Things fall apart?

British writer Will Hutton began research for his upcoming book on China's astounding economic and political rise believing that "China was so different that it could carry on adapting its model, living without democracy or European enlightenment values." In the course of his research, he changed his mind. After detailing the staggering growth of China's economy, the global reach of its political power, the abandonment of anything resembling Maoist doctrine, Hutton concludes:

But for all that, it remains communist. The maxims of Marxist-Leninst-Maoist thought have to stand, however much the party tries to stretch the boundaries, because they are the basis for one-party rule. Yet the system so spawned is reaching its limits. For example, China's state-owned and directed banks cannot carry on channelling hundreds of billions of pounds of peasant savings into the financing of a frenzy of infrastructure and heavy industrial investment. The borrowers habitually pay interest only fitfully, and rarely repay the debt, even as the debt mountain explodes. The financial system is vulnerable to any economic setback.

Equally, China is reaching the limits of the capacity to increase its exports, which, in 2007, will surpass $1 trillion, by 25 per cent a year. At this rate of growth, they will reach $5 trillion by 2020 or sooner, representing more than half of today's world trade. Is that likely? Are there ships and ports on sufficient scale to move such volumes - and will Western markets stay uncomplainingly open? Every year, it is also acquiring $200bn of foreign exchange reserves as it rigs its currency to keep its exports competitive. Can even China insulate its domestic financial system from such fantastic growth in its reserves and stop inflation rising? Already, there are ominous signs that inflationary pressures are increasing.

Hutton goes on to discuss China's environmental crisis, which has been covered here on so many occasions that I don't think it's necessary to restate it now. His basic argument is that "it is the lack of independent scrutiny and accountability that lie behind the massive waste of investment and China's destruction of its environment alike."

Enterprises are accountable to no one but the Communist party for their actions; there is no network of civil society, plural public institutions and independent media to create pressure for enterprises to become more environmentally efficient. Watchdogs, whistleblowers, independent judges and accountable government are not just good in themselves as custodians of justice; they also keep capitalism honest and efficient and would curb environmental costs that reach an amazing 12 per cent of GDP. As importantly, they are part of the institutional network that constitutes an independent public realm that includes free intellectual inquiry, free trade unions and independent audit. It is this 'enlightenment infrastructure' that I regard in both the West and East as the essential underpinning of a healthy society. The individual detained for years without a fair trial is part of the same malign system that prevents a company from expecting to be able to correct a commercial wrong in a court, or have a judgment in its favour implemented, if it were against the party interest.

The impact is pernicious. The reason why so few Britons can name a great Chinese brand or company, despite China's export success, is that there aren't any. China needs to build them, but doing that in a one-party authoritarian state, where the party second-guesses business strategy for ideological and political ends, is impossible. In any case, nearly three-fifths of its exports and nearly all its hi-tech exports are made by non-Chinese, foreign firms, another expression of China's weakness. The state still owns the lion's share of China's business and what it does not own, it reserves the right to direct politically.

Hutton believes that the world cannot afford a China that dominates the globe without achieving some form of democratic transformation. From what I can suss out about him, he's no neocon; he's also no cultural relativist and makes a strong case for the superiority - and universality - of Western enlightenment values, which he believes China desperately needs to achieve its stated "peaceful rise":

Britain and the West take our enlightenment inheritance too easily for granted, and do not see how central it is to everything we are, whether technological advance, trust or well-being. We neither cherish it sufficiently nor live by its exacting standards. We share too quickly the criticism of non-Western societies that we are hypocrites. What China has taught me, paradoxically, is the value of the West, and how crucial it is that we practise what we preach. If we don't, the writing is on the wall - for us and China.

I'm not entirely sure how I feel about this. Nowhere in Hutton's piece does he make a case that certain traditional Chinese values might be advantageous or even virtuous in the modern world (in fact, quite the opposite). I can't help it - I'm a good liberal, and this makes me uncomfortable. I'd venture, a little tentatively, since this is only a small excerpt from a much longer work, that this lack and even downright dismissal of 5,000 years of cultural traditions somewhat undercuts Hutton's larger argument.

I will say, however, that my first time in China, back in the beginning days of Deng Xiaoping's reforms, gave me an appreciation for the American Constitution, Bill of Rights and the rule of law that I'd never had before. And also, as Hutton states, the absolute necessity of following our own values.

As for China's future, Hutton concludes:

My belief is that what is unsustainable is not sustained. Change came in the Soviet Union with the fifth generation of leaders after the revolution; the fifth generation of China's leaders succeed today's President Hu Jintao in 2012. No political change will happen until after then, but my guess is that sometime in the mid to late 2010s, the growing Chinese middle class will want to hold Chinese officials and politicians to account for how they spend their taxes and for their political choices. What nobody can predict is whether that will produce another Tiananmen, repression and maybe war if China's communists pick a fight to sustain legitimacy at home or an Eastern European velvet revolution and political freedoms.

So what do you think?