Making Sense of China's Meteoric Rise

Hua Bin explains "The China Phenomenon"

This essay is the second installment of my interview with Mike Whitney published on Unz Review. This is quite lengthy as I was trying to cover many grounds in Mike’s expansive question about the underlying forces for China’s resurgence.

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The following essay is a response to a question I asked Hua Bin in an earlier interview. Here's the question:

Western pundits seem perversely fixated on the size of China's economy, but what interests me is the China Phenomenon, that is, how the Chinese government managed to transform a poor, agrarian country into a technologically advanced, state-of-the-art civilization in which poverty has nearly been eradicated, standards of living continue to rise, and the masses of people seem to support the government's vision of the future. How did China become the expression of 21st Century modernity it is today? (Or am I overstating the case?)

China's Revival in the Context of its History

The west likes to talk about the rise of China. For the Chinese, it is not a rise. It is a return to normalcy – the place China occupied in the world for most of its existence.

Most educated people are aware China is the oldest continuous civilization in the world with a history extending back 5 millennia. For most of the 5000 years, China was one of the wealthiest and most advanced civilizations on earth.

There were 24 imperial dynasties during this time and China was one of the most powerful states in the world at least during 6 dynasties – Qin Dynasty (221 – 206 BCE), Han Dynasty (202 BCE- 220 CE ), Tang Dynasty (618 - 907 CE), Song Dynasty (960 – 1279 CE), Ming Dynasty (1368 to 1644 CE), and first half of Qing Dynasty (1644 – 1912 CE).

In comparison, ancient Greece, Rome, Egypt, Babylon, Persia, Ottoman, and more recently Spain, the Netherlands, France, Britain, Germany and Japan all experienced one great historical period as a powerful empire. But they are unlikely to rise to that position ever again.

Most westerners get their impression of China being poor and backward from its humiliating history in the last 150 years since the Opium War in 1839 and the early rules of PRC under Mao. China had a terrible 150 years – the very nadir of the civilization since its inception. But China is now back on its feet and is rising to the top of the world for the 7th time.

The US, with its unique deficit of history and historical awareness, happened to go through its peak years during the time when China had its worst. It is no wonder the US perennially underestimates China. Now we are at a point where things normalize, and China will return to the position it has long been used to. And the US and the others will need to find their equilibrium, whether they like it or not.

The famous investor Ray Dalio published his book The Changing World Order: Why Nations Succeed and Fail in 2021, in which he explored the cyclical patterns of history to understand the rise and decline of empires, economies, and global powers. He studied the recurring patterns and life cycles of multiple Chinese dynasties and global empires. It is very instructive to use the cyclical patterns he presented to understand the world we live in.

In his analysis, the world events we are experiencing today are just another historical cycle of the rise and fall of empires. It so happens China is on the up trajectory and the US the down trajectory now, while the reverse was true 150 years ago.

Most Chinese are not surprised as westerners about the revival of China since we have been through such cycles many times for millenniums.

The secret to the remarkable resilience of China is that China is not a nation state, it is a civilization state. China has had uninterrupted unitary central government since 221 BCE and its identity is civilizational rather than Westphalian.

Chinese-ness is an embedded innate quality that doesn’t change over time. This stands in sharp contrast with the west whose identity is diluted and changed through colonial expansion and subsequent immigration from former colonies (talking about a historical boomerang).

China’s return has much to do with the Chinese political system which in turn is based on its own historical and cultural traditions. China derives its confidence in its path not from validation by others but through its own long history and culture, which is unequalled in the world. China views its destiny through its own lens.

The naivety of the US neoliberals, from Bill Clinton onwards, who believe they can somehow influence the political evolution of a civilizational state that has 4 times the population and 20 times the history is nothing short of ludicrous.

Someone wise once said “anyone can become an American but only a Chinese can be a Chinese”. That’s probably the most astute observation about the Chinese by a westerner.

If you use the framework of historical Chinese dynastic rise and fall, it is easy to understand China’s current situation and what the future holds.

The first stage of a dynasty is revolution and birth of a new order (dynasty). Modern China went through that between 1912 and 1949 when the communist party won the wars against the Japanese and the Kuomintang. The second stage is consolidation of power and institutionalizing governance. This happened during Mao’s watch between 1949 and 1976. It was a turbulent and chaotic time as the revolutionaries grappled with actual ruling. The guiding ideologies were faulty and many bad mistakes were made.

The third stage is a period of prosperity as course corrections are made, right policies implemented, and meritocracy installed. This is where we are in the dynastic cycle. President Xi’s specific target is to reach the rejuvenation of the country by 2049, which should mark the end of this stage.

The fourth stage is the peak of national economic, political, technological and military power. The peak typically breeds seeds of its own demise. If not managed properly, the second half of this stage could see ossification of institutions, arrogant power elite, entrenched interests, too much debt, wealth disparity, polarization, and economic and political decay. This is the stage the US empire is in right now.

The last stage is the fall when the house of cards crumble and a new revolution must happen to dismantle the old order and begin a new one.

The burst of innovation and creativity you are witnessing now in China are features of the third stage in the big cycle. This forms a self-reinforcing flywheel. We can expect to see more breakthroughs in technologies, economic progress, and improvements in standards of living in the coming years.

Chinese record of technological and scientific innovations before industrial age

China accounted for half of the ancient world's scientific breakthroughs. Such inventions began with the agrarian revolution, urbanization and organized warfare that accompanied it. For most of recorded history, China was one of the wealthiest and most technologically advanced civilizations on earth.

China invented paper, printing, the magnetic compass and gunpowder – the four inventions described by Francis Bacon as marking the modern world from antiquity. All these inventions didn’t arrive in Europe until centuries later and were the foundation of the industrial revolution. Even so, they only represent a small portion of the scientific inventions and engineering feats produced by China in the pre-industrial era.

Others include complex irrigation systems, cast and wrought iron, bridge building, large scale public works (such as the Great Wall), and advanced ship building. Admiral Zheng He in the Ming Dynasty sailed to Africa and Middle East with much larger ships than the European ones in the Age of Exploration.

And his seven such trips happened a full century before the dawn of Age of Exploration by the Portuguese.

China was also the world leader in astronomy, seismology, medicine, cartography, hierology, and mathematics. Inventor Zhang Heng developed an advanced seismograph in late Han dynasty (2nd century CE). China began immunology around the 10th century CE with vaccination against smallpox, centuries earlier than Europe.

Foreign visitors to China before the industrial age such as Marco Polo, Ibn Battuta, Niccolo de’Conti, and Matteo Ricci talked about the splendors and wonders they saw in China and described in detail how much more advanced China was compared with medieval Europe.

Now that China has caught up with the rest of the world in science and technology, it will return to its historical normalcy to lead in future scientific and technological developments.

China’s foundational philosophies and religion

China’s historical resilience and success is owed, to a large extent, to its foundational philosophies and religion. This is seldomly discussed when westerners analyze China’s phenomenal success in the last 40+ years. However, I believe this is the core of the country's revival as the foundation for the China belief system and governance system today.

Some confused westerners continue to argue that China is governed by Marxist and Leninist ideologies, which cannot be farther from the truth (I’ll get to the part played by Marxism later on).

The guiding philosophies in China are Confucianism and Daoism (a.k.a Taoism). The main religion for the Chinese is Buddhism, a religion that worships many gods. Sometimes people treat Daoism also as a religion but Daoism involves no worship of god (Daoism is about self perfection so one can become a god oneself).

The common theme of the Chinese philosophies and religions is the emphasis on personal development and enlightenment and achieving virtue.

The fundamental difference between Chinese and western religions is the absence of a monolithic religion in Chinese belief systems. Therefore, the country has no missionary zeal to spread its religion (or values) and has high tolerance of other religions unlike the monolithic Abrahamic religions originating between the Jordan River and the Mediterranean.

Confucius was born in 551 BCE, about 80 years before Socrates. He lived during the Warring States Period. Confucius’ core belief is virtue, very similar to Socrates’ own belief. He believed achieving virtue is the highest aspiration in private and public lives, especially for leaders (i.e. emperors in his day).

Confucius believed that the welfare of a country depended on the moral cultivation of its people, beginning from the nation's leadership. He believed that individuals could begin to cultivate an all-encompassing sense of virtue through ren (mercy), and that the most basic step to cultivating ren was filial piety – primarily the devotion to one's parents and ancestors.

He taught that one's individual desires do not need to be suppressed, but that people should be educated to reconcile their desires via li, rituals and forms of propriety, through which people could demonstrate their respect for others and their responsible roles in society. Confucius also believed that a ruler's sense of de, or 'virtue', was his primary prerequisite for leadership.

Confucius' primary goal in educating his students was to produce ethically well-cultivated men who would carry themselves with gravity, speak correctly, and demonstrate consummate integrity in all things. Virtue, hierarchy and harmony are the ideals.

After his death, Confucius’ disciples compiled his sayings and ideas into a book called The Analects (or the Saying of Confucius). Confucianism became state philosophy during Han Dynasty (202 BCE – 220 CE). In the meritocratic imperial exam system (Ke Jue), the Analects was the central text for the tests and the results were used in official selection.

The Analects has been one of the most widely read and studied books in China for more than two millennia; its ideas continue to have a substantial influence on East Asian thought and values, especially around China’s peripherals such as Korea, Vietnam and Japan.

Daoism or Taoism was created by Laozi around the same time as Confucius. It is a very laid-back way of life, to use a modern term. Its central theme is called wu wei – roughly translated as “the act of not doing”.

Daoism emphasizes “the way” (Dao literally means the way), which is the timeless flow of the universe, its essence, and how the world stays balanced and ordered.

For Daoists, the primary goal of life is to align one's self with the Dao. They strive to be in harmony with the natural order of the universe. By being in tune with the Dao, they believe they can avoid violence, suffering, and struggle.

Daoists cultivate a sense of naturalness, called ziran (nature). They believe that all living creatures ought to live in a state of harmony with the universe and the energy found in it. They believe that the only human actions which ultimately make sense are those which are in accord with the flow of Nature.

They emphasize simplicity, spontaneity, and humility.

Daoism is essentially pagan and the ultimate philosophy/religion of peace. It distains human endeavor to change the flow of nature and advocates a live and let live spiritual awareness. When the movie Big Lebowski first came out, I remember thinking the Dude is a Daoist

Buddhism was founded by Gautama Buddha, who lived at around the same time as Laozi and Confucius. Buddhism was introduced to China during the Han Dynasty. It spread through trade routes along the Silk Road, carried by traveling monks from India and Central Asia.

Similar to Confucianism and Daoism, Buddhism emphasizes ethical living and a deep understanding of suffering. While Daoism focuses on harmony with nature and Confucianism focuses on proper order among men, Buddhism focuses on personal development and enlightenment.

Buddhists focus on personal development, achieving enlightenment, and reincarnation. They believe mindful actions lead to positive outcomes, while negative actions perpetuate suffering. Buddhists believe that everything is transient and interconnected. One should focus on achieving rebirth through prayers and merit-making.

Chinese philosophies and religions play a crucial role in forming the values of the society and shaping personal behavior. This is the underlying reason why the Chinese prioritize order, respect hierarchy and virtue, promote personal development and harmony with the nature.

I would call out the following as the most salient elements and built-in assumptions from the Chinese historical political culture that have shaped the Chinese state today:

- Leaders should inherently be benevolent (wang dao) and look out for the best interests of the people. Rulers should set a moral example through their behaviors. Legitimacy is based on benevolent and benign morality (dao de).

- While benevolent is preferred, coercion against usurpers is justified to maintain stability and the sanctity of the state; excessive coercion, however, is considered hegemonic (ba dao) and thus illegitimate.

- China is a global great power with a long history and highly accomplished civilization. Restoring China to its historical position (fu xing) is the primary mission of all Chinese leaders.

- A strong national identify and patriotic nationalism must be inculcated in all Chinese.

- A strong state is the best defense against both internal and external threats. Disorder (luan) must be avoided at all costs. Premium is placed on maintaining stability (wen ding) and order (ci xu).

- Play the long game and keep a clear eye on end goals. Time is an asset. Don’t be impatient.

The centrality of Meritocracy

In my opinion, the most critical element of Chinese traditions in the governance of the country today is the practice of meritocracy, especially in government.

Unlike European kingdoms, the Chinese dynasties never had an entrenched landed aristocracy class. Starting from the Han Dynasty and codified in the Tang Dynasty, selection of high government officials was entirely based on the imperial exams (Ke Ju), an elaborate exam system on multiple subjects and conducted at county, provincial and national levels. Many scholars took decades to try to pass the exams and reach officialdom.

In the Chinese imperial court system, there were no hereditary titles that could be passed down from father to son. Officials were strictly selected and promoted on their performance in Ke Ju and later in their official roles.

This system of talent selection has not changed in 2000 years and has evolved into the Gao Kao (college entrance exam) system today. The Gao Kao is sacrosanct in the Chinese life and even Xi Jinping’s own daughter had no guarantee to enter the prestigious Tsinghua University where he himself graduated from. In the end, she didn’t get into Tsinghua but did manage to get a spot at Harvard – a happy ending.

Impact of Marxism on Chinese economics and politics

The first mistake westerners make about the Communist Party of China (CPC or CCP) is to focus on the word “communist” when the correct focus should be on the word “Chinese”.

Rather than understanding CCP as the Chinese Communist Party, people would do much better to understand it as the Chinese Civilization Party.

This is why the US won’t defeat CCP and China as they defeated the Soviet communists and USSR. If the US makes the same assumptions about “communists” in its rivalry with China, it has already lost the first battle according to Sun Tzu, whose first rule of war is “Knowing yourself and knowing your enemy”.

Marxism came to China in 1921 when a small group of urban intellectuals, inspired by the October Revolution in Russia and European socialist ideas, founded the Communist Party of China. It was a time of extreme social upheaval and chaos as China just went through the fall of the Qing Dynasty and decades of colonial aggression by foreign powers.

Marxism was one of political factions that was trying to modernize China. The CPC won victory over the Nationalists (Kuomintang) in 1949 after decades of civil wars and the war against Japanese invasion. It established the new order as the People’s Republic of China.

Marxism is viewed first and foremost as a classical economic theory in China. Karl Marx and his Das Kapital were extension of the 19th classical economic thinkings from Adam Smith, David Richardo, John Stuart Mill and Benjamin Franklin as well as philosopher G.W. Hegel.

The use of his analytical theory “dialectic historical materialism” is still very influential for the Chinese to understand the economic law of motion of modern capitalist societies.

Volume One of the Dap Kapital focused on the relationship between the industrialists and the worker and the concept of surplus value. Volume Two and Three focused on the money owner, money lender, merchant and trade, interest-bearing capital, landed-capital, and economic rent.

Though discredited by generations of free market capitalist economists, Marx’s views on surplus value, economic cycles, financialization, rentier income, and class struggles are highly relevant. They explain the economic polarization and social tension in the west today much better than the superficial analysis proposed by contemporary mainstream economists.

In fact, the 2013 phenomenal bestseller, Capital in Twenty First Century by Thomas Piketty fully validated the predictions by Karl Marx over 100 years ago. Piketty studied 200-years’ worth of data in Europe and the US and proved Marx’s thesis about wealth and income inequality that is innate in the capitalist system.

Piketty proved definitively that the rate of return on capital is greater than the rate of economic growth over the long term, thus leading to concentration of wealth, and this unequal distribution of wealth causes social and economic instability.

Back to China, Marxism provides the Chinese leadership with an analytical tool to understand the nature of capitalist systems, both the good and the bad, how it will evolve, and what pitfalls to avoid as China embraces the market.

Also many of the ideals in Marxism appeal to the Chinese and are compatible with traditional Chinese aspirations – equality, public good, and classless societies.

CPC in the first 30 years of its rule was a revolutionary party led by people who didn’t understand modern economics, science and technology. So it imported a rigid economic and political system from USSR – we can call it Marxism with Russian characteristics. Obviously the result was disastrous.

After three decades of experimentation and repeated frustrations, Deng led the economic reform to transition to a mixed state and private economy in 1978 – socialism with Chinese characteristics. Since then, China has embraced the market and the Chinese economy has become one of the most competitive globally.

Politics in China has been nationalist, not Marxist or communist. While many of its ideals such as equality appeal to the Chinese, Marxism has never been a governance theory for China. For that, China taps into its own historical traditions and wisdom.

Chinese governance is centered around centralization of political power, economic pragmatism, cultural conservatism embodied in Confucian teachings, socialist ideals, and most importantly, meritocracy.

China has explicitly rejected the USSR’ missionary zeal with worldwide communist revolutions and its sponsorship of organizations such as Comintern.

Meritocracy, one party state, democracy, and China’s choice

In this part, I will make some controversial arguments in favor of meritocracy-based one party rule and against multi-party electoral democracy practiced in the west.

I make this argument not to justify China’s one party rule or disparage the western system. I base my argument on the merits and results each system has delivered.

I categorically reject the universalist arguments about the inherent superiority of democracy often made by westerners.

I subscribe to Deng Xiaoping’s cat theory. He argued “it doesn’t matter if a cat is black or white, as long as it catches mice”. According to this theory, planned economy or market economy is only a tool for distributing resources and has nothing to do with political institution, in other words socialism can have market and capitalism can have planning. This has been the underlying ideology guiding the reform and opening of China.

Similarly, I believe one should be indifferent to one party rule or multi-party electoral democracy as long as the governance system delivers the results of improving the standard of living and overall well-being of its population. As the old saying goes, “there are nine different ways to skin a cat”.

Even Plato argued that the best government is not rule by democracy (mob rule) rather by an enlightened philosopher king.

The Chinese are perfectly happy to live under one party rule as long as its rule is based on meritocracy and accountability, corruption is punished, and results are delivered. Like in ancient times, so long as the emperor had the mandate of heaven (i.e. he delivered), his rule was accepted.

Lee Kuan Yew in Singapore was the closest modern equivalent of a philosopher king or an emperor with mandate from heaven. He transformed tiny Singapore from an impoverished colony in 1965 (comparable to Haiti) to a highly developed country with $85,000 GDP per capita by 2023, higher than the US. He did it with one party rule.

In comparison, most of the west seem to live very unhappily under their multi-party electoral democracies, where there is no accountability, wages are stagnant, and ruling party repeatedly fail to deliver on empty campaign promises.

The Chinese and the Singaporean political systems are meritocracy based. Both select the best college graduates into government positions. Both promote officials based on performance. In China, civil service exams are exceptionally competitive with lower admission rates than Ivy League colleges.

As a result, compared with its peers around the world, the Chinese governing class has generated far better governance than any other government if you define good governance as improvement of the well-being of its citizens.

The Chinese government enjoys the highest trust level of its citizen at ~90% as shown by the annual Edelman Trust Barometer and repeatedly confirmed by surveys and studies done by Harvard Belfer Center and Pew Survey. China also shows the highest percentage of citizens who think their country is on the right path (83%). In contrast, citizens in major western democracies consistently rate trust of governments and approval of the direction of their countries at lower than 50%.

The Communist Party of China is the largest political party in the world with 95 million members, which represent the top of the cream of society. Its members are from all walks of life, including peasants, workers, teachers, business owners, venture capitalists, and many billionaires. The goal of the party is to represent the entirety of the society rather than just some special interest groups or demographics. This full spectrum representation is called the “three represents” by former president Jiang Zemin.

Few westerners are aware of a unique feature of the CPC which cannot be found in other political parties in the world – there exist two party departments within the CPC that hold enormous powers. One is called zu zhi bu (the Organization Department) and the other called ji wei (the Discipline Inspection Commission).

The Organization Department is a giant human resources department, responsible for party members’ appointments, job evaluation, training, and promotions. The Discipline Commission is the internal anti-corruption department which is independent of regular party hierarchy and responsible for investigating and prosecuting misconduct and corruption.

The heads of the two departments sit in the Politburo Standing Committee, the highest decision-making body of the party and the state. They are some of the most capable administrators in the system. For example, Wang Qishan, former Vice President and Beijing mayor, headed the Discipline Commission in Xi’s first term between 2013 and 2018.

These two departments constitute the core to institutionalize meritocracy.

The one party system is compatible to the realities of the Chinese society. When the Chinese are given a choice between strong central control and the chaos of political competition, they have a reflexive tendency to choose the former as part of their millennia old political tradition.

Many people will list numerous shortcomings of the one party system. But let me present the much less discussed superiorities of one party system:

- It makes the government less vulnerable to sabotage. Multi-party system lends itself to the “divide and rule” by special interest minorities. With elections come manipulations. A small but determined interest group, well financed and well connected, can hijack national agenda and push policies detrimental to the broader public. The Jewish influence in the US is a good example where true US national interests are sacrificed for the benefit of Israel and the Zionists. The many NGOs in eastern Europe, funded by NED and USAID, are similarly such agents of chaos implanted to subvert the host countries by the hegemon. Che Guvera advised Fidel Castro to stick to one party rule rather than having multi-party elections as the US could easily use the opposition to sabotage Castro’s nationalist revolution.

To many Chinese, the reason why the west promotes democracy to China is because democracy, in practice, has the opposite effect of what the theory suggests. It destabilizes and weakens societies rather than strengthening them. When the US promotes democracy in China, it is not trying to strengthen China. It is trying to bring about a more disunited and divided China, beset by chaos. How can it be otherwise from an adversary? This is a basic human self-defense mechanism that a three-year old understands intuitively.

- Meritocratic selection in a one party system is superior to multi-party democratic election. As long as the ruling party has the best interest of the population in mind and is responsive to the changing needs of the society, meritocratic selection is more efficient and produces better results.

How many corporations use elections to appoint CEOs? Would you invest in a company whose CEO is democratically elected by employees? Does the general population have the information, intelligence, time and energy to consider every aspect of a candidate’s qualifications and experiences in general elections? Why waste so much money and time on performative campaigns? Why open the door for corruptions by the donor class? An average US congressman spends 50% of his time dealing with donors. Does anyone seriously believe he will act in the best interests of his voters rather than his donors?

- One party rule is superior for long term planning and when whole-of-nation efforts are needed. Important policies and commitments have better continuity in a one party system, especially when long term planning is required. Can you imagine electoral parties who have a 4 or 5 year mandate will commit to long term projects that will have payout decades down the road? Electoral parties think in election cycles, much like professional managers focusing on quarterly results. One party rule affords the ruling party to think long term like business owners. One party state can mobilize whole-of-nation efforts to tackle difficult challenges without opposition. No second guessing or Monday morning quarterbacking in a one party system.

During WW2, FDR was elected President for a third and a fourth terms. You don’t switch commander-in-chief in the middle of a war. Similarly, why limit a leader’s terms as long as he is delivering results and remain capable? Would the US be in a better place today if JFK were not assassinated, but instead served a second, third and fourth terms?

- Multi-party democracy produces paralysis and stalemate by default. How many times have we seen the same movie again and again – budget deadlock, government shutdown, filibuster, blame trading, and other “democratic” dysfunctions? The built-in feature of democracy is division, not unity.

- Multi-party democracy has a spotty track of record of electing good leader. It produced not only Trump’s first term, but his second term when anyone with eyes can see he is a fraud and bully, has low intelligence and thin skin, and behaves like a mafia don. It produced George W Bush, who stole his first term through legal maneuvering in the Florida recount against Gore and cheated his way into the second term by launching a war against Iraq based on lies. Don’t forget Adolf Hitler came to power also through elections. Joseph Stalin said “you don’t have to control the voters, only the candidates”. The donor class deciding elections in the west have kept this firmly in mind.

- Lastly, how many people can honestly call the form of government in the US today as real democracy? Under the disguise of electoral procedures with the rituals of campaigning and voting, the US has become a plutocracy run by moneyed aristocrats who use their wealth to make major economic and political decisions that benefit them. As a result, much of the wealth accumulated by the 1% is in effect the wealth transfer from the 99%. Citizen United decision made sure in the US it is one dollar one vote, instead of one person one vote. Can anyone say with confidence whether Trump is the president or Musk is? As the oldest and the leading “democracy” of the world, where the US is today will be where other democracies are tomorrow. It is prescient that Karl Marx predicted all this with his dialectic historical materialism analysis.

At the end of the day, a country’s political system should be driven by its own historical traditions and based on the realities of the society itself. There are pros and cons to each system of government.

If a government can continuously reform and adapt its policies to meet the demands of the time, that is a good government. One party rule vs multi-party electoral democracy is the outside form or procedure of governance. The essence is the integrity and quality of the government. The final arbiter of a system’s superiority should be the empirical results it produces, not some theoretical benefits.

Some will ask what about the corruptions inherent in one party system? I wrote an essay comparing corruption in China vs. the US before. See the text in italics.

China’s corruption problem is well known and widely acknowledged by the government. In the last year, China arrested multiple senior military officials including 2 defence ministers and 9 generals in the PLA Rocket Force. Just this week, a senior political officer with a general’s rank in the PLA was arrested for corruption.

Also in the past week came news of corrupt behavior by the sitting US president Joe Biden, who gave an unconditional and blanket pardon to his son Hunter Biden for illegal gun ownership and drug possession. The language used in the pardon is so broadly that it is laughable – Hunter Biden was “pardoned for all crimes he committed or may have committed or may have taken part in between 2014 and 2024”.

Interestingly, Hunter Biden wasn’t even charged with his real crimes including using his father’s position for gains in Ukraine (Burisma board seat for a cool $1 million a year) and even acting as bagman for outright bribes on behalf of his father, the “big man”.

Another news from the US this week came from the president-elect Donald Trump who just named his in-law Charles Kushner to be the next US ambassador to France. Very interestingly, Trump pardoned Kushner when leaving office in 2020 for his crimes which carried a 14-year prison sentence. This real estate felon and convicted criminal will have to be addressed as “your excellency” by the French starting next January.

More on Trump, it is widely reported in the US media that Trump took a $100 million donation from Jewish gambling kingpin Sheldon Edelson, now dead, in his first presidential campaign in 2016. As a quid pro quo, Trump moved the US embassy from Tel Aviv to Jerusalem against international law. In this election cycle, it is reported Miriam Edelson, the widow, gave Trump another $100 million for backing Israel to annex Gaza and West Bank.

Another outright corruption involves the octogenarian former Speaker of the House, Nancy Pelosi, who has the dubious distinction of an EFT fund named after her (Nancy Pelosi Portfolio with ticker BK20883) for her prowess as an insider trader of US securities in the stock market. The Pelosi portfolio returned 65% in 2023, vastly outperforming the S&P500. According to Quiver Quantitative, Pelosi’s stock picks returned 775% vs. market index of 221% between 2014 and 2024. The “democracy” touting old witch is a super star stock picker, handily beating the most high-powered hedge fund managers on Wall Street.

So how should we understand and make sense of corruption in the world’s two major powers? Here is my take –

- Chinese corruption is retail, individual, punishable. Xi made the issue his No. 1 domestic policy priority when he took power in 2013 and hasn’t taken his foot off the brake to date. Xi’s corruption drive took down hundreds of thousands of officials at national and local government level, including members of Politburo, defence ministers, foreign minister, railroad minister, provincial governors, mayors of major cities, bank CEOs, state owned company executives, military procurement officials, hospital administrators and countless others. - Chinese corruption is about corrupt individuals. Corruption is illegal and heavily punishable. It may never go away as human defects won’t go away but it is risky for the corrupt individuals. Corrupt officials can steal lots of money, but they run a very real risk of being shamed and losing everything including literally their lives (the railroad minister was executed). -

On the other hand, US corruption is wholesale and institutionalized. Such corruption is legalized and therefore protected. Such corruption is not even recognized as prima facie corruption. This is done through legislations like Citizen United which legalizes money in politics by treating political donations as freedom of speech.

This is done through institutionalized evolving doors between Pentagon and military industrial complexes (e.g. Lloyd Austin and Raytheon, David Petraeus and KKR), between government offices and lobby firms (Tony Blinken and WestExec Advisors), between regulators and those they are supposed to regulate (e.g. Tim Geithner working as CEO of Warburg Pincus after his stint as Treasury Secretary to bail out Wall Street at the expense of the main street).

This is done through codified patronage systems like the presidential right to nominate campaign donors to posts like ambassadors.

As a result, American corruption is systemic, wholesale, and unreformable. It is large scale, open, risk free, and unaccountable. There is no shame involved. In the US, corruption carries very high rewards and a strange sort of “honor” (like having an EFT fund named after your insider trading prowess).

China’s relationship with outside world

Unlike the west, China concept of itself is centrality, not universality. The name of China (zhong guo) literally means the Middle Kingdom.

China’s first, second and third priorities have always been China, China and China. In its entire history, the sun rose and set in China for the emperors and their subjects.

China is indifferent what kind of politics, religions, and governments others practice. They don’t feel a moral obligation to “make others see the light” or preach its version of universal truth.

As China doesn’t have a monolithic religion, it has never felt an urge to spread its belief system. The Confucian way is to practice virtue and others will emulate, not to forcefully assimilate.

This lack of interest in others came with a heavy cost. In the late Qing Dynasty, the Chinese were so insulated from world affairs that they didn’t even realize the country had fallen behind in technology and industrialization until they became victims of those who mastered them.

China’s encounter with the outside world was painful and humiliating for over a century. While the country will not make the same mistake again, its default position is still inward looking. If the west is liberal interventionist, then China is illiberal non-interventionist.

China doesn’t want to become an honorary member of the west like Japan. China engages with the world on its own terms. Ironically, the illiberal Chinese way may be the more democratic approach to conduct international relations as China embraces divergence when the liberal-interventionists force convergence, often down the barrel of the gun.

The world would be a safer place if everyone practices the teaching of Daoism – live and let live.

What China’s resurgence means

In my opinion, the most important lesson from China’s resurgence is that modernization doesn’t equal westernization. Governance and politics are not physical laws with universal application. Social structure must fit with history and tradition.

In fact, the western neoliberal cocktail of economic capitalism plus electoral democracy hasn’t worked out for most non-western countries.

Chinese experience cannot be replicated since it is specific to the Chinese history and culture. That said, elements of it can be applied elsewhere in economic policies, governance approach, etc.

...... (Note) I hope this discussion is helpful to understand the transformation in China and dispel some of the myths propagated by misleading western media and opinion leaders.

People are too often tied down by rigid beliefs, biases and outdated facts. John Maynard Keynes wisely observed “when the facts change, I change my mind. What do you do?”

Suggested Reading--

- China A History by John Keay (comprehensive Chinese history starting 5 millenniums ago, chronologically organized and detailed)

- The Great Chinese Revolution 1800 – 1985 by John King Fairbanks (China’s two-hundred-year encounter with the west and its long and turbulent quest for modernity)

- Encountering China by Michael Sandel (a series of essays featuring Michael Sandel, the Harvard scholar, and other Chinese and western scholars who debate Chinese philosophy. Akin to a conversation between Confucius and Socrates)

- China’s Economy by Arthur Kroeber (a primer on modern Chinese economic and political system by a scholar/businessman/journalist)

- China’s Dream and China’s World by Kerry Brown (the books examined China’s governance system, China’s national aspirations and foreign relations)

- China’s Leaders From Mao to Now by David Shambaugh (detailed study of the 5 Chinese leaders from Mao to Xi, with a heavy western ideological bent)

- China’s Great Road – Lessons for Marxist Theory and Socialist Practices by John Ross (a study of the socialist economic system and policies with Chinese characteristics by a China-based scholar with 30+ year experience in the country)

- On China by Henry Kissinger (a study of Chinese diplomacy through historical lens and personal experience)

- Has China Won by Kishore Mahbubani (about US China rivalry and comparison of the two nations by a Singaporean diplomat and scholar)

- When China Rules the World by Martin Jacques (about China’s resurgence and its historical foundations; written in 2009, the book outlasted most other China-themed books from that era with its accurate predictions about China’s rise and the implications on its relations with the rest of the world)