In Pursuit of Liberty in China Kate Zhou University of Hawaii Grass Root Institute International Seminar “Challenges For A Free Society In The 21 Century” June 3, 2005, Santiago, Chile. Marriott Hotel

Theme Liberalization at the grass root level is the most effective way to reduce the authoritarian party state control.

Grass-roots Liberalization movements in China Baochan daohu decollectivization The right to be left alone The right to move freely 250 million to 100 million people Religious freedom Local market institutional building internet publication Grass root legal liberalization

the growth rate of goods in the market

Economic Transformation the ownership structure State 30%, nonstate 40, private 25%, foreign 5% the rise of free labor market the end of the state export monopoly 100 million cellular/80 mi net users more industrial production than agricultural production in rural China

Popular Support for Liberalization and Globalization the highest among all East Asian nations (Japan, South Korea, Taiwan, Thailand, and China) second in favorable attitudes (Singapore is the first) toward open markets in nine nations (Japan, Korea, China, Taiwan, Singapore, Malaysia, Indonesia, Thailand, Philippines) third in overall support for open markets and for deregulation (92%) in the survey support competition in the global economy

The increasing Use of English 400 million English students 130 million in elementary schools 85 million in junior high schools 20 million in high schools 30 million in postsecondary institutions 100 million via adult education 250 million ordinary people learn on their own

Liberal values a more liberal society encourages pragmatism instead of ideology no strong sentiment for anti-West ideologies lack of will and power for the Communist state to enforce conformity Private ownership and cosmopolitan values public tolerance of differences and "unhealthy" behavior (homosexuality, prostitution, drug use, openness, religious practice) Respect for privacy and other “different life styles” reduce the voice of radical fundamentalists.

Global Trade Trade with the US the number one trading partner with Japan in 2004 The trade benefit is a good motivation for China to work with the U.S. and its alliance hand in hand despite the political conflicts China has replaced Japan and becomes the engine of growth in Southeast Asia.

Open door policies and export growth the role of overseas Chinese: foreign investment international division of labor: comparative advantage: labor Intensive. Stock market

People have more freedom More than 80% of Chinese people own their own houses or apartments (higher than US) More people work outside the state Relative freedom of information Most Chinese people have school choices Most urban residents have private medical account

Continued State Control Failure of the Banking System 50%, or 3 trillion renminbi are non- performing loans. Control over birth Political control One party domination

Lessons from China Freedom is the foundation for growth Globalization benefits the late comers to modernization (Russia/ China) China is the leader in the global trade. Private Property is the most important institution for the poor. China completely destroyed the dependency theory and sets up a role model for developing countries in Latin America, Africa and South Asia.

Pursuit of liberties was linked to market breakthrough. Global linkage provided a new source of power (human, capital, services, information, and technology)to reduce the state control.

The Lesson from China: Liberalization must come from below.