When we first travelled to China, in the early 1990s, it was very different from what we see today. Even in Beijing many people wore Mao suits and cycled everywhere; only senior Chinese Communist Party (CCP) officials used cars. In the countryside life retained many of its traditional elements. But over the next 30 years, thanks to policies aimed at developing the economy and increasing capital investment, China emerged as a global power, with the second-largest economy in the world and a burgeoning middle class eager to spend.
One thing hasn’t changed, though: Many Western politicians and business executives still don’t get China. Believing, for example, that political freedom would follow the new economic freedoms, they wrongly assumed that China’s internet would be similar to the freewheeling and often politically disruptive version developed in the West. And believing that China’s economic growth would have to be built on the same foundations as those in the West, many failed to envisage the Chinese state’s continuing role as investor, regulator, and intellectual property owner.
Why do leaders in the West persist in getting China so wrong? In our work we have come to see that people in both business and politics often cling to three widely shared but essentially false assumptions about modern China. As we’ll argue in the following pages, these assumptions reflect gaps in their knowledge about China’s history, culture, and language that encourage them to draw persuasive but deeply flawed analogies between China and other countries.[ Myth 1]
Economics and Democracy Are Two Sides of the Same Coin
Many Westerners assume that China is on the same development trajectory that Japan, Britain, Germany, and France embarked on in the immediate aftermath of World War II—the only difference being that the Chinese started much later than other Asian economies, such as South Korea and Malaysia, after a 40-year Maoist detour. According to this view, economic growth and increasing prosperity will cause China to move toward a more liberal model for both its economy and its politics, as did those countries.
It’s a plausible narrative. As the author Yuval Noah Harari has pointed out, liberalism has had few competitors since the end of the Cold War, when both fascism and communism appeared defeated. And the narrative has had some powerful supporters. In a speech in 2000 former U.S. President Bill Clinton declared, “By joining the WTO, China is not simply agreeing to import more of our products, it is agreeing to import one of democracy’s most cherished values: economic freedom. When individuals have the power…to realize their dreams, they will demand a greater say.”
But this argument overlooks some fundamental differences between China and the United States, Japan, Britain, Germany, and France. Those countries have since 1945 been pluralist democracies with independent judiciaries. As a result, economic growth came in tandem with social progress (through, for example, legislation protecting individual choice and minority rights), which made it easy to imagine that they were two sides of a coin. The collapse of the USSR appeared to validate that belief, given that the Soviet regime’s inability to deliver meaningful economic growth for its citizens contributed to its collapse: Russia’s eventual integration into the global economy (perestroika) followed Mikhail Gorbachev’s political reforms (glasnost).