Steinfeld - Playing our game why Chinas rise doesnt threaten the west

PLAYING OUR GAME

PLAYING OUR GAME

EDWARD S. STEINFELD

Why Chinas Economic Rise Doesnt Threaten the West

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Copyright 2010 by Edward S. Steinfeld

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Library of Congress Cataloging-in-Publication Data
Steinfeld, Edward S. (Edward Saul), 1966

Playing our game : why Chinas rise doesnt threaten the west / Edward S. Steinfeld.

p. cm.

Includes bibliographical references and index.

ISBN 978-0-19-539065-0

1. ChinaEconomic conditions21st century.

2. ChinaForeign economic relationsUnited States.

3. United StatesForeign economic relationsChina.

I. Title.

HC427.95.S74 2010

330.951dc22 2009052386

1 3 5 7 9 8 6 4 2

Printed in the United States of America on acid-free paper

TO MY PARENTS,
BARBARA AND LEONARD STEINFELD

TWO THINGS TRUE of all books: They never get written as fast as the author would like, and they always depend on more help than could ever be adequately acknowledged. This book is no different. For me, being an academic is all about being the ultimate student, a person continually graced by the unstinting generosity of all manner of teachers. Some of those individuals have been my official teachers, my professional mentors and colleagues. Others have been unofficial teachers, people who, frequently through their participation in field interviews, have helped me to understand the world through their own privileged lenses. Still others have been my own students, budding scholars who through their brilliance, their questions, and their fresh perspectives have profoundly influenced my views. I cannot mention each and every one of those teachers here, both because the list of names would be endless, and because some of those individuals, for reasons political or otherwise, prefer to remain anonymous. Nonetheless, I am grateful to all of them. They have provided generously, and never asked for anything in return. This book could never have been written without them.

I would like to take the opportunity, though, to thank a few of my teachers by name. Through the course of this project, the MIT Department of Political Science and the MIT Industrial Performance Center have served as intellectual homes. At those venues I have had the honor of learning from a wonderful set of colleagues, particularly Suzanne Berger, Richard Lester, Richard Locke, Michael Piore, Richard Samuels, Barry Posen, Stephen VanEvera, Charles Sodini, Tayo Akinwande, and Timothy Sturgeon. At MIT I have also had the good fortune to be surrounded by an extraordinary team of fellow China specialists: Yasheng Huang, Lily Tsai, Taylor Fravel, and the lateand incomparableLucian Pye. Several of my current and former students at MITco-researchers, reallyhave deeply influenced the ideas presented in this book. I particularly want to thank Edward Cunningham, George Gilboy, Douglas Fuller, Danny Breznitz, Jonas Nahm, Kyoung Shin, Gao Xudong, and Greg Distelhorst.

Moving slightly farther afield geographically, through the course of this project I continued to benefit immeasurably from the mentorship of my teachers at Harvard: Roderick MacFarquhar, Dwight Perkins, Ezra Vogel, and Tony Saich. And still farther away, but no less crucial, I have benefited tremendously from extensive interactionsand often extended staysat Peking Universitys China Center for Economic Research (where I would particularly like to thank Professors Justin Yifu Lin, Yi Gang, Hai Wen, Yao Yang, and Hu Dayuan), Tsinghua Universitys School of Economics and Management (where I particularly benefited from the guidance of former dean Zhao Chunjun), and Tsinghuas School of Public Policy and Management (where I would like to thank Professor Xue Lan).

A number of other scholars, policy makers, and business practitioners have been unfailingly generous in sharing their wisdom. I would like to mention in particular Ambassador Chas. Freeman, Ambassador Erwin Schurtenberger, Douglas Steinfeld, Professor Peter Nolan (University of Cambridge), Professor Ashutosh Varshney (Brown University), the late Professor Ellis Joffe (Hebrew University), and Dr. Mark Qiu.

This project could never have been completed without financial support of a number of organizations and agencies. Crucial portions of the research were supported by grants from the following: the MIT Sloan School of Management China Program (where I am especially grateful for the steadfast support of Senior Associate Dean Alan White), the MIT Industrial Performance Centers Project on Globalization, the MIT Study on the Future of Coal, and the Essonne Development Agency of the Government of France (where I would particularly like to thank Mr. Thierry Mandon).

The book itself would never have come to fruition without the guidance and advice of Lynn Franklin. At Oxford University Press, I am indebted to David McBride, Keith Faivre, and all their staffers who worked tirelessly in speeding the manuscript through the publication process.

My teachers are spread across the world. Some of the most important ones, however, are those nearest at hand, my family. My wife, Zhuqing, a scholar with plenty of professional responsibilities of her own (all while being a fully engaged mom), has been an unfailingly generous intellectual companion, sounding board, and cheerleader. So too have my sons, Daniel and William, who have never stopped asking questions and coming up with interpretations as theyve traveled the world through the course of this project. My great hope is to be to them the kind of teacher that my own parents, Barbara and Leonard Steinfeld, have been to me. It is to themmy first teachers, of course that I dedicate this book.

In the summer of 1989, I arrived in China for a one-year stay as a visiting faculty member at a major Chinese university. Two decades have passed since then, a blink of the eye in the grand sweep of things. Yet, the China of twenty years ago is so far removed from the present as to feel like a distant dream, a sort of alternate universe to what we witness today. Had you in 1989 predicted that China twenty years down the road would look the way it does today, you would have been laughed from the room and with good reason. The things we take for granted in present-day rising Chinathe phenomenal growth rates, the high levels of exports, the vast foreign exchange reserves, and the sheer robustness of the system even in the face of serious worldwide recessionextraordinary though they may be, are the least of it. These are but surface manifestations of far deeper changes in Chinas social, political, and economic core. Chinese society in its most fundamental relationshipsthat between citizen and state, citizen and economy, and citizen and fellow citizen has undergone a profound revolution. That revolution, Chinas capitalist embrace, is the subject of this book.