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Fletcher PhD Students Ponder China's Future By Ben Ball, Office of Public Affairs “Don’t be deceived by the false teeth of the shining Shanghai skyscrapers,” warned Fletcher PhD student Krisztian Orban. “The engines of economic growth seem to have run out of steam.” Orban's pungent words of warning came during a panel discussion at The Fletcher School this past week called “China: Beauty or Beast?," featuring three PhD. students at The Fletcher School. They were meeting to discuss China's financial, military and environmental future. Interest was keen within the Fletcher community as approximately 60 students jammed a conference room on the school's 7th floor to hear their colleagues. Orban challenged the view that China’s spectacular economic growth over the past several years was a natural result of market reforms, instead, asserting that the Chinese government was wasting money by taking on debt to prop up state owned enterprises. Sooner or later, he argued, that debt is going to result in the massive closure of these largely inefficient factories. “Reform of state owned enterprises means closing them down,” he stated, adding that if this happened, the Chinese authorities would “risk the survival of the regime” due to the destabilizing effects of unemployment. Orban also challenged the notion that China’s accession to the WTO would open the doors for large scale investment. “The WTO will not bring major change. If they cannot fix the state owned enterprises, they cannot fix the financial system. If they cannot fix the financial system, they will not open it up to international actors, " he said. Toshi Yoshihara focused on China’s role in international security, stating bluntly that “Beijing will disrupt the status quo.” Still, he felt that the Sept. 11 attacks had changed the nature of the Sino-US relationship for the better. “Sept. 11 deeply affected China’s outlook and produced a strategic opportunity for improvement in Sino-US relations,” he said. The main difference in post-Sept. 11 Chinese policy has been that country's relative silence. Yoshihara told the panel audience that the lack of a strong Chinese statement on the attacks “would have been unthinkable a few months ago,” when the US and China were at odds over an EP-3 plane which collided with a Chinese jet. In this new environment, the strategic importance of China has dropped. “China has very little to offer the United States in terms of this campaign," said Yoshihara. "Beijing has been effectively marginalized.” Furthermore, “a US presence in Central Asia may undo a diplomatic triumph for Beijing,” Yoshihara adds, speaking about a recent regional cooperation agreement. Kelly Sims Gallagher, the third PhD student, spoke about environmental conditions in China, saying she believed that Beijing no longer has the luxury of remaining complacent about its problems. “The environment is already constraining economic development in China,” she said, citing statistics which show that China loses 4-12% of its GDP growth to environmental damage. A large industrial sector has also caused health problems in China, where the number one cause of death in rural areas is indoor air pollution. While Gallagher had a mostly gloomy prognosis for China’s environmental state, she did see a glimmer of hope for the future. “China is twice as energy efficient as it was twenty years ago,” she said, noting that most of China’s new energy technology is provided by the United States. “China has become dependent on north Atlantic countries for energy technology,” she held, adding that this allows China to “leapfrog” over more inefficient and environmentally damaging production processes already in use. Gallagher ended on an optimistic note. “I think the [Chinese] leadership cares, and I am hopeful about that.” |