Interview: Jon Huntsman Explains China’s Turbulent Transition

08/28/2012 8:30 am EST

Focus: GLOBAL

In the last 30 years, China has moved from being an underdeveloped country to being a global economic power. But after three decades of export-driven growth, what's next? Few people have a better handle on that than Jon M. Huntsman Jr., who served as the US Ambassador to China for two years before stepping down to run for president in 2012. Before that, Huntsman was governor of Utah and had been a US trade representative under President George W. Bush.

Huntsman, 52, is fluent in Mandarin Chinese, and has lived in Asia four times, including stints working in the multibillion-dollar Huntsman Corp., which his father founded. Huntsman was interviewed by MoneyShow.com columnist and editor at large Howard R. Gold.

MoneyShow.com: Ambassador Huntsman, China is going through a once-in-a-decade leadership change this year. What do you expect will be the focus of the new government?

Jon Huntsman: I expect much of the same in terms of their overwhelming priority, which is stability and economic growth. It will signal the end of the Deng Xiaoping era, and I say that because the rise of Xi Jinping, along with the Fifth Generation of leaders, will be the first not personally elected by Deng Xiaoping.

Deng Xiaoping will be remembered for three things: the opening of the doors diplomatically to the rest of the world, the opening of the doors economically to the rest of the world, and maintaining the primacy of the Communist Party-all of which he succeeded at.

You've got the rise of the Fifth Generation now, which is going to have to be very mindful of their big priorities in terms of how the rest of the world sees that. And the rest of the world will be looking for answers around:

  1. Is China becoming more repressive?
  2. Is China becoming more nationalistic from an economic standpoint?
  3. Is China becoming more conservative in its military and national security affairs?

So the new generation will have challenges ahead far different than those of earlier generations. But by and large, as much of the world sees it, it will be a continued focus on stability, economic growth, and job creation.

MoneyShow.com: Before this leadership change is complete, we've seen a big purge and power struggle. Bo Xilai, the powerful party boss of Chongqing, has been stripped of his titles, while his wife, Gu Kailai, has been convicted of murder. What are Americans to make of all this?

Jon Huntsman: No. 1, this is probably the messiest transition in recent generations-certainly since 1989, and probably even since the Cultural Revolution.

No. 2, and probably a positive thing, there seems to be more transparency in Chinese politics. Never before would you have been able to read about the details that are playing out behind the so-called velvet curtain and the "to-ing" and "fro-ing" between the two factions in Chinese politics, which I think is a positive thing.

No. 3, I think it probably sends a clear signal about policy priorities going forward. And that is a stable, continued "glide path" with no disruption to party control. In the way in which they manage the five-year plans, they're not likely to look to any seriously innovative programs.

MoneyShow.com: There appears to be a battle between the hardliners and princelings on one side and the reformers on the other. Do you think the reformers (led by Wen Jiabao) will win? And if they do, what will the impact be?

Jon Huntsman: The reformers will win because ultimately there's no choice, but the arguments will be over the speed and the content of the reforms. But there will be no backtracking. China can't afford that, and its population won't accept that. Increasingly, the nature of 600 million Internet users and 90 million bloggers-the voice of the people-increasingly matters in Chinese politics.

And the big question will be once you get that new team in power, what kind of reforms do you see at that point? Clearly, there will be a need for political reforms, including a broader definition of the role of the Internet in society.

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