A while ago I reviewed Jonathan Fenby‘s [amazon_link id=”1847394116″ target=”_blank” ]Tiger Head, Snake Tails[/amazon_link], which I liked because its answer to the question about China’s prospects for economic and geopolitical success is essentially ‘it depends’. It’s a rare book that gives an effective overview while resisting the temptation to be either a China-booster or China-basher. I’ve now read another China book that probably falls into the latter camp, Timothy Beardson’s [amazon_link id=”0300165420″ target=”_blank” ]Stumbling Giant: The Threats to China’s Future[/amazon_link].

[amazon_image id=”0300165420″ link=”true” target=”_blank” size=”medium” ]Stumbling Giant: The Threats to China’s Future[/amazon_image]

The author would surely describe it as China-realism though. It is certainly more nuanced than some others, pointing to the country’s amazing recent achievements. He lives in Hong Kong and has done business in China for decades. The book is full of interesting and informative detail and insights. For example, in the chapter on the knowledge economy, I learned that plagiarism is a pervasive problem in the Chinese academic world. One biologist, Fang Shimin, documented 500 cases of plagiarism in his field in one year, 2007. A professor named as a culprit arranged for criminals to attack Fang with a hammer. Beardson goes on to claim that while plagiarism is a global problem, the culprits in other universities are often Chinese, citing a consultancy to US universities advising clients to expect half of all Chinese applicants to submit forged transcripts. Of course I haven’t done any additional research into Beardson’s figures but this is indeed an interesting perspective on the capacity of the country’s education system to turn out creative, innovative thinkers. Another example – the description of an increasing number of incidents of large-scale public violence in the past 20 years, including more very large scale incidents, albeit against the background of very high (80-80%) support for the government and belief the country is heading in the right direction.

The book runs through a series of important challenges facing China’s leaders: its ‘broken’ economic model (other authors might dispute that description of course); the elusiveness of the knowledge economy; a fragile financial sector distorted by state intervention in lending; the absence of adequate social welfare; adverse demography; environmental degradation and pollution; civil stability; the future of the Communist party; the geopolitics of east Asia and relations with the US; ethnic unrest in central Asia; the battles in cyberspace. That’s quite a list – it’s a chunky book covering lots of ground.

Can they be overcome? Beardson concludes: “Many of the challenges which China confronts appear to an international audience to have clear solutions. However, they must be viewed in the context of a government which is driven by the desire to stay in power and yet has a sense of fragility. Many obvious policy solutions are avoided as they carry political costs or risks.” He thinks it “inconceivable” that China will overtake the US this century. The challenges have solutions but these will not be implemented. I found it impossible to assess this ultimately political judgement.

What does seem clear is that events in China will be – one way or the other – extraordinary. If you’re interested, this book is a very welcome addition to the collection of well-informed perspectives on a country that has unavoidably become part of our future. ‘[amazon_link id=”0300165420″ target=”_blank” ]Stumbling Giant[/amazon_link]’ is an apt title: it’s an alarming prospect and it could take some nimble footwork from the rest of us to avoid collateral damage.

It wasn’t until reading Jonathan Fenby’s [amazon_link id=”1847394116″ target=”_blank” ]Tiger Head, Snake Tails[/amazon_link] that I realised how polarised some of my previous reading on China had been. While I’ve read some superb reportage/analysis such as Leslie Chang’s [amazon_link id=”033044736X” target=”_blank” ]Factory Girls[/amazon_link] and Richard McGregor’s [amazon_link id=”0141975555″ target=”_blank” ]The Party[/amazon_link], there is definitely a strain of the literature that is either ‘China will conquer the world’ (eg Martin Jacques in [amazon_link id=”0140276041″ target=”_blank” ]When China Rules The World)[/amazon_link] or ‘China is doomed’. Mr Fenby is an experienced journalist – a former editor of the South China Morning Post – and the extent of his knowledge about the country is clear on every page.

[amazon_image id=”1847394116″ link=”true” target=”_blank” size=”medium” ]Tiger Head, Snake Tails: China Today, How it Got There and Why it Has to Change[/amazon_image]

As always, the scale of anything about China is staggering – to give just one example from the book, China’s foreign exchange reserves in 2011 were enough to buy Italy; or all of the sovereign debt of Portugal, Ireland, Greece plus Spain, and also Google, Apple, IBM and Microsoft and all of the real estate in Washington and Manhattan, and the world’s 50 most valuable sports franchises. There are lots of fascinating insights too. I was struck by the information on market structure – many markets have a few state giants but are otherwise highly fragmented and regionalised. There are 121 very large state firms, another 114,400 smaller state owned enterprises, and a vibrant competitive fringe. In retail, the very biggest firms have less than 6% of the market each. Rare earth mining – surely somewhat capital intensive? – is carried out by small family-owned enterprises. Of the half million food producers, 80 per cent have fewer than 10 employees. The book has other interesting insights. For instance, China excels at individual sports – golf, table tennis, gymnastics – but fares poorly at team sports.

Like many commentators, Fenby highlights the enormous challenges facing China as it makes the transition from relying on cheap, abundant labour to drive rapid export growth and infrastructure (often debt funded) at home. These include the political conundrum of how the Communist Party will try to keep control – and whether it will succeed – and the enormous demographic challenge. He writes about the endemic corruption and absence of trust, the environmental horrors, the need for better social welfare including ending the distortions created by the ‘hukou’ system of residence permits. However, the book does not despair. All countries face difficult transitions at various points in their history, and China also has great resources for addressing the challenges. Tiger Head, Snake Tails is a cracking read, and I really like its injection of nuance into the debate we in the west have about China.