Magazine

A Slipping Dragon?


Our July 23 Cover Story, "Broken China" posed a provocative question. The article went beyond China's flashy fa?ade??he Starbucks (SBUX) caf??s packed with young people surfing the Internet and streets clogged with shiny new cars??nd examined the enormous challenges confronting the country on its path to becoming a modern industrial power. With China's dangerous products, overheated stock markets, endemic corruption, and a spreading eco-crisis, the mainland's growth-at-all-costs economic model is looking increasingly unsustainable. Worse yet, the involvement of local Communist Party officials in all facets of business makes it difficult, if not outright impossible, for Beijing to press ahead on reforms to build a social safety net, clean up the environment, spur innovation, and make China's capital markets more efficient and transparent.

As soon as our magazine hit newsstands and went live on our Web site, letters and e-mails began to stream in. We were struck by the passionate defense of China from readers who accused us of unfairly taking Beijing to task. And several suggested that if we were to examine the U.S. through a similar lens, we might well find comparable ills. But many readers hailed the article for asking tough questions about whether China will be able to overcome its problems and develop into the world's next superpower. Here are some edited excerpts:

For years now we have heard endless stories about China's labor-cost advantage being the reason so many U.S. factories have been shuttered, with production being shifted to China. The U.S. just can't compete, we're told. But the real cost advantage China has over the U.S. is the lack of oversight and regulation obvious in the poisonous air and water in China. The Chinese public puts up with environmental abuse on a scale that would never be tolerated here in the U.S. This is the real cost of cheap imports.

Eric Dalton

Little Rock, Ark.

I find this article a bit one-sided, to say the least. It is obvious that, once again, it is all about China-bashing. What China has achieved in 25 short years America failed to do in 100 years. Some people just refuse to accept the fact that the sleeping giant is now awake. Get used to it: 1.3 billion people don't care about the views of the authors of this article. In time, China will address and fix some of its problems. The writers should concentrate on giving advice to America on how to fix its basket of domestic problems, such as health care, jobs, budget deficit, and lack of government accountability.

Screen name: humanbeing*

When I first came from China to America just a year ago, I could hear or see news about China every day, and most of it was about how fast China's economy is growing. But all I could remember was the corrupt government officials, the poor countryside, and the extremely polluted water and air. The government is uncontrollably digging up minerals, drilling deeper wells for oil, chopping more trees to make space for factories. The system is unbalanced. The economy takes precedence over the environment. Sometimes, I feel that China is more of a capitalist country than the U.S.

Xuewei Wang

Leyden, Mass.

The capitalist system that China is moving toward is a well-beaten path, all its atrocities included. Once one realizes this, China's ascent starts to seem quite ordinary. China's competitive advantage??ith its cheap labor supported by poor human rights, its cheap manufacturing subsidized through lack of regulation, its counterfeit culture thriving through lack of a strong government hand??ill eventually diminish, and its growth rate will stagnate. Then the country will be left with some mighty big messes to clean up.

Ross Carver

Arlington, Va.

I taught English in Nanjing in the late 1980s, and from what I've read in this article it seems that despite the warp-drive growth rate and the glitzy Shanghai skyline, a lot of things, particularly the environmental problems, have hardly changed at all. That's doubly true for the Communist Party cadres. My Chinese friends called them rascals then and are still calling them rascals now. Official corruption has been an important factor in the collapse of every imperial Chinese dynasty for over 2,000 years.

Screen name: Mike Gallagher

There are those who defend China by saying: "The West took several hundred years to reach its current level of technological development, social justice, and concern for human rights and the environment. Let's be patient." But if China started its industrial revolution with modern technology, why doesn't it also embrace a modern mind-set? China adopted only the worst parts of capitalism: greed and selfishness. It has no use for democracy, human rights, social justice, and environmental protections. With its new wealth and technology, China will become a bully and menace to the world.

Screen name: Chang Liao

I had to keep coming back to your title page, Broken China, to realize I was reading about "them" and not "us." "Why then is it so hard for this same government to crack down on exporters of tainted seafood, toothpaste...?" How many millions of illegal immigrants are now in the U.S.? "Shanghai's stock exchange...an even bigger casino." Ever heard of Enron or WorldCom? "In its pursuit of growth at all costs, China skimped on investments needed to provide basic affordable health care..."Seen Sicko yet? "...Local Communist Party officials enjoy wide latitude over social and economic affairs." Who's the ex-mayor of Newark (N.J.) who was just indicted on multiple counts? "China doesn't lack the finances to fix its shortcomings, and it has the legal structure for regulating the environment, health care, and worker safety." How much are the wars costing? Was that $12 billion a month? How many Americans are in favor of them? How many homes, post-Katrina, are considered fixed? Puh-lease. Give the Chinese a break; at least they're trying.

Dan Coughlin

Garwood, N.J.

I am from China, and I think this article is fair. Most Chinese are conflicted between pride for our country's development and concerns for its precarious social, legal, and economic infrastructure. I've seen a lot of traditional values eroded to make way for progress, and it's disheartening. But I do believe that a moral backlash is imminent and China will act swiftly to clean up its act, or risk losing a lot of face.

Screen name: Chanalyst

"Can China be fixed?" is the wrong question. The right question is: "When will China be fixed?" Yes, the problems are daunting??ne-party rule, environmental devastation, endemic corruption, and intellectual-property piracy, product quality problems, and a volatile stock market. But China's precarious path is the same one followed by Japan, South Korea, and Taiwan to their current successes. The four Asian cultures also share the tools for fixing all things?? strong work ethic and high value placed on education. It's too bad that we Americans don't share the latter!

John L. Graham

Paul Merage School of Business

University of California at Irvine

Irvine, Calif.

* All comments signed by screen names are from BusinessWeek.com.


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