James A. Dorn
A survey covering 20 countries, conducted by GlobeScan in 2005, discovered that the Chinese are the ones who believe (74%) that "the market economy is the best system on which to base the future of the world." This is a surprising result, until 1979 when the Chinese government took absolutely all economic decisions. That same poll found that people in the United States also supports the free market (71%) while in Russia the support of capitalism is weak (43%) and France (36%), even weaker.
The big change in thinking about the Chinese capitalism is confirmed by a 2006 study by the Chicago Council on Global Affairs: 87% of respondents in China believe that "globalization, especially the greater interconnectedness of the economy their country with others around the world, benefits the nation. " That compared with 60% in the U.S. and 54% in India.
not surprising that the Chinese support globalization, which opened his country to the world, fired economic growth and social change, enabling millions get out of poverty. By expanding the horizons and opportunities of people, globalization has put pressure on the Communist Party to allow privatization and market performance, achieving a positive impact on civil society.
The Chinese can now own their homes, run their own business and seek employment in the private sector. Such economic freedom was impossible under central planning and autarky before. In a major Chinese business magazine, Caijing, a photograph of the Statue of Liberty on the same page as the notice of a condominium in Beijing. And high school students in Shanghai read discussions on globalization and economic reforms in their textbooks with no mention of Mao.
Trade liberalization has benefited China and the global economy. Although millions of Chinese workers have been affected, the Chicago Council survey shows that 65% of respondents in China believe that "international trade benefits the job security of workers." By contrast, only 30% of U.S. workers believe that international trade benefits to workers.
course, the purpose of trade is not to protect jobs but to create wealth and global wealth is much greater today than two decades ago. Trade liberalization, the information revolution and financial integration have been combined with institutional changes that help the market to offer to China, and the world, a splendid future.
One of the lessons learned in China is that poverty is fought best with institutional changes that foreign aid and government intervention. Decades ago, the concentration of poverty was in Asia, not Africa. Today, the opposite happens and foreign aid has not improved the lives of the poorest Africans.
Similarly, the minimum wage is no panacea. Politicians offer to increase the minimum wage, but do not address the root causes of poverty. If the minimum wage is set above the indicates that the market, employers will hire fewer people and change their production systems, replacing labor by machines.
Hong Kong never had minimum wage and China does not enforce it nationwide. Although China has made great strides toward a market economy, is still missing. It requires the expansion of property rights, justice and transparency in the judicial system, while the free flow of information. Beijing should also allow full convertibility of its currency, the yuan. Open
Chinese Communist Party to capitalists and to amend the constitution to protect private property is not sufficient if there is no independent judiciary. But erected a statue of Adam Smith at the University of Finance and Economics in Chengdu, something not seen in Latin American universities.
If the future of China depends on free trade, must also be present political freedom because the free market does not exist without a free people. The challenge is to institutionalize the rule of law that protects the government to the people and their properties.
* Cato Institute's academic vice president and director of the Cato Journal
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