However, when it comes to higher education, relations have still not completely opened up. While there is wide agreement that there would be benefits if there was cross recognition of each side’s university accreditation, there are still many worries about the short-term challenges this would pose. This is particularly true in Taiwan, where all discussions about China are potentially political. Taiwan’s opposition Democratic Progressive Party (DPP) which is pro-Taiwan independence, and is only now slowly emerging from under the shadow of the previous Taiwan president Chen Shui-bian, has been quick to capitalize on fears of the island being over-run, if not by the People’s Liberation Army, then by mainland Chinese graduates of universities and colleges in Taiwan. The party is particularly strong in southern Taiwan in the cities of Kaohsiung and Tainan, and which continue to be DPP dominated even though most of Taiwan’s other counties have come under the rule of KMT supported candidates.

Background to the problem

For Taiwan, its higher education problem began in the 1980s, when Taiwan’s Ministry of Education sought to widen the number of students accepted into the island’s universities. Like China, university admissions were determined through university entrance exams and up until the 70s, average annual admissions were in the region of 11%. As Taiwan democratized, local politicians supported the opening of new colleges and universities as a way to build local popularity among their voter base. At the same time, the Ministry of Education loosened up restrictions on the opening of new universities and colleges. The end result today is that now, everyone who wants to attend university on the island is able to gain admittance. 

But it has not just stopped there. Today, there is an excess of universities and colleges in Taiwan, with 147 private and public colleges and universities serving the island’s 1.2 million students. Of this number, 1/3 of the schools are public, while 2/3 are private. While the public institutions are directly chartered and managed by the Ministry of Education, the private institutions are also indirectly financially supported for up to 15% of their annual budgets, also by the Ministry of Education. This has created an additional financial burden on Taiwan’s economy, which has faced higher unemployment and a smaller tax revenue base as more businesses have relocated their manufacturing to China.

Adding to Taiwan’s current problems are the brutal reality of Taiwan’s low birth rate and age demographics which means that many smaller universities and colleges are operating at far below their normal student capacity.

For political reasons, it is almost impossible for the Ministry of Education to shut down some of the universities and colleges, since such a move would be unpopular with both alumni of the affected institutions and local politicians. The only acceptable solution is to increase the number of students admitted. For this, the most readily available Chinese-speaking source of students pursuing higher education is China.

The China Challenge

In contrast to Taiwan, only some 60% of Chinese students are admitted to university and college in China every year. Since university education is a prerequisite for white collar jobs in China’s cities, these exams are a major annual event in the country, with parents accompanying what is usually their only child as they sit the exams. The Chinese government deliberately wants to move its population up the value chain, from the first generation, which was largely uneducated rural farmers working in factories at low wages, and now wants more educated factory workers and city workers. For this reason,  government policy wants to speed up the number of Chinese attending university. University enrollment in 2009 was 6.4 million in 2009, compared to 5.7 million in 2007 and only 2.2 million in 2000.  

Because of China’s thirty year old one-child policy, the age demographics of the country is moving back; this precludes China’s Ministry of Education from opening more universities and colleges, since at most, the new institutions would only operate at full capacity for only a few years before running into the same problems facing Taiwan’s surplus of higher education institutions. China experienced large population growth in the 50s and 60s, and that particular age group of the workforce will start retiring in 2015, slowing demand for higher education in China. In the period after 2015, the size of China’s workforce will essentially fall off a cliff.

So, from almost everyone’s point of view, the answer is simple. Admit Chinese students to Taiwan’s schools for higher education. The only dissenters  from this view on Taiwan are the hardline pro-Taiwan independence advocates who see this as yet another compromise to China’s authorities by the Ma administration, and depict the Chinese students as a potential fifth column, destined to change the character of the island to something much more closely resembling China. 

The Accreditation Question

So what has held back the development of education relations? For years, many Taiwanese have gone to study in China’s universities, but Taiwan’s Ministry of Education has continued to refuse to recognize Chinese diplomas. For years, this was because Chen Shui-bian, while serving as president (2000-2008), deliberately wanted to put a brake on the development of relations, and in the education field, one of the easiest ways was to refuse accreditation for Chinese universities on the island, preventing many Taiwanese from finding jobs on the island after returning from study in China because mainland diplomas were not recognized on the island. According to Nathan Chow, director of Shih Hsin University in Taiwan, this restrictive period under the Chen presidency severely hurt Taiwan’s economic standing, making it less competitive than other countries in Asia which did not place restrictions on economic and education ties with China.

Even though Ma Ying-jeou was elected in 2008, recent election setbacks on the island have forced the KMT to take a hard look at the pace of the development of its relations with China. Ma has been criticized for poor planning in opening Taiwan’s relations with China, and his DPP critics have been able to win in local elections on the island. DPP legislators have selected the education issue as a potential sign of capitulation to China. Since the DPP is now in the opposition, it has been under less pressure to come up with a counter-proposal to the KMT’s openings on the educational front to China, even though they have no ready solution to the excess number of universities and the increased financial burden placed on the government.

According to Nathan Chow, the criticism has centered around five major questions:

• What is the true purpose of opening up education in Taiwan to Chinese students?
• Do Chinese students actually want to study in Taiwan?
• Does Taiwan only want the worst students from China coming to Taiwan?
• Is it fair for Taiwan to subsidize Chinese students, and to take from Taiwan students’ quotas?
• Will this solve the problem of excess private universities in Taiwan?

Faced with these questions, the Ma administration has been forced into a defensive posture by the opposition pro-independence Democratic Progressive Party.

Since China’s population base is so much larger than Taiwan’s, China’s Ministry of Education has been much more generous about recognizing Taiwan’s universities and diplomas. Many Taiwanese, unable to find work because of the accreditation issue, have chosen to find work in China instead, or to move on to other countries. In the past year, the Chinese authorities, recognizing the value of China-educated Taiwanese, have opened up their labor restrictions, making it easier for them to find work permanently in China, instead of forcing them to return to Taiwan. 

A Turning Point for Taiwan, China? 

As with so many issues in Taiwan, anything with a China angle is likely to be highly politicized. This is even true when improved education relations between China and Taiwan are likely to accrue to the benefit of both sides. In Taiwan, the Ma administration will have to work on a comprehensive and detailed education plan which will be implemented with care, and which will show clear benefits to the island’s people, if he is going to hope to win in another term in 2012.

Your book does not challenge the legitimacy of the Chinese government and party, but it was banned in China. Why?

The main thesis of the book is that China, throughout its long history, was most prosperous when it had a pluralistic society, and often divided into smaller states and kingdoms. This division allowed competing ideas and cultures to flourish. In comparison, when China has been united into a single state under one dynasty, the Chinese people have tended to suffer more. This is because the power of the central government is virtually unlimited, and the rights of the people suffer as a result. The state becomes strong under this strong centralist model. The prevailing officially-supported view now is that China can only become strong when it is united under one strong central government, and that this is especially necessary now if China is going to become a leading global power.

My book was first published in China in late 2006. It was, as is normal, allowed for a two-month commentary period before final distribution at a Beijing book fair when it would be released. During this period, I was informed that the book would not be distributed. Since the book had already been printed, I had 60 copies which I kept and distributed among friends. They read the book and liked it. Eventually a copy found its way to New Century Media; I spoke with the publisher and reached agreement, and it was published in Hong Kong.

Have you been affected by the book’s publication in Hong Kong?

No. I continue to work as a journalist covering the stock market and economics for my newspaper.

How did you come to your thesis about Chinese history? And how did you decide to write a book about it?

I grew up during the Cultural Revolution, so I missed university. In the eighties, I began to question the concept of class struggle, and the Marxist division of society into capitalists and the proletariat. So I decided to start reading as much as I could on the subject. Since I did not go to university, I was free to read whatever I wanted, and I focused on the push for constitutional government in the early 20th century, especially during the Republican period. I wanted to understand why these multiple efforts at reform failed. I did this study in my free time, and since I was poor, like many Chinese at the time, I would go to bookstores, and hand-copy what many of the books’ authors wrote in my own notes. 

In most Chinese histories, China is portrayed as being torn apart and weak when it is divided into competing states, and only strong when it was unified under one emperor, such as Qin Shihuang, the first emperor to unify China. As much as I could, I went to primary sources so that I could understand the true original conditions at the time. Gradually, a new picture emerged: the period when China was divided into competing states such as the Spring and Autumn period, the Warring States period, and the Southern and Northern Dynasties period were all periods of unprecedented growth in the arts, history, culture and commerce for the Chinese. There were many competing religions and philosophies which vied for influence in the court and throughout the country. Some emperors were intellectuals, historians, artists and even monks. When it came to the rights of Chinese as individuals, they enjoyed more prosperity and rights during these periods. In contrast, when China was unified under one dynasty, as first happened under the emperor Qin Shihuang of the Qin dynasty, the power of the emperor and dynasty knew virtually no limits, and the rights of the people suffered. This was because unlike in the west, there was no true feudalism in China, where the power of the kings was checked by the landed gentry and the church. All power and property was directly held by the emperor, and his influence was exercised throughout China by the bureaucracy.

As I learned more, I decided to write a book about my views starting in the eighties. It would be fair to say that this book was twenty years in the making. My questions about the official views of history deepened, and I wanted to understand why China, and Chinese society, developed the way it did. I questioned the division of the world’s ideologies into capitalism and socialsm; since capital is money, why should there be an -ism to it? 

I wrote the book to be read by Chinese, so that I could present my view on Chinese history, and to show that pluralism in society was what was best for Chinese. I hope that it provides some insights for my readers, and that others can build on my views.

Most historians say that the Tang Dynasty was the best in Chinese history, but you suggest that it was the Song Dynasty. Why?

The strength of the Song Dynasty was also its weakness. Unlike many other dynasties, its emperors rejected collective punishment of whole families, choosing instead to punish criminal individuals. Chinese commerce experienced unprecedented growth in this period, with many Chinese business people based in Korea, Japan and Southeast Asia and traveling back and forth to China. The population experienced strong growth. Chinese culture, in contrast to political power, expanded.

During this period, China was divided, as there was the Northern Song and Southern Song dynasties. This is another example of how the Chinese people benefited from pluralism.

This ended in 1279, when the Song was replaced by the Mongolian’s Yuan dynasty. Since then, all of the dynasties, down to modern times, have attempted to unify China under the strong centralist model, and the rights of the Chinese people have suffered as a result.

Turning to modern times, you cover economics and stocks. How do you feel about China’s economic development? Are you optimistic about the future?

Many western observers don’t understand China’s economic development. The cost of economic development for the Chinese government is low because the property rights of Chinese are very limited. For instance, the government can take over a piece of land, force the current people out, give them housing, and develop it into whatever it wants at very little cost. This is because the government controls the creation of capital, and the property rights of the people are limited. For the Chinese government, the costs and risks of modernization and development are very limited because they have all been shifted to the people. Moreover, China has a population of 1.3 billion people, so the risk can be spread wider. For the most part, Chinese will not rebel unless they can’t eat, and the government has been very good at insuring that their basic needs are met. So far, the Chinese government has done a good job at steadily improving the living standards of Chinese. I believe that China can continue on this course of development for at least fifty more years.

This is something which western societies simply cannot do. Even if they took away the property rights of the people,  and lowered the costs of infrastructure development, they don’t have as large a population base to support this kind of development. This is what makes China unique. 

How do you feel about revolutionary change?

Revolutionary change is not good. The people suffer, but the politicians are unaffected.

You have talked about transitioning Chinese from being subjects to citizens. How can this be done?

This can be done by gradually building a more pluralistic society where the property rights and freedoms of individuals are respected. These rights need to be enshrined in the law.

Are there plans to publish the book in an English edition? 

The book was written for a Chinese audience. If there is enough interest among a non-Chinese audience, that is something which can be explored.

Like it or not, Google’s policies regarding the distribution of information on the Internet are seen as being closely aligned with US values. Is this something which the company wants to be seen as closely aligned with? Is it good for the company which says “do no evil”  to have an official, US-government backed position?

When Google released its statement about stopping the censorship of its China search engine, google.cn, and being willing to withdraw from the Chinese market, the firm had come under China-based Internet attacks on many occasions. What may have made the most recent attacks different this time is that there are signs that an individual or individuals within Google’s China engineering team may have assisted in targeting which computers to attack. The aim of the attack was to obtain information on critics of Chinese government policy through their Gmail accounts.

There is no doubt that as the second-largest search engine in China (after Baidu), and the largest foreign-company-owned search engine in China, Google is the subject of much official attention from the Chinese government. It has come under media attack and criticism, and since the official media in China is all government-owned, that means that there are large swathes of the government which are critical of what Google does, and wants to bring Google China under “official control”. This is especially true now, because China’s stimulus program, while helping the government to maintain high official growth rates, is also leading to increased popular complaints (mainly on the Internet), about abuse of power, corruption, the growing rich-poor gap,  and the erosion of social values. The greatest fear for the Chinese government is that these critics will organize through the Internet, and to counter this, the Chinese government has increased the budget of China’s internal security forces. Sensing that the Internet will become a convenient rationale for ever-increasing security budgets, Chinese Minister for Public Security Meng Jianzhu, in a speech given in December 2009, said: 

The Internet has become a primary method for the anti-China forces to infiltrate us and amplify destructive energy. This provides new challenges in maintaining state security and social stability for the Public Security agencies.

The message to the Chinese government and leadership is very clear: the security services are in the vanguard of protecting social stability, and it goes without saying that they will ask for ever-increasing budget to fight this battle. By taking a stand against censorship and threatening to pull out of China, Google’s management has positioned itself firmly as the leader of the “anti-China” forces mentioned by Security Minister Meng Jianzhu.

By politicizing the Internet and censorship, Secretary of State Clinton and Google have set the stage for a confrontation between “good” and “evil” and social values which ironically feeds the budget and fears of China’s security services, and those in the Chinese government who want to pursue a more confrontational approach with the US government in the economic, energy and foreign policy areas. Chinese in government who advocate a more cooperative and less confrontational approach with the west will be further pushed into the background.

While the Obama administration has spoken of increased engagement with China, its actions deliver another message. It appears that the Obama administration wants to have its cake and eat it too; for domestic political reasons, it wants to pursue a hard line with China in preparations for upcoming elections, but it also wants to wink at China, and hope that the Chinese government understands that it also wants to cooperate.

This calls for a much higher degree of understanding and political sophistication, and maybe even cynicism, about the American political system than the Chinese government and leadership are likely to have. By trying to please all sides, the Obama administration instead ends up muddying the waters, sowing confusion among allies and giving ammunition to its foes both in the US, and in the Chinese government.

Time will tell whether the genie can be put back in the bottle.

In the past year, the Chinese government has stepped up its enforcement of copyright violations and has set up mobile industry alliances for digital publishing. In 2009, the Chinese government stepped up Internet content regulation, claiming that there was too much pornography and other undesirable content on the Internet. China’s Ministry of Industry and Information Technology, which is the main ministry in charge of regulating the Internet, has even floated the idea of requiring sites on non-Chinese servers to be included on a whitelist; Chinese visitors would be able to visit them only if they were on the whitelist. China’s social networking sites, such as Renren.com, have come under especially heavy government content monitoring regulations.

All signs point to the Chinese government playing a much more hands-on role for the Internet in China. For global companies such as Apple and Amazon, which will be making inroads in digital publishing this year, a big question will be how they want to deal with the Chinese government when it comes to regulation of their services in China.

The days when the Internet was wild and unregulated in China are over for good.

A great challenge within the Chinese government is over when to act? While the Chinese government has more economic tools available than the US government, which relies almost entirely on interest rates to guide growth, a major bone of internal discussion is over when to take action? Too early, and some continued growth may have been forsaken, too late and, well, it’s too late.

Because of the government’s stimulus package, much of the aid has flowed through China’s state-owned banks to state-owned enterprises (SOEs). The result: the state sector has grown, while Chinese private businesses have had a hard time keeping their head above water. Outside China, all of the cash-rich companies making major energy deals are SOEs. Compared to previous years of reform, Chinese university grads now prefer to work for SOEs where they have more job security than with the private sector.

The trouble with state-owned enterprises anywhere is that while they offer good job security, they are slow to change and slow to innovate new products and services. China has shown that it is the best in the world at making commodity products at low prices; no other economy even comes close to competing. But this growth is predicated on there being a large base of consumers who have money to buy these things, either overseas (mainly in the US), or in China (as has not yet happened). In 2009, the US consumer base which fueled China’s exports for the past 30 years largely disappeared because jobs and easy credit evaporated, and the large Chinese consumer base which would replace American consumers has not appeared yet.

In 2010, we will find out if this gap is manageable for China, or whether it’s a bridge too far. 

This begs the question: “If COP15 was so important, then why wasn’t China involved in the discussions which led to the agenda for this make or break meeting?” Since China is, and has been the leading carbon emitting country since 2006, shouldn’t the meeting coordinators have done more to make sure that China, especially the Chinese government, are involved in the decisions which led up to COP15?

The simple fact is that, for the most part, the meeting coordinators were so focused on driving their own agenda, they forgot how differently China looks at things. For the past 30 years, the Chinese government has been mainly focused on economic development. This necessarily means that carbon emissions will go up. For the Chinese government, economic development is important because it will bring social stability. That is, as long as the Chinese economy grows, the Chinese people will be relatively happy, and will not want a change in government. While China has a long history, it does not have a history of peaceful changes in government. 

Cutting China’s carbon emissions will necessarily mean a slowing down of the Chinese economy, even though the Chinese are investing heavily in solar, wind and other clean energy technologies. The energy demands of this expansive growth are such that a large portion of China’s energy demand can only be filled by that cheap and dirty carbon emitter, coal. The Chinese government knows full well that China will lead in terms of carbon emissions worldwide for the next 20 years, and will be widely blamed by environmentalists for the effects of climate change. 

This is a real global challenge, not just for China. 

But if environmentalists want there to be change, they must include China in all discussions, and not just expect it to sign on the dotted line. Copenhagen has shown us that if when push comes to shove, China won’t sign.

Because of high human population and resource consumption, the stress we are putting on our planet is unprecedented. We are basically consuming the planet, and the by-products of human activity are poisoning our environment and changing our climate. Scientific studies, ice-cap melting and other measurable data all show that this is a trend which has taken hold, and cannot be easily slowed and reversed. Even if we drastically changed our habits, and curtailed emissions, the trend would continue for some time because accumulated trends cannot be turned off easily like a tap of water. Instead, the effects of new more environmentally friendly policies will take decades even to begin to show results.

And yet, in spite of the depth of our environmental problems, there are many who choose to question the data models which lead us to our worst fears about the environment. The fact is that ice-cap melting is moving at a faster pace than most of the data models predicted, and most climatologists predict that the Arctic Sea will be ice-free in the summer months in 10 years. So what is the point of arguing about data models if nature tells us that the the worst predicted outcomes are too conservative?

At the same time, bankers and other commercial interests are seeking to commercialize green environmental efforts and products. The simple fact is that we will not be able to monetize green products and services in a sustainable manner in the near future on a sustained basis. Sure, we can create bubbles, but the bubbles are not sustainable. And aren’t bubbles such a big part of what got us into trouble in the first place when it comes to the global economy?

When it comes to sustainability, the simple fact is that we have stretched air, water, food and energy resources beyond the limit. There is nothing sustainable about the way we live now. Assuming that current populations do not change, we are all going to have live within a lower standard of living. If human population takes a drastic fall due to war, disease and/or famine, the survivors can live well without making sacrifices quite as large.

This is just for the environment and climate change. In future articles I plan to talk about how stubborn refusal to change leads to economic and business calamities.

Let’s change while we still can; while it can still make a difference. The old ways don’t work anymore.

I would like to thank Asian Correspondent for inviting me, as a contributor, to talk about important issues and Asia. Asia is the single most important region in the world today, and for those of us who live here, it is a place we all have strong feelings for. 

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