Nepali Times
President Xi's Singapore lessons


NEW YORK China is at a crucial point today, as it was in 1978, when the market reforms launched by Deng Xiaoping opened its economy to the world.

Deng was substantially influenced by an early visit to Singapore, where accelerated growth and prosperity had come decades earlier. Understanding other developing countries' successes and shortcomings has been and remains an important part of China's approach to formulating its growth strategy.

Like Singapore, Japan, South Korea, and Taiwan in their first few decades of modern growth, China has been ruled by a single party. Singapore's People's Action Party (PAP) remains dominant, though that appears to be changing. The others evolved into multi-party democracies during the middle-income transition. China, too, has now reached this critical last leg of the long march to advanced-country status in terms of economic structure and income levels.

Singapore should continue to be a role model for China, despite its smaller size. The success of both countries reflects many contributing factors, including a skilled and educated group of policy makers supplied by a meritocratic selection system, and a pragmatic, disciplined, experimental, and forward-looking approach to policy.

The other key lesson from Singapore is that single-party rule has retained popular legitimacy by delivering inclusive growth and equality of opportunity in a multi-ethnic society, and by eliminating corruption of all kinds, including cronyism and excessive influence for vested interests. What Singapore's founder, Lee Kuan Yew, and his colleagues and successors understood is that the combination of single-party rule and corruption is toxic. If you want the benefits of the former, you cannot allow the latter.

China, too, most likely wants to retain, at least for a while, the benefits of single-party rule, and delay the transition to 'messier' governance influenced by multiple voices. In fact, a pluralistic system is already evolving under the umbrella of the Chinese Communist Party, a process that may eventually lead to citizens gaining an institutionalised voice in public policy. To maintain single-party legitimacy, and thus the ability to govern, narrower interests must be overridden in favour of the general interest.

Many insiders and external advisers believe that the Chinese state's role must change (not necessarily decline) to create the dynamic innovative economy that is key to navigating the middle-income transition successfully. Lee Kuan Yew in Singapore and Mao Zedong and Deng in China gained their peoples' trust as founders and initial reformers. But that trust dissipates. Succeeding generations of leaders do not inherit it completely, and must earn it. That is all the more reason for them to heed the lessons of history.

China's new leaders should first reassert the Party's role as defender of the general interest by creating an environment in which narrow interests, seeking to protect their growing influence and wealth, do not taint complex policy choices. They must demonstrate that the Party's power, legitimacy, and substantial assets are held in trust for the benefit of all Chinese, above all by fostering a pattern of inclusive growth and a system of equal opportunity with a meritocratic foundation.

There are times when muddling through (or, in the Chinese version, crossing the river by feeling the stones) is the right governing strategy, and there are times when a bold resetting of values and direction is required. Successful leaders know what time it is.

Feeling the stones may seem like the safest option for China's next president, Xi Jinping, and China's other new leaders. In fact, it is the most dangerous. The only safe option is a radical realignment of the Party with the general interest.

The issue, then, is whether the reformers who carry the real spirit of the 1949 revolution will win the battle for equitable and inclusive growth. The optimistic (and I believe realistic) view is that the Chinese people, through a variety of channels, including social media, will weigh in, empowering reformers to push through a progressive agenda.

Time will tell. But it is hard to overstate the outcome's importance to the rest of the world. Virtually all developing countries and, increasingly, the advanced countries as well will be affected one way or another as they, too, struggle to achieve stable and sustainable growth and employment patterns.

Michael Spence, a Nobel laureate in economics, is Professor of Economics at New York University's Stern School of Business and Senior Fellow at the Hoover Institution. His latest book is The Next Convergence: The Future of Economic Growth in a Multispeed World

1. Daniel Gajaraj
Lee said that Deng Xioping was the greatest leader of his time.
"At his age,to admit that he was wrong ,that all these ideas ,Marxism,Leninism,Maoism,they are just not working,and have to be abandoned,you need a great man to do that and to convince or override his Old Guard colleagues and say, now we go this different way."
Such great leaders can push history in the desirable directions.

2. Tashi Lama
I am just wondering why this Nobel Laureate Michael Spence is only concerned on the economic stability of autocrat regime China with the continuity of the same oppressive regime ? a one party government that selects it's ready made leaders behind the closed doors, but still calls it an election. At present the 90% of rich Chinese elites are directly connected with powerful leaders or their relatives and near ones, this is the reality of the rule by Communist thugs in present China. During the Mao's era capitalism is looked as society's enemy and they always preached of commune and equality in sharing the wealth and food. But in reality millions died of hunger in China, while the powerful ones enjoyed abundantly the best of all the delicacies to themselves and to their near ones and poor died of starvation.

Later Deng learned a lesson from Singapore and opened the doors for economy and China progressed rapidly and became first Capitalist Communist regime in this world, but still what they preached of equality, equanimity and poor communes interest was just an empty words to fool the poor majority of Chinese, so at present in China the rich people are all Commies politburo members and their near ones. Out going premier Wen-Jiabo amassed a wealth of 2.7 billion Dollars, where did it come from? and the New President Xi at present has property worth 332 million Dollars, and there are many more kept in dark secret. We understand that 1.3 billion Chinese are kept in dark by this corrupt regime of China, there is no Human Rights, no freedom of speech and no freedom of expression in China but this Nobel Laureate is only concerned on China's economic stability to remain with the power of one party government. If the progress of Singapore is compared, they have multiparty system with an open society. I am wondering why this economist is only concerned on China's economy values rather than the moral values for humanity which are badly degrading in China? A country prospered in balance with money and morality matters for rest of the world, not the greedy narrow minded autocrat regime of China!

Values on moral ethics is must and matters most for humanity to live in harmony and peace, it is not only the money that matters! it indeed is secondary matter of concern.   

(11 JAN 2013 - 17 JAN 2013)