• Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • "The Chinese Model"

    Capitalism, Chinese Style Pt.2 - Orville Schell -   May 14, 2011
    Members don't see ads. If you are a member, and you're seeing this appeal, click here

      Share to Twitter
    Share to Facebook

    TRNN has... made its mark with amazing original reporting on the Middle East and international protest movements. - Caroline Lewis
    Log in and tell us why you support TRNN


    Orville Schell is the Arthur Ross Director of the Center on U.S.-China Relations at the Asia Society in New York. He is a former professor and Dean at the University of California, Berkeley’s Graduate School of Journalism. Schell is the author of fourteen books, nine of them about China, and a contributor to numerous edited volumes. His most recent books are, Virtual Tibet, The China Reader: The Reform Years, and Mandate of Heaven: The Legacy of Tiananmen Square and the Next Generation of China's Leaders. He is also a contributor to such magazines as The New Yorker, The Atlantic, The New York Times Magazine, The Nation, The Los Angeles Times Magazine, Granta, Wired, Newsweek, Mother Jones, The China Quarterly, and The New York Review of Books.


    PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay. We're at Bretton Woods, New Hampshire. We're talking to Orville Schell, one of America's foremost China experts. Orville is the Arthur Ross director of the Center on US-China Relations at the Asia Society in New York. he's a former professor and dean at the University of California Berkeley Graduate School of Journalism, and he's written 14 books, nine of them about China. Thanks for joining us.


    JAY: So let's talk a little bit about what's going on inside China. China's still run by the Chinese Communist Party. Do they still say they are moving towards some kind of socialist economy, socialist society? Or is this the model they think it--is this what it is, you have a communist party running a capitalist economy?

    SCHELL: Well, it's a very interesting question of what manner of beast is China and its economy now. They call it socialism with Chinese characteristics. Other people call it authoritarian capitalism [snip] you know, Leninist capitalism. There are many monikers for it. But what it is in reality is a kind of a very curious hybrid between certain highly marketized sections of the economy. Big state-owned enterprise is still owned and controlled by the government but operating more or less by market rules, and has the virtue--which we have discovered in the recent economic collapse in America and around the world--of having a great deal more control ability. So we used to think of China five-year plans, you know, centralized economies as very retro, you know, something that grew long since dusty on the shelf and out of date and rigid, brittle. But now, actually, we've come a full circle around after the economic collapse, I think, to look at China through a different lens, mainly that by maintaining certain kinds of almost authoritarian control and by not letting market forces run so free, they've actually come out in much better condition than they went into this crisis, and the US and other more open markets have suffered. So there's a paradox and a shift in thinking about models of development and what works and what doesn't work.

    JAY: The--some of the things that were considered achievements of socialist China were things like a health-care system, where pretty well everybody had access to a doctor. That seems to be more or less gone now. When I was in China last, I was told that if you work at a state-owned factory, the real cost of a doctor's appointment might be a month's salary, even though it's not supposed to be. There's just so much under-the-table payments that wind up actually happening. The other thing was educational system that was accessible to everyone. Now you read stories of people who are--life-savings are going in to pay for a kid to go to university, and if they don't make it to university, some kids are committing suicide, because you don't have a future without the education. So some of that characteristic seems to have been lost in all this. What's your sense of--what--or even what does the leadership say? Is this supposed to be some stage of getting to a more equitable society? Or--I guess, or what?

    SCHELL: Well, I don't think anybody would describe China now as a more equitable society. In the good old days of Mao it was equitable in the sense everybody was poor but equal. I think the Chinese leadership is extremely worried by the fracture lines that have developed between rich and poor, urban, rural, you know, worker, management class. And you're absolutely right: the old welfare system has vanished. It used to be, when everybody was in a people's commune or a state-owned factory, that you had everything from birth to death--funerals, births, schools, health care, you name it--all provided. Now, of course, all that has been lost and they're trying to reconstruct a new welfare system, something on the line of an open society or a Western, American society. But it's very, very difficult and very, very costly. And so that's an incomplete piece of this reform, which is the market has become more and more open, has left less control in the hands of the government, but still far more than there is in a country like the United States.

    JAY: With this enormous amounts of capital China has, which they're investing all over the world, is one would wonder why aren't they putting more money, then, into building up more of this kind of social infrastructure, which would also to some extent increase the internal demand equation, 'cause if people didn't have to spend so much money on doctors and schooling, they'd buy more commodities, which would give them a better domestic market. But they seem very focused on this buying up around the world.

    SCHELL: Well, this is a question that China itself is now debating of why aren't they investing more in their own social infrastructure. They have invested in their hard infrastructure very aggressively--ports, airports, highways, trains, bridges, tunnels, things like that--and they've done a pretty extraordinary job. There are some particularly unique characteristics of the Chinese system in that it captures dollars, it kind of turns them into renminbi, the Chinese currency, and then it has to do something with those dollars, 'cause it doesn't have a convertible currency. So then it has to park those dollars someplace, and really the only place to put them is outside the country. That's why you find this exporting of foreign currency. But the economy's done very well, and they do have massive reserves, and they're roaming the world now to find higher-yield investments for them.

    JAY: So some of the people we've interviewed previously about China who follow some of the things going on, especially with the strike struggles that have been happening for higher wages, and there's been--and some of the factories, particularly in the bigger cities, trying to move away from the more state-controlled unions, and there's more demand for independent unions. What's happening on that whole front?

    SCHELL: Well, [snip] going to be loath--they have one union, the old Chinese Federation of Labor Unions, and they're going to be very loath to allow free unions to arise any time soon, because they do not smile kindly on any independent organization that might challenge the party. That goes for civil society; it goes for political parties. So there was some labor activity over the past year agitating for higher wages, and interestingly, the Chinese government, recognizing that this was a point, a flashpoint that could lead to social instability, did support higher--the increase in wages. But it was interesting that it was initially only for factories owned by Japanese, Taiwanese, and foreigners. They kind of believed the foreigners a little. But, nonetheless, the principle was established that unhappy workers could get some sort of satisfaction. So it remains to be seen how this will come out in the future.

    JAY: The potential--we--during the height of the crisis, meaning the Western crisis, there was quite a bit of unemployment in China. We saw stories of whole cities where people were starting to go back to the countryside because there just weren't enough jobs. Is that's change? Or how much have they come out of that?

    SCHELL: Well, China's dilemma during the economic crisis, global crisis, was that, of course, they depend heavily on exports for employment. And when the United States became unraveled with the housing bubble and people stopped buying--no more credit--it really did affect China. So you had a lot of these factories, filled with migrant laborers, were laying off, laborers going on half-shift, closing down, and a lot of these people had to go home, back to the countryside. But, in fact, they're redundant there. They're not needed there.

    JAY: In the countryside.

    SCHELL: So it was a tremendous dislocation. The only beneficial part of it was that a lot of these migrant laborers who'd been to the big city learned more sophisticated ways and something about business, and then start starting businesses back in their rural areas. So there was some modest benefit. But actually it was quite a dislocation.

    JAY: The price of food is skyrocketing around the world, and it must be in China as well. The Chinese authorities look at what happened across the Arab world and Northern Africa, and they see, you know, millions of people in the streets demanding not just economic issues but demanding political rights, very much about democracy. What effect has this been having in China?

    SCHELL: Well, inflation is quite high, particularly in food in China, and the Party's very, very worried about this, because this is the precursor to everything that ever happens in China by way of social instability. Then to compound matters, they look out at the Middle East at the Jasmine revolutions fed by the internet, and they become triply alarmed, because they see these disturbances and these governments being overthrown, and they think right back to 1989. They've been there, they know what it's like, and it's very alarming to them. But having said that, I don't think in the immediate future there is quite the pressure in China for a Jasmine-like revolution, simply because they have, to date, against all odds, managed to keep the economy growing at 10 percent. By and large, enough people think that they can work their way up if they just keep their nose to the grindstone. So, you know, one has to be very cautious about predicting anything in China. No one's ever been right about it [crosstalk]

    JAY: Now, we hear that there are thousands of strikes taking place across the country, and thousands of protests happen in villages in the countryside that we don't really get much media reportage on. What's your sense of the amount of unrest and opposition? Is it perhaps more than we think it is?

    SCHELL: I think there's a huge amount of unrest locally in different areas for different reasons--people whose lands have been confiscated by government projects, people whose villages have been polluted, corrupt officials, etc., etc. There are literally thousands of these sort of insurgents or demonstrations or some kind of social unrest. But they're localized, and the media doesn't report them nationally. And so they--never gets to be knit together in any kind of a fabric of a national movement. This is the great anathema and fear of the Party.

    JAY: And this is where the internet, if not controlled, could change things.

    SCHELL: This is where the internet is terrifying, because you could have people in one part of the country hooking up with others. So that's why the Party has spent literally billions of dollars to manage the internet, to keep weeding it, controlling it, packet-sniffing, /"k@.rIN/ it out, so they can get the benefits of it in business and the Party maintaining connections with the regions and propaganda purposes, but not have the antisocial sort of effect of social media. No Twitter, no Facebook. They're very wary about these kinds of alternative networks of interaction that could rival the parties.

    JAY: Thanks for joining us.

    SCHELL: A pleasure.

    JAY: And thank you for joining us on The Real News Network.

    End of Transcript

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at


    Latest Stories

    The Modern History of Venezuela and Popular Democracy - Edgardo Lander on RAI (9/9)
    An Asia "Pivot" Should Mean Cooperating with China to Solve the Global Environmental Crisis
    Assessing the U.S. Environmental Movement
    Intimidation and Political Interference Goes Unpunished in UAW Case
    Exclusive Investigation Uncovers How BP Uses Bribes To Do Business
    The Modern History of Venezuela, The Protests and Democracy - Edgardo Lander on RAI (8/9)
    Greek Politics 4 Years After The Financial Crisis
    CBO Report Confirms U.S. Deficit Back to Normal Level
    Israel Uses Refugees as "Currency" in Arms Trade with Africa
    Who Will Pay for Climate Change Disaster?
    Canada Shifts to Right Under Harper, Mimicking the United States
    The Savings and Loan Crisis Demonstrates the Importance of Glass-Steagall
    South African Platinum Miner's Struggle Challenges ANC Leadership
    TRNN Original Report: Manning Determined to Fight Back After Army Upholds 35- Year Sentence
    Hundredth Anniversary of the Ludlow Massacre
    The Bundy Ranch Standoff Demonstrates Values Shared by Corporations and the Far Right
    The Resegregation of American Schools
    The Modern History of Venezuela, Why Still So Much Crime? - Edgardo Lander on Reality Asserts Itself (7/9)
    What Role Has Russia Played in Eastern Ukraine?
    Can Johns Hopkins Afford to Pay A Living Wage? (2/2)
    University Sit-In Targets World's Largest Private Coal Company
    The Modern History of Venezuela and the Need for a Post-Oil Economy - Edgardo Lander on RAI (6/9)
    Can Johns Hopkins Afford to Pay A Living Wage? (1/2)
    One Percent of Environmentalists Killings Lead to Convictions
    Investigation Finds Former Ukraine President Not Responsible For Sniper Attack on Protestors
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Ukraine Transitional Gov't Moves Militarily To Reclaim Seized Buildings
    IPCC Report Flawed By Narrow Focus on Carbon Emissions
    The Modern History of Venezuela: The Bolivarian Revolution - Edgardo Lander on Reality Asserts Itself (5/9)
    Obama Signs Directives to Reduce the Gender Wage Gap
    Eastern Ukraine Lacks Political Representation in Kiev
    Demystifying the Role of Mitigation in the Most Recent IPCC Report
    Hypersurveillance State Won't Prevent Another Boston Marathon Bombing
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Univ. of Maine Faculty Reinstated After Students Protest Against Cuts
    The Modern History of Venezuela from 1908 to 1973 - Edgardo Lander on Reality Asserts Itself (2/9)
    IMF Will Address Global Inequality, Says Managing Director Christine Lagarde
    Raising Big Banks' Leverage Ratio Good, But Not Nearly Enough
    TRNN Replay: Austerity Road to 19th Century
    Has Palestinian Maneuvering Revived Peace Talks?
    Late Jackson Mayor Lumumba's Son Wins Primary to Replace His Father, Runoff Election Ahead
    Quebecers Reject PQ and Elect a Liberal Government Representing Big Business
    TRNN Debate: Decriminalization vs. Legalization
    The Beginning of the Chavez Era - Edgardo Lander on Reality Asserts Itself (4/9)
    "Off With His Head": Court Upholds Obama's Power to Kill
    Workers at Nation's Top Hospital Strike For Fair Wages
    From Exile to Radicalization in Venezuela - Edgardo Lander on Reality Asserts Itself (1/9)
    Rwanda 20 Years Later: Genocide, Western Plunder of Congo, and President Kagame
    Ukrainian Protesters in the East Demand More Autonomy From Kiev Government
    Hunger Strikers Demand President Obama Halt His Record 2 Million Deportations
    Indian Parliamentary Elections - A Primer With Vijay Prashad
    West Looks to Carve Up Ukraine & Privatize Industries Held by Kleptocrats
    Where Are Israeli-Palestinian Peace Negotiations Headed?
    The Multiple Kingdoms of Saudi Arabia (5/5)
    Do the Afghan Presidential Elections Signify Progress?
    Republican Presidential Hopefuls Pay Homage to Billionaire Casino Tycoon Sheldon Adelson
    Will Extremist Lieberman Become Israel's Next Prime Minister?
    Why do the Saudis Want the US to Attack Iran? (4/5)
    Immigrant Advocates and Families Tell President Obama 'Not One More'
    Elections, Pipelines, and Protests - The Canada Panel
    Chris Hedges on "Israel's War on American Universities"
    Baltimore Residents Decry Lack of Affordable Housing
    Yellen Talks the Talk But Will She Walk the Walk?
    Hopkins Hospital Workers Speak Out against "Poverty Wages"
    Will Venezuela's New Floating Exchange Rate Curb Inflation?
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Supreme Court Decision Opens Floodgates for More Campaign Cash
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    Saudi Arabia and the al-Qaeda Monster (3/5)
    Maryland Residents Voice Opposition to Natural Gas Fracking Export Facility
    Supreme Court Ruling Gives Wealthy Individuals More Influence Over Elections
    What are the Saudis Afraid Of? - Madawi Al-Rasheed (2/5)
    Baltimore's MICA Adjunct Professors Set to Vote on Unionization
    Boycott of Israel Moving to Next Level?
    Hypocrisy Dressed Up as "Realism" Justifies American Alliance with Saudi Dictatorship
    Immigration Reform in the Shadows of Cesar Chavez's Legacy
    Leaked Senate Report Shows Use of Torture As "Ineffective"
    UN Report Says Climate Change Will Threaten Food Production Worldwide
    The Hypocrisy of US Calling for Enforcement of International Law
    How the Ecuadorian Economy Grew in a Global Recession
    'Shadows of Liberty' Trailer
    Kristina Borjesson on Why CBS Shut Down Her investigation into Flight 800 (2/8)
    Glen Ford on Racism in the American Media (3/8)
    Paul Jay on What Drives Corporate Media and What Drive The Real News (4/8)
    Creating a New Media Paradigm After Citizens United (5/8)
    Should The Left Engage with the Mainstream Media? (6/8)
    What Is the Financial Backing For The Real News? (7/8)
    Standing up to Character Assassination (8/8)
    Oligarchs, Fascists and the People's Protest in Ukraine
    TRNN Debate: Is Obamacare In the Interest of Workers?
    Too-Big-To-Fail Advantage Remains Intact For Big Banks
    Obama and the Saudi Agenda
    TRNN Replay: Investigating the Saudi Government's 9/11 Connection and the Path to Disilliusionment - Sen. Graham on Reality Asserts Itself pt 1
    The Iraq War's Real Legacy
    Petitions with 100,000+ Signatures Call for Snowden's Passport to be Reinstated
    We Need to Harness People Power - Andy Shallal on Reality Asserts Itself (4/4)
    BC Pipeline Fight and Quebec Elections - The Canada Panel
    Jonathan Schell - 1943-2014: Board Member of TRNN on Why We Need The Real News
    Teachers on Strike from the UK to Argentina
    Connecticut Poised to Become First State with $10.10 Minimum Wage
    Oil Spill Threatens Wildlife and Local Economy
    DC School Test Scores Up, But Poor Black Kids Are Doing Worse - Andy Shallal on RAI (3/4)
    Obama's Proposal To End NSA Bulk Data Collection Won't Protect Privacy
    How Google, Apple & The Biggest Tech Companies Colluded to Fix Workers' Wages
    An American Should be One that Questions Their Government - Andy Shallal on RAI (2/4)
    What's Driving Putin & Obama's Posturing on Ukraine?
    Hundreds of Students & Faculty Occupy College Campus to Fight Cuts to Public Higher Ed
    Due Process 'Impossible' In Harsh Death Sentencing Of Over 500 Muslim Brotherhood Members
    Has Anglo-American Capitalism Run Out of Steam?
    Being the "Other" in America - Andy Shallal on Reality Asserts Itself (1/4)
    TRNN Debate: Should Baltimore 'Ban The Box'?
    How Fallujah Became the Iraqi Government's New Battleground
    Why I Decided to Blow the Whistle on the NSA
    NASA Climate Predictions Show Serious Threat To Humanity
    Professor Who Teaches Israel-Palestine Conflict Accuses College of Violating His Academic Freedom
    CIA and NSA Wrongdoing Requires Independent Investigation, Says Former Church Committee Staff
    Are Tuition Breaks Enough To Combat High Student Debt And Low Graduation Rates?
    Industries Across the U.S. Are Stealing Wages From Their Lowest Paid Workers
    Who In Ukraine Will Benefit From An IMF Bailout?
    NSA Recording All International Calls From U.S.
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (2/2)
    BP Gets Green Light to Drill in Gulf, But Has Safety Improved?
    Residents Still Not Drinking Tap Water Two Months After West Virginia Spill (1/2)
    Libya's Descent Into Turmoil Three Years After NATO Intervention
    From Pipelines to Peladeau - Canadian Report
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (1/2)
    Congressional Progressive Caucus Budget Strikes Back Against Austerity
    Libya Three Years Later - Chaos and Partition
    Why Was Gaddafi Overthrown?
    Should Ukraine and West Accept De Facto Crimea Joining Russia? (2/2)
    Tony Benn Saw Socialism as the Culmination of Democratization
    Why Didn't Bush/Cheney Attack Iran and Can Obama Make and Sell a Deal? - Gareth Porter on Reality Asserts Itself (3/3)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi? (2/2)
    Crimea Referendum: Self Determination or Big Power Manipulation? (1/2)
    Sen. Graham: President Must Side with Openness About CIA and 9/11
    Manufacturing a Narrative for War - Gareth Porter on Reality Asserts Itself (2/3)
    Protesters Hit the Streets of Brooklyn to Demand $15 Minimum Wage
    Hammer: 'Moral Bankruptcy' Behind Massive GM Recall
    White House Withholds Thousands of Documents from Senate CIA Probe
    I Grew Up Believing in Time Magazine's Version of America - Gareth Porter on RAI (1/3)
    Western European Banks Vulnerable to Ukrainian Sovereign Debt Crisis
    TRNN Debate: What's Driving Inflation in Venezuela? (2/2)
    CIA vs. Senate: Who Is Obama Protecting?
    Will Tipped Workers Get Excluded Again From Minimum Wage Hike?
    TRNN Debate: What's Driving Inflation in Venezuela? (1/2)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi?(1/2)
    TRNN Replay: A Look at Who's Poised to Become No.2 at the Fed
    How Right-Wing Nationalism Rose to Influence in Ukraine (2/2)
    Netanyahu Attacks Boycott As Campaign Enters New Phase
    Moving Towards a Police State - Michael Ratner on Reality Asserts Itself (7/7)
    Fighting Reagan's Secret, Illegal Wars - Michael Ratner on Reality Asserts Itself (6/7)
    Puerto Rican Independence Movement and Cuba Further Radicalized Me - Michael Ratner on RAI (5/7)
    The Butcher of Attica - Michael Ratner on Reality Asserts Itself (4/7)
    MLK and a Radicalizing Moment in American History - Michael Ratner on Reality Asserts Itself (3/7), Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting