The following is a transcript of
"WomenMatter - Facts and Trade-Offs - China and the U.S. - Us and Them"
From February 6, 2006



WomenMatter - Facts and Trade-Offs - China and the U.S. - Us and Them - China has a unique 5,000 year history but many Americans are suddenly surprised that the Chinese not only exist, but can do "anything we can do." We are connected to China in both buying and selling as well as serious problems with pollution and the possibility of diseases that spread. When we pay attention to how and why China behaves, we are forced to notice how very western and American and Judaeo-Christian we are. So different from them. Is the future one of competition or one of cooperation? Is it all about us and them - or is it about us in a much bigger global world? Does either political party in this country understand enough to lead?

Intro: How can a one party system that calls itself Communist use capitalism and ties to the United States to promote their point of view? Dr. Bauer highlights when and how and why the Chinese turned away from Soviet Communism to use western capitalism as the engine for their astounding economic development - without changing their basic revolutionary philosophy and purpose.

ANNOUNCER: WomenMatter Facts and Tradeoffs is the place where we take one issue at a time and find the connection between our personal lives and the facts of the bigger system we all live in, and recognize that every idea for making it better has tradeoffs.

This show could have been called the China show, pointing out how much of what we buy and sell is affected by China’s size and the speed of their economic growth over the last generation. It’s clear, however, that understanding what makes China tick requires a startling look at ourselves in the mirror.

The two nations – theirs so many thousands of years old and ours just a couple of hundred – are built on different foundations. And those differences show up as we address WomenMatter’s key questions. How much of this do I already handle on my own? How much of this do I wish to continue to handle by myself? How much of this would I rather handle as a community? How much better would it be if we handled this together as our government, which is us? And now, how much better would it be if we were to handle this together globally?

Dr. Nancy Bauer, CEO and Editor-in-Chief of WomenMatter, teaches at the University of Pennsylvania about staying competitive in a world that is dominated by China and the United States.

BAUER: This show is about two questions. Who is China? And how do we Americans look at China and the Chinese? Are we in competition with one another because we’re in the same economy? Are we so worried about a job going abroad that that’s all we think about? If they gain something, are we automatically losing something?

We Americans need to take a close look at China to understand not only what they’re doing, but how they see it. So many Americans seemed surprised and shocked at China’s growth and success, as if it just happened recently. But actually, we shouldn’t be surprised. China has had a long, long history of being interested in technology and interested in science. And we all have heard about how they invented gun powder and printing. And that seems so long ago, and then we all thought in this country that then they had years and years of darkness when they didn’t invent anything.

It so happens that the Chinese have always been interested in science and technology, and have always paid attention to education and to teaching and learning. So that what we’ve got to learn and understand here is that they have a workforce that has spent years paying attention to what they’re doing, and they haven’t been sneaking up on America. They made this big move to modernize, even the recent one, a whole generation ago while we weren’t thinking about them at all.

They actually planned to leapfrog from agriculture and peasant poverty to manufacturing, and now to services. And they’re right on schedule for that time-table. Their leaders planned to use, first, the Soviet model. And then when that didn’t work, they turned to free enterprise and capitalism to make the money they need in order to fulfill their Communist belief that their promise to the people is that the government is supposed to spread the wealth to the millions who are poor. They take this very seriously.

So in this history of China- and you will see on our website there is a long history that is posted there for your interest and understanding- it began with Deng Xiaoping, the leader after Mao Zedong, the one that we all know so much about. But Deng Xiaoping in 1978 actually made a plan, and they are doing it and following it precisely.

The plan was the turn away from the Soviet model to the West, and to the U.S. To learn English, to travel to the United States, to send thousands upon thousands of students to study here, and to bring them back in order to help teach the others what they needed to know to catch up from the years when they were not paying attention to it.

They had the terrifying years of both the war, where the Japanese took over China, then the civil war between the Communist and the Nationalist government, the one that went to Taiwan, and then when Mao came into power, and he had the terrible failure of both the Great Leap Forward and the Cultural Revolution that sent the intelligentsia away to the country side.

All of that happened, but Deng Xiaoping came back from the countryside and wrote and talked, and took power, with a group of people who understood what they wanted to do, and they actually planned it. First they were going to do agriculture, then they were going to do manufacturing, now they’re going to move into services. And they know how to do this and they’ve been planning it for a very long time.

So we turn now to three very exciting interviews with specialists, each of whom knows something particular about what’s happening in China today, about the facts of what’s going on, and the trade-offs. And we can then see, to what extent we need to adjust our thinking about them, and our thinking about us, to match the reality as we hear it from these people who specialize in knowing just what we need to know.

How long has this habit of mind, that’s producing what we think of as such a remarkable great leap into this wonderful future, how long has this been going on? Will they change when they become more capitalist like us? Or will they use capitalism as they say they will, as a way to make a productive engine to make China richer and better for their hundreds of millions of people who are still poor? How, or where, is their leadership? And can they lead, if they are smart leaders, can they lead if the population doesn’t understand? How about their political system?

So we’ll turn to our three specialists. Elizabeth Economy specializes in the biggest problem China has, which is a lack of natural resources. They don’t have the land and the water that we have, they never had it. And industrializing, which they’re doing, and we are all so aware of, has had an effect of using up land that could be used for food to put factories on, and then factories pollute, and that pollutes the water. And they have a shortage of water to begin with. And that creates health problems, and with the health problems and a huge population there can be epidemics, which would not only hurt them, but could hurt the world. And they’re aware of that as well. So we will hear from her.

And Professor Tu Weiming, from Harvard, who talks about the cultural resources that have lasted through generations and generations, through thousands of years, and about a way of life that gives them strength. What are his long-term concerns? That their relationship to government today, and their concerns about capitalism today might destroy some of the strengths that he feels the Chinese have, and that they can continue to build on.

And then we’ll hear from Albert Keidel, an economist who points out that what China is doing is not necessarily unique, but it is stunningly successful. And what’s happening to their place in the world is happening so fast, now, that within another generation or two they will be a huge economy compared to ours. And they are looking in global ways, and is that saying something to us? If it’s not a competition between us and them, as we call this show, then how do all three of these interviewees talk to us? What do they have to say to the women of WomenMatter?

In order to understand the relationship of China and the United States to each other, we also have to understand the relationship of China and its government to China and its land, and to its resources. Just as we have to do that in our country, and deal with it with our government, we have to look at how China deals with the resources they have, that nature brings to them, and how that impacts and intersects with the economy that we have all seen grow at such astounding rates.

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We bring today Dr. Elizabeth Economy, a specialist in China and the environment and how China’s environment impacts all of us. Dr. Economy is the CV star, senior fellow and director for Asian studies, of the Council on Foreign Relations. She is the award-winning author of a book called “The River Runs Black: The Environmental Challenges to China’s Future,” and she’s currently writing a book on how the rise of China is reshaping the entire landscape of East Asia and a good part of the rest of the world. And is it business of the environmental challenges to China’s future, what have they got and what are they doing with it?

ELIZABETH ECONOMY: Well thank you Nancy, it’s a pleasure to be on your show. I think the most important thing for anybody to realize right off the bat, when you think about what’s going on with regard to China and the environment, is that China is really facing a challenge on every aspect of its environment. Whether you’re looking at the quality of air that the people are breathing, the water that they’re drinking, or the land that they are trying to farm.

And just to give you a couple of statistics to give you a sense of just how challenging the situation is, China has five of the world’s 10 most polluted cities. About 400,000 people die in China prematurely every year because of air pollution. In terms of the water, about 30 percent of the water that runs through China’s seven major rivers is so polluted that it’s not fit even for agriculture or for industry, let alone for human consumption. And about 300 million people drink contaminated water every day.

BAUER: And of course, that’s 300, and we are a country of 280 million ourselves.

ECONOMY: [laughter] That’s right.

BAUER: So that the numbers always startle us, because, what percentage is that of their 1.3 billion population? But we started out with lots of good air, water and land in the history of the United States, as the Europeans came and took over this continent. What did they start out with? They had a shortage to begin with, right?

ECONOMY: No, that’s a fair point. In fact, China through the centuries has degraded the land and polluted the air and fouled its water, and that’s something that most people don’t appreciate. They think that… the rise in China’s environmental challenges has just come over the past 25 years of very rapid industrial development. But even through the Qing, in the 1800s, there were already reports of local protests, because factories were polluting the water.

So this has been a problem that has been a long time in the building. In terms of whether or not China sort of inherently faces a water scarcity problem, it’s true that… in the north of the country, and the northwest, it gets far less precipitation than in the south, which is relatively water-rich. But today, because of water pollution and because of over-utilization of the water in the south, even the southern part of China is facing a water crisis. So this is really, in some ways, a challenge that we haven’t seen in the world before.

BAUER: And so from their point of view, is the government paying attention to this? Or are they pronouncing that everything is just fine, thank you, because they’re… building all of this wonderful economy that is now about to become number two in the world, and maybe soon the number one?

ECONOMY: Right, well it’s just been within the past two to three years that the government has really begun to acknowledge that the situation is having serious implications for a much wider range of sort of social, political and economic issues for the country. And it’s really not because of the environment, but because of how the environment is beginning to affect social stability, is beginning to affect economy productivity.

Because now when you look at various parts of the country you find out that… in the far west of China, or even in southern China, factories don’t have enough water to operate. That has very important economic implications- and the public health implications, which I’ve already touched on. And so for these reasons, I think the Chinese government has begun to sort of stand up and take notice, and said, “OK, we have got to start doing something differently.”

BAUER: So that they’re smart enough to know they’ve got a problem. When I read the China daily newspaper they talk about it all the time, they’re worried about it. What can they do? I mean after all, there are people in the United States who think, well at least they have a benevolent dictatorship there, and they’ll be able to tell people what to do.

ECONOMY: [chuckling] Well, I’m sure in any estimation I would characterize the Chinese leadership as a benevolent dictatorship [laughter], but – dictatorship, maybe. But…what I think is important to understand is that while China has an authoritarian government, and in some cases it seems as though it’s able to control everything from the top down, it really is not the case. So that while Beijing spends a lot of time passing very good environmental protection laws and regulations- oftentimes they’re modeled on those in Japan or the European Union or the United States- what you see on the ground is something quite different. And so when it comes to implementation of these laws, as is the case in public health or intellectual property rights, whatever it might be, local officials have a different set of priorities.

And either for reasons of wanting to grow their local economies and employ people, or because maybe…local officials have personal, financial ties to local polluting enterprises, you find very low rates of implementation of environmental laws. So what has to change, really, is what’s going on on the ground. What has to change is the enforcement apparatus, and the system of incentives to get people to do the right thing environmentally. And that’s very difficult, because you’re talking about systemic change now.

BAUER: And of course we have the kind of flipped over view of this same thing. We have one part of our history, coming out of the Democratic Party, of regulations about the environmental laws. And we have a government now, coming out of the Republican Party, that says we’ve got too much regulation, and therefore it’s unfair to the people in the country who are providing the jobs. We’ve got the problem turned on its head.

ECONOMY: Well I happen to agree with you and, I’m sorry, go ahead.

BAUER: But it’s really interesting to see. So there are issues of what kind of laws do you need, can you implement those laws? And then are you paying attention to the people on the ground, in the local communities?

One of the things we talk about all the time at WomenMatter, is that in our country, as individual voters we can get onto the web, and we can send a message to our Congress people all the time, any day, and tell them I don’t like the way you voted last week, and this is what I want you to do this week. And we can join advocacy groups that mass votes. Because it’s votes and money that make a difference in putting pressure on our government. Over there, what kind of pressures work?

ECONOMY: Right, well of course what they can’t do is what you’re talking about. Which is to essentially threaten local officials that they’re not going to be reelected if they don’t start enforcing the laws and making things right at the local level. But what they can do, certainly, is to organize.

One of the most exciting areas of change in China over the past decade has been the development of environmental non-governmental organizations in China. And the environment is really at the forefront of civil society in China. And many of the NGO leaders are, in fact, women. So it’s a very exciting, very dynamic sort of change. And they’ve gone, in just 10 years, from being primarily concerned with environmental education, biodiversity protection, and recycling issues, to actually working to stop major dams from being developed, and insisting that Chinese officials go through proper environmental impact assessments. And so there’s really been a sea of change in terms of the role that environmental activists on the ground are playing.

BAUER: Are these NGOs, these non-governmental organizations, which as we hear about them in our country, there are politicians who hate them. Because they’re saying they’re non-governmental and we have to make the deals, and spend the money. But are these Chinese people who are in the NGOS or are these international groups?

ECONOMY: No, these are Chineses NGOs. Most every large, international environmental non-governmental organization is engaged in China, from Conservational International to Environmental Defense to World Wildlife Fund, they’re all there in China, because China is so important. In fact not only just for the Chinese people, because China exerts such a profound impact on the global environment. But what I’m talking about are Chinese NGOs. Now they’re largely funded by the international community, because China doesn’t have quite yet an understanding or laws to make public philanthropy really work, but they’re moving in that direction and I expect we’ll see some change in the next five to 10 years there.

But no, these are Chinese NGOs spurred by Chinese interests and headed by some very courageous, in some cases, Chinese women and men.

BAUER: Well we will follow them on WomenMatter, that’s really exciting to hear. And so they’re developing the voice of the people, and from the government’s point of view, the national government’s point of view, it’s useful to them because it makes a difference to the local governments where they don’t have the control.

ECONOMY: That’s absolutely right. The NGOs can serve as a watchdog on local issues, NGOs coupled with the media, because the media is also very active in the environmental field in China, sort of exposing polluters and bringing shame upon the factory heads and this kind of thing. So yes, typically, from the perspective of Beijing, environmental NGOs are quite helpful.

But there are also boundaries, and I think it’s important to know that NGOs are constantly pushing up against an invisible line. And some NGO leaders have been placed under house arrest over the past year. One was just arrested and denied representation by Beijing. So you never quite know when you’re going to push the envelope a little bit too far. But in general they’re very politically sensitive, and they take their time and move along in ways that Beijing can support.

BAUER: This is so different from what the American press says, that the media is controlled and the government is a dictatorship, like the Soviet Union and Hitler. Americans tend to believe all of these things. But the idea that the media is speaking up about it, and are being allowed to, and at the same time you talk about these NGOs having to understand what is timing.

ECONOMY: Right.

BAUER: And of course there’s that Chinese thing about how much time do they have? I mean we work quarter by quarter in this country. Is it possible for them to take this sort of long term view we hear about China, and still apply it in time to save the country from an environmental disaster?

ECONOMY: No, I think that’s actually a very important point, because they don’t have the time. In Shanghai, in the far western part of the country, something like a thousand lakes and rivers dried up over the past decade and a half. Some of these changes that they are inflicting on their land are irreversible, basically. And they’re cognizant of this fact. So they’re trying to move rapidly.

But as I mentioned, I think part of it has to do with systemic change and in changing the way local governance works. And that really is quite difficult, and I’m not quite sure that this current leadership knows how to go about doing this. Or if they do know how to go about doing it, they’re maybe not willing to shake the system up enough to get the job done.

BAUER: It’s an interesting thing because we go back and forth in the history of this country, which is only 200 hundred years old instead of 10,000 years old, between federal government and states.

ECONOMY: Mmm-hmm.

BAUER: And if we want the federal government to do it and they don’t do it, then people go to the states and they get it done, and they say it’s a matter of states rights. And then if the states aren’t working, we go to the federal government and say, “It’s not fair.” And a large country as big as a continent like theirs or ours, we have this relationship between what is the overall philosophy of the country, its history and its national government, and then what can go on in the individual places.

Can we take just a minute as we finish this part of the show, about dams? Americans love to go and look at the three gorges, and they like to go up and down the rivers on those boats. What about the need for hydro-electric power so that they are not competing with us in oil around the world?

ECONOMY: Right, well China has moved very aggressively in terms of hydro-power and very aggressively in terms of large scale dams. Not only in China, but they’re building them in Ghana and in Sudan, and so this is a whole industry for them. What the Chinese NGOs and other international NGOs have tried to do really is to encourage them to think in terms of, instead of one large scale dam, to think in terms of a set of smaller dams along a river, where the impact may be less on the environment. And this battle just played out quite significantly, out in Yunan.

And what’s also interesting is that new issues have begun to come to the Chinese people, issues of social justice. They no longer believe that necessarily bringing these dams and these hydro-powered plants are going to benefit the local people, because they’ve seen that typically these dams do not. That deals are struck, and maybe you’ll fill the coffers of the provincial governments, but the people that live in the areas of dams, that have to be resettled, are moved to poorer land. Compensation doesn’t come to them because of corruption. And so you’ve seen a lot of very significant-- I mean we’re talking on the scale of 60- to 100,000 people protesting these dams. So I think this area is important on the energy front, but it’s also equally important, I think, as an issue of social dynamics and the voice of the people really coming to the fore in China with this issue.

BAUER: OK, one last question then, why do we care here in the United States?

ECONOMY: Well I think there are a couple of different reasons we care. First, I think we care because in any place where you have 300 million people drinking contaminated water and half a million people dying because of polluted air, on humanitarian grounds we care. We also care for a reason that we really didn’t have a chance to discuss, and that is for China’s impact on the global environment.

China is the second-largest contributor to global climate change after the United States, likely to surpass us by 2025. The largest importer of illegally logged timber in the world. And as Chinese enterprises go abroad, they are really changing the environmental landscape in South America, in Africa and Southeast Asia. So the Chinese are exerting a profound impact on the global environment.

And last, but I think certainly not least, I think, as someone who’s tracked this issue for a long time, that if you’re going to try to understand what China’s going to look like 10 years, 20 years from now, you have to understand what’s going on the environment, because it really is shaping both the geography of the country and also increasingly the political economic landscape.

BAUER: And that’s all in addition to disease, and the spread of disease, which is the one thing that does hit the newspapers. But for Americans and American women who meet government at the point of service, where air and water and the uses of land are so critical to our personal lives, we need to think bigger and bigger. And this is not something Americans have had to do and it’s very helpful to have a chance today, Dr. Economy, to talk with you and help us to understand the details that make it possible and necessary for Americans to think bigger and include China in our plans for ourselves and view of the world. Thank you very much Dr. Elizabeth Economy of the Council on Foreign Relations.

ECONOMY: Thank you.

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Interview with Tu Weiming, Professor at Harvard University and Director of the Harvard-Yenching Institute. Clues to why the Chinese are so different from us even in this modern economy. How China's attention to lifelong education, holistic thinking, and desire for stable relationships are deeply rooted in ancient Chinese Confucian philosophy. Will capitalism change their motivation to American-style individualism?

BAUER: WomenMatter now turns to a most interesting part of what we’re trying to learn about the Chinese and us. And that is, why are the Chinese living a life so much like ours, and why are they so different from us?

In order to understand this, we turn to a scholar who understands the history of China, and the meaning of philosophy and personal relationships, as the Chinese have been Communists, Socialists, and now from where we sit, it even looks like capitalists. So we turn to Professor Tu Weiming, director of the Yenching Institute and professor of Chinese history and philosophy, and of Confucian studies, at Harvard University.

He’s the first professor of Confucian studies at any English language university. And Dr. Tu currently interprets Confucian ethics as a spiritual resource for the global community, which of course includes us. I welcome Dr. Tu Weiming from Harvard to talk to us about the Chinese as they see themselves, and have seen themselves over their enormously long history. Dr. Tu Weiming, I invited you to tell us why you think Confucian thought is still important in this modernizing world we see, both in China and around the globe.

TU: Thank you very much. It’s a real pleasure for me to be on the show. And I admire many of the programs of WomenMatter. The question of Confucianism, if we put it in the broader comparative cultural perspective, every major spiritual tradition – Buddhism, Hinduism, Judaism, Christianity, Islam, and even Greek philosophy and other traditions – are still extremely relevant to us today. And Confucianism is relevant in China because without Confucianism, it’s difficult for us to imagine what Chinese cultural identity would be. And Confucianism is also relevant to East Asia, Japan, Korea, also for cultural reasons.

BAUER: That’s really interesting because Americans often think that spiritual is one thing and religion is the same thing.

TU: Right.

BAUER: And you’re using these differently.

TU: That’s right.

BAUER: Tell us about that.

TU: Yes. As we know many of the rather important introductions to world spirituality or world religions, such as Huston Smith’s book on man’s, “World’s Religions,” or [INAUDIBLE NAME] work on our religions, each one of them includes Confucianism as part of the spiritual tradition.

I think the important thing to remember is from the Confucian perspective, the sharp dichotomy between the body and the heart and mind, the spirit and natural, or the secular and profane, all these are considered not realistic in understanding the total person. The commitment of Confucian tradition is learning to be human in a very wholistic, broad sense.

BAUER: We see that a lot when we talk about alternative medicines and integrative medicine now.

TU: Right.

BAUER: Turning to this, and are the Chinese people themselves aware—

TU: Oh, they’re critically aware of this, because first of all, I don’t think alternative medicine is the precise description. We should talk about quite a few different medical systems in the world. And Chinese is one of them. Also there’s the Indian and maybe other forms. The idea is looking at a person as a dynamic process of transformation, rather than simply aesthetic structure.

The person does not simply consist of bone structure, muscles, and so forth. But it’s also consists of energy fields that interact among themselves. That’s why we’re alive. Although the assumption is that a person is always a center of relationships. Always in the process of transforming, developing, evolving, for both positive and sometimes negative reasons. And therefore we need to be self critically aware of what we’re doing.

If you want to single out one word that is particularly powerful in the Confucian tradition, it’s the word sheh, which means “learning.” Each human being ought to be a learning being, in society, ought to be a learning society, in a university, ought to be a learning university, organization, ought to be a learning organization.

BAUER: That’s really very interesting, because we hear in this country about the emphasis and the money that’s being spent on education, and the way in which parents and grandparents feel about education being critical to China. Is this part of why modernization is working so well there?

TU: Well, I don’t know whether modernization is working well. I don’t think so, because the market economy is only part of it. Social disintegration is to come. But anyway, this commitment to education, to learning – I would consider education almost like a civil religion in China.

Normally, the parents don’t ask questions of outcome. We say, well we’re the best because we want to get some kind of outcome. We educate our children so eventually they will support. This is a very pragmatic and limited understanding of the situation. There’s a commitment that education, for oneself, for one’s children, is intrinsically valuable. It’s related to the work ethic. You really have to work. You really have to not just perform, but to excel. The idea, it’s very huge too, not just, if a student is able to get a very high score, 95, the parents normally say, “Well try hard, next time you’ll get 96, 97.” So there’s always the idea that learning is a ceaseless process.

If you look at the short autobiography of Confucius himself, that, “At the age of 15, I set my heart upon learning, at 30 I stood up, at 40 I had no delusions, at 50 I knew the mandate of heaven, at 60 my ears became attuned, at 70 I could follow the dictates of my heart without transgressing the boundaries of right.” And you know, always, from the age of 15 all the way to 70 and so forth, he’s a learner. And it’s very intriguing, in the 17th century some scholars asked the question, had Confucius enjoyed longevity like Buddha, lived up to the age of 82 or 83, would he have tried hard to learn more? So theoretically yes, the old man would have to work hard to learn more.

BAUER: So how does this way of thinking explain what’s happening today in any way? It explains the attention to education. Does Confucian thought explain in any way, through its historical tradition, what’s happening in government?

TU: Well I would say it helps us to understand the complexity of the situation. But learning for its own sake, as character building, is terrific. But if learning is considered as a way of getting ahead, or trying, or acquisition of wealth, acquisition of power – it’s all happening in China now, marketization, to attain the wealth. You mobilize the people to try to learn, try to get ahead, and if the principle is not human self-transformation, it is simply the acquisition of skills, knowledge and power, it could turn out to be a major distortion of Confucian humanism. I think both are happening.

The government on the one hand is taking advantage of this commitment to learning, and trying to develop to develop certain kinds of authoritarianism mechanisms of control. As many people know, the Confucian ideas have been used negatively by the government. Authoritarianism is not [INAUDIBLE]. On the other hand, the government is also deeply committed to the transformation of society as a collective good, whether the people in the government are motivated by their self-interest or not, the rhetoric, which is very much deeply rooted in Confucianism, is the idea of the public accountability to cultivate the good of society.

BAUER: So that the leaders and the government then are totally aware—

TU: Oh, they’re very, very aware.

BAUER: They know that they’re accessing Confucian thought and Confucian tradition to mobilize the public into this huge development of the nation into something powerful and also, of course, a better life for the people. But to what extent does the idea of the collective good explain their concern for spreading the wealth?

TU: That’s right.

BAUER: We read in the newspapers that they, on the one hand are letting people make a lot of money, as we do here in this country as well, and that on the other side, which we also debate here, how do you get that wealth spread to other parts of the country and other people? Are they serious about that?

TU: Oh, absolutely now. I’ll just give you a very brief explanation of the complexity of the situation. And Confucianism in principle is much more compatible with socialism, with emphasis on equal distribution of wealth, of fairness, of justice. And then with capitalism, with emphasis on liberty, vitalism and transformation, even inequality can be tolerated.

And yet when Deng Xiaoping decided to move from this old egalitarianism, and it turned out to be extremely inefficient system, to the market economy, he was quite aware of the fact that inequalities would happen. And of course I think he totally failed to understand how rapidly they happen. Now the situation in China is much worse than the United States and many other countries, in terms of inequality.

Therefore the current leadership I think, with Yao Bao and Hu Jintao, are really deeply committed to this whole question, and especially with how the 70 percent or so people who are somewhat marginalized and suffered a great deal, especially the poverty-stricken environment in the countryside in the so-called great western side of China, and how the Shebei Province, northwest of China, can be totally transformed. This is the major challenge.

In fact, there’s a deep concern, which is commonly shared as a kind of ethic, that an individual or group who is more powerful in grandeur, have access to information, ideas, resources, ought to feel more obligated for the well-being of the society. That’s the reason why everybody looks up to those people who are more powerful in grandeur, you know, politicians, business people, people who made it, academicians. They ask them for the kind of right leadership for guiding the society into a situation where they are not so much plagued by inequality and the restlessness, and the sense of conflict between the rich and the poor, between the rural and the urban, between the educated and uneducated, between the overwhelming majority of [INAUDIBLE] Chinese and the minority, and things of that nature. Mao Zedong’s notion about the 10 great convictions in China still, I think, are applicable.

BAUER: So the idea that they’re well aware of this philosophy is critically important, and the leadership understands the philosophical history of China.

TU: Right, right.

BAUER: And also as you point out, which is new to my thinking, about the starting speed with which this has happened. The development of the economy, that it has distorted what has been a long tradition in philosophical thought and responsibility of one group to another.

TU: Yeah, of course the question of to what extent is what’s happening today in China part of a historical tradition is an intriguing one. I think we need to recognize that China in the last 166 or -67 years has undergone such a major transformation, or major change. And unprecedented in Chinese history. So we cannot understand what actually happened in the last century and a half in China in terms of all the categories that we’re familiar with in tradition. Because of the impact of the West, historians are quite aware of the fact that from the Opium War in 1839, when China’s economy was one-third of the world economy. And every 10-year period from 1839 to 1949, the major transformation of China, major change. Not just the Opium War, the Taipei rebellion.

BAUER: And by the way, we are posting that history on our website so that people can go to it from this conversation with you.

TU: Yes.

BAUER: And begin to understand what the Chinese people have been through. But the idea that you’ve helped to clarify for us, that we will come back to again and again on WomenMatter as we understand the relationships of our personal relationships, our spirituality, our political and economic histories, is that as we engage each other in this very unusual and global economy, we’re meeting up philosophically with debates that are going on in both countries over who are we and what does it mean, and what are our obligations to each other.

TU: Sure.

BAUER: Professor Tu Weiming, thank you very much for starting us out on this road, and we will be back.

TU: OK, thank you.

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Interview with Dr. Albert Keidel, Senior Associate, Carnegie Endowment for International Peace. Why the flow of investments is going to China and why the Chinese and others lend us money to pay for our deficit. A call to Americans to understand why China takes a global view of their economy and is creating ties around the world. How different this is from our government's use of the military option.

BAUER: WomenMatter welcomes Dr. Albert Keidel, who is a senior associate at the Carnegie Endowment for International Peace and an expert on the Chinese economy. In his previous positions he served as deputy director for the Office of East Asian Nations at the U.S. Department of the Treasury, and he covers all those economic trends that Americans are also so concerned about – system reforms, poverty, and country risk. He was also a senior economist in the World Bank office in Beijing.

These are the subjects that are the most exciting for Americans as we look at the Chinese economy- we are in all of this with them. And where did they come from, and where are they going? And how did they get there? So Dr. Keidel, tell us in how many ways are we already tied to the Chinese, and they to us?

KEIDEL: Well thank you Dr. Bauer, it’s a pleasure to be on this broadcast. We’re linked in very many ways, and to enumerate them as merely China links is attractive, but in fact China is a symbol of changes that are global. And so that when we say that China is affecting us and linked to us in these ways, it really represents a huge pool of undeveloped country, or developing country labor and skills literally coming online in the global economy.

Take trade and manufacturing. This is one that is perhaps most obvious to Americans. We are now importing large quantities, as everybody knows, of goods that are, quote, “Made in China,” although many of the core quality dimensions of them are manufactured in other countries that used to sell directly to the United States.

But this symbol of global trends is very important. It’s not only that we benefit because of the inexpensive goods we can now purchase. It also provides us with an opportunity, although a painful one for many, to make ourselves more productive.

Also linked are shifts in trade and services. Because of transportation costs that are falling in general – except for a recent blip in the airline industry costs – telecommunications, and many services that used to be provided only by domestic labor are now also being provided by foreign labor. In China’s case, perhaps not as obviously as in the case of India.

But these are also adjustments and they provide an opportunity for us to strengthen our services in places like health care, where we would need to be able to be a world leader more than we are – and could be – if our own insurance system were better engineered and running more smoothly.

Education – we’re an enormous leader in global education, and that’s a trade and services opportunity. Other links that are apparent, that may not be as important in the economic sphere have to do, for example, in Chinese holding of U.S. treasury bills.

BAUER: Explain that one, because Americans hear about this and we’re told not to worry about all of our wars being off-budget, because the Chinese are going to continue to buy our bonds, and we will have money to spend on both the budget items and the off-budget items. Why are they investing in us and how does that really work?

KEIDEL: Well we really have to see this in the perspective of the global financial systems, that the U.S., in spite of the growing strength of the Japanese yen and the European euro, the U.S. dollar is really the world currency. And so when the United States runs a deficit and publishes treasury bills and sells them, what it’s really doing is using its own currency to increase the global money supply.

And so it would be, in effect, a mistake for the U.S. to try to end its trade deficit if Japan and Europe didn’t end their surpluses, so that we could continue to use trade to help poor countries develop.

BAUER: Stop a minute and explain this to me, so that when we sell a bond and they buy it, they’re buying it and then dollars are going out of the country?

KEIDEL: Well they’re really willing to hold U.S. paper. And in fact, that’s what our dollar bill is, it’s a piece of paper with a backing of the U.S. government on it. These treasury bills have a different maturity in the sense that, although they can be bought and sold in an instant, the U.S. government isn’t required to do anything with them right away. The dollar bills that we print, the $20 bills and the $100 bills, the U.S. government is required to accept immediately, if you pay your taxes, for example.

So that we are printing money, that money is then injected into our economy in various ways, usually through the deficit that our domestic budget has. And that money then gets spent abroad and other countries don’t spend it back as much. So they hold our dollars. But they want to hold them in a form that maybe earns some interest. So what’s happening is global equity is growing, and it’s growing largely on the back on the expansion of the U.S. global currency scale.

BAUER: And when they buy our bonds, are they paying in dollars?

KEIDEL: Yes, they pay in dollars, absolutely.

BAUER: Aha. So the value of the dollar then, internationally is one of the things women of WomenMatter ought to be watching – is the dollar up or down? how much trade? the idea that it’s supporting our standard of living because goods are cheap. But at the same time, what you’re saying is the Chinese are really in this total global economy with us, it’s not just us and them.

KEIDEL: That’s right, and we also need to know that a lot of their holdings of treasury bills are because other people outside of China, and some in China, are speculating that there will be a change in the exchange rate. And so they’re temporarily parking dollars in China. Not just because they have a trade surplus. In fact the trade surplus, if you take it over the last five years, has been a fairly small part of their increase.

U.S. companies and other companies are investing there in direct investment. And there’s been a significant surge in speculative investment in the first half of this decade, that’s temporarily diluting some of their foreign exchange coffers. That means that money has been taken out of some other country’s holdings of treasury bills, and the whole global market in high-quality bonds is very deep and very liquid, and they have a lot of close substitutes.

So that the Chinese holding doesn’t really represent a threat. They would have to really shoot themselves in the foot to try to hurt us to do anything with it. And we have the Federal Reserve System, which maintains and is able to maintain some equilibrium in the supply of money in the U.S. economy.

So the notion that these treasury bills somehow represent a threat is not only exaggerated, you’d just have to say it is inaccurate. And what’s more, China’s whole approach to modernization is to be part of the world economy. It’s not about to be irresponsible in the way that it manages its debt holdings. And that’s another reason why we can rest easy, that these movements of dollars and dollar-denominated instruments are a strong linkage, but they’re a fairly normal one in this globalized economy.

BAUER: So they see themselves as part of the world economy, and they are partners with everybody. So tell me about their investment – there is the oil and energy piece that our government and people in our country are forever talking about, that we’re going to run out of oil because they’re going to want more of it. That the developing countries of the world are not going to be partners with us because the Chinese are investing in places in Venezuela, and in Nigeria, and in Indonesia, and in Iran. In what way should Americans think about all of this?

KEIDEL: Well I think that the U.S. having a spat with China over access to global oil supplies is a bit like two toddlers each grabbing the same doll because it looks like the other one’s going for it.

And what I mean by that is that there may be a global limit on the availability of petroleum products, and hydro-carbons in general. And therefore one of the solutions is for the competition in the world to allow the price of hydro-carbon to go up, which will increase exploration efforts, it will also encourage saving in the use of hydro-carbons in the production of energy.

It’s really toddlers spatting over a doll that neither of them would be interested in if the other didn’t want it so much, or would be interested in but wouldn’t be interested in such a newsmaking way.What we need to do with China is to do something about the growth of global warming, which now scientifically seems so clearly linked to hydro-carbon emissions in the air, CO2.

And there- the position of the United States and China, we’re linked again, because the U.S.’s position has been that developing countries eventually have to take some responsibility, whereas the developing countries are saying, “no, the U.S. and others right now need to make the first move, they are the biggest consumers.”

If you look long term, the developing countries will be more like us. And the answer is that we need to work together. This is the biggest linkage that we have, the requirement that we link together – that those ice caps on the shores of Antarctica and on Greenland don’t move down into the ocean and raise its level by several tens of meters in the coming century.

So that’s a huge linkage. And the idea that we need to fight over who has access to oil in Africa or in other parts of the [world] is a secondary issue. Yes, oil is important. But the bigger picture is that we need together to solve the problem of hydro-carbon emissions in the atmosphere. And that means figuring out how to conserve on the use of energy, in particular petroleum products and other sources of energy that emit CO2 into the atmosphere.

We will be competing with China. The best way to do that is to allow the price of petroleum products to govern who gets what. And that includes not only the price of the end product, but also the price of access to oil in the ground. And this is where the conflict became so heated last year, and where we need to try to avoid persuading the Chinese that they will not have access in a free market sense because we will block it.

In the future, that needs to be an open market in which we compete on the basis of price. That will then allow us to at least allow the price mechanisms, as the demand for oil goes up, to reduce our demand by encouraging savings and efficiency in use. And also encourage the finding of alternative sources of energy.

BAUER: So just recap for half a second, you’re saying that it’s going to be good for the whole wide world when the price of oil, which is going up and up and up and up, and it’s going to continue to go up, will cause people to look for other sources of energy. It will cause us to buy different kinds of cars, it will cause people to have to spend money on something, on transportation, but they’ll have to save up in order to do it.

So that in terms of all of those things that are sort of embedded in our consumer culture in this country, including our joy with the automobile -- instead of saying to the Chinese that we don’t want you to be like us, and therefore we’re going to prevent you from being like us, what you’re saying is that competing nationalisms are requiring a global way of thinking. That is, they may be wanting to save the Chinese and we want to save the Americans, but together we’re in this one worldwide.

KEIDEL: That’s right. We have to say, “Let’s all change together.” Now in the domestic scene, in the U.S., that means perhaps raising the minimum wage enough to compensate for low-income earners that use their cars a lot to go to and from work, and use energy to heat their homes. But those adjustments can be made if we have the political leadership to do it.

It also means, for example, more reliance on nuclear methods of producing energy, but those which have their own safety measures. But that also means that the use of a nuclear technology for military purposes needs to be better coordinated internationally, and this is where we also have an opportunity to build on the links we certainly have with China on issues of nuclear proliferation, and perhaps finding a regime that requires everybody in the world to be under international supervision in terms of their uses of nuclear energy. And to make sure that it doesn’t get diverted into weapons use.

BAUER: That’s really interesting that you’re saying that we all have to grow up beyond nationalism. That is, this thing we have is called the nation-state. It hasn’t been around very long, just since the 16th century, with Henry VIII. But we think of ourselves and our protections, and when we talk about “us,” we talk about the nation-state. And do the Chinese also think about themselves as a nation, that nation-state?

KEIDEL: Oh they absolutely do. And they also were in the winner’s circle in World War II. That’s why they have a permanent seat and veto rights in the United Nations, which was a creation of the winners of World War II. The Chinese therefore have status in that regard.

And yet the Europeans, and this came out in a debate last year between the Europeans and the United States when the Europeans wanted to eliminate arms embargo language that they had put in after the Tiananmen incident in China 17 years ago. That language said there would be an arms embargo on China.

That debate with the United States made the Europeans express their own interest in a world that had some super-national institutions, which of course the United States pioneered in the creation of the United Nations system after World War II. The Chinese are vocally saying that’s a model they’re interested in being a member of. And so China gives us an opportunity to move in that direction.

And in fact, we don’t have a lot of time, because if you look at the Chinese growth pattern, by the middle of this century they will have total GDP that could be 50 percent larger than ours. And by 2060, their GDP could be double ours. We will be dwarfed by their economy. And what kind of global system will we and the Chinese inherit at that point? We’d better start working on it now if we want it to reflect U.S. interests and Chinese interests as much as possible.

BAUER: Albert Keidel, you have moved this conversation into the future by taking a much harder and more detailed look at where the economy is right now. This is enormously helpful, and we will come back to this again and again in WomenMatter, as we want to look realistically at how our personal lives have got to begin to look farther forward, on the environment, on global thinking, and on modernization. Way beyond what’s happening just in our own backyard.

Thanks very much for moving us forward into the next generation, and recognizing that it’s really ours to deal with right now. WomenMatter thanks you a lot, Dr. Keidel.

KEIDEL: Thank you very much Dr. Bauer, it’s been a great pleasure.

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Dr. Bauer spotlights how differently the Chinese and current American government leaders weigh the same FACTS and TRADE-OFFS in pursuing national interests and promoting nationalism. The startling difference in the way two governments address serious decisions: health care, oil and energy, pollution, spreading the wealth from the rich to the poor, and using investment or military options around the world..

BAUER: We all agree that Chinese leaders are smart, and that they’re aware of the facts-the facts both favorable and dangerous. That they understand the issues and they understand the trade-offs, and that they discuss them among themselves, and that they’re in the media and they know what they are doing. That doesn’t mean that everybody on the streets or on the farms know exactly what’s going on, because most of us, as we say, most ordinary citizens, measure what government is doing by whether our daily lives change or not.

And of course, that’s what WomenMatter is all about – for all of us to work together to understand how our personal lives are affected by what government does and what the bigger picture nationally, and now internationally, does to our personal point of view and our personal, day-by-by quality of life.

So it’s important for us to understand that the Chinese leadership is weighing the trade-offs and gambling with their environmental and health time table. They know that they have terrible possible health problems. They know that there are terrible possible pollution problems. They know that there is a danger of an epidemic, as they did when they had the SARS epidemic. It happened, but then they were able to use their central government, their national government, to actually quarantine the people who had it and stop it from spreading. Whereas the people who got on an airplane, who came to Canada, nobody was going to be able to tell them that they couldn’t get off the plane, or that they couldn’t hurt the people that were around them. They didn’t mean to, but it’s not the Western way.

So the Chinese leadership, we hear, is worried about energy. They’re going around the world trying to make arrangements for oil. At the same, they know that oil is going to run out. Therefore what they’re doing is they’re building coal-fired plants, and they know that those coal-fired plants pollute, and they need to do something about nonpolluting coal-fired plants. They know that they have to use hydro-electric power, at the same time, you do that by building dams, and when you do that, you hurt the water supply. And you’ve changed the places where people lived, and where they had water for their farms. And they have to deal with that day by day.

As they make plans for the nation, they have to deal with what’s happening to the people on the ground. Because most of the people are not living in Beijing or in Shanghai. Most of the people are not the ones we focus on on the television that look just like us. Most of them are poor peasants who remember and believe that the communist party is going to help them have a better life.

When the Chinese talk about what they’re doing with capitalism, they describe it, and always have, as socialism with a Chinese face, while we in America say, “that’s nothing but capitalism.” But they say it’s the use of capitalism, the use of competition, the use of investment, the use of private enterprise – all of that, in order to have the money to spread the wealth to the people who need it most. And that is the promise that the people are waiting for. And when it doesn’t happen, then you hear, and you can read it in the Chinese press, that they have riots of the peasants, who say “my land has been taken for a dam, and I’ve been moved, and where I’ve been placed I don’t have enough water, or I don’t have health care.”

And so in dealing with these things, the Chinese people and their government have to play it out, and there are serious trade-offs. They are in a sense gambling with a time table, knowing that they have to increase the standard of living in the east in order to have the economic resources to increase the standard of living in the rest of the west – and most of their country is in the west.

So how do they do this? How do they gear up for the long haul? And of course, this is where their long history helps them. Even the poor know that they have to work. They always have had to work. There is a work ethic, and the Confucian influence that we heard about says that it’s a good thing to do. They know that they’re supposed to trust the government until the government is not trustworthy. So they wait as long as they can, but they can also object.

Of course when they object, one of the things we have heard is that they don’t have the control from Beijing and the national government over the local government. We in America tend to think that for everybody who lives under a dictatorship, that that dictatorship is right at your door. It turns out that there is a single-party government in Beijing, but it is not monolithic. It does not have control over all the local governments in that huge country, directly governing millions of people. They have a practical governing problem, an implementation problem. They are a one-party government and we are a two-party government, but we also have to carry out the plans that we make.

So how does this compare to what we do here? When you have one-party rule, the party in power is the one that’s held responsible. And throughout Chinese history, they give then a chance to do that until there is a revolution to remove them. The Chinese government knows that and the Chinese people know their long history.

But in this country, where we have one party that is in control of all parts of our government, and a minority party that doesn’t have the ability to stop what’s going on, a system where one vote over half takes everything, we’re in a very interesting situation. So the party in power has to believe in taking the lead. And we are just beginning, in this very season of 2006, to hear the party in power talking about research on energy, money incentives to people for research and development, and asking people continually, voluntarily, to do something about pollution and the environment without the government itself doing a great deal about requiring it.

We also hear much discussion in this country now about whether we should participate with the rest of the world in issues like global warming. And it is interesting to know that the Chinese are turning more to Europe in their way of thinking than they are looking at us and how we deal on the international scene. And of course with the United States we are the only superpower when it comes to military power. And we are the biggest economy so far.

But the Chinese know that there is no point in their taking a military offensive or doing something to start a war. They would never do that because they would never be able to achieve to what they’re trying to do.

So it’s very interesting that we need to understand how they think, and they need to understand how our two-party system works. And we of WomenMatter need to know how to influence both parties to understand specifically why those Chinese children are working so hard in school. They are learning both Mandarin, which is the language of the nation, an upper-class language, and it’s required of everyone, they can’t speak their dialects. They can speak them but they can’t learn them in school. And in addition to that, every child in China now has to learn English. And they’re learning American English. Almost 90 percent of the country is now literate.

We have got to pay attention in this country to our jokes. We joke about celebrating school closing. And “oh goodie, we have a holiday, we have a national holiday to honor our nation heroes, like Washington and Lincoln and Martin Luther King.” And what do we do? We close the schools. Children who are very smart in school in this country have to defend themselves against being called a nerd or a geek. And it’s much better to be a jock. And we have leaders – both political and business leaders – who say, “Gee whiz, when I went to college, really all I did was play football and I was a C-minus student, but look what I did?”

Chinese don’t think that way. Chinese children don’t believe that. And in order to compete, as they must, they have to compete in examinations in order to be able to go to college. Only one in 20 Chinese children is allowed to go to college, and they have to be the best to get there. So they know, the day they first show up in school, that it is their job for their family, and their family’s future, but also the job for the nation. That they are expected to learn for China, because learning is what children’s job is, and the society cannot exist without it.

This is an enormous, powerful tool, an enormous, powerful engine for continuing China’s growth as both countries recognize that it is in education that we can have better and better jobs. The jobs that require less education have gone from here to China. Now, some day, they will go from China to other parts of the world, which can do them cheaper.

China needs to be seen in the global context, and we need to interpret what they do, understanding how the Chinese see themselves. We’re both countries with pride, and take pride in our nationalism and in our country’s history. They take a very practical view of their success, and this is something that Americans have to understand. They have an ideology about a belief in communism as a philosophy, but a very pragmatic view of how to make things happen.

They realize that with us as the major power, and with oil being limited, and with countries around the world having to play into an international scheme about the uses of oil, they have to use their nationalism in a global context. And they can’t afford to do it militarily because there’s no way they are going to win that one, nor do they see that as in anybody’s interest, that war only destroys.

So we see the Chinese pushing for the United Nations, see the Chinese desiring more international rules. At the same time we see that they negotiate under the terms of the trade agreements of the World Trade Organization, which is our only transnational rule-making organization at this point. The World Trade Organization oversees negotiations over individual items – lumber, brassieres, trade and shoes, all of these things. Currently we all negotiate for those items, but more and more and more, we will watch the Chinese wanting an international standard, and how are we going to manage that?

The debate in the United States may have the wrong frame. It’s not just about competition with the Chinese for jobs. And it’s not just about competition between our political parties for the future of the United States. WomenMatter says, as we study about China and us, it’s not us and them, it’s us and them within a global context, and we need to be able to understand that.

We started this show with our very first question, Is this a zero-sum game? If they gain do we lose? And the answer is, no – that in this country and in China we have shared problems about health care, we have shared problems about epidemics, we have shared problems about world trade. But we are going to have to work on them together, and see them in this bigger picture as our health care system is now under question, and their health care system still has to be built. The epidemics and health care are problems that we share – a serious problem that could go across the borders.

These are the kinds of things we need to be talking about. And WomenMatter will track them. So women of WomenMatter, we need a broader and further view into the future. We need a viewpoint now that takes us into bigger and bigger pictures. The global economy will be dominated by China in another generation or two. There is no question about that. But working together, we can build the United States and China into a global future that could be better for all of us.

ANNOUNCER: WomenMatter will continue to follow how the Chinese and Americans work out our lives both separately and together. In this way, you’ll be able to judge how clearly your representatives understand the facts and trade-offs, and hold them to policies that reflect your knowledgeable view of a workable future that is best for all. For Women Matter: Facts and Trade-offs, this is Victoria Jones.