Not surprisingly, my two-month summer internship at China Universal Asset Management deepened my understanding of Chinese financial markets and the Chinese economy at large. But as I sifted through market analyses and examined the client potential of foreign investors, more poignant questions were often on my mind. Surely this – a market economy driven by some of the fastest economic growth in human history – can’t be what Reagan was referring to when he coined the phrase “evil empire” in 1983 to describe the suppressive force of communism in the Soviet Union. How “communist” could China really be? Ultimately, answering this question gave rise to some of the more surprising insights of my summer.
Sure, China’s economic reform and opening in 1979 has had a profound effect on economic freedom that has distinguished the nation sharply from other remaining communist powers (North Korea, Vietnam, Laos, and Cuba). The tenets of classical Marxism no longer pervade the Chinese economic system; privatization of business, deregulation of industry, lower taxes, diminishing state-provided healthcare and social security programs, and the internationalization of the RMB are just a few of the free-market measures which have lead China farther away from the ideals of its communist founder. As The Economist recently put it, “Mao may be spinning in his grave” at the rise of capitalist ideology and its subsequent creation of a Chinese economic elite.
Of course, we also often hear about China’s lack of political freedoms. It is necessary to consider that, for example, the media (and thus the flow of information) is still state-controlled, the internet is heavily regulated (Facebook, Twitter, and YouTube are all illegal), and the concept of free speech remains as foreign to China as that of private property.
In the end, these are all well-known facts. This trip to China wasn’t my first, and even as someone who reads often about Ai Weiwei, Chen Guangcheng, and the like, it’s taken a more up-close and personal look to more fully understand the Chinese situation.
A co-worker of mine approached me one day with a surprising request: she wanted me to tell her about the Tiananmen Square protests of 1989. I naturally hesitated to tell her, but she insisted. I was met with the following response (made all the more surprising when she switched languages and began speaking broken English):
“Caleb, I wanted to know the truth. Before, I hear that they use tanks, but I not believe it. Now you tell me the story, and say they have pictures, and that many people died, and this make me very sad. How many more things I do not know…” At which point she began to shed tears.
As I watched her cry, I was stunned by how her tears could so easily illustrate the injustice inflicted on 1.3 billion of the world’s population. We hear phrases like “state-run media,” but these are just words, they mean little; tears are real. It’s impossible, I think, to understand the human effect of Chinese communism without such experiences, let alone the actual events themselves – the tanks firing on students or the monks lighting themselves on fire. It’s enough to question the sustainability and legitimacy of a system that continues to operate in such a manner.