Sta. Ana coordinates Action for Economic Reforms or AER. This article came out in the BusinessWorld on October 6, 2008, pages S1/4 to S1/5.

When Chito Sta. Romana speaks, I listen.  That’s because he has something new to say or he offers a fresh insight into a widely discussed issue.  To be sure, Chito, the chief of the ABC News Bureau in China, is an expert on Sino affairs. But self-effacing as he is, he would object to that description.

In most cases, Chito is the listener and the inquirer.  And when it concerns Philippine matters, he is eager to ask questions and be informed about the latest developments.  Chito has been away from home for a long time although he and Nancy frequently visit Manila.  He has lived in China for 37 years; stranded in Beijing during an exposure visit and forced into exile. Chito became a military target when Marcos suspended the writ of habeas corpus in 1971, the prelude to martial law.

Chito was a popular radical student leader from De La Salle and thus the Left’s foil to the Jesuit-trained, then moderate Ed Jopson.  Edjop subsequently embraced Chito’s political line, joined the revolutionary movement, and ultimately became a hero and martyr.

Together with a band of Filipino exiled activists, Chito experienced the twists and turns of China’s contemporary history—the ignominy that was the Cultural Revolution; the fall of the Gang of Four; the rehabilitation of Deng and the ascendancy of his counter-revolution that heralded China’s modernization; the Tiananmen massacre, which dented Deng’s international stature; the sustained high level of growth, making China the poster boy of globalization; Beijing’s spectacular hosting of the Olympics; and China’s emergence as a new global power, closing the short episode of a unipolar world dominated by the US. Through all this, Chito has seen the working of China’s institutions—in the main, disciplined, pragmatic, smart, and unorthodox but on many occasions, clumsy, slapdash, or naïve.

And so a short and minor news item in the Inquirer (5 October 2008) captured my attention.  The report, written by TJ Burgonio, was about the melamine-tainted food products manufactured in China, with Chito’s views on the issue liberally quoted.

The title of the news item was in fact a quotation from Chito:  “Cover-up more damaging to China.”  Chito’s main point was that China’s system of governance, which allowed covering up the scandal, was the bigger danger than the food contamination itself.  The cover-up has deeper and longer-lasting consequences on China’s economy, domestic politics, and international reputation.  Said Chito in the interview: “It’s clear that Chinese officials at the local level knew about this as early as July, some say as early as December [2007]. But they didn’t want to bring it to the attention of the national leadership and they didn’t want it revealed to the media because of the Olympics.”

His blunt criticism: The cover-up was “the result of the greed that has been unleashed on Chinese society by the economic reforms” and a manifestation of “the failure of the system of governance,” specifically the regulatory regime.

Most troubling in any system is the deadly combination of the lack of transparency, in this case, a cover-up, and the weakness of regulation.  The best example nowadays of the disastrous consequence of the lack of transparency and information and the failure of regulation is the collapse of Wall Street and the US financial meltdown, the effects of which have likewise spilled over to the rest of the world. Shame then on the US regulators for not anticipating and promptly addressing the “fictitious capital” that defined the long period of “irrational exuberance.”

But in China’s case, transparency is not ingrained in its political culture.  Chinese regulatory and accountability mechanisms may be sound in some critical areas (they shoot corrupt officials, don’t they?). Without such good institutions, albeit limited, it would be difficult to imagine a China growing at double-digit level for a generation.

However, the absence of a culture of transparency, arguably arising from a system that is described as a “dictatorship of the proletariat,” remains a constant threat to China’s success, especially as it moves to a mature level of development that requires a higher quality of governance. It does not befit a new global power to be lacking in basic transparency.

This Chinese unfamiliarity with the culture of transparency also makes it difficult for Chinese middle-level officials to relate with the media, civil society organizations and other institutions found in liberal democracies, even the nominal ones.  We have seen first-hand how not having a culture of transparency can damage China’s reputation.

We offer this funny but real story.  Early this year, we wrote a formal letter to the Chinese ambassador in the Philippines, requesting information on Chinese economic investments and development assistance in the Philippines.  The request was transmitted at a time that the controversial Philippine-China agreements, especially the National Broadband Network scandal, were headline news.  The Chinese embassy never responded, not even a pro-forma letter of regrets, to our formal request.

We followed up the request through telephone calls, and the last call was the most shocking if not funniest incident of this episode. The answer to our call was:  “Sorry, wrong number.”

While Chito has lots of stories—funny, unpleasant or horrible—about governance in the Middle Kingdom, it’s a place that he has come to love. For all its flaws, it’s still much better than Gloria’s enchanted kingdom.