This episode's guests include Wu Jianmin, Former Chinese Ambassador to the United Nations; Evan Osnos, Former Beijing Correspondent, The New Yorker; and Jing Ulrich, Chairman, Global Markets, China, JP Morgan.
Kristie Lu Stout: Jing Ulrich, Ambassador Wu Jianmin, and Evan Osnos, welcome to On China. Now one question, the very top: what are we going to call it, "Zhong Guo Meng (中國夢)" -- is it China dream or Chinese dream?
Jing Ulrich: I suppose "the Chinese dream." It sounds good. It has a nice ring to it. Perhaps it evokes some similarity with the American dream.
Kristie Lu Stout: That's right. And I think that's the reason why that the international bodies have been so captivated by this concept. But what is the official definition of the Chinese dream?
Wu Jianmin: I think the official definition of the Chinese dream is reemergence of China. China used to be a leading nation in the world for many, many centuries. But in the past two centuries, China lagged far behind the industrialized countries. Chinese were down and out. Chinese always dream of better future. Reemergence of china is the Chinese dream.
Evan Osnos: Of course, there are few on it. There's wealth, obviously, by continuing to grow, continuing this economic rise; but it's also about strength, and about establishing China on the world stage. So these are the two important parts and not always necessarily going in the same direction.
Kristie Lu Stout: You mentioned wealth and part of the Chinese dream is to keep the economy growing. It's incredible the last three decades china has been able to pull 600 million people out of poverty. But how do you keep that economic machine going?
Jing Ulrich: That's indeed part of the Chinese dream which is really the prosperity of the country, as well as well-being for every citizen in China. We all know China is now the second largest economy in the world. This year China's GDP will be almost US$10 trillion. That compares against 14 trillion of the U.S. economy. However, on the per capita basis, China only ranks number 72 in the world. So, you know, the economy has emerged. It is really no longer a developing economy; however, China still has a long way to go in terms of lifting per capita income for the entire country.
Kristie Lu Stout: And then the question is how is China going to do that? Is it an issue of turning from an export-led economy to a consumer economy? What needs to happen next?
Evan Osnos: Look, 10 years ago, 3% of the Chinese population qualified as the middle class. Today, it's around 20%-25%. And that means the next generation of aspiring middle-class members, they want to get there. And the days of super-fast high growth-those are over. And I think we all agree that the double digit growth is behind us. So part of the challenge, part of the promise inherent in the Chinese dream is that we're going to give you the chance to get there; we're going to transform the economy however it needs to be transformed. But those are hard choices because it means going after some of these entrenched interests. (Jing Ulrich: absolutely) This is where it becomes a real political challenge.
Jing Ulrich: That's right. I think this is all about the Chinese consumer. We know the economy can no longer rely on external demand to propel its future growth. So when we shift to the domestic economy, where is growth coming from? We cannot rely on investments, building a lot of infrastructure, factories, real estate forever. We have to really shift to a service-driven economy. That means Chinese consumers will be buying more goods, they will consume more services, not just working in factories, they prefer service jobs. So that's a question. How do you lift the income levels of more people in China so they can consume, starting from basic goods to middle class consumption? And aspirational consumers are everywhere in China but they need to feel more secure about their future so that they can save less and spend more.
Kristie Lu Stout: And what's at stake here for the Chinese Communist Party? How important is the economy to the survival of the party?
Evan Osnos: This is everything. I mean if the party cannot figure out how to establish a new level of legitimacy, a new standard by which it can be judged, then it has a serious problem. People today are looking for things that are more than just about their pocketbook. They have a richer conception of what the good life means. They say, for instance, "I want to live in a city where the air is cleaner." Seven out of ten most polluted cities in the world are in China today. And people are sort of reaching the end of their patience on that. People also say, "if I go to court, I want to be confident that I can get a reasonable judgment where the judge hasn't been bribed or perhaps hasn't been political influenced." So that's where it starts to get into a political issue. In order to satisfy people's economic demands, there's going to have to be political reform of some kind. And that's where it gets hard for the party.
Kristie Lu Stout: As Evan points out, economic prosperity is not enough because the people of China are complaining, they're vocal, angry about pollution, corruption, lack of rule of law, need for political reform. How does the Chinese dream factor into these social needs, the needs of people in China?
Wu Jianmin: I think we need rule of law and democracy. Rule of law and democracy is the goal of our political reform. That process will be very long. It's gradual. But the orientation should be very clear. To achieve this goal, we need to move forward step by step. No revolution. (Evan Osnos: but also no standing still.) Yea, right, right.
Kristie Lu Stout: For a lot of viewers watching this right now, and to hear ambassador Wu, you, say that China needs political reform, democracy, a lot of eyebrows are being lifted. Is that really in the thinking of Beijing in party leaders right now? We have democracy and meaningful political reform in the back of our minds. We do have a time table in mind?
Wu Jianmin: If you look at President Xi Jinping's speech, if you look at the party congress report, you can see they talk aloud about political reform. Whether we need a time table, I think we need some time, to have it, but the goal should be very clear. Xi Jinping was very clear on that. We need rule of law and democracy.
THE DREAMS OF INDIVIDUALS?
Kristie Lu Stout: People's Daily made a comment about the Chinese dream. And it said that the Chinese dream is the dream of every individual Chinese. Is that just party propaganda or is it true? Party is putting focus-unprecedented emphasis-on the individual.
Jing Ulrich: I think what this means is that China wants to create a more egalitarian society. We have a lot of people in the last twenty years who have gotten extraordinarily wealthy. But lots of people have been left behind. So I think this means that we need to improve the incomes of the lower segments of society, not just creating an elite, which is a small part of population.
Evan Osnos: When you talk to 10 different people today, you'll get 10 different answers on what the Chinese dream is. (Wu Jianmin: Yea.) I mean that's remarkable. That's a real change from the past. If you think about the previous slogans, they were things that were frankly impossible for the people to understand: "Three Represents," "Harmonious Society" was difficult for people but "Chinese Dream" is, it's good marketing. And it makes sense. People can adopt that into their lives. So that's a challenge, partly to the party because what they've done is that they've made a promise to people that you'll have a chance to have a Chinese dream. (Jing Ulrich: Absolutely.) And now they have to make good on that promise.
Kristie Lu Stout: What about the Chinese dream of becoming a U.S. citizen because that's the one I've heard over and over again?
Wu Jianmin: Yea, but this is a very small segment of Chinese population. We have 1.3 billion people. Your population is only 300 million. So maybe part of them. We live a globalized world. People move around. People are adopting different nationalities and this is something new. Chinese is part of this trend. Maybe for some Chinese, they have this dream. But most Chinese, they don't because they have to live in China.
Kristie Lu Stout: Let's talk about the dreams of ordinary Chinese. And for example the ones that I've heard: dreaming of a better job, a car, an apartment, a house of their own, or even a chance for their entire family to live together in one city. Very, very simple things.
Evan Osnos: There's a poll recently about education they issued. They asked the parents, "Do you think you can get your child into a good school?" 46% of the parents said, "I don't think I can get my child into an adequate education without social connections or without paying fees under the table." That's a problem because that means that there is sense of unfairness that's been baked into the system and they have to correct that if they want to have the people to feel that they're getting an equal shot.
Jing Ulrich: Yes, that's absolutely right. I would say the Chinese dream is not equivalent to the American dream. Not every Chinese person can afford to own a large vehicle, or large vehicles or large home. Chinese dreams can be quite basic. It could be quite different from person to person.
Kristie Lu Stout: Can these dreams come true under the Chinese dream of Xi Jinping?
Jing Ulrich: That's a good question.
Wu Jianmin: Not all people will have their dreams come true. But many people will have it, achieve it. Look at the past 35 years. China achieved a lot. A lot of Chinese pursued their real dreams. They succeeded it. That explains China's dynamics. Otherwise, that kind of achievement will be impossible. So in the next 10 years, same thing will be true. The Chinese will pursue their dreams in different ways and some will succeed more, others less, but dream, to my understanding, is a universal value. Dream drives people to move forward for a better life, for better future. This is the source of progress of human civilization.
Jing Ulrich: Absolutely. Each person, of course, needs to strive to achieve his or her own dream, no matter what it is. But as a government, as a leadership, I think Xi Jinping and his top leaders in China need to provide the preconditions for the individuals in China to achieve their dreams. So that means they need to create, as I said, a social safety net for the 1.3 billion people in China. They need to provide a stable society. They need to provide a descent, stable economic growth. Otherwise, individual dreams cannot be possibly met.
Evan Osnos: I think Jing's absolutely right. The system at a certain point has to start give way against the pressure of these aspirations. And one of the big things that we're all aware of the elephant in the room is corruption. And Xi Jinping has been very upfront about that. One of the first things he's done since getting into office is to say, "Look, I'm going to go after the tigers and the flies" -- the big corruption targets and the small. And I think that's the recognition that ... he's not doing that because he's trying to go beyond what's necessary. He recognizes. He's catching up with these people. People really need to see some progress in corruption because that's where it starts to feel it's limiting their ability to get to that dream that they have.
Kristie Lu Stout: And do you feel that there is that X-factor in the Chinese dream and that Xi Jinping has the charisma to lead the people to say, "Yes, we have this aspiration and we're going to go for it"? Is that there?
Evan Osnos: He set a high bar for himself because of essentially the level of aspirations he's giving people permission to have. And now it's about giving them the substance to back it up.
Wu Jianmin: Xi Jinping said in the beginning of his career, if you travel around China, people feel good about his initial action. For instance, eight measures are very popular in China. People see he's doing the right things. Certainly in the beginning of his mandate, he did right things. In the later, I think he has to deliver. People are waiting for more measures to implement what he said before.
CHINA'S MILITARY AGGRESSION?
Kristie Lu Stout: Outside looking in, we see these Chinese consumers pursue their own dreams of buying a new house, buying a new car, buying more material goods. What does that mean for the outside world? I mean, we've heard from Xi Jinping, saying that the Chinese dream will benefit the people of China, but also other countries. Is that true?
Wu Jianmin: Yea. Today, if you look at China's relationship with outside world, we are deeply interdependent. Why the last 35 years, we did well was because of the opening. So when we go abroad, when we develop our international relations, we should base this relationship on the win-win basis. If the other side doesn't benefit from China's growth, China will be in trouble. For China, this is the only way to rise peacefully.
Jing Ulrich: That's absolutely right.
Kristie Lu Stout: That's the key: rising peacefully. And that's the concern. Many are asking, "How are the Chinese military and the PLA interpreting the Chinese dream?"
Wu Jianmin: PLA, you know, in China's modernization program, there are four components. Defense is one of them. I think if you look at modernization of any major countries, defense is part of the modernization program. With China's rise, certainly, we need to modernize our defense. It's quite right. But, there's a limit: no arm race with anyone-with U.S., with the rest of the world. We know how the Soviet Union fell. China will not follow their footsteps.
Evan Osnos: And Xi Jinping has said that he's very conscious of fall of the Soviet Union and he's determined to avoid that mistake. The hard part, of course, is how do you do enough political reform so that you can accommodate demands of the people without taking so many reforms that, in your view, you threaten the sanctity of the party?
Jing Ulrich: Yea, I think the stability is absolutely the keyword here. Stable and prosperous China clearly is very good for the rest of the world. After all, 22% of global population resides in China. So if this society is stable, if this society is moving forward, it is definitely going to bring huge benefits to the international community.
Kristie Lu Stout: And this is the fear: if there are bumps in the road as the Chinese pursue their dream that the government might play the nationalist card.
Evan Osnos: I think there is a concern that as the economy slows that the government is going to feel pressure to rally people around the flag to try to bring them together around the new ideology. And that ideology, if it's nationalistic, that's volatile. So I think it's a dangerous game to play when you start to feel nationalism because of course it can always turn against you as the government. So I think the government is conscious of that. One of the things I hear a lot is turn it on and off like a faucet because it can be useful in some contexts but it can also be volatile in others.
Kristie Lu Stout: Is nationalism a tool?
Wu Jianmin: No, I don't think so. With nationalism, you'll reject others. Can China afford it? No. We can't. We can't afford to alienate anyone. We need the world and the world needs China. That's why the Chinese leadership is quite careful about the nationalism. If you look around the world, this is something which is quite worrisome. This rising nationalism and rising populism. The combination of these two "-ism"s quite dangerous.
Evan Osnos: I think one of the things that people are looking for overseas when they try to interpret the Chinese dream is "how far does China imagine this goes", for instance, militarily or diplomatically. Does it mean that there's still a role for the United States in Asia? Because President Obama has said we are a pacific nation and we'll be in Asia for the rest of the century. So that sets up an inherent level of tension. And I think that's where it really is incumbent on this generation leadership to figure out 'how are we going to live together'. We ultimately cannot afford, frankly, a war. Neither side can.
Kristie Lu Stout: There are concerns about China becoming more militarily aggressive as it pursues the Chinese dream and of China also consuming more of the world's resources as it tries to enrich itself. Is that going to be a source of geopolitical tension?
Wu Jianmin: No. When we pursue our dream, how can we achieve it? Through a military way? No, that's impossible. China is heavily dependent on the international community: resources, we need to send out manufacturing goods abroad. We're deeply interdependent. If we go to war, that will end up a big failure. Everybody, I mean, most people in China, we understand that this is a wrong way.
Evan Osnos: I think that's a really important point. When we talk about where China's headed, it can sometimes sound to us overseas that they're beating the drums of nationalism and that they're trying to prepare for some sort of conquest. The reality is I don't think that's part of where the Chinese want to go. They just have too much on their plate on the domestic front. The danger is about the unintended consequences. It's about when we've got a pacific that's getting crowded because we've got larger navys or when we've got people fighting over ground. That's where you run into trouble-when something gets out of hand. And that's where that kind of communication is really important.
Wu Jianmin: Yeah.
Kristie Lu Stout: One final question: how should the rest of the world interpret the Chinese dream?
Evan Osnos: I think it's fundamentally positive development. I think we should see it in those terms. There are going to be moments in the years ahead where we look at China and it feels threatening to us as Americans or as other big countries. But I think the reality is that this is a domestic message primarily. This is saying to Chinese people, "this is your opportunity as an individual to go after what you want and we're going to try to help you get there." The question, of course, is can they do it.
Wu Jianmin: The Chinese dream will not only benefit the Chinese but also the rest of the world. In the past 35 years, we did that. We shared the benefits of China's growth with the rest of the world. Otherwise, China's growth will be impossible. In the future, we will do the same. As I said earlier, this is the only way to lead China, to rise peacefully.
Jing Ulrich: Absolutely. I think the Western world should actually embrace this new development. Having a Chinese dream, having hope, having aspiration, and having the dream of a better life for the future, I think can be only positive for the Chinese society as well as for the rest of the world.
Kristie Lu Stout: Here's hoping for that. Jing Ulrich, Ambassador Wu Jianmin, and Evan Osnos, thank you so much for helping to interpret the Chinese dream.