What is China doing wrong? A more nuanced view.

In the past week or two, I've been posting a lot of criticism of China's policies, both in the security realm (cybersecurity, hacking, etc.) and in the economic realm (mercantilism). It may seem that I'm trying to paint a picture of an evil empire; a monolithic government ruthlessly aggrandizing itself at the expense of other nations. But the reality, I think, is much more nuanced.

Consider this article about the relationship between the Chinese government and Chinese hackers:

"Guaranteed successful attack tools!" is how Black Hawk Safety Net advertised its online academy for hackers. "Spare one minute to learn and you'll make your life more exciting."

Police in Hubei province announced to the Chinese media over the weekend that they had closed down the operation, which state media said was the largest training site for Chinese hackers, and arrested three of its ringleaders. Black Hawk is accused of collecting more than $1 million in tuition from 12,000 subscribers and 170,000 others who took its online courses, according to Chinese media...

But critics say the arrests might be little more than a propaganda ploy in the midst of the Google scandal.

"It seems aimed at bolstering the Foreign Ministry's claim that China is getting tough on hackers. This is meant for an international audience, not for domestic criminal prosecution," said James Mulvenon, director of the Center for Intelligence Research and Analysis at Defense Group Inc., based in Washington...

Some [hackers] claim their motives are purely political.

"We are the real patriotic youth. We'll target anti-China websites across the nation and send it as a birthday gift to our country," boasted a website called 2009.90, which, when opened, showed an image of a fluttering Chinese flag.

One of the difficulties in cracking down on hackers is their level of acceptance in society. Top Chinese hackers hold a yearly conference in Beijing under the name Xcon.

Moreover, some cyber warfare experts have accused the Chinese government of sponsoring the more sophisticated attacks, such as those against human rights groups and political adversaries like the Dalai Lama, Tibet's exiled spiritual leader.

Or consider this article on China's trade issues:

China’s competitive advantage is to some degree based on its inadequate governance; its failure to enforce its own laws in a transparent, even-handed manner...

China’s political economy has two key attributes: authoritarian governance and inadequate governance. At the national level, the Communist Party sets the rules, yet it is sometimes willing to ignore its international commitments in order to maintain power. In addition, the Communist Party owns and operates or is tied to private enterprises in key sectors such as transportation, energy and banking. Some have described the government as both a market competitor and referee.

China’s inadequate governance at the provincial level also reflects many factors including corruption, a lack of uniformity among rules, and arbitrary abuse of power. Local officials often have financial stakes in the same companies they are supposed to regulate. These officials sometimes ignore or circumvent governmental mandates from Beijing. Finally, China has a culture of non-compliance, where bad actors set the norm, where laws and regulations are often ignored or unevenly enforced, and where many citizens and market actors don’t know or can’t obtain their rights under the law.

Inadequate Chinese governance is a trade problem because of the country’s dominance in global markets. Its failure to enforce the rule of law threatens the concept of mutual benefit that underpins the trade regime...

In recent years, China has become infamous for its failure to enforce its own laws, whether those laws related to intellectual property, product or food safety, human rights, or employment.

In both of these cases, it seems that China's government is trying to ride a tiger.

In the realm of cybersecurity, China's government has to deal with a huge pool of profiteering opportunist hackers, and another pool of restless young nationalistic hackers. Those hackers could easily turn their skills against the government, especially (in the case of the latter group) if they perceived the government as being weak or conciliatory toward foreign rivals. So the government arrests some hackers, but others it co-opts into its own apparatus, directing their energies outward toward foreign companies and foreign governments. This simultaneously distracts the hackers from causing trouble at home, and beefs up the government's nationalistic credentials.

In the realm of trade policy, the tiger is the local governments. Profoundly corrupt and deeply enmeshed with the private sector, these local governments long ago realized that abusing the environment, Chinese workers, and local peasants was an effective means of attracting investment and thus lining their own pockets. If China's national government fails to allow this pocket-lining - say, by cracking down on environmental abuses or allowing the yuan to appreciate - the local governments could become profoundly dissatisfied with the ruling regime. And local governments, if angered, could cause a lot of trouble.

So is China's government blameless? No. Their fault lies not in the compromises they've made in order to ride the tiger, but in insisting on riding the tiger in the first place.

Why are so many of China's youth restless and nationalistic? I don't know, but my guess is that there are two primary reasons. The first is China's breakneck economic growth, which has emboldened the youth with a feeling that their country is on the rise and invincible. But the second reason is education; in order to maintain its legitimacy, the CCP has long emphasized China's "century of humiliation" at the hands of foreign powers, pointing out that the CCP was the first regime under which modern China was secure from invasion.

And why are so many local governments involved in graft that would make an early 20th-century Chicago mayor blush? Because in order to maintain the CCP's status as China's one and only political party, the party has to co-opt and buy out every possible dissenting voice. That means enmeshing the CCP deeply in every profitable enterprise in the country; the local barons' rampant environmental, labor, and social abuse is the price the CCP pays for their loyalty. This is another application of the principle that authoritarian government is usually inefficient because avoiding periodic regime change requires paying too many people off.

So in both cases, the Chinese government is forced into bucking the world because it insists on maintaining permanent power at home. Political systems by their very nature, produce frequent minor earthquakes; often these earthquakes result in a change in the ruling party (example: America in 2008), so authoritarian governments go to great lengths to direct the energy outward. Genghis Khan, for example, united the warring Mongol tribes by turning them toward external conquest; fortunately, modern states are a little more restrained.

The bottom line: for a ruling party that has made up its mind to be The Boss, nationalistic excesses - in addition to all the well-known human rights violations - are basically unavoidable. All empires are forced to be a bit evil.

Which means we can - and should - put pressure on China to shape up its behavior on the world stage, but that pressure will be of only incremental effectiveness. China will not truly begin to clean up its act until the CCP either falls, or allows itself to be just one of multiple Chinese political parties.