Nor will improving the management of SOEs do anything to solve the problems of loss-ridden enterprises that have no real owners. Real stability will come to China only when its leaders abandon their fatal conceit and realize that it is impossible to plan the market or society. Although the leadership is willing to tolerate gradual reform to keep the economy strong, there is no indication that they will tolerate political reform. The crackdown on dissidents, especially the arrest of Henry Wu and Wei Jingsheng, is a clear signal to Hong Kong and the rest of the world that democratic rule is unacceptable. The West should not confuse economic liberalization with a desire for democratization.
Foreign pressure is unlikely to foster positive political change in China.
Indeed, such pressure is likely to be counterproductive. Beijing's frosty attitude toward the United States and our confrontational approach to China will do little to promote stability in East Asia or to advance human rights in China. Sanctions or higher tariffs could inflict harm on those who are fleeing the state sector for greater opportunities and freedom in the market sector, and protectionist measures clearly would harm U.S. consumers and Americans who do business in China. To depoliticize economic life, China needs constitutional change and new thinking. That is not a new idea, it is the idea of law, the idea of a constitution.