Global Trends by Martin Khor

Monday 11 August 2008

Olympics and the China factor

The Olympic Games has had a spectacular launch.  The thrills and spills of the next fortnight are mixed with complex feelings, especially in the West, about the rise of the host country China.

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For the next fortnight, the Olympic Games will dominate not only the news but also the television and internet attention of hundreds of millions around the world.

The “greatest show on earth” was launched in Beijing at the spectacular opening ceremony that many are still talking about.  It was shrewd of the Chinese authorities to get the country’s prime film director to plan the extravaganza, which became an impressive showcase of the country’s history and present development.

While this opening and the new magnificent sports buildings, especially the “Bird’s Nest” stadium, won the acclaim of many, not least the reportedly billions of people that watched the show on TV, the whole Olympics being held in China also attracted sharp criticism, notedly from the Western press.

The Times (London) said the Olympics was a subtle agenda for a dictatorship to overcome its crisis of legitimacy.  It added that the US$40 billion propaganda coup is paid for by the masses the politicians are seeking to keep in check, who have no choice but to cough up.

“No democractic government at China’s stage of economic development would have had the will or the gall for such extravagance,” said the Times.

The claim of this paper is that the Chinese people, if only they could freely voice their feelings, are angry about how their money is being wasted on the Olympics. 

Yet the paper contradicts itself, by stating upfront that the Olympics is used as propaganda by the government to win political legitimacy – in other words, that this extravagant show makes it popular with the masses.

The reality, as affirmed in many a report, is that the Olympics has been largely welcomed by the people in China, who are filled with pride at another  “coming of age” of their country on the world stage.

Whether the vast amount of money and human resources that have gone into the Olympics could have been better spent is of course a legitimate subject of debate – as it always has been when any large Games – be it the Olympics or the World Cup, or the Commonwealth Games or Asian Games – is held, especially in a developing country, where there are competing uses of resources, such as building homes and schools for the poor.

However, China currently arouses especially strong feelings among the governments and people in the Western world. 

This is usually dressed in the garb of caring for the human rights of the poor Chinese people, who are often portrayed as being victimized for the country’s development and the supposed personal glory of the political leaders.

But it is hard to deny the other view, that the development in the past almost 60 years of that highest-populated country has eradicated more poverty that elsewhere.  And whatever we think of the social unevenness and the environmental degradation accompanying the prolific economic growth of the past 10 to 20 years, it has also contributed to realizing the economic and social rights of many hundreds of millions of ordinary Chinese.   

And that in itself, transforming the image and reality of China from being populated with starving and malnourished people into a thriving developing country, has also contributed to the realization of economic and social rights of humanity, given the gigantic size of its population.

Much more of course can be done to promote civic and political rights and freedoms, to cater to the legitimate interests and rights of minorities, to resolve the problems in Tibet, and so many other issues.  The urgent need to resolve these kinds of problems can be said of many other countries too, including in the developed world.

It is also true that China’s neighbours that are developing countries are afraid of China, in that foreign investment and trade may be diverted to that country.  But this is counteracted by viewing China also as a source of growth of the region’s exports.  Awe and mutual cooperation, rather then envy and anger, characterize Asean’s view of China.

African countries have recently viewed China as an additional and welcome source of finance and investment.  Though there may be some worry about over-dependence on China, there is more goodwill than fear because China is a major and growing market for the continent’s commodity exports, and its finance comes without the onerous (and often erroneous) conditions that accompany Western and International Monetary Fund financing.    

The criticisms against China comes mainly from the West. One can’t help but feel that the real source of this is envy and fear.  Envy at the 10% plus growth rates, the huge trade surpluses and the gigantic foreign reserves, a bit of which has been used to buy equity in Western companies. 

Fear that the balance of world power is shifting to Asia, especially to China, and Western hegemony, including of its culture and civilization, is significantly slipping.

In fact, China has made itself vulnerable by holding so much of its foreign reserves, which are approaching US$2 trillion, in US Treasury bills. China is criticized for providing financing to Africa (reportedly US$6 billion a year) but it provides many times more financing to the United States.  And if the US dollar depreciates significantly, China stands to lose many billions (even hundreds of billions) of dollars in terms of its capacity to import from (or buy assets in) other countries. .

The growing dependence of the US on China, its large trade deficit, and the shifting of US companies’ operations to China, makes this country a source of fear, especially of American workers losing their jobs.  This is firstly the reason for firstly the growing protectionist sentiments in America, and secondly it may be an underlying factor for the expression of contempt for the political structures in China.

The envy and fear comes up most obviously during high-profile events like the Olympics.  We can expect to see more of these complex feelings, mixed up with the thrills and spills of the sporting events, throughout the rest of these Beijing Olympic Games.