Fareed Zakaria: China’s New Parochialism
In Time Magazine, Fareed Zakaria takes on China’s increasing inward focus when it comes to business and trade, coupled with nostalgia for all things red:
China is on course to become the largest movie market in the world. It has more than 6,200 movie theaters and is adding to them at the astonishing pace of three new theaters a day. But the government seems determined to keep Western movies at bay. There is a strict quota of 20 foreign movies imported every year. Those movies are censored and tightly restricted to a limited number of theaters. Hollywood studios receive only 13% of the ticket price, about half what they get everywhere else in the world. The DVDs are pirated within days, and the government makes no effort to stem this criminal activity. The result is that Hollywood, America’s largest export industry, makes very little money in China.
And Hollywood isn’t alone. The CEO of General Electric, Jeff Immelt, told the Financial Times earlier this year that it appeared that China did not want Western companies to succeed in that country anymore; he was voicing the feelings of many foreign CEOs. There is growing evidence in many areas that Beijing is favoring locals over Western companies, even violating the rules of market access and trade. The World Trade Organization ruled recently that China’s regulations on foreign movies were a form of illegal protectionism and had to end. So far, Beijing has done nothing to abide by that ruling, though it is likely to expand its quotas to mollify the WTO.
Countries play trade games all the time, but this is different. Over the past few years, a new Chinese parochialism has been gaining strength in the Communist Party. Best symbolized by the senior party leader, Bo Xilai, it includes a romantic revival of Maoism, harking back to a time when the Chinese were more unified and more isolated from the rest of the world. It is a reaction to the rampant marketization and Westernization of China over the past 10 years. Bo, who has organized mass rallies to sing old Maoist songs and routinely quotes Mao aphorisms, might well ascend to the Standing Committee of China’s Politburo next year on the strength of this new populism.