Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : BEIJING, CHINA
Tarikh/Date : 11/05/94
Tajuk/Title : "THE 1994 CHINA SUMMIT MEETING", IN
BEIJING, CHINA THE SOCIALIST MARKET
ECONOMY OF THE PEOPLE
Distinguished Guests;
Ladies and Gentlemen,
Let me begin by thanking the organisers of this
important meeting for inviting me to be here and to address
this meeting today. It is a great honour and a great
privilege.
2. Also, like a good Asian, let me express my apologies if
anything I say is incorrect or causes offence. Perhaps
above all, I must express a great sense of humility.
3. I have been asked to talk on the subject of "The
Socialist Market Economy of the People's Republic of China:
the ASEAN Perspective." First, how would I critique the
Chinese development objectives and experiences? Second,
what advice do I have, as the leader of perhaps the second
most dynamic economy after China, for the Chinese leadership
on the economic path they have chosen? I have also been
asked to focus my address on the lessons of the development
experiences of Malaysia and the ASEAN nations as they relate
to China's present situation. Lastly, what is ASEAN's
position on China's aspirations?
4. I cannot of course speak for ASEAN. Yet I feel
reasonably sure that my views are very close to an
overpowering consensus of the thinking not only of ASEAN but
also of all of East Asia, stretching from the Korean
Peninsula to the farthest reaches of the Indonesian
archipelago.
5. As Asians we intuitively understand what China is
attempting to do. We intuitively understand why China is
doing what it is attempting to do. We intuitively
understand how China is going about the entire process of
revolutionising its society and building towards a place of
pride and comprehensive prosperity for its people in the
twenty-first century. Perhaps this is because almost all of
us are trying to do the same:-
* in the best way we know how;
* given the complexities of our own specific
situations;
* given the enormous obstacles that stand in the way;
and
* the incredible opportunities that are before us.
6. In a sense, therefore, even though I cannot speak for
ASEAN, I believe that in much of what I say I will in fact
be reflecting the view of most East Asians.
7. Let me also begin by saying that in all humility I will
not critique China's policies and I will offer no specific
advice to the Chinese leadership. As an individual, I have
of course followed with a great deal of interest over the
last 60 years of my life the great events occurring in and
around China. I have read substantially about China's last
2,000 years. But I am by no stretch of the imagination an
expert on China.
8. I cannot imagine that I know more about any Chinese
policy than the Chinese leadership and its wealth of
advisers.
9. I also come from a country a part of which was under
authoritarian colonial rule for more than five hundred
years. For a very long time, most of what is now Malaysia
lived under a system in which we had to ask for 'advice'
from the imperial power before we could do anything. Under
this system of 'advice', all advice solicited or unsolicited
had to be followed. You will understand why I am reticent
about outsiders giving advice -- even when asked for.
Perhaps there is some virtue in not doing unto others what
others have done unto you.
10. In the 1970s and 1980s, my country was villified and
ridiculed for our New Economic Policy. This Policy was
aimed at eradicating poverty and restructuring our society
so that we would not only have rapid growth but also income
and ownership restructuring and greater social justice. We
were constantly badgered and advised to give it up. We were
constantly scolded even by people who were themselves busy
redistributing wealth in forceful ways, for example by
nationalisation or affirmative action.
11. We tinkered. We fine-tuned. We amended. We changed
what did not work. We went fast track. We slowed down.
And in the end, after it had achieved much of what we aimed
for, we decided not to extend it but to formulate a slightly
improved version which we called the National Development
Policy. But to the outsiders, we were stubborn. We were
obstinate. We were recalcitrant. We refused to listen and
to accept good advice. And of course they say in the tone
of the 'I told you so' critics that we had failed and been
forced to change our course.
12. Still after the undeniable results that have been
achieved over the 20 years of our New Economic Policy, some
have quietly acknowledged that we are one of the very few
examples of societal restructuring which others should
follow. Many countries are now advised to look at
Malaysia's example of marrying dynamic and sustained
economic growth (an average 6.7 per cent over two decades)
with massive wealth redistribution and dramatic advances
towards socio-economic egalitarianism between ethnic and
social groups.
13. If I may, I would like to tell another story. In my
country's history, it is the Western countries which fought
against giving us freedom and
democracy. In the last couple of hundred years the only
authoritarian rule we have known have been British
authoritarian and, for some, totalitarian rule, and for a
short period, Japanese totalitarian rule. We have been
extremely fortunate that since our independence 37 years
ago, we have been a successful democracy. If you care to
look around, you will notice that the political switch from
authoritarian Governments to independent democratic
Governments is not easily achieved. If you throw in a
multi-racial population, the switch may not be achieved at
all.
14. Most assuredly, our democracy is far from perfect,
which is why we have specifically identified advance towards
a more liberal democracy as one of the nine modernisations
of our generational plan which we call Vision 2020. But we
are not weighed down by `gridlock'. For almost all of our
37 years of independence, we have had stable and strong
governments repeatedly elected by the people. With strong
Governments we have been able to concentrate on doing what
is right rather than what is popular. We have had
leadership that is prepared to lead, that has always had to
satisfy the people but never to pander excessively to the
gallery. Fortunately, all our nine democratically elected
central governments have never had to be pre-occupied with
short-term political considerations at the expense of
long-term welfare. We do not have a democratic system where
the public good has to be sacrificed to powerful lobby
groups. We are unashamedly community oriented. We do not
believe that the rights of the individual come before the
rights of society. In our elections, large percentages turn
out to vote. Our majorities are not silent as in some
western democracies. We do not have constant,
ultra-combative, confrontationist politics. There has
always been a strong consensual impulse. Our press do not
believe that it is their job to hound politicians, to tell
lies and to adopt at all times the superior stance of
king-makers. The people want enough Opposition Members of
Parliament so that the Administration is kept on its toes.
In several states various Opposition parties have been voted
into power. But few want them in power in the central
Government. The ruling coalition party has always been
broad-based, bringing together the widest range of political
parties, ensuring the widest ethnic and geographical
representation.
15. But a world which tolerates and even encourages ethnic
cleansing in Bosnia never tires of pointing out the
inadequacies of Malaysian democracy. They seem unhappy that
we are not assailed by the violence and instability that
characterise most new democracies. They would love to see
our Governments and policies change with each election, so
that the uncertainties would deter investments for economic
growth.
16. For what it is worth, I believe that whilst my
country's success could not have been achieved without a
democratic system of government, it would not have been
possible without our particular form of democracy. Had we
simply taken -- lock, stock and barrel -- a different
democratic system that might have worked well elsewhere, we
might today be in deep trouble. I am certain that had we
adopted the democratic system now in place in some western
countries, you may not have the Prime Minister of Malaysia
in front of you today. He would be too busy dealing with
riots and bombs in the Malaysian capital, assuming that a
country called Malaysia still exists.
17. My country has had to listen to a lot of advice on how
to run a Western-style democracy from the day it was born as
a democratic independent state, sometimes, ironically, from
experts who only the day before had argued that we should
not be given freedom and democracy because they were
convinced we were not ready. Democracy becomes urgent only
when territories have to be given up. Otherwise good old
authoritarian government should go on.
Ladies and gentlemen,
18. I have said that we were lucky to have been born a
democracy and to have evolved a productive Malaysian
democracy. We were also lucky in that, unlike China, we
have more or less always had a market system. Even so, ten
years ago we started a process of further market reforms
which have transformed us from an agricultural,
commodity-exporting economy into a thriving industrial
country. Only ten years ago, when we started our latest
round of reforms, manufactured goods constituted only 25 per
cent of all our exports. Last year, manufactured goods
accounted for 71 per cent of a much-increased export volume.
We are the 19th biggest trading nation in the world.
19. We are now receiving reluctant accolades for our
reforms of policy and practice over the last decade. Still
the advice keep pouring in, mostly gratuitous. Fortunately,
through a mixture of good fortune and good judgement -- more
good fortune than good judgement -- perhaps, we appear to
have chosen the right advice.
20. Still, it is always wise to be open minded, to be eager
to learn from the experience of others, to seek outside
advice. But no amount of intellectual brilliance and
sincerity can overcome the iron law that in order for
policies and actions to work they must always fit the
specific conditions within which they have to operate. God
helps China if China were to adopt policies which can
perform miracles elsewhere but which would probably be
disastrous for China. It surely must be the task of China's
leaders and intelligentsia themselves to pick and choose
from the methods of other countries which could possibly fit
in with the conditions of China. The best thing that others
can do is to be open to the Chinese about their own
experiences, good and bad, i.e. if they wish the Chinese
well.
21. But I suspect the Chinese are not going to be allowed
to do that. Already we see the Chinese being badgered and
hectored to conform to systems and values which have been
devised elsewhere for the benefit of different people. It
would be a pity, for the world does not need an isolated and
bitter China.
Ladies and gentlemen,
22. Let me now turn to the third task I have been asked to
fulfil.
23. I have said that although I do not even speak for
ASEAN, my views may well reflect that of East Asia, eight of
whose economies (Japan, China, the Republic of Korea,
Taiwan, Hong Kong, Thailand, Malaysia, Singapore and
Indonesia) are now commonly regarded as constituting `the
East Asian Miracle'. The reason is crystal clear and
natural. Despite significant differences between us, all
eight of us share the same basic perspectives. We actually
present only one model of economic development.
24. The term `socialist' means different things to
different people. Whatever the subtleties, there is no
doubt that China's `socialist market economy' rejects
laissez faire capitalism, the extreme type of market economy
which regards the government as extraneous. With the
possible (and only possible) exception of Hong Kong, all
eight of us do reject laissez faire capitalism. We each
have applied socialistic central planning and controls to
some degree or other. Some have indeed tried state
enterprises as a means of breaking into certain areas of
business which involve greater risks or extremely long
gestations.
25. Most certainly, all eight of us seem to agree that
Governments are not good at business. Government managers
do not have the kind of bottom line concerns as private
managers. I am a strong believer that Governments have no
business to be in business. They have a role in regulating
and curbing excesses. Left to themselves the private sector
can breed predators which grow and grow swallowing up their
competitors, forming monopolies and cartels. Only
Governments can curb their excesses and break them up when
necessary.
26. However a free-market economy, even when properly
regulated, cannot guarantee success. Certainly it cannot
succeed if the essentials are not in place. A country which
has known only a command economy for three-quarters of a
century cannot have the entrepreneurs, the private capital,
the management know-how, the legal framework and the market
without which the free market system cannot work. It would
not be suicidal to switch from command to market-economy,
but it would certainly require time and nurturing. China is
right in not making a total and immediate switch. It is
right in not attempting a radical political about turn
simultaneously.
27. An anarchic situation is not going to facilitate the
growth and flowering of a free market. Certainly it is not
going to help the transition from a command economy to a
market economy. China needs the strong Government that it
has. It may be authoritarian, but it is better than
anarchy. Business needs order. It needs to have a
predictable future, for few businesses are immediately
profitable or successful. The bigger the business, the
longer is the gestation, and the greater is the need for a
predictable future. A firm strong Government can reasonably
ensure a predictable future. A weak Government, depending
upon a fickle public, buffeted by the demands of the
extremists of the right and the left, cannot be stable, much
less ensure predictability.
28. There is no such thing as a free lunch. And
Governments, good Governments, cannot be had for free. A
price will have to be paid. Before a good Government can be
conjured up, sacrifices will have to be made.
29. For the 1.2 billion inhabitants of this great nation,
individual freedom to go against the interest of the
majority, is a luxury it can ill-afford now. The day will
come when individual freedom to disrupt and undermine the
well-being of the great majority will be enshrined in the
democratic values of China. But for the moment the interest
of the majority demands an orderly society.
30. Democracy is the greatest idea ever conceived by man.
Like all such ideas it was not born perfect. Who today
would regard 10 per cent of the population having the
absolute right to rule a state as democratic? Yet that was
the democracy in the Greek city states which first conceived
democratic Government. In their view women and slaves had
no rights.
31. It took centuries to improve the concept. Today
democracy takes numerous forms. Even among the western
liberal democrats interpretations and practices differ.
Some consider carrying guns as a fundamental right, others
consider lying as an absolute right, others have various
degrees of limitations on individual public behaviour, while
others still hesitate at legally recognising homosexual
marriages and families. What they do agree is that anything
they do or do not do is democratic and everybody else not in
their circle is undemocratic.
32. The worst part is the assumption that democratic
western countries can foist their principles through
undemocratic means. They object to other ideologies being
spread by subversion or force but they never hesitate to use
these same methods of spreading their ideology. Sanctions,
arm-twisting of various kinds and sustained campaigns
through their controlled media are weapons they never
hesitate to use. This proselytising for democracy veiled
only slightly the objective of eliminating competition
before it begins.
33. All this makes the task of governing and developing the
developing countries much more difficult. This difficulty
is made worse because everyone really wants to practise a
democratic system of Government and accept the free-market
economy. No one really wants authoritarian rule. But
democratic anarchy and poverty, brought about by the
inability of the free market system to function, create the
conditions for opportunists with ambition to seize power and
rule by fiat.
34. In East Asia we believe in democracy and we are anxious
to practise it. But we also believe in strong stable
Governments that are not easily pressured. The liberal
democracies of the West have not produced strong stable
Governments. In some countries yearly changes of Government
take place. For long periods there seems to be no
Government at all. And when there is, the Government seems
more anxious to preserve itself rather than provide good
Government. Excessively populist Governments have no
principles or policies or programmes. They merely try to
satisfy just about everyone. And that is fatal. There is
no way any Government can satisfy everyone.
35. On the other hand, the countries of East Asia, wanting
to catch up in terms of development with the West, need
stability and predictability. Countries with regularly
changing Governments cannot have consistent policies
especially towards investors. We cannot have one Government
nationalising and the next privatising, or one giving
incentives which are then withdrawn by the next one.
36. The problem is that democracy is inherently unstable.
This is a virtue in itself. It is the fear of being thrown
out that motivates democratic Governments to do their best
for the people. But people are also fickle and extremely
forgetful. And so despite providing good Government, there
is no guarantee the people will not reject it at the next
election. Changing Governments is disruptive. Indeed even
changing leaders is often disruptive. The virtues of
democratic instability are negated by the drawbacks.
Ladies and Gentlemen,
37. The successful economies of East Asia have somehow
managed to give the people democratic rights without
undermining the effectiveness of Governments. It is not
unusual for the same party to be returned again and again
with strong majorities intact.
38. The competing economies of the West are not happy with
this. It puts them at a disadvantage. They would like the
East Asian democracies to be weak and unstable like theirs,
or worse. Maybe there is no grand conspiracy by the West to
undermine all the East Asian economies. But conspiracy is
not necessary. It is sufficient for everyone to see the
danger threatening them for them to act in concert.
39. The early attempts to disguise their intention by
talking about democracy and human rights, etc. have now been
largely jettisoned. Now they are openly proposing to
eliminate the competitiveness of the East Asian economies in
order to prevent them from successfully competing with the
West.
40. The proposal for a worldwide minimum wage is one
blatant example. They know very well that this is the sole
comparative advantage of the developing countries. They
know that all the other comparative advantages; technology,
capital, rich domestic markets, legal framework, management
and marketing network are with the developed countries.
Indeed they had made sure that their technology is
considered as intellectual property and cannot be used or
copied by the developing countries without the additional
cost of hefty royalties. They know if the sole comparative
advantage of the developing countries is taken away from
them, they would be unable to compete. Yet they pushed for
this so-called social clause at the recent Final Act of the
GATT Round, openly declaring that low wages give an
advantage to the developing countries.
41. Since it is obvious that the professed concern
about workers' welfare is motivated by selfish interest, it
is equally likely that the sanctimonious pronouncements on
humanitarian, democratic and environmental issues are
motivated by the same selfish interest -- the desire to put
as many obstacles as possible in the way of anyone
attempting to catch up and compete with the West. They made
a mistake with Japan. They are not going to make any more
mistakes.
Ladies and Gentlemen,
42. I have already said that although I cannot presume to
speak for ASEAN, much of what I say would reflect the common
thinking of the South East Asians and the East Asians. This
is because we are all in the same boat.
43. I have said that China did right in sticking to its
brand of socialist politics while espousing a version of the
market economy. It is right because it has managed to avoid
the kind of economic and political anarchy that the Soviet
Union has suffered. It is right because it is apparently
more successful economically. It is growing and growing
very fast.
44. When a country of 1.2 billion does anything it will
have world-shaking effect. South East Asia is very close to
China. Obviously it is going to feel the tremor more than
most other parts of the world.
45. We in South East Asia (S.E.A.) have always felt the
influence of China. Almost without exception we have
Chinese minorities, some very substantial. There is even a
Chinese state in our midst now. We understand the Chinese
and we understand China.
46. When a country is poor it cannot expend much on the
armed forces. When a country becomes rich, even if it
spends the same percentage on the military, the absolute
amount is going to be considerable. Japan was told to spend
not more than one percent of its GNP on the armed forces.
In 1945 that was a tiny sum. Today one percent of Japan's
GNP would exceed the military budget of most Western
countries.
47. Similarly a rich China would spend much more than what
it is spending now on its forces. It will then become a
true world power and have the attendant economic and
political clout.
48. But historically China has not exhibited any consistent
policy of territorial acquisitiveness. Its neighbours may
have lost some disputed territory, but full invasion and
colonisation has not been a feature of Chinese history.
This differs very much of course from the European record.
49. This question of Chinese aggression occupies much of
the western mind. This is because historically hegemony and
violent or peaceful occupation of territories had always
been the West's approach to self-preservation and wealth.
So now they naturally suspect China of having similar
ambitions.
50. If South East Asia is not apprehensive of Japan, it
should not be worried about China. If we must be
apprehensive we must be apprehensive of both. The presence
of a western power will not make a difference especially
after Haiti, Somalia, Bosnia and Rwanda. It takes only one
soldier to be killed before the whole force will be
withdrawn.
51. On the other hand a prosperous China will become the
engine of growth firstly for East Asia, including South East
Asia, and then the world. If 1.2 billion Chinese are half
as rich as the Americans the size of the market will be
almost unimaginable.
52. Although it can be expected that China will export to
the world it will still have to buy a whole lot of things
from the rest of the world. The South East Asian countries
would have at their doorstep s a huge market for their
edible oil, gas and petroleum products, and even
manufactured goods.
53. On the other hand China cannot remain competitive
forever. Its cost of production will go up and its ability
to export would be reduced. The South East Asian countries
would continue to benefit.
54. South East Asia should have no fear of a wealthy and
strong China. Indeed South East Asia should welcome a
wealthy China. They will share in the wealth through trade
and economic interaction.
55. In the `Socialist Market Economy' the Chinese have
found an answer to their political and economic needs.
Admittedly, spreading wealth evenly in a market economy is
far more difficult than spreading poverty evenly through the
command economy. There will be many political problems, not
least the demand for greater public participation in the
political process. The Government will have to give in,
fighting rearguard action all along the retreat. There may
even be some upheavals and bloodshed along the way. But the
Chinese are likely to handle it better than the Russians or
the Yugoslavs.
56. East and South East Asians can reasonably expect this
scenario as being more likely than that projected by
European and American observers. With China's modernisation
and economic development, the wheel of progress would have
turned a full circle and Asia would, at the very least,
regain its place in the world's civilisation. Europeans may
not like this but there is no reason for Asians to actively
assist them in order to block China and delay Asia's
rightful place in the sun.
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