The Belgrade bombing has exposed fissures in China as well as disasterously setting back China's relations with the West. As go WTO hopes so go reform and modernisation in China . Article  published  in South China Morning Post  May 14

From: Philip Bowring

The 80th anniversary of the May 4 movement is a reminder of
the divergent paths that lead from China's quest for change
and modernisation. All factions now claim May 4 antecedents.

There is the anti-feudal path which divides into Marxist and
Liberal democratic manifestations. There is the authoritarian
nationalist path combining economic modernisation within a
neo-Confucian framework. There is the self-reliant, chauvinist
path spurred by western and Japanese oppression and perfected
by the peasant emperor Mao. And there is its opposite, summed
up by the city of Shanghai, of modernising through
indiscriminating contact with the most modern societies.  

Several of these divergent strands are interwoven in the
leadership's thinking today. But from time to time the nation
reaches a crossroads and a decision has to be made, left right
or straight ahead. Now may be one such time.

Vast and inward looking China may be, but China's inter-action
with the outside world has always been a factor in determining
the shape of 20th century modernisation movements. The outside
world is both friend and enemy, depending on perceptions in
China and the behaviour of the foreigners. It is probably as
true now as one hundred and fifty years ago that China cannot
modernise without foreign help. But that does not mean that it
is prepared to accept the terms, or will not veer off into a
dead end combination of east and west such as Maoism.

The foreigners did a grave disservice this week to the
outward-oriented modernisers, and thus to themselves, by
bombing the Chinese embassy in Belgrade. Doubtless it was a
mistake but a high price for such idiocies should be paid.
Small these issues may seem in the grand scheme of Chinese and
world history. But then so was the Serbian nationalist 
assassination of Archduke Ferdinand in Sarajevo, 1914.

Well before the bombing, some of China's inner tensions in
dealing with foreigners were already coming to the surface
over entry into the World Trade Organisation.

Chinese outrage, however much officially encouraged, was
understandable, particularly in the light of a cowardly NATO's
own unwillingness to take casualties in pursuit of justice for
Milosevic. However, Chinese reaction has also thrown up
interesting differences which reflect internal divisions on
the direction of the country:

* Those who believe that the US is so technologically advanced
that the bombing must have been deliberate.
* Those who don't actually believe it was deliberate but use
it as illustration of US desire to keep China weak and
humilated, thereby undermining Zhu Rongji's efforts at
modernisation through friendship with the west.
* Those who see the Balkan war as evidence that, despite (or
because of) its technology the US has lost the will to right
and thus, as Mao always claimed, a "paper tiger" 
* Those -- now including Jiang Zemin -- who recognise it was
imcompetence but desperately need something from the US in
return if their own policies are not to be de-railed.

That brings us back to the WTO. During his recent US trip, Zhu
made huge concessions, unpopular with many Beijing cadres, in
an effort to clinch membership. China went further than ever
in accepting that it is a normal country, not one entitled to
abnormal treatment. 

Zhu did so in recognition of China's weakness. A stalled
Chinese economy badly needs a pick up in foreign investment.
Membership would, it believes, re-ignite foreign interest and
lead to a new round of industrial modernisation and service
industry development. China, which is more reliant on the US
market than other Asian exporters, also needs a WTO buffer
against protectionism which could erupt if the US economy goes
from boom to bust.

For relentless modernisers like Zhu, membership also
represents a weapon in forcing efficiency on Chinese
enterprises and thus helping eventually resolve the bad debt
problems of the banks. It would also provide an occasion for
China to move to a more flexible exchange rate, determined by
economic rather than political objectives.

If WTO fails to happen despite all Zhu's efforts, the
prospects of a reaction within China against current
mainstream thinking are very real.They would be self-
reinforcing as the economic difficulties would mount and so
make further reform politically unpalatable.

Close though membership may now seem, it is all too easy to
see how it can de-railed by a US Congress incapable of
thinking strategically, a president incapable of leadership,
or by a Brussels incapable of quick decisions on anything. or
even in Beijing itself by those who can simultaneously exploit
the outrage of nationalists and the unemployed.

WTO is no panacea for China. The problems of unbalanced growth
and years of bad investment decisions go deep -- 50%
overcapacity in office space and car plants. Continuingh
unrealistic GDP growth targets do not help. Some reaction
against the open door policy may happen anyway even with WTO
membership. But the foreigners who are dragging their feet
because of concerns about democracy, human rights or China's
military modernisation need to recognise that for now the
alternative to the present leadership is one which places
nationalism, and especially the Taiwan issue, above economic
progress and internationalism. Economic liberalism still
remains the best path to gradual political change.

Nor is liberal democracy the most likely immediate alternative
to the current flawed system. The rise of the Falun Gong
movement may seem to some as an upsurge of principle and
spirituality -- especially to Americans who have a weakness
for all religions and cults except Islam. But to others it
looks at best a reactionary, obscurantist throwback to
traditional beliefs, or opportunistic self-promotion along the
lines of Korea's Moonie cult. At worst it can be a messianic
force of intolerance and unreason reminiscent of the Taiping
rebellion and the cultural revolution.

Today's Communist party may be irretrievably corrupt and soon
destined for the dustbin of history. But its leadership
reflects the desire for the economic modernisation to which
most Chinese aspire and which dominates most patriotic
aspirations. Modernity matters even more than the GDP number.
Grim though it sometimes seems, the current regime makes more
sense than the type of mass movement which follows the
dictates of a guru in New York, or leftist or militarist

In sum, it is time the west got a grip on who its friends in
China really are -- and at this key juncture then gave them
some help to stay on the path of openness and
internationalism. Self-interest demands it.



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