Letter: Russia still reeling as China delivers the goods

Sir: Mary Dejevsky's claim ('Peking reaps a harvest of chaos', 22 July) that China is closer to 'chaos' than Russia and that the ' 'Chinese model' is collapsing' is based on fundamental misunderstandings of both countries.

It is true that some positive signs are emerging from Russia. An inflation rate of 750 per cent is still incredibly high, however, and could easily worsen. The fiasco over the recent monetary reform will do little to inspire confidence. Boris Yeltsin's hurried return from vacation to Moscow on Sunday puts the lie to Ms Dejevsky's claim that the president could 'take a holiday without the opposition taking advantage of his absence to foment revolt'.

The picture portrayed of China is even further removed from reality. The economic reforms begun in 1978 have brought an ongoing, rather than only 'initial', improvement in living standards. Income per capita grew at an average of about 7 per cent a year throughout both the first and second half of the Eighties. The result is not just 'urban plenty'. In 1980, less than 1 per cent of rural Chinese households had a television. Now almost half do.

Of course China faces serious problems, not the least of which is the economy's boom-bust cycles. But the current annual inflation rate of 15-20 per cent, while high, is no more than Russia's monthly rate. Although weakening central control is a problem, it is likely that, just as following the 1984/85 and 1987/88 booms, inflation will be brought under control via a credit squeeze and slowing down, rather than reversing, of growth. If growth does become negative, it will be the first time since 1976. Certainly foreign businesses reckon on much more growth in China: foreign direct investment, negligible in Russia, reached pounds 7bn last year.

It is also true that China faces problems of political instability. But this is a future threat rather than, as in Russia, a current reality. To compare the authority of the Chinese leadership with that of Mikhail Gorbachev in the late Eighties is hyperbole of the most extreme variety.

Unlike Gorbachev, the Deng Xiaoping regime still enjoys some legitimacy, based on the fact that it has delivered, and is still delivering, the economic goods. Ms Dejevsky's analysis is dangerous as well as misleading. The West's challenge with regard to China is the difficult, long-term one of encouraging democratic reform while supporting economic development. If the West were to await the collapse of the 'Chinese model' before engaging in these tasks, it would be relegating itself to the sidelines for what could be a very long wait.

Yours sincerely,

STEPHEN HOWES

London School of Economics & Political Science

University of London

London, WC2

28 July