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Johnstone's View 18th July 2008

During July and August the Scottish Parliament goes into recess.  This means that members and staff can safely schedule their holidays and for members in particular, there is a much needed opportunity to catch up on all the constituency visits and meetings which have had to be delayed because of the many competing demands we experience during sitting weeks.  While it is defiantly not an eight-week holiday, it does provide the time to pause for thought and take stock of some of the bigger problems facing the world and its people.

One of the particular highlights of this summer will of course be the Olympic games that will take place in Beijing, giving China a place on the world stage which it has sought for many years.  This comes at an opportune moment for the rest of the world too since China and its one point six billion people will be the single biggest influence on the planet, its people and its economy, during the rest of our life times.

We in the developed world are very lucky in that most of us are now of the second or third generation to enjoy a standard of living which puts us right at the top of the economic league.  Not for us the shortages experienced in Eastern Europe and the Soviet Union or the vast economic inequalities of South America and Africa.  What was going on in China however, was often a mystery and appeared, to me at least, to be driven by politics rather than the needs of the people.  I now believe that China has put these days behind it but we must now consider how we interact with this enormous economic powerhouse.

The return of Hong-Kong to Chinese sovereignty in 1999 was controversial and we heard much more about it before it happened than we have since.  This is because the Chinese were I suspect, a great deal cleverer than we were prepared to give them credit for.  They did not destroy the prosperity of Hong-Kong, they added to it and built on it, kick starting the economic growth for which China is now world renowned.

So what of the people? The people of China aspire to the same standards as we do, and why shouldn’t they?   Trouble is that when a single country represents somewhere between a quarter and a third of the worlds population, a modest increase in living standards requires a huge increase in recourses.  Some years ago I was told by an energy economist that energy consumption in China was the equivalent of about one 100 watt light bulb per person and that, if the Chinese ever aspired to a second light bulb, there would not be enough energy in the world to satisfy the demand.   I would hazard a guess that we are now well down that road.

The Chinese desire for a modest increase in living standards has sent world energy prices spiraling upwards and we can all see this reflected in the cost of heating and lighting our homes or in the cost of running a car.  More importantly but slightly less obvious perhaps is the way this adds massively to the cost of providing public services at local and national level.  Our primary and manufacturing industries see their production and transport costs increase and their profit margins collapse as their products become more expensive and less attractive in export markets.

And there is food.  We used to hold large surpluses in Europe and North America while half of Africa starved.  The evolution of a more sophisticated world market in food commodities has brought that to an end while, at the very same time, China has become the worlds biggest importer of food.

These things we cannot deny a people who have suffered so much in the last century but China is not a democracy and much of the thinking in Beijing remains hard for us to understand.  The economic miracle has not only produced the worlds fastest growing economy but it has become the worlds fasted growing polluter too, leaving many of its people paying an enormous personal environmental price.  They cannot speak out because the government remains oppressive and intolerant of any criticism from within.  The recent suppression of protest in Tibet is only the tip of the iceberg.

So should we try to isolate and punish the Chinese? No, we must trade with them and encourage them to embrace our values by, wherever possible, connecting as much with the Chinese people as with their government.   We must embrace and include them in the world order and this summers Olympic games must play a big part in that.