Fortress China Raises the Drawbridge

JERRY Seinfeld described the magic formula of his sitcom in two words: "No learning." Gettit? Fail to learn and the result is farce. We sure are learning about how China learns. In the days of Chairman Mao the revolution had to be protected from imperialism. Since this was understood to permeate everything from quantum physics to classical music, learning about the outside world, and drawing on its experience, took place at a glacial pace.

Things picked up with Deng Xiaoping and the economic reforms of the 1980s. Self-confidence rose, and a new generation began to travel and study overseas. There were limits to ideological tolerance at home, but at the same time, China's leadership acknowledged the need to behave modestly and listen to foreign expertise, in the hope of absorbing useful knowledge to rebuild the country.

China scholars have been noting a shift to a third phase in this learning curve over the past few years. There is a new boldness, sometimes shading into arrogance, that accompanies China's rise in the international economic tables. At home, the nation is claimed to have left behind its lowly status and, especially in the wake of the collapse of the US economy, to have emerged as a leader and indeed an example to others.

This is far from universally accepted. Cautious voices abound in the Chinese media. But it seems to be hardening into a syndrome at senior leadership levels and is implicated in the one step forwards, two steps back pattern in China's international relations.

This pattern is evident in the revelation that President Hu Jintao personally authorised the probe into alleged bucks-for-secrets deals by Rio Tinto representative Stern Hu. Whatever the facts about Rio's dealings in China, for the Ministry of State Security to be charged with major responsibilities in matters of foreign trade speaks of a stepped-up retreat from the much-touted Deng policies of "open door" and "liberation of thinking". Hard on the heels of a big setback to ethnic relations in Xinjiang, with ripple effects outwardly, especially in the Muslim world where China has many vital interests, the self-defeating zero-sum mentality of "fortress China" has gained the upper hand, at least for now.

Has China stopped learning? I don't think so, in fact I hope and believe that at least at the level of working officers, if not top leaders, valuable lessons will be drawn from what is now little short of a debacle on the level of the Olympic torch relay.

A leading social researcher, Yu Jianrong, recently analysed China's primary problem as a governance style based on "rigid stability". Instead of reacting in a "resilient" way, accepting risk and seeking to manage it creatively, the Chinese state was prone in a host of different areas to take the "rigid" option. This involves zero tolerance for risk, managing uncertainty by pushing it outside the borders. In the international field, this would be consistent with blaming it on outside forces. The cost was that the uncertainty "exported" in this way is disturbing to the world with which China needs to forge positive ties. If exporting uncertainty were codified into a sport, we'd have to say that, in the post-Bush era, China has taken the mantle from the US.

The interesting thing is the extent to which "working level" Chinese officials show awareness of and deep concern about this situation. For over a year, the Central Party School, which is responsible for grooming future leaders, has been casting about both in China and internationally for governance models of a far more "resilient" type. It is very much in the interests of outside observers such as Australia to respond positively, and provide opportunities for those agencies in China with a continuing interest in opening doors and liberating their thinking.

Meanwhile what is the shape of our own learning curve about China? Kevin Rudd has applied his thinking to this question over the years but the solution has yet to be found. At the heart of the problem is a major asymmetry between China and countries such as Australia in sheer access to information. While the top leaders wobble between extremes of resilient and rigid stability, they are endowed with excellent resources in the form of a whole generation of people, returned from overseas studies or otherwise equipped, to translate and explain the outside world to them. By contrast, dealing with Chinese policy discussions in any depth is regarded, outside of China, as just too difficult and expensive.

The media has been raising its game, but in a time of shrinking budgets, the intellectual vitamins needed to play the game of really understanding and dealing with China are in short supply.

Hu may be released unharmed and Rio Tinto may go on to great things in China. I fervently hope so. But lessons remain to be learned.

In China even writers favourable to Rio -- or at least critical of Chinalco and other would-be big players in the game of overseas mergers and acquisitions -- point to defects in Rio's game plan, stating that it was not on the level of firms of similar size from the US and Europe.

We badly need China to get back on a steep but manageable learning curve about us. But we cannot expect it to do so if we are ourselves unwilling to make similar efforts.