(00:00:00) I want to speak very briefly on some of the events that we've seen happen and seeing developing in the last couple of weeks the last couple of months. We are late in China. Not only the last week's I guess but the last year's and and maybe even the last century or two if you'll be if you'll give me that little bit of opportunity most recently as I think most of us are aware in this room. We saw we witnessed a major event when the people's Congress sort of China's equivalent of their legislative of our legislative body put forth a series of really important fairly significant economic proposals issues were discussed at this conference a series of decisions and effect were made. And a program that emerged the program that emerged 6-8 weeks ago that have been discussed to be sure for a number of years prior to that point, but the program that that emerged was ostensibly one that was designed to bring China into what we in the west might like to call the modern era that is a program to bring more in the way of technical education to various areas of China to bring what the Chinese might call at least in translations managerial competence. To bring even to some areas of China but we in the west fondly call the profit motive to some areas of their industry their small-scale as well as their large-scale industry. It's a program that is known generically or and larger form under the general rubric of the four modernizations after some of the themes that remove Joe and I and others were discussing four and five years ago, the modernization of four of the most important Fields. The China feels is necessary to bring them into the to the current world family of Nations the modernization of Industry. the modernization of agriculture the modernization of the military the modernization of Science and Technology and it's held that if successful this program will indeed bring China into a brand new world into an area that China has not experienced in the past and it should lead Chinese leaders tell us to new policies to new frames of organization to new politicians and Personnel coming to the Forefront Forefront replacing the group that we've seen in become so familiar with over the last several decades and new systems of administrative and political organization as well. All of these things are held to be necessary to bring China into this modern world. And I put to you the program that's being talked about in China the program that's being outlined is immense the consequences of it are stupendous and commentators at least commentators on the western side that if this program is put into effect in the way that it's discussed that it will be probably the most serious policy change. The China has faced since the beginnings of the People's Republic in 1949. It's a it's a program. It's a policy change of immense magnitude. (00:03:02) The problem, of course (00:03:06) the problem that I'd like to address myself to just very briefly is that it's a problem. It's a program not just of modernization. Not just to Bringing new things into China but the program of modernization implies and this is the hang up the program of modernization implies a sort of parallel movement. That is a movement toward the west towards North America United States, possibly the Soviet Union as the Chinese seek Industrial Equipment as they seek this technology that they've disabled is so important as they begin to adopt or study at least a few components of the things that have made industry and economic production. So successful in the so-called capitalist countries inevitably China is also going to come closer into contact with the West As well as coming closer into contact with the machines and the scientific knowledge that the West is produced. Now our reaction to this our reaction is as might be expected. We all say well sure of course how natural it's about time that the Chinese did this why not 30 years ago. Why not? Why didn't they do this before it's about time that they really saw the light and saw what wonderful things that we in the west had to offer and we might indeed give them. For China, however, and here's I think the Crux of the issue for China the problem not just a modernization but really of movement towards the West this movement towards the West is the most Troublesome part of I think the policy is coming to Bear right now. The Chinese have traveled this road before the movement towards the West is nothing new. It's something that the Chinese have experimented with touched a little bit in the past and in many respects have drawn back because every time they've touched the West in the past, the experience has not been altogether Pleasant. There are indeed bitter after taste bitter problems that the Chinese remember and the Chinese have seen over and over again the to accept some of the things that the West has to offer. It's not only accept something that comes from outside is to give up in a sense a part of yourself as well. There's a trade-off and important trade off implied here. So any approach to modernization? Any program that implies a movement towards the West implies also a bit of tension. Things that are in the west are wanted and yet other things that the West have to offer are disliked, but we might call sort of a love-hate relationship or relation between attraction on the one hand. And repulsion on the other. Now today in later hours. This really impressive group of panelists that have been lined up I think are going to discuss in more detail. Some of the implications of the problems themselves of this for modernization program that the Chinese are facing. What I'd like to do in the next few minutes is to put this program of modernization in the larger context the context of development of history of contact with the west and the way the Chinese see the problems themselves. Some of the bitterness has some of the hates some of the tensions that are implied and how these affect the right process of modernization itself. The debate that's really going on in China today. Let me do that if I may buy. Summarizing a couple of points. Just let me pick a couple of points not chronological necessarily, but just a couple of points that I think you should bear in mind as you try to think and understand what this program of the four modernizations really means to China itself why it is that there is this sort of tension or love-hate relationship involved in the programs that we're seeing right now. A few points that maybe will help us see how the Chinese see their own society and their own problems. If you'll allow me I'd like to make the most obvious Point first and I hope you don't giggle at its obviousness, but I'd like to mention and reinforce in your mind's the nature of Chinese civilization itself. The fact that what we're talking about is one of the oldest one of the most grand civilizations that the world is noun. A civilization that came under administrative Unity some 2200 years ago. I just remember some degree unified and administrative Integrity administrative entity for the 2,000 years in between. There's a history here a marvelous history a history of several thousands of years. And in this history, we see some of the most grand achievements that the world is now. An art of real delicacy a real complexity. a literature of refinement that a recorded history an architecture on the scale that the world has never known before with grand cities and marvelous planning involved in them. Everything from The Culinary decides to do is delete do we still experience administrative efficiency an examination system, which to be sure didn't always work but an examination system which transpired at times to bring some of the best people in the Empire regardless of birth into the official processes of government. a fantastic history of colorful (00:08:43) history and maybe most (00:08:46) importantly a history of very important technological and economic achievement as well. Let me point out something that I'm sure most of you know, but for most of China's history the standard of living of this people. Was amongst the highest in the world. The people of China lived well, they produced well and they had a remarkable technology to go along with this. Many of the things that the rest of the world does the Chinese did first think if you will of things like they're their damning of some of the Great Rivers the immense irrigation systems the covered not just miles but literally thousands of miles spreading the waters from some of these Great Rivers over the barren areas of China and the way the land itself is utilized the land utilization techniques. The Marketing Systems the way the grain was grown and raised and traded and a very complex pattern throughout the Chinese area and most importantly as economists. Now tell us the Chinese in terms of their yield per acre yield per unit of land up until maybe a hundred or a hundred fifty years ago. Their yield per acre was amongst the highest of any peoples in the world. It was a proud economic technology one that had a great deal of accomplishment to it when the produced when the turned out and one to give the Chinese what they thought they needed in this world. Let me emphasize that that the people were talking about the Chinese they have a glorious Heritage. We are not speaking of what might be euphemistically euphemistically referred to as a backward people. We're not speaking about necessarily an underdeveloped. people in terms of their culture or their society when our ancestors were still sitting around campfires cooking meat that they captured with bow and arrow. The Chinese were living at the height of some of the Civilized World Simpson things that were done. They made amazing progress. And it's a Heritage an important Heritage that they are loathe to give up. one that they have every right to be extremely proud of a second point (00:11:02) if you will, (00:11:05) how do the Chinese see the West? What is the West done to them in the last several years? Well again to speak of topics that I'm sure you know of. It was into this Grandeur into this technological and cultural achievement. That the West began to come. First to be sure only a few trickles of Overland Traders a few Arabs that applied the desert Trails on their camels. They came over land. They returned they brought back with them. Some of the goods that were produced in China and they brought back with a most importantly Tales of what China was really all about and these tales and turn spurred even greater activity the activity of some of the great Wonders that will go to China the famous ones. Of course that you know about the Journeys For example of of Marco Polo during the who traveled, excuse me who traveled to China. During the times of the great khans and participated in some of the activity in the court during this period Marco Polo, of course writing what we might consider. One of the world's most famous travel logs. As you came back describe these Tales recorded them on paper and pass them around recall. If you will that the Marco Polo was from Venice, he was from Venice at a time when Vanishing culture was at the height of its glory and yet as he described it. The China that he saw and the tails that he brought back. Venice was no match for the things that the China had to offer Venice was crude Venice was still in a situation where slaps were being thrown into the street where sewage ran wild in the like it was great to Intrigue in the various professional areas. Marco Polo route of the magnificence of China and the things that have been participating at and he in turn of course wedded European appetite even further in turn generating the great exploratory voyages that we know about Vasco de Gama Magellan or Columbus and the like that set out to discover a sea route to these fabled Indies the polo had written about By the 14th century, of course, the Europeans were arriving. They were finding their way to Asia ships were coming. They were sailing around India. They were sailing up to the coast of what we used to call Indochina and around into the China's themselves missionaries were coming franciscans Jesuits Dominicans coming in involving themselves in the things that we're going on in China Traders were coming Merchants were coming, especially the merchants came. They came for the treasures of Asia. They came for these things that they said were there that they wanted to trade for. And as we know, of course the Chinese tolerated them put up with them with some degree of humor. They were a little bit funny. They were Barbarian in their civilization the Europeans they came they saw they had big noses red faces. They smelled the high heaven. They had little in the way of civilization. The Chinese nonetheless tolerated them put up with them in a good set. As we know of course the Traders were not there merely to be put up with they wanted more. They wanted to trade they wanted to deal with. And they discovered as it became more familiar with China but not only were their goods and treasures to be had they discovered one commodity in particular. Of course. The Europeans especially the British could simply not get enough of tea drinking tea. By the early 1800s the trade in t especially amongst the British had reached enormous proportions the potion 48 spread around the British Empire. spread around the British Isles And it was just as if the British people simply couldn't get enough of it and so the Traders traded in tea. But they had to trade in something of course and they would ask the Chinese. What do you want? The Chinese of course would respond your goods recruit your implements. We don't need our technology is already developed. What do you have? What could we possibly want that you might have? And of course over the process of the years they discovered one thing that the British had the Chinese might indeed want silver. And in fact during the early 1800s an enormous trade in tea and exchange for silver grew up all else the Chinese considered crude. Now, of course what happened that has this trade expanded as the amount of tea coming into Britain grew the amount of silver going out of Britain also grew at the same time. There was an enormous outpouring of British Sterling what we did they might call a balance of payments problem was developing debates in Parliament. What are we going to do this? I'll never be allowed. We're going to break ourselves on T. We got to do something about it. There must be something else the British were saying there must be something else. But the Chinese one, we got to find something. And of course the British did find something something with built-in demand opium. They're developed as a result that very famous three-cornered trade. The trade that saw opium grown in India sent the China sautee grown in China sent to Britain. That's all clothing and other articles manufactured in Britain sent to India in exchange for the Opium, which would be exchanged for the T which be exchanged for the goods and the light a complex three-cornered tray with a British participating in each leg of the tray an enormous trade by the late 1830s some 40,000 chests of opium a year chests of opium a year coming into China as a result of the British tray. Some of the greatest Fortunes in England some of the greatest Fortunes in Boston had their Beginnings by people acting as dope dealers on the coast of china such as the great Jardine Matheson Trading Company in the like and some of the Boston families. They would like to forget the form the basis of their of their monetary wealth We know of course the Chinese said stop. Don't want it. Try to control it a little bit. This is some of the things that we don't really like about the West the British cars responded as you know by saying things like free trade. We got the right to do what we got to protect our interests in the like confrontation resulted push to shove. And of course what happened is one of the most unfortunate incidents in both our history and Asian history the series of Opium Wars during the 1840s. The West won these wars, of course, at least I won the military battles and they imposed on China, but we have to call or what's called I think today the series of unequal treaties. The Treatise by which China in effect lost control over a great deal of the things that are going on within their own territory treaty ports were open the West could come into various areas of China tariffs were set tariffs were set. Not just by the Chinese but by the westerners as well concepts of extraterritoriality foreigners living by Foreign law rather than by Chinese law and indemnity hated the British for fighting this war in Asia. This ushered again, but Western histories, but I think Chinese history is referred to as the century of humiliation the period from the 1840s up through the 1940s the period in which in all honesty China lost control over a great many things that were happening within their own country control over lawmaking the way foreigners behaved the right to do with their land what they wanted the right to station military where they wanted to do them Chinese Affairs were in the hands of others. Here then we see the beginning of a crucial debate. Western technology Western military technology that obviously proved itself Superior. They defeated Chinese military units in these Opium Wars. There are some real advantages to be had the Chinese saw in some of the things that the Western did in fact have to offer (00:19:04) the civilization behind it. (00:19:07) The things that the West stood for the crudity with which they impose these things these Chinese said were not necessarily worthwhile. (00:19:16) the civilization (00:19:18) that Western Civilization represented a threat to the things that were best about China to this thousands of years of Heritage that we spoken about And so the basic question that the Chinese faced in his period following the Opium Wars with this. Can you have one? Can you have the technology? Can you have the military goods? without taking the other the civilization the values the barbarism the crudeness that the West seem to offer as well. The Chinese would try. Oh how they would try during the 1800s. They would experiment by bringing industry in They would find over and over again that you couldn't have one without the other to bring in Western ways meant to bring in Western forms of organization. To bring in Western industry meant to million to organize yourself the way the West itself dead. It meant new Social and economic patterns to the detriment of a proud long (00:20:19) history. (00:20:21) And here then we see the beginnings of the basic struggle but struggle that the Chinese faced in the 1800's the attempt to merge the glory of the past the Grandeur of the past. with the things that the present and the future seemed to be represented by the West with In a sense, that's one of the things that the Chinese Revolution was all about the struggle for control the struggle to control one's own Affairs the struggle to seek out a new form to go along with these things that the West had imposed on China the technology the rules the patterns of Warfare on the light. The struggle of merging past and present it was at the core of this revolutionary process that really we think has to be thought of as as a century of upheaval the period from the 1840s of through 1949. Is there a Chinese way can we merge these things that we love so much from the past? Can we have at the same time but thing that the West these items that the West are imposing on us? The Chinese then the second point I guess that I'm trying to make you aware of. Is it the first contacts with the West were bitter indeed? Chinese would begin to see that the West had things to offer that the consequences that they could not stop. And it led where it was at least partially responsible for the upheavals that culminated in the late (00:21:55) 1940s. a third point if you will (00:22:02) after the establishment of the People's Republic, I think we have to think of the Chinese trying yet another experiment to see if in fact the West had things that were useful or could be employed in to the Chinese situation. There was as you might see a natural distrust of the West especially Britain France the United States who have been involved in some of these more ugly incidents in the past. It was not all that unusual that we see the Chinese turning to the Soviet Union in 1949 and 1950 the see if an effect there was something there other than ideological Affinity this nominal commitment to Marxism that might also come from the Soviet Union as well. And in fact after a complex series of negotiations negotiations began in 1949 continued on through the early 1950s a series of agreements between the Soviet Union and China were in effect consummated a series of Aid agreements a series of trade agreements and the Chinese sooner found arriving in their country in the late 1950s things like Soviet Specialists Soviet technicians people with know how people with blueprints people could help rebuild some of this industry have been so destroyed either in the Revolutionary War or been damaged During the period of the war against the Japanese in Manchuria equipment came from the Soviet Union and some cases whole factories as in the great steel factories of Manchuria assembly lines. Some cases raw materials administrators people to organize. I don't need in the early 1950s. We see coming once again from the West many things into China. industry on the Soviet model it sprang up in China. It was highly developed primarily in Manchuria. And it was also highly successful. It worked. Well, it produced what it was supposed to produce and we know that a large proportion of China's industrial national product. came out of these factories that have been reorganized given some degree of resurgence by Soviet Aid during this period (00:24:08) Again (00:24:10) here as well a problem developed. As West Western goods and Western methods came in. First came the problem of repayment. The Soviet Union was shipping into China a good many dollars worth of goods material and the light has been estimated in several years anywhere between 300 million and a billion dollars worth of goods including industrial goods and military hardware in 1950 prices. (00:24:38) How to repay (00:24:39) Soviet said we can't afford to give them to you we need repayment and (00:24:44) sorts (00:24:46) agreed to have a muzzle on a very gentle loan. If you will alone at about 1% a year to be repaid beginning five years after the initial importation of Soviet good beginning in 1954. 1955. What do we want back to Soviet Union was was asked what we want. The Soviet Union said we would like not money. We would like repayment in kind or at least it's something we can use crops raw crops things like cotton we can use a lot we need some foodstuffs especially for Siberia. We need some material for our plants that were destroyed during the war. These things we would like back in five years. and the question of course became where to get the food in China Or to say it more forcefully from what group is this food going to be extracted. Where is this 300 million to a billion dollars going to come from who's going to pay for? Question, of course, the Chinese found themselves faced with was it the people inevitably that we're going to pay for it where the people that grew the crops. Or the people consume the food. That food was not going to be used in China was going to be used elsewhere. It was going to be extracted and the Chinese found beginning in the mid-1950s that in fact the cost of Industry imposed an extremely high tax on sectors of their economy that they may not necessarily want tax on their farming good taxes under consumers somebody had to pay for it and there was in fact an extremely high monetary cost. (00:26:18) And even more importantly (00:26:20) a second cost a social cost. What many Chinese discovered what does the such as the Soviet Industries grew as this technology developed primarily in several major locations in Manchuria Northern China and the like what happened was that the complexes were growing the populations are round the complexes were growing and the cities in which these complexes were located their populations are growing faster than any of the other cities in China at a much faster rate. And so it generated in turn a series of peripheral related problems population growth much more rapid in the Soviet areas that are other areas a demand for food and other Goods people that are living in the cities are of course not growing food on the countryside. They got to be fed somehow, where's it going to come from and is some Chinese said even the development of what we might call sort of a Bourgeois attitude. The way city folks off on our what a city folks want to do. They want to go to movies. They believe in buying things. They have it start consumer attitude. They are shot with what Chairman Mao used to call silver bullets from of money. What the Chinese discovered done was that they were not only repaying the Soviet Union back in foodstuffs that they vitally needed, but there were also being forced to divert from the countryside even more food to supply the city complexes that were growing up around the Soviet developed Industries. Again, the Chinese saw contacts with the West even contacts with a Marxist West led to cost led to a problem. And the question was who is going to pay at what cost do we accept the West how bad do we need all of these things? How much do we have to give up? To get this modern industry to get these things that the west shows us we need how much of ourselves do we give up in this process? The journey into the future of the Chinese saw was fraught with danger at almost every step of the way. (00:28:25) Today then (00:28:26) that is the basic question that the Chinese themselves still face. We as they are left with this question. The Chinese want the things that the West has to offer at least some of the things but the questions remain, how do you get it? How do you modernize how close to the West do you get In order to get some of these things it's going to bring China or Chinese industry at any rate into the modern world. This is a question over which good men can disagree and it's a question which in China good men have disagreed Good Men of principle of high standing of great deal of character. It's the core problem around with some of Chinese politics is revolved in the 1950s 60s and 70s. How do we do it? How do we get it? (00:29:14) How are we going to pay (00:29:15) for it? and we know that at the most General level these men these Chinese politicians these people of Goodwill of strong principled have broken into General camps over the question some people some groups those that we and the rest tend to sort of possibly mistakenly labeled pragmatists. Like we got a bite the bullet we got to do it. We got to pay the cost will use Western models with a Soviet or American or Western European. We will pay the cost it is worth it. There have been others as you know, who said it ain't worth it. What we have to pay in terms of this, there's got to be a better way. There's got to be what was used to be called a more indigenous way. And we found of course these attempts expressed in some of the programs that you're familiar with the program such as the Great Leap Forward the rather utopian program to to reorganize the basis of Chinese agriculture, according to a Chinese pattern the cultural revolution, possibly an even more utopian program along the same line. All emphasizing the need to give up as little as possible of China. Order to get those things the China thought (00:30:31) for 30 years (00:30:33) for 30 years this debate. Over approaching the west and what the West has to offer has been one of the most fundamental questions in Chinese politics. Thus I can't emphasize to you strongly enough as we begin this day the what we're seeing now, the program that we're talking about right now is not a sense of not a situation where we're talking about China finally coming to its senses or China finally seeing the light or find the China finally coming into contact with the West after years decades of isolation. It is rather the latest phase and what we might call a hundred and fifty or a 200-year debate over this problem a debate or discussion that's touched the most deep-rooted patients in Chinese culture. The fundamental questions that are being asked today are the questions that were asked this century ago. What do we take from the West what do we want from them? What costs is this going to entail? What do we pay for those things that were taken from the West? Is it worth it? Should we do it? How much do we give (00:31:44) up how much of (00:31:45) ourselves do we leave in the process? This is a debate I put to you, which is far from settled. (00:31:55) It's going on far too long. (00:31:58) It's a debate over which these good men and women still disagree. Over which real tensions continue to develop in the People's Republic we've seen for example during the last three or four years as China has moved toward this program that we now refer to as the four modernizations. We see the results in terms of purchases from the West rational planning. The implementation of so-called capitalist methods. And we also see such things as as the Chinese indicated several months ago things like an 11 billion dollar deficit. And the budget of the Chinese government more is outgoing than his incoming as a result of these purchases and the old question remains who is going to pay. How is it going to be paid for we see serious debate over this issue we can think of the debate is occurring at a number of levels. We see debate amongst politicians. We surmise that there was probably a great deal of debate between politicians such as well guofeng jajang and others as the transformation of power during the last several weeks occur. We know that there's probably a great deal of debate coming from the military. We know there's some of the old military war horses, for example, yeah. Jian-yang and others are to some degree opposed to some of the policies that they see developing and we surmise that at some levels at the rural levels amongst real cadres amongst these men and women who gave a great deal of their lives to change China. Bring Chinese Agriculture and do different sphere to change the relationships and to bring Chinese control. Once again under Chinese auspices. We surmise that the rural level at the local Cadre level. There must be some degree of resistance as well. People don't change their minds their attitudes that quickly we know they don't in this country. We can't imagine that the Chinese are that different. And so I put to you the possibility the debate. There's two century-old debate. It is far from Over the fundamental dilemma remains how much from the West do we take while maintaining our past our pride Our Heritage the things that we think of as most important. The current leadership. It seems Seems convinced that they can in fact have both that there can be this merger that they're talking about a merger, which will keep the best from Chinese past. With some of the things the China's future (00:34:27) demands, (00:34:29) but while our leaders while Chinese leaders have (00:34:31) confidence. I think history tells us (00:34:35) that the path the China is embarked on is not going to be easy. It won't be easy at all. Because if this merger is attempt if there is an attempt to merge past and future as has been in the past, it's fraught with dangers fraught with tension their problems their built-in conflicts there. You can't have one without the other. (00:34:56) We know (00:34:57) that in the past during the previous hundred and fifty years any of these attempts at merger. Any of these attempts at bringing together things from outside within have led to immense upheaval immense turmoil. And tremendously deep discussion. And to that degree I put to you China's present course. Willa thank set it off once again on a very very difficult Quest a quest that will undoubtedly succeed. (00:35:31) But the merging (00:35:32) the merging of past and future it's not going to be easy and the possibility exists that the merger ever does occur, May. In fact be even more turbulent in the future than it has been in the (00:35:44) past. Thank you very much.