Over the past decade, China's leaders have pursued rapid economic reform while stifling political change. The result today is a rigid state that is unable to cope with an increasingly organized, complex, and robust society. China's next generation of leaders, set to take office in 2002-3, will likely respond to this dilemma by accelerating political reform -- unless a new cold war with the United States intervenes.
George Gilboy and Eric Heginbotham are Ph.D. candidates in political science at the Massachusetts Institute of Technology. Gilboy studies industrial technology development and economic institutions in China. Heginbotham studies Chinese civil-military relations and grand strategy. Both have lived in China for more than five years.
THE MAIN EVENT
Social forces unleashed by China's economic reform over the last 20 years are now driving inexorably toward a fundamental transformation of Chinese politics. Since the suppression of the 1989 student protests in Tiananmen Square, China's leaders have struggled to maintain the political status quo, even while pursuing rapid economic reform. The result today is a nonadaptive, brittle state that is unable to cope with an increasingly organized, complex, and robust society. Further efforts to resist political change will only squander the benefits of social and economic dynamism, perpetuate the government's costly battle to contain the populace, drive politics toward increasingly tense domestic confrontation, and ultimately threaten the system with collapse.
Many of today's senior Chinese officials recognize this dilemma but have powerful personal motivations to resist change. The next generation of Chinese leaders, however -- set to take office in 2002-3 -- is both more supportive of reform and less constrained by Tiananmen-era political baggage. These new leaders will likely respond to the dilemma, therefore, by accelerating political liberalization.
This does not imply that China will soon become a Western-style democracy. Rather, the coming steps in reform will likely include measures to legitimize independent social organization, give citizen groups increased input in policymaking (in exchange for some limits on their activities), and develop greater intraparty democracy. These changes will be difficult, and in the near term, they are as likely to throw China into domestic turmoil as they are to create a stable partial democracy.
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China's reform policies have created economic opportunities, but they have also unleashed political tensions. Some U.S. strategists advocate a containment strategy, yet such a strategy is both undesirable and infeasible. America's fortunes in Asia depend on the evolution of a China that is secure, cohesive, reform-oriented, and open to the world. Failed reform could easily lead to a nationalistic, obstructionist China. In recent years, Washington, while trying to engage the People's Republic, has driven it into a corner over human rights. America must develop a long-term strategy to integrate China into the world community and avert serious damage to this crucial bilateral relationship. And it must begin to do so now.
The West accounts for a disproportionate share of world income because it has already passed through capitalist development. Now that Asia is becoming capitalist, it will return to the center of the world economy, where it was in the early nineteenth century. Current currency crises are only blips on the screen. Asia's miracle transpired not because of shrewd industrial policy or great leaps forward but because countries attracted foreign investment and moved up the development ladder one rung at a time. But ahead lies the challenge, particularly for India and China, of establishing modern governments.
Washington need not worry about China's economic boom, much less respond with protectionism. Although China controls more of the world's exports than ever before, its high-return high-tech industries are dominated by foreign companies. And Chinese firms will not displace them any time soon: Beijing's one-party politics have bred a timid business culture that prevents domestic firms from developing key technologies and keeps them dependent on the West.

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