Sir, The excellent recent analyses of China by FT correspondents (James Kynge and Gideon Rachman come quickly to mind) are insightful. But China thinks holistically, not analytically, with cognition emphasising connections, coincidence, correlation and trial-and-error dynamics. The west relies on Aristotelian logic but China progresses by Confucian relationships. Chinese culture retains its stability through protective networks (guanxi) controlling resources, and avoiding, where possible, external controls.
We need the complex theories of Ostrom, not Keynes or Hayek, to understand China. Thinking holistically, therefore, creates a new perspective. Dynamic historical patterns, not causal events, repeat themselves.
Recent research, by US mathematical historian Peter Turchin, categorises the structural-demographic variables leading to national instability. His six predictive “indicators” are labour oversupply; labour pricing; biological wellbeing and health; wealth inequality; intra-elite competition and conflict; and sociopolitical instability. When applied to China, these complex dynamics reflect very worrying negative trends. Poor economic data indicate labour oversupply; as well as recent cost increases; worries over pollution and health abound; inequality – as measured by the Gini coefficient – is well above most countries; internal feuding is high – exemplified by the Bo Xilai case; and riots and rebellions, whether in Wukan or western Xinjiang, are increasing.
