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Comment by malvim | Hacker News Reader

Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

They went to China because it was cheaper. They went there in detriment of their countrymen that went without jobs, in detriment of the environment (what with all the shipping boom that followed), even in detriment of their own countries, since this would stifle development and industrialization. And they KNEW that technology transfer would follow, because China had made it clear.

No one forced them to do it. They did it knowingly in the name of short and medium-term profit. I’m not even judging if that is bad (I do THINK it’s bad overall, but I’m not arguing it here). I’m just pointing out what happened.

So now the West must not be surprised. And they aren’t! They just need to craft narratives that will paint them in good light.

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Perhaps it would be more accurate to say that US policymakers deregulated capital flows with China in the hopes that it would lead to political liberalization. Businesses always just follow the money, but for a long time American policy makers had made it difficult to invest in China, from regulatory uncertainty to restrictions on dual use technology exports to high tariffs.

It really was an intentional decision, largely on the part of the Clinton administration, to make investing in the country easier and improve the economic well being of Chinese citizens in the hopes it would inevitably lead to democratization. Clearly, those hopes were just that though

I think China also made it difficult to invest in China.

> Perhaps it would be more accurate to say that US policymakers deregulated capital flows with China in the hopes that it would lead to political liberalization.

I'd say "in the hopes it would satisfy the political-donor class." The desired liberalization of the PRC was... not necessarily a falsehood, but not the main reason either.

> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

Yes I think. At least a lot of Western policymakers did buy a "change through trade/investment" story, and it wasn't pulled from nowhere because it had worked in the past.

In postwar Japan and later South Korea, integration into the West's economic system coincided with eventual democratization, closer alignment of values, and alliance.

It was reasonable to think the same thing would work in China, but that doesn't seem to be the case.

Also the US intentionally set China up for investment by doing things like bringing them into the WTO. All that investment wouldn't have happened without some level of government support.

I think it’s more accurate to say that Western policymakers sold that story to the public on behalf of the companies that bought, er, lobbied them.

I'd totally believe they would have lobbied for it, but even absent lobbying I think policymakers would look at historical trends and conclude that deeper western economic times would ultimately benefit the West strategically as well. Lobbying could have further incentivized and accelerated it though.

> South Korea

Didn't they have a dictatorship or two for quite a while? I think they've only been a democracy in fact, for about 35 years.

Right. They liberalized as they became more wealthy.

As did Taiwan.

True, but both SK and Taiwan had always wanted to be more aligned with the West as they needed to be under the US defense umbrella. The liberalization could only come after gaining stability.

On the other hand, China has always sought to regain what it considers to be its rightful place as a first world power and to recover from its “century of humiliation.”

I think the CCP has been pretty consistent in this stance. Policy makers in the West that didn’t notice were blinded by corporate wishful thinking.

You’re confusing the faction leading the country with the people themselves.

South Korea and Taiwan as countries don’t have an inherent will to align with the West. The countries are made up people with different beliefs, some are more aligned to democracy (what you call the West) and some aren’t. Even today Taiwan has a political party that is pro-CCP.

The logic is not that the CCP will suddenly want to align with the West, it’s that the people will become more pro-Democratic as they become more developed (both economically and politically).

No, I’m intentionally speaking of the leadership. Yes there are dissidents in China (and Russia and NK…) but the governments have been able to make their work seem futile.

There are also some Chinese who are happy to live in a police state. There are also some US citizens who would like more of a police state, provided the police are on their side of the culture wars.

The fantasy is that capitalism automatically breeds liberal democracy. Sometimes it does, but don’t forget it can work the other way too. It was the excesses of capitalism in the gilded age that led to the rise socialist revolutions in the first place. Sometimes might say today’s billionaire capitalists are becoming like the robber barrons of the gilded age.

In our current system, which is, without a doubt, a corpocracy, it's easy to forget that before the 1970s, corporations didn't have that much power at all, and they were regularly overruled by other organizations - labor unions, government social welfare programs, religious institutions, grassroots movements, etc. Allowing corporations to maintain access to the US market while outsourcing jobs to countries with slave labor is the exploit/loophole that allowed corporations to amass wealth and MADE corporations as powerful as they are today.

Bring back capital controls!

This does sound radical (and it is), but the lack of capital controls is essentially what's created the ability for corporations to engage in massive, massive labour arbitrage to the detriment of many citizens in the West (I personally, and my family have benefited from this, but that doesn't make it right).

> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

I think the OP would frame this as the Western governments allowing Western businesses to invest in China.

> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

Not the businesses. Governments and their advisors that encouraged it thought that. Francis Fukuyama's "end of history" bullshit was widely believed, and even now retains some influence.

Did big businesses in the West really think “investing” in China would lead to “freedom” and such?

You’re right in your assumption that profit-seeking was the major part of it - like, it wouldn’t have happened otherwise.

But the idea that the West trading and interacting with China would mean the populous (and perhaps government) would come to understand the benefits of a free society, and so China would trend towards a Western political system - probably gradually rather than violently - was a mainstream view from the 80s to the early 2010s.

> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

It worked in south korea and taiwan which were severe military dictatorships before (maybe you could throw japan im there too?) so the history of capitalism liberalizing countries isn't all failures

SK was a capitalist dictatorship for almost as long as has been a capitalist democracy.

There's literally nothing about democracy that capitalism finds necessary or even particularly attractive.

Yeah, so what?

There was definitely a broad (not universal) triumphalist belief on the part of both elites and the broader population in the West after the fall of the Berlin Wall and disintegration in the 90s that capitalism and democracy were intertwined and the triumph of both was inevitable.

This widespread belief doesn't have to be true to help contribute to explaining why decisions were made to allow broad economic integration with and technology transfer to China, in a ways that never really happened with the Soviet Union, and only happened in very limited ways with China prior to the collapse of the Soviet bloc.

People who burnt witches generally believed that witches existed. That belief doesn't have to be true to be useful in contributing to explain the behavior.

I mean, yes, you are right, I lived through all that, and I remember it well.

But to me, even at the time, this was at best, magical-thinking bullshit. But what does a teenager know..? I just write the things my teachers tell me to and get graded on them.

The massive backslide in Russia throughout the 90s and 00s towards autocracy at the same time as it was turning into a capitalist country... Wasn't exactly a state secret.

Warsaw pact states tying themselves to a democratic union in an effort to get as far as they could from Russia was, I think, the larger reason most of them didn't go down the same road.

>Did big businesses in the West really think “investing” in China would lead to “freedom” and such?

BDS is a thing. It toppled South Africa's regime and makes Israelis gnash their teeth. Part of the "sell" for investing in China, and buying Chinese products, was that we were bringing them Capitalism, which would bring them wealth and freedom. The alternative is that you're fueling a Communist regime that is going to become your rival and adversary. Maybe I'm mixing up which was explicit and which was implicit, but there's no way Americans would have been on board with everything if the latter was seen as a real possibility. So either big business knew and suppressed it, or they genuinely themselves believed that they could do business in China and not support strengthening the CCP. (And, before Xi rose to power, that was not an completely unreasonable thought.)

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