Is China more legitimate than the West? | BBC

Economist Martin Jacques, author of When China Rules the World, sings the praises of China in BBC Point of View.

“Even though China is still a poor developing country, its state, I would argue, is the most competent in the world. Take infrastructure – the importance of which is belatedly now being recognised in the West. Here, China has no peers…….. we are in a new ball game. With the Western economies in a profound mess and with China’s startling rise, the competence of the state can no longer be ignored. Our model is in crisis. Theirs has been delivering the goods.”

Patrick Chovanec has a different assessment:

“China’s economic miracle was result of govt getting out of way and letting people improve their lives, not planning by all-seeing mandarins.”

China is a developing country, with rapid growth fueled by massive infrastructure investment and strong exports. The country faces diminishing returns on infrastructure investment and dwindling exports — not only from an economic slow-down in the West but from rising wages as the country attempts to boost internal consumption as an antidote to the middle-income trap that is already threatening growth in its richer provinces.

China also faces push-back from the West against trade advantages maintained by suppressing their exchange rate through vendor financing —  balancing trade inflows on current account with outflows on capital account. Why else would a developing country hold more than $1 trillion of investment in US Treasuries at negative real interest rates?

Jacques claims that the Chinese state enjoys popular support:

“But does the Chinese state, you may well ask, really enjoy legitimacy in the eyes of its people? Take the findings of Tony Saich at Harvard’s Kennedy School of Government……… he found that between 80 and 95% of Chinese people were either relatively or extremely satisfied with central government.”

One of the most powerful tools of an oppressive state is fear: fear of the unknown. Many of their citizens would settle for the status quo rather than risk the turmoil that accompanies change. The same is true of many autocratic regimes. That does not make them a beacon of good government.

Western democracy has many problems but the solution does not lie with increasing the size of the state, nor with greater autocracy. Rather we should examine the most successful Western democracies and learn from them. Switzerland would be a good start. Their well-managed economy enjoys low unemployment, a skilled labor force, and GDP per capita among the highest in the world — 70% above the US. The stable democratic government runs with a strong tradition of consensus among political parties, while citizens hold a collective right of veto over government policy. The country boasts a pristine environment with minimal pollution, a strong human rights record — without oppression of its citizens or minorities — and no territorial disputes with its neighbors.

Which state would you say is the most competent?

Far-Right Party Leads in Swiss Vote –

Swiss voters went to the polls to elect a new parliament Sunday, the composition of which will help determine the makeup of the seven-member Federal Council in December.

Swiss politics are marked by a very weak executive and a strong tradition of consensus among the political parties. The three largest political parties have typically each held two seats in the Federal Council, with the last seat going to the fourth-largest. Each member of the cabinet then takes turns as the Swiss president, with each term lasting just one year.

….the SVP won nearly 27% of the vote, down from 29% four years ago, but it remained the single largest party. A new, breakaway conservative party, the Conservative Democrats, won 5.4%. Social Democrats and Liberals were the second- and third-largest parties respectively, with 19% and 15% of the projected vote.

Switzerland has been an island of prosperity over the past couple of years, with unemployment of just 2.8%, solid public finances and healthy growth.

via Far-Right Party Leads in Swiss Vote –

“Switzerland has been an island of prosperity” — it is not hard to figure out why. With one change in composition of their seven-member Federal Council in the last 50 years, Switzerland is the most stable democracy on the planet, and certainly one of the most prosperous. Their leaders are able to focus on long-term goals and stability without disruption from a four or five-year election cycle.

Oppositional, winner-takes-all democracies as in the US, UK and most Western countries are continually disrupted by elections, changes in government and changes in direction. Their leaders are focused almost exclusively on the next election, with little thought given to long-term consequences. Charles De Gaulle expressed his frustration at being an ally of the US, equating it to sharing a lifeboat with an elephant. Every time they shift position there is a mad scramble to stay afloat.

Unless you have a fairly homogeneous population with a large swing vote, you are likely to end up with some form of coalition government. Italy used to be the prime example but has now been joined by the UK, Germany and Australia. The danger is that small minorities can exert inordinate power over the incumbent government if they hold the balance of power. And you have little guarantee of stability, with coalitions prone to splinter and re-form.

Unfortunately the present system is entrenched, with so many vested interests it will be difficult to change. But that is no reason why new democracies such as Iraq, Afghanistan, Tunisia, Egypt and Libya should be encouraged to follow the same path. They have a simple choice: who do you want to resemble — Italy or Switzerland?