'China's industrial capacity surpasses US, Japan, Germany and India combined'

Focusing on the last chapter of his recent book in which he discusses the present and future of China, Eric Li, a Chinese venture capitalist and political scientist, claimed in Hong Kong last week that in the last three months, China’s industrial capacity had increased from having the combined capacity of "US, Japan, and Germany put together" to "US, Japan, Germany AND India".

Li was delivering a book talk at the Foreign Correspondents' Club in Hong Kong on his recent book Party Life: Chinese Governance and the World Beyond Liberalism. While no further reference to India was made during his talk and the subsequent question and answer session, the dramatic claim placed a question mark before those who believe India can become the ‘next China’.

The venture capitalist, however, confessed that barely 10 years ago in 2012, China was beset with a high level of corruption, growing economic inequality, and a high level of environmental degradation. Official corruption was believed to be part of the DNA of the party state, and China was producing more billionaires than the US, while millions lived in abject poverty. Air pollution in Beijing was routinely commented upon in international newspapers.

In 2024, Li claimed, the sky over Beijing is a vivid blue on most days and China has dealt successfully with climate change; millions have been pulled out of poverty and corruption has reduced significantly. China has dealt with wealth and income inequality without imposing inheritance tax, property tax and capital gains tax, he said, while pointing out that neither the most powerful and ‘free’ country in the world, the United States, nor other liberal democracies had been able to address inequality quite so successfully as China.

China had overcome Western sanctions, a real estate meltdown, and high youth unemployment around 2012 when people did not seem to have enough jobs and opportunities. By 2015, the economy had slowed down and two pillars of the Chinese economy, manufacturing and real estate, had run out of steam. Li claimed that 10 years later, China finds itself in a far more comfortable position and credits the gains and stability to the leadership of Xi Jinping.

The Communist Party of China under Jinping took a political decision to invest in new, technology-driven industries, and launched the most intense anti-corruption movement in the past two thousand years. China also undertook a big infrastructure push by the government. As a result, he claimed, people in China today have more confidence and trust in the government and institutions than, say, in liberal democracies like the United States with democratic elections, free speech and a free press.

During the question and answer session, the venture capitalist went on to take a further dig at Western democracies. Referring to the United States, he pointed out that the American system looks broken, and American society appears divided and polarised. There is no respect for facts in the United States, he claimed, and bluntly added that the free American press does not seem to have helped the US government to take better and more rational decisions.

Free and unregulated speech, he argued, can be harmful; too many checks and balances can lead to corruption and ‘free elections’ could lead people to perpetually "elect and regret".