, China acted for a while as a poster child for anti-democratic thinkers in the West, a beacon of what could be achieved if we didn’t have to bother with popular consultation.

What went wrong?

From the 1960s on, the main theory about why some countries were democratic was simple. The richer a country was, the more likely it was to be democratic. Democracy was the kind of good that people only really wanted after they had satisfied most of their more pressing needs, like putting a roof over their heads and feeding their children.

But mainline ‘modernisation’ theory never asserted that societies would necessarily become more democratic as they got richer.

Instead, it simply pointed out that democratic societies tended to be rich, and that once societies were rich and democratic they virtually never slipped back into autocracy.

In the early 2000s a new wave of theories tried to explain why societies become democratic, and also account for a small number of countries who were very rich and, at the same time, very undemocratic.

The new ‘redistributionist’ theories assumed that elites dislike democracy because they fear that a democratic regime will redistribute their assets. That means that they'll only allow democracies to be set up if their society is already so equal that they don’t stand to lose very much, or if their assets are easy to hide from the eyes of prying democrats. Think capital in Swiss bank accounts rather than vast oilfields topped with refineries.

More recently, there has been something of a backlash against the redistributionists, with a new generation of political scientists arguing that increasing wealth does, after all, make societies more likely to become democracies. But wealth on its own isn’t enough. What’s crucial is a rising middle class that will demand more power to stop autocrats from appropriating its newfound wealth.

What might all this tell us about China?

For starters, it was always naïve to expect that growing prosperity would, in and of itself, lead to a more democratic China.

At the same time, the fact that Chinese elites tend to hold wealth in the form of capital rather than land or oil might mean that the Middle Kingdom is more likely to turn democratic one day than the oil-rich sheikhdoms of the Arabian peninsula.

And China’s increasing prosperity may well open a path to a more democratic future if that leads to a middle class that’s willing to wrest some power back from the likes of Xi Jinping.

Almost a decade on from Xi’s banquet at Buckingham Palace, then, we need to be less naïve about the effect that access to Western engagement is going to have on the country.

At the same time, there’s a danger of being too pessimistic. Continuing trade may well help move China dictatorship in a more democratic direction if that can give a big enough boost to its middle classes.

Continuing and expanding trade with China also continues to be in the interest of Western nations, including New Zealand.

But where a democratic China might have seemed inevitable a decade ago, it now seems little more than a possibility, and a distant one at that.

For the time being, China remains the world’s largest and most powerful autocracy, something we’d be fools not to take into account in our dealings with it.

That means that the New Zealand government’s current sceptical stance on China’s Belt and Road initiative is probably right. And that we should be on guard against Chinese interference in our universities.

At the same time, the West should and will continue to trade with China in areas where there is less cause for suspicion. That will be good for us, good for the Chinese people, and – who knows? – might just lead, at some point in the future, to a more open and more democratic China.

To read the full article on the NZ Herald website, click here.

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