Wen Jiabao's tour of Western capitals underlines the fragility of China's prosperity

Times of London
February 3, 2009

There is something extraordinary about the spectacle of a Chinese prime minister touring Western capitals to bolster his country. A year ago his "Journey of Confidence" would have been not only unnecessary but contrary to China's own wish to play down its emergence. Even now, many may wonder why he has risked a new slogan to market his country. Previous slogans, after all, are hardly inspiring: both the Great Leap Forward and the Cultural Revolution led to precisely opposite results. Will his tour undermine, rather than bolster, global confidence?

Gordon Brown and Wen Jiabao yesterday told each other what they wanted to hear. Mr Brown assured the visiting Chinese Prime Minister that, despite the downturn, there was still much scope to expand trade and investment between Britain and China, and that he would not allow any retreat to "narrow, short-term protectionist policies". Mr Wen said that China would join co-ordinated global action to overcome the financial crisis, and would support strong and effective stimulus plans.

Mr Wen's visit, at the end of a five-nation European tour, could hardly have been more timely. Struggling Western governments are looking with anxiety at China's falling growth rate, now projected unofficially to be a mere 6 per cent this year. Will China's vast markets still be open to their exports? How much of its huge reserves will Beijing commit to global recovery?

For China, however, the questions are even more critical. Recession in the West has already cost an estimated 26 million jobs, shed by factories with falling order books. In Germany, Spain, Brussels and at Davos, Mr Wen has been seeking assurance that governments will not succumb to protectionism. China cannot consume its way out of difficulties, despite the £404 billion fiscal package launched late last year. Its industries are dependent on Western markets and Beijing needs to know that the doors are not closing.

Mr Wen is a persuasive exponent of his country's interests, a man whose understanding of when and how to demonstrate his commitment was shown amply after the Sichuan earthquake last year. His adroit personal diplomacy, however, will not be enough alone to instil foreign confidence in China's ability to weather the storm. Nor will it hold up China's growth rate and assuage the grievances of those who have lost their jobs. He admits, with refreshing candour, that the army of rural Chinese now unemployed could threaten his country's social stability. And although a government survey showed that 15 per cent of around 130 million migrant workers have returned to their home towns, the huge majority remaining in the cities in the hope of work could soon become a serious challenge to law and order, to local economies and even to the authority of the Communist Party.

Mr Wen is as astute as he is robust. He knows that his country's interests are now entwined with those of the outside world in a way that they have never been before. He knows the fragility of China's new-found prosperity and the dangers of thwarted expectations.

The Chinese Prime Minister has let it be known that he travels with a copy of Adam Smith's The Theory of Moral Sentiments in his suitcase. The chief precoccupation of his journey, though, is plainly the wealth of nations.

Source: http://www.timesonline.co.uk/tol/comment/leading_article/article5645331.ece