• Highlights
• The two Chinas
• Controlling information in a capitalist system
• Multinational corporations and China
• Could the China model become our future?

[We have these headline figures of 8.5 percent economic growth in China. How many people are benefiting from this growth?]

It's a difficult question. On the one hand, China's economic growth has allowed the government to lift out of poverty 200 to 300 [million] people in terms of annual income, but at the same time, because capitalism is totally unchecked in China, there is no mechanism for balancing it; there is no control over what the government chooses to do. The past 20 years have seen the emergence of a true labor underclass as in the sense of Europe in the 19th century. …

China has the most dangerous coal mines in the world, with miners dying every minute as we speak. Migrant workers coming from the countryside do very dangerous and hard jobs in the cities, and they have not been allowed to really participate and enjoy the benefits from this impressive economic growth. You have also farmers. Maybe most of them have benefited, but in the last 10 years, the phenomenon of land officials stealing the lands from the farmers has become totally out of control. Even the government admits this.

So you have this mounting population which is deprived of its main way of life, and what you see in China is this growing pool of resentment from the Chinese underclass that is progressively spreading over China. There is no coordination yet. Everyone has specific grievances: workers, their work conditions; … farmers are protesting because land was taken away from them. …

But on this background of the negative impacts of the economic reform, you have also very clear policy choices made by the Party, where [they] put everything for economic growth and basically let society fend for itself. … Education and health care, which are the two main benchmarks for the advancement and the progress of the society at large, have totally collapsed in the past 20 years. Education used to be free and accessible for every child in China. The constitution stipulates that you have the right to a nine-year compulsory education. It's not the case. There is not one kid in China that doesn't have to pay to go to school, and not only the school fees but the book fees, the heating fees, an array of fees. Teachers don't receive their salary; they're not paid for a year, two years. You have demonstrations of teachers, especially in rural areas everywhere.

Health care is another area that has been totally neglected. You have to pay in China for any kind of medical care, and this cost is prohibitive for a lot of Chinese people. A Harvard Medical School study found out recently that illnesses or accidents are the main cause of falling into poverty for Chinese people. That means that if you're a farmer and you have an accident or you get a certain disease, the health bill is going to be so incredibly high, the whole family will have to contribute. Everybody will have to pay for taking your father to the hospital, and in the end these people will be so much in debt that they won't be able to make a living for the rest of their life, and you have hundreds of cousins, of people whose case this is. Many ordinary people can't afford medical care. They don't go there.

Of course you don't want a return to the totalitarian system just on the premise that health care and education was provided, but it really begs the question, what is in the mind of the Chinese leaders? Is it to make China a rich and powerful country on the international scene, or is it to try to bring into the 21st century the entire Chinese population? I think many indicators show that they just think that part of the population is expendable.

One of the big discriminatory factors in China is the household registration system, the hukou. It's a system in which if you're a rural resident, technically you don't have the right to take residence in the cities. This system is unique in the world, and it explains how China has been able to concentrate so much wealth and development in the cities, all these glittering buildings that you see everywhere, all this prosperity, order and cleanliness, because it has denied the very people who built this any enjoyment of the cities. Migrant workers go to cities [to] build, do something, work [at a] very low wage. Sometimes they're not even paid, and then they move to another job in another city, and of course a fraction of them progressively integrates the urban society, but they're always second-class citizens.

There is a lot of consent from China, from the population, about the current leadership, but the question is, is it informed consent? It's not, and that is why China is so insisting on controlling entirely the media, the Internet and any kind of information. This is because they want to conceal the true cost and the hidden human toll of the economic model that they have chosen on which so much of their legitimacy rests.

[You've said that one should consider how there are actually two Chinas.]

There really seem to be two Chinas today: … China A and China B. China A is all the major big cities where business men and foreign governments go: Beijing, Guangdong, Shanghai, Shenzhen. … [It's] modern and confronting a lot of the problems that developed countries are facing: … problems of urbanization; too many cars; social problems; the rise of criminalization; the education, health system; the judicial system; lawyers and etc. These are some of the problems for developed, rich or getting-richer countries. …

Then you have China B, the undeveloped or developing China, the China which is the vast majority of the country, the majority of the population and the majority of the land mass. This China in development is still very poor, not getting very much better, because all the economic growth is concentrated in the cities, and they face developing countries' problems: not enough water, land, economic resources, infrastructure; a very low education.

These two sets of problems are very different and call for very different responses, but the way that China is governed … is an absolute top-down, autocratic, macro way of doing things, and it's a one-solution-fits-everything, and very little attention is paid to whether China B can catch up with China A.

This is particularly relevant for human rights issues, because many of the issues that the Western countries have been engaging China on are really China A types of problems: how to build an efficient legal system; how do you train lawyers; how do you train judges; how do you build transparency in the government, and etc. All these are legitimate problems, but they seem to leave out, as the Chinese rulers have decided to do, most of the Chinese population. It's a profoundly unequal system, and it's a system whose contradictions we see every day are playing out more and more.

There is a pool of unrest in China. There is a lot of ferment for change. People are pressing the authorities; they are defending their rights; they are trying to find a way to have a secure life. … They are trying to get the attention that they need to have these problems addressed, and this is where the old reflexes of the one-party system come into play. Any kind of organized dissent is immediately crushed down, from bloggers on the Internet to lawyers who want to defend striking workers to peasants trying to organize because their lands are taken away to journalists who are going past the line that the Propaganda Ministry sets. As soon as you do something that the government considers to be a challenge, then you're immediately put down.

[What are your thoughts on where this might lead?]

Well, China is on a knife edge, and if we in the West are not aware of this, the leaders in Beijing are very much so, and this is their top concern. They know that the stability is very fragile. They know that there is a lot of the economic disparities. They know that they are resisting what society demands, which is more transparency, more freedom, more accountability from the government. And also they see that through the Internet, through the globalization of China, more and more of the true picture of China will emerge. …

[The separation of the country into A and B, First World and Third World -- do you think that is a deliberate policy or not?]

I think that the Chinese government and the Chinese leaders are very cynical, and they do think that part of the population is expendable. They do understand that part of the Chinese economic miracle is based on the fact that they have such an abundant, cheap, pliable workforce, and that can feed the needs of manufacturing organization and all the kind of works that needs to be done in the cities and in the developed areas.

Certainly not abolishing the system of household registration, … [The hukou is] certainly a decision that was made rationally on the basis that it served a purpose, and the purpose that it served is you have an underclass here that is entirely pliable, given that they have no residency rights; for instance, they can't fight an abusive employer; they can't fight for unpaid wages; they can't go to the police to complain if they are robbed or anything. … So they will come, contribute their work, get paid very menial, very minimal wages -- and often there are problems; they are not paid -- but then they will have to leave, to move or to try [to] lie low in the city because they are not entitled to residency.

Even if China today is moving towards the abrogation of this system, it still insists on the system of residency permit, so that cities like Shanghai, for instance, can say that what they want is high-quality migrants; they don't want the low-quality migrants. They'll restrict certain professions to certain types of people with certain education levels and so on and so forth. …

They are very much an underclass. As for education, there is a lot of shocking language in government official publications. They always talk, almost as kind of society eugenism, [about] people of low quality. That's what you hear a lot for minority areas, for instance: … "Oh, here it's not very developed; it's very backward because the quality of the people is very low." This is official discourse. It's rulers deciding that one part of the population is worth less than the other, and certainly the emphasis in education is put on elite education, on the top universities to get the top student and to get the best elite that they can, but they're not so much concerned about providing basic education or the best education you can afford, and you can afford a lot of education when you have 10 percent GDP growth for the past 20 years. …

[I]t shows clearly how the imperative of maintaining this economic growth, which is so crucial to the legitimacy of the Party -- let's be frank. Without such an economic growth, the Party will be in very, very big trouble and will probably crumble down, so they need the sustained economic growth, and they're ready to do anything to get it, including leaving one part of the population as the slaves of the modernization effort.

[Do you think withdrawing free education is deliberate?]

I wouldn't say it's deliberate in the sense that they decided not to provide education. … [T]hey didn't remove free education; they let education become fee-paying. They let schools impose fees simply because the budget allocation is not adequate in the beginning. When the school is not receiving sufficient funds to operate, well, they have to get the money somewhere, and they're getting it from the parents. …

It is a conscious choice and a conscious decision. China is a country that allocates one of the smallest parts of its GDP [to] education among developing countries. You have African countries whose share of the GDP allocated to education is larger than China. There is a deliberate choice in not putting education as high as other priorities.

What are the priorities? The essential economic priorities [are] at the service of a political program, and the political program is, "Keep us in power." With economic legitimacy, which is the only legitimacy the Party has today, there's no ideological legitimacy. No one in China believes in Mao Zedong thoughts or in communism; people believe in free markets. … What you have is a system where economy growth is the legitimacy, and it is crucial for the Chinese government to continue to have this economic growth so that it has the legitimacy that allows [it] to stay in power.

[When China began reforming state-owned enterprises, millions were thrown out of work. But China seems to have avoided some of the cataclysms that people prophesied.]

Yes, certainly. In 1992, three years after the Tiananmen massacre, Deng Xiaoping went on a tour in Southern China to relaunch the economic reform. This was a crucial moment for China, and this embrace of capitalism and economic reform actually saved China from a Brezhnev-like situation of the USSR. But we shouldn't give too much credit to the government as well. All they did was to remove artificial communist ideology-inspired restrictions on economic activities. Once they lift off this, it's basically laissez-faire policy, while the natural dynamism of Chinese society produced this outstanding result. … We should never forget that China has the capacity to overgrow a lot of its problems just by the sheer energy of its economic development.

But certain problems will not disappear, and these problems are essentially political reform. China is actually less advanced in terms of political reform than before 1989. There's less freedom; there is less steering of new ideas on how to proceed to political reform in China than before the '80s. It seems to be pretty unsustainable to continue to have economic reform without never having political reform. …

[Can an authoritarian one-party system be combined with a capitalist economic system? Can that work?]

Yes. China has succeeded in controlling information in a capitalist system, and they have succeeded in censoring the Internet. The Internet in China today is censored. It doesn't mean that you can't find dissenting postings or articles on the Web; it means that at large, the Internet is censored. If we go back to the early '90s, the famous President Clinton quote, "Trying to control the Internet is like trying to nail Jell-O [to] the wall" -- well, the Chinese government effectively managed to censor the Internet in China, and they've managed it basically by using the same mechanisms [that they use to control the] press; that is, the responsibility ultimately for every posting that is made, every article that is posted, lies with the operator.

The keystone of the system in China is that ownership is censorship. When you operate a Web site, when you operate a newspaper, when you operate a radio program, when you're a foreign company operating in China, you are responsible for whatever is put outside, and if something goes wrong you will be punished, and you will be penalized. They've managed to do that as well as build an architecture of control that goes from very sophisticated imported technology from the West. … Software equipment, hardware, routers -- everything that they have imported from the Western companies have helped them censor the Internet, but this is the hard way of controlling information.

This is real censorship: You block access to Web sites. The BBC in Chinese, for instance, is blocked. You block or you jam the broadcast of CNN when there is a mention of Tiananmen, etc. There is also a lot of middle-ground censorship which is done by the operators, the Internet operators; which is done by the Internet police, the tens of thousands of policemen who are scouring the Web and trying to identify whoever is posting what they call subversive material.

But really the most efficient weapon -- and the Chinese government has understood this -- the best censorship is self-censorship, so responsibilize the operators, draw vague lines so that people never know whether they're within the bounds or without, or beyond the limits, and then make an example from people -- arrest and sentence heavily some people. It's totally arbitrary, because some people have been sentenced to 20 years in [jail] for something that their neighbor is doing every day, and he is fine.

… [T]hrough these hard methods and soft methods, the Chinese government has effectively managed to control and censor the Internet. Now, whether they can manage to do it in the future, we don't know yet, but we should keep in mind that basically since the Internet started in China, a lot of commentators and analysts from the beginning have written off the Chinese government's capacity to control the Internet, … and if we continue to write off China's capacity at controlling public opinion, freedom of information, the media scene and the Internet, it's very unlikely that it finally collapses.

What we see today is that in this system, the state doesn't need to control all the information, like in the Mao era. What it needs is to occupy the high ground. It needs to be the authoritative provider of most of the information, and if there is a little bit of dissent and criticism there, well, we can deal with that, because the Internet has no memory of China. … The Chinese Internet is ephemeral. Every day they wash and they tear off the pages that they don't like. …

This is a qualitative difference. This makes all the difference. You cannot control the information all the time for all the people, but you just need to control it in a systematic way, so that no knowledge is accumulated. In a sense, that's the old weapon of any operator in government: Keep your population ignorant. This is so much easier to rule. With the Internet they do manage to do that, and I think that's the problem for the West, is that they would never have managed, technologically speaking, without the collaboration and the help of Western companies. …

[A]ll the major IT companies in the West have not only embraced the Chinese market, they have bent over backwards to please the Chinese government, they have proposed to tailor their information system to fit the political censorship needs. Yahoo have very early on signed a self censorship pledge, Google has followed. Cisco is tailoring systems for the police in China. …

[What should one make of all the advertising, the street-corner stuff, the kids' stuff and the entertainment that seems pervasive in the urban areas?]

… Most of the analyses of China are very skin-deep. People go to Beijing and they see a Starbucks company and people with mobile phones buying Nike shoes, and very naively they think, oh, that's it; China has embraced capitalism; it's like us now. I count the number of articles that I've seen in the international press [that start] by mentioning the Starbucks café, as if a commodity that you buy from an international chain makes you necessarily a modern and open, diverse country.

But this goes beyond this. What the Chinese government have understood is that they could enroll entertainment and, what the Romans always said, the circus games in order to consolidate their control. So it's basically money and MTV, and the instrumentalization of entertainment, of soft news, entertainment news, soft pornography that is prevalent all over China is also helping the state to keep its population ignorant. But as opposed to the Mao era, where they were ignorant and basically unhappy, now they're blissfully unhappy, at least some parts of the population.

When you think about Xinhua … News Agency, which is a state agency, part of its function is to provide news and relay the propaganda, and part of it is to collect internal information for the exclusive use of the Party and the state. The main page of China News information, if you go at the bottom, there's always a number of pictures of women who are very lightly dressed and will provide an immediate link to some other pages of soft porn. And this is the state agency. We have a very conscious decision here. This is not something that is commercially driven.

… [T]his is a very worrying phenomenon, and this is all the more worrying where this entertainment, or the presence of this entertainment in China, is seen by the West as a sign of liberalization. There can't be a graver mistake. …

[Could you talk about the surge in multinational companies now doing business with China?]

I think it's a marriage made in heaven for the Party, because the goals of multinationals and the goals of the Party are very much aligned. Both want to have minimal civil responsibilities or responsibilities towards society, and both are engaged [in] a maximization of power, and both have very manipulative and cynical views of individuals and citizens. … I think this is the logic of organization, this is the logic of bureaucracy, to expand and standardize and focus on their main result, which is the bottom line.

But of course, for a multinational to operate in a country where they don't face any of the responsibilities and constraints that they have in a democratic society -- that is, the demands on the accountability of the impact of their practices -- and also check[s] and balances that you have in democratic countries and also in democratizing countries or even developing countries, the fact that this is airbrushed by the police state aspects of the Chinese system is fantastic for them, and it's much [more] comfortable than anything else.

A very telling example is the Formula 1 racing track in Shanghai. Formula 1, which is a huge business, of course, has said on the record that this project would never have been possible elsewhere. Only in China could they do that, because you have to forcibly evict, demolish, put enormous resources into building this track, and yes, it would not have been possible to do it at that pace in a democratic or in a normal country, because in a normal country, you cannot forcibly evict tens of thousands of people just because you want to have a nice international project in your city. The Shanghai government has poured money into this. We are talking about billions of yuans, and the Formula 1 organization, of course, is extremely happy with this. They can have all the benefits of having a partnership with a market-savvy government without having to pay any of the costs of being a responsible company or a responsible social actor.

For the Party, of course, this serves numerous objectives. A, it demonstrates to its population how the government has been embraced by the foreign world, and this is so important for them to show that the foreign countries are actually supporting the Chinese leadership and that everything is all and well. [B,] they can also make a window of the modernity of Shanghai or other cities so as to attract more foreign investment, and they also provide some sorts of entertainment for the new urban class. So all this is politically risk-free, generates enormous income, allows China to weigh more and more influence in the international business world, and everybody is happy.

The people who are not happy are invisible. They have been erased; they have been airbrushed from the scene. All the people who built this track, migrant workers, have disappeared. They've probably moved to another project in another city. …

Foreign corporations are very savvy about this. They like predictability; that's the good thing. If you do business in Brazil, you can have a change in government at [one] point or another, or you can have a province or region that suddenly is in conflict with the central government. All this is impediment for the development of the multinational. In China, you have a very predictable political system so far, the one-party system, and it makes [doing] business easier.

[Do you think the China model could become our future?]

This is the fundamental question that politicians and governments in the West should address. Maybe we don't have an answer yet, but it's inexcusable that they don't address it when they decide what is their diplomacy and what is their policy towards China. They don't address the fundamental questions of if you nurture, if you help, if you strengthen a one-party dictatorship of the size of China, what impact can it have on the world? …

China is supporting the worst dictatorships in countries around the world: Burma, North Korea, the autocracies of Central Asia -- Uzbekistan, Kyrgyzstan, Kazakhstan -- where the worst of the human rights violations against people -- endemic torture, a total lack of rights and free press -- are occurring. It's no coincidence. China is influencing the world. Look at China News Agency [Xinhua], which has a function of propaganda so powerful and is so backed financially and operationally by the Chinese government that it has become an internationally major source of news. If you go in a European country that is not using English language -- say France, for instance -- you will see that 80 percent of the news on China comes from Xinhua, and there is no critical news on China on Xinhua. … A big power like this can shape their reality more and more.

We're not talking about the "Yellow Peril" here; China's rise is good, and can be good for the world, and can be good for its Chinese citizens. There is no doubt about it. It's not about containing or punishing China because China fails to live up to the standards of the Western world, but it is about not allowing vicious parts of the Chinese political system to claim that they act on the behalf of the Chinese population, because they are not. They are trying to survive and keep in power at the expense of their population, if needed.

At the moment, they have managed to create this so-called middle class, which is actually almost a plutocracy in Chinese terms, and so they have managed to consolidate their legitimacy and to do a lot of things that are expected from government. But ultimately it doesn't answer the basic question: What will be the impact of a China that is undemocratic, unpluralistic, that is profoundly suspicious of the Western world, that is profoundly aggravated, and that is nurturing nationalism -- and a form of extreme nationalism[?] …

What a disappointment for all the people who have always maintained that economic growth would mechanically lead to democratization. Well, this is not the case, and one of the reasons why it's not the case is because Western countries have chosen to close their eyes on all the negative aspects of China's economic and political model, because their interest lies with making money with China, and the long-term sustainable goals are not addressed, and time is running out. The level of unrest in China is rising.

Farmers, workers, common people, after they have gone through all the channels that were available and that nothing happened after they petition, after they try to go to court, after they try to have articles published, after they try to reach the outside world, human rights organizations or media, when nothing worked, they resort to unlawful means of contention. They block highways; they block railroads; they encircle Party or government headquarters. You have rising violence, and this is a situation that is dangerous for the Party, but that is also dangerous for international society at large, because we don't want a chaotic China. We want a stable, prosperous, pluralistic China that is a model for a developing country. We don't want them to be a model of how to be a one-party system and have economic growth, and the lack of faith in the democratic principles that the Western countries have shown.

[Can you talk about the legacy of the 1989 Tiananmen crackdown?]

I think that June Fourth is … the backdrop of everything political with China. It is because of June Fourth that Chinese citizens are not challenging directly the state, because they know that if they do, that is what is going to happen. They will send the army and tanks.

All the strategies developed by Chinese citizens today to push for greater individual space, greater security, greater predictability, greater transparency for government, a better judicial system, more privacy, etc., all this is predicated on the fact that otherwise you're doomed. It's political suicide to oppose the Communist Party. Even people who don't know about June Fourth have integrated this principle through, for instance, their parents or the peer pressure coming from Chinese society, because maybe they don't know about June Fourth, but their parents will know, and if they see their kids starting to engage into political commentaries, they will immediately tell them to stop because of the risk involved. So June Fourth is still the backdrop in China. Whether people know it or not, it is still the backdrop; it is still floating in the air. If you confront directly the government, that is what you get.

But in '89, China missed a big chance for organic evolution. The population was still behind the system after the excess of the Cultural Revolution. Certainly the open-ended reform period in the '70s and '80s was hugely beneficial for the society. They wanted to [go] further. They were the first to ask for more free markets on which Chinese governments today base so much of its strength. Intellectuals, students and workers and residents, urban residents, were all for this kind of organic progressive reform.

Now what we see is more and more people are driven to despair and the criminalization of a lot of local governments who can't maintain order through normal ways, so they hire thugs and secret societies or criminal gangs to enforce order. … All this system shows that tensions are much more acute today. This year, in 2005, the minister for public security officially announced that there had been 74,000 mass incidents in China over the previous year, a tenfold increase over the previous year. Even by Chinese official standards, which means that they're probably choosing and massaging these numbers, this is still a very good indication that, yes, unrest is rising in China, and it doesn't have the degree of coordination that it needs to be a threat to the Party, but it's profoundly dysfunctional for society, because there is no way to mediate social contradiction, social problems. There is no judicial system; there is no labor union, so you can't actually manage industrial relations properly. All the government is doing is when there is too much of a problem, they go there, they arrest the leader, and then pay off the others.

Well, China is a big country. This is not a viable way of managing the country, and this is what we're seeing everywhere, and the central government is failing now, and a lot of the things that it's trying to address -- environmental pollution, very unsafe mining conditions, certain medical scandals, a lot of social evils, social problems -- the government cannot manage to address it. But the reason is not because the local officials are bad. It's because they don't allow free press; it's because they don't allow people to associate. You can't set up a parents' association that is independent in China. You can't set up any kind of organization that calls for accountability from the government [or] use the press to put pressure or alert on issues. You can't have anything like this. So if you remove this counterweight, [the local governments] have a choice which is not a deliberate choice -- "Let's ignore these problems" -- but which is a cynical choice -- "Let's not do these reforms because they will jeopardize our hold on power. The free press will jeopardize [it], so let's not have it, whatever the cost," and the cost is rising.

[What are your thoughts about the efforts made to try to erase the events of Tiananmen 1989 from the collective memory of the Chinese people?]

Well, there's no doubt that Tiananmen on June Fourth is political dynamite for the Party. They used the army to kill and crush peaceful demonstrators, and this is something that the Party has been trying to erase ever since. … But what it does to the Chinese collective psyche is, of course, very dangerous. It's a distortion of history; it's building the future of the country on a lie. …

The resentment created by the June Fourth crackdown is still there. There is no political space to express it; there is no public space to express it. There are no media; there are no books; there are no intellectuals that can talk about it, but it is there. It is just under the surface. … Probably it will re-emerge at the first occasion if there is political change or transition. … There is a lot of political capital to be gained in this, and if the leadership enters a crisis or a mid-crisis, there will be people who will want to tap into this political legitimacy of the June Fourth issue to further their own goals.

So don't write off June Fourth. It is not a model for what you can do about China. Chinese people know very well this: You have to do things under the radar; you have to push the envelope progressively. But at the first occasion, it will re-emerge.