Understanding China

BOOK REVIEW

Tiger Head, Snake Tails, by Jonathon Fenby (Amazon Kindle edition $US16.99)

It is difficult to overestimate the importance of China to New Zealand.

In the coming years the economic, social, and political health of China will have huge influence on our country.

It behoves us to understand China and reading this book is a good way to start.

Jonathon Fenby reveals how China’s foreign exchange reserves are so enormous it could buy the whole of Italy, or the sovereign debt of Portugal, Ireland, Greece and Spain, plus Google, Apple, IBM, and Microsoft, plus all the real estate in Manhattan and Washington DC as well as the world's fifty most valuable sports franchises.

China has a very long history – almost too long for the average New Zealander to properly comprehend.

China has ruled for more than two thousand years with only eight dynastic changes over that period of time - the longest lasting government system the world has ever seen.

This changed in the nineteenth century when China suffered from a number of incursions from foreign armed forces and internal rebellions. The Qing dynasty found it impossible to evolve a modern state which led to the downfall of the Imperial system.

China had no true experience of power coming from the ground up; neither does it have independent courts, or newspapers. The government spends lot of time, thought and money trying to control the electronic media, with varying degrees of success.

Corruption, family contacts and the concealing of wealth all are the way Chinese business and politics work – until suddenly they don’t for often opaque reasons.

The precipitous fall of Bo Xilai is an example. Unfortunately it is not mentioned in this book - it happened after it was published. I would have liked to read Fenby's take on the scandal.

An old Maoist Deng Liquin is said to have remarked: if the Party does not eradicate graft it will lose the support of the people; but if it does it will lose members. Time may be running out for the remedying of the huge problem.

Fenby gives us an example of what a complete lack of scruples can do in the shape of a pretty little Vietnamese refugee who grew up to become the mistress of a number of wealthy politicians and business men.

She amassed export quotas, big bribes for setting up contacts, licences to run petrol stations and cash until she got nailed for tax evasion. After four years in prison, she departed to Honking with most of her money – and a diary.

Her round heels had made her very well-heeled indeed.

So far so good - but the interesting part of the story is what happened next. Large numbers of young women who dream of taking the same pathway from rags to riches have taken to making pilgrimages to her mansion.

Like all eBooks I have read this one does not take advantage of the many features which could be so easily incorporated in electronic books, such as maps and photos and links to other sites.

Constantly referring to the internet for extra information does not improve the reading experience.

This book is well written, informative and explains why New Zealand companies find it so very hard getting traction in China: the pervasive corruption, the opaque legal system, and the rampant counterfeiting of foreign products are factors that most Kiwi businessmen have never before encountered.

When China overtakes the USA as the world’s biggest economy, which is assumed will happen within about five years, the world's biggest economy will no longer be a democracy.

Some experts forecast China will continue on its breath-taking upwards trajectory to global domination; others predict political, social and economic fault lines will stall growth and development.

As Zhou En-Lai is reputed to have said when asked about the success or otherwise of the French revolution – it’s too soon to say.