A great deal of Hu Jintao’s experience is from his time in the western provinces, particularly in Tibet. What do you think of China’s future regarding ethnic minorities like the Tibetans or the Uighurs of Xianjiang?

Hu had a very tough problem when he was in Tibet. People in the United States think “the more freedom the better.” In the 1980s, some top Beijing leaders felt the same way and took measures that increased popular expectations and hopes. This led to chaos and demonstrations. Hu took part in leading a crackdown in response, but Hu did it without alienating the local community. In his attention to root problems, he demonstrated concern for the issues of the local population. I think minorities feel that Hu is a person they can deal with, someone who understands them.

Minorities compose roughly eight percent of China’s population. When Jiang visited Harvard University in 1997, some responsible for his security were less concerned with the thousands of demonstrators for the Tibetan movement and more worried about the small number of Uighurs, who have demonstrated a willingness to resort to violence. In contrast, Tibetan Buddhists have generally avoided violence since their uprising in 1959. The United States itself no longer considers the Uighurs “freedom fighters;” after September 11, they became Islamic terrorists. The current US attitude is now closer to the Chinese view that some Uighurs present a problem to social order. Xinjiang is officially led by a Uighur government and Uighur officials, and they use their traditional language. The Uighurs have not assimilated as much as the Hui, another Muslim minority in Xinjiang.

The minority populations of China include very different kinds of people, and the diversity among the groups extends to their grievances. On one hand, there are the Koreans, who have a higher level of education and income than the average Chinese and, as a result, form a kind of privileged minority. Then there are a number of groups, particularly in southwest China and mountainous regions, who have been pushed back by the advancing Chinese in a way similar to the experience of Native Americans in the United States.

The Chinese government will make an effort to bring aid to backward areas, but there will still be far more investment in the area near the eastern coast because capital flows are now governed by a free market, and investors will make more money in the east. The amount of money the government will put in the west will not be nearly enough to counterbalance that lure. Nonetheless, the Chinese government will do quite a bit to build infrastructure and transport links to the western part of the country. They will also try to build schools and universities in the region. You can argue about whether this is enough or not, but at least there will be some national program of assistance.

But even this approach can be complicated when minority issues are at stake. In the 1990s, for instance, as money began to flow into Tibet and the government began its construction projects, many merchants, such as the Hui, moved from nearby areas in search of profit. Many outsiders came to Lhasa, the Tibetan capital, because the government gave financial aid. These people are working to respond to market opportunities, not because of official assignments.

When discussing economic modernization, what do you think of the internal changes in the way the domestic Chinese economy is run? How does this impact China’s foreign trade?

China was a planned economy when it began to open in 1978. The big factories were all entirely state owned. The government dreaded having private enterprises, which were only allowed on a small scale. After 1978, private enterprises were gradually allowed to exist and grow. In the last decade, the government has allowed foreign companies and their subsidiaries to develop infrastructure in the country. During its liberalization period, the former Soviet Union was under the influence of the World Bank, so it tried to privatize right away. In contrast, China felt—I think rightly—that this would not be a good policy. In China, there were no private investors and no real experience with the free market. The unemployment situation was so severe in China that privatization could have led to massive social unrest. What China wanted was to build up enterprises first and then gradually put more pressure on the state enterprises to become competitive, a process that continues today.

But in the last decade, foreign investment has become the cutting edge of the export market. There were few foreign companies in China in the early years of reform, and generally they were required to have Chinese partners. As more foreign companies were allowed in, the vast portion of Chinese exports are now produced by more competitive foreign companies. Other countries at comparable stages of development, like Japan, were far more restrictive in allowing foreign enterprises to enter. For China, that policy means ceding a certain portion of profits to foreign countries, but it also means that China grows and acquires modern technology. China is now modernizing fairly rapidly, moving up the chain from the handicraft industry of the 1970s to a labor-intensive light industry and toward higher technology production. China cannot yet compete with Japan or Korea in terms of high technology products, but there has been notable progress. One example of this progress is that Chinese businesses are beginning to make memory chips and computer parts.

This industrial evolution will only accelerate in coming years as China’s World Trade Organization (WTO) membership forces it to allow more foreign firms into the country. China has learned from the Japanese Ministry of International Trade and Industry how to manage the process of slowing the entry of foreign firms while simultaneously telling local companies that they must get ready for the transition. The officials supervising the Chinese auto industry have decided that the only way to manage the coming competition is to allow many foreign companies to have joint ventures in China. Modern foreign industries are coming in, and the Chinese who are operating their plants are learning very quickly. So the Chinese auto industry is rapidly developing labor and management skills as well as higher levels of technology. After all, if they do not adapt, these businesses will be pushed out. On the other hand, the pressure from WTO membership will inevitably lead to problems with copyrights and patents. There will also be other internal issues with admission to the WTO, but they will not stop China from continuing to catch up with the industrialized world.