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Chinese leap forward into uncertain future

By Thomas L. Friedman, The New York Times, in The Straits Times, 26 October 2000

BEIJING -- In the wake of the latest Middle East violence, it's easy to fall into the trap of believing that this tribal war is the world.

It is useful to remember that the very same week that 10.3 million Palestinians and Israelis fell back into conflict, America agreed to terms for 1.3 billion Chinese to enter the World Trade Organisation, Slobodan Milosevic was ousted from power in Belgrade, President Bill Clinton completed plans to visit Vietnam, the No 2 leader in North Korea came to the Oval Office and asked Mr Clinton for normal relations, and Jordan became the fourth country to reach a free-trade agreement with the US.

There is a dominant flow in the world today, and it is towards more integration, networking and the global economy; and there is a powerful undertow constantly pulling people back to struggles over who owns which olive tree -- wars over identity, culture, religion and politics.

Both are happening at once, and you need to keep them in perspective. Visiting China is a great reminder of that.

What characterises China today is that, like so many of its neighbours, it has chosen the future over the past. The Chinese have decided -- at least for the moment -- to go with the dominant flow.

China has crossed the international dateline where it is now tomorrow, as opposed to much of the Middle East, which is again stuck on yesterday.

That can change again, as it has before -- the lure and pressures of globalisation do not go away just because your nation decides to ignore them for a while -- but it will take a huge renewed effort.

What the Chinese are now wrestling with is no longer whether to choose the future, but how to deal with the consequences of their choice. That is what people here are talking about.

China is about to enter the WTO, which is going to force it to open up its economy to global competition and rules as never before. This will lead to huge investment in new companies and huge lay-offs in inefficient old factories, which provided the health care, housing and social security for Chinese workers, many of whom will now have to fend for themselves.

China is making this leap because the Communist Party leadership concluded that without external pressure, economic reform was not possible; and without economic reform, continued growth was not possible; and without growth, continued party rule was not possible.

Recent reports that China was getting 11th-hour cold feet about joining the WTO appear wrong. That came through in a talk I had the other day with Mr Qian Qichen, China's thoughtful Deputy Prime Minister, who oversees foreign affairs.

Psychologically, we are prepared for it, he said in an interview.

Once we join the WTO, we will abide by the WTO rules, while enjoying the rights and obligations.

We should admit that our accession to WTO will bring to us advantages and disadvantages. Our advantages lie in that we will be able to further expand our foreign trade and more fully participate in the international market.

As for the disadvantages, it means that state-owned enterprises and other enterprises in China will be faced with fierce international competition. We are not afraid of such competition.

It will expose Chinese enterprises and help them further develop, expand and improve. Those enterprises that can't survive clearly don't have the capacity for competition, so there is no value in their continued existence.

It is not unusual for a worker to lose a job (as a result of global competition), added Mr Qian. What we must do is help those workers who have lost their jobs to learn new skills and find new jobs. That means we have to gradually build a social safety net which would cover those workers financially.

He made it clear that China is not backing away from its rapid Internet expansion. The number of Internet users (here) doubles every six months. While providing useful information, the Internet has some negative contents and may also mislead the public. But it does more good than harm.

So fasten your seatbelts. Because, having bet on the future, the Chinese are leaping into it with no net.

Wish them well, too. Because, while the Middle East's Great Leap Backward truly breaks your heart, its effects can be contained. If China's new Great Leap Forward fails, we will all feel the pain.