Wednesday, February 8, 2012

China, international trade rules and democracy

The Chinese President Hu Jintao warned recently the West was waging a "cultural war" against China and was attempting to Westernise it. The Telegraph reported,
"Mr Hu called on the 80 million-plus Party members to fight "hostile international powers" and meet the "cultural demands" of the people.

"Hostile international powers are strengthening their efforts to Westernise and divide us," Mr Hu wrote in the latest edition of Communist Party's magazine, Seeking the Truth"
Another cultural revolution in the making? China's entry into the WTO heralded its entry into the multilateral trading system.Will the multilateral trade rules provide the impetus for China to adopt a democratic form of governance?

Predicting the fall of the Communist party of China in 2012, this piece says,
"Today, social change in China is accelerating. The problem for the country's ruling party is that, although Chinese people generally do not have revolutionary intentions, their acts of social disruption can have revolutionary implications because they are occurring at an extraordinarily sensitive time. In short, China is much too dynamic and volatile for the Communist Party's leaders to hang on. In some location next year, whether a small village or great city, an incident will get out of control and spread fast. Because people across the country share the same thoughts, we should not be surprised they will act in the same way. We have already seen the Chinese people act in unison: In June 1989, well before the advent of social media, there were protests in roughly 370 cities across China, without national ringleaders.
This phenomenon, which has swept North Africa and the Middle East this year, tells us that the nature of political change around the world is itself changing, destabilizing even the most secure-looking authoritarian governments. China is by no means immune to this wave of popular uprising, as Beijing's overreaction to the so-called "Jasmine" protests this spring indicates. The Communist Party, once the beneficiary of global trends, is now the victim of them.
So will China collapse? Weak governments can remain in place a long time. Political scientists, who like to bring order to the inexplicable, say that a host of factors are required for regime collapse and that China is missing the two most important of them: a divided government and a strong opposition.
At a time when crucial challenges mount, the Communist Party is beginning a multi-year political transition and therefore ill-prepared for the problems it faces. There are already visible splits among Party elites, and the leadership's sluggish response in recent months -- in marked contrast to its lightning-fast reaction in 2008 to economic troubles abroad -- indicates that the decision-making process in Beijing is deteriorating. So check the box on divided government.
And as for the existence of an opposition, the Soviet Union fell without much of one. In our substantially more volatile age, the Chinese government could dissolve like the autocracies in Tunisia and Egypt. As evident in this month's "open revolt" in the village of Wukan in Guangdong province, people can organize themselves quickly -- as they have so many times since the end of the 1980s. In any event, a well-oiled machine is no longer needed to bring down a regime in this age of leaderless revolution."
Predicting a less gloomy picture for China in the coming years, Stephen Roach in this Project Syndicate Idea commentary says,
For China, there is a deeper meaning to recent global developments.  A second major warning shot in three years has been fired at this export-led economy.  First, the United States, and now Europe – China's two largest export markets are in serious trouble and can no longer be counted on as reliable, sustainable sources of external demand. As a result, there are now major questions about the sustenance of China's long powerful export-led growth model.
Accordingly, China has no choice but to move quickly to implement the pro-consumption initiatives of its recently enacted 12th Five-Year Plan. Strategic transition is what modern China is all about. That’s what happened 30 years ago, when economic reform began.  And it needs to happen again today.  For China, a soft landing will provide a window of opportunity to press ahead with the formidable task of increasingly urgent economic rebalancing."
While differing opinions about the impact of multilateral trade rules on the Chinese economy in the coming years straddle the debate, its impact on the Chinese political spectrum is less written about. Are they mutually exclusive domains not influencing each other's trajectories? To suppose that would be naive considering the complex interlinkages.

An interesting insight into international trade rules, internet freedom and political freedom is brought out by Anupam Chander in 2010 in this article titled "International Trade and Internet Freedom". Arguing that international trade rules related to GATS in the context of internet freedom could have a great impact on liberalizing political freedoms, he notes,
"International trade law puts pressure on state repression of information through two principal mechanisms. First, the transparency obligations of GATS require what is often absent in authoritarian states—a set of public rules that governs both citizens and governmental authorities. WTO member states must publish regulations governing services and establish inquiry points where foreign service providers can obtain information about such regulations.publication requirement written for the benefit of foreigners may prove useful for local citizens, who will be given the opportunity to understand the rules that bind them—and the opportunity therefore to challenge those rules or their interpretation.
Second, the market access and  national treatment commitments provide opportunities for foreign information service providers to disseminate information that local information service providers might eschew. Censorship by itself may not necessarily constitute either a market access or a national treatment violation. But consider three scenarios: what if a country (1) declared foreign blogging sites off-limits, or (2) required foreign information service providers to route their offerings through  special traffic cops,  or (3) required local Internet service providers to deny access to certain foreign services in toto? In cases like these, the censorship measures would likely run afoul of a country’s market access and national treatment obligations."
The issue whether the WTO should at all be treading into the minefield of human rights and political freedoms is a tricky one with conflicting viewpoints. Would it be stretching its mandate and diluting it's efficacy in addressing issues of trade and development. One is not questioning the primacy of the values of free speech, political freedom and human rights. The issue is whether a multilateral trade body is the right forum to decide on its limits and enforceability.

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