Grigory Yavlinsky is a politician recognised and respected by the world democratic community. He is a regular participant of the meetings of the International Crisis Committee, the World Economic Forum, the Trilateral Commission, etc.

Grigory Yavlinsky has been one of the initiators of nomination of Chinese dissident Liu Xiaobo, a candidate for the Nobel Peace Prize. We began our conversation with discussion of this event.

QUESTION: Grigory Alexeyevich, when you decided to nominate Chinese dissident for the [Nobel Peace] Prize, did you think about that the reaction in the world would be controversial?

GRIGORY YAVLINSKY: I knew that Liu Xiaobo beliefs were the same as mine, and he had received 11 years in prison because of this. He, like me, is convinced that a man has a right to say what he thinks, that freedom is the right of every individual, that laws must be respected by everyone, including the authorities, and that one should fight for his beliefs only in a non-violent way …

And I tried to support a person, who had been going though very difficult times and who had no one but his wife who could support him in China. That’s what I wanted to say, when I signed the appeal to nominate him for the Nobel Prize. And [the Nobel Committee] agreed with our nomination. That’s it.

I did not act against the Chinese state or their government. Over 1 billion 300 million live in China today, however, it is for the first time in history that a Chinese citizens had been awarded the Nobel Peace Prize. I think that time will come when China will be proud of its citizens Liu Xiaobo.

QUESTION: Why, when the socialist camp collapsed in 1990s, the Chinese Communist Party managed to keep the power? Moreover, according to many prominent politicians, [the Chinese Communist Party] managed to solve the economic problems so that now China even competes for the world leadership in [economic] growth?

GRIGORY YAVLINSKY: Well, it is too early to talk about what has happened. The process of disintegration, of which you are asking me, is not over yet, and the consequences of the Cold War are far from being understood and interpreted. Much is yet to come, in China too. We need a much deeper analysis and try to forecast for a long-term perspective, rather than limit ourselves to the present situation only. In addition to advertising there is a real life and serious problems of different type.

Everyone knows that the scope of poverty in China is still a very large, and many people live below the poverty line, the gap between the rich and the poor has been deepening and stratification of the society has been progressing. It is a big question whether this is consistent with what is called socialism and communism.

The Communist Party, which has been in power for many decades and refused to carry out some political reforms, conducts a different policy [now]. This conflict between the form and the content will inevitably lead to a situation when they will have to address many fundamental problems that are only beginning to emerge now.

I was in China and I would like very much to see peace in this great country and so that China would conduct transformations via evolutionary non-violent way, but I have great concern whether this is possible. I think that China’s economic model is not so economically efficient and competitive, as is often pictured by outside observers.

The modern business world, the world media, world politics praise those countries (regardless of their regimes) where they can obtain huge profits and dividends — such as in China.

QUESITON: What, in your opinion, has allowed the Chinese government to achieve such economic growth rates?

GRIGORY YAVLINSKY: I’m not an expert on the Chinese economy. I think that high economic growth rates and apparent economic success, are primarily due to exceptional hard work and talents of the Chinese people, their patience, persistence, desire to learn new things and master it all. This is, in my opinion, the main thing!

As for the economic mechanism, given extremely low price of labour at long working hours and increasing skill, we can say that the whole economic model is similar in essence to leasing arrangements between the Chinese government and global businesses.

Due to the low rental payments (payment for labour and taxes), stable long-term rules, incredible scope and huge profit margins for both the leasers and the leaseholders we got the Chinese economic «miracle».

But people make their living through very hard work. When, for example, a young girl in China, works at an assembly line and assembles computers, such hard and intensive work leads to her loosing eyesight so that a year later she can not work there any more. They replace her with another girl coming from a province and who is happy to get out of there and get a job with a small salary. The issue of healthcare is never raised there.

And those politicians who say that we should adopt the Chinese model of development are either naпve or dishonest. It is impossible for Russia. Historians might argue whether Russia of 1990s could try and keep a competitive advantage of an extremely low price to work or not, but for this issue is closed for the present Russian economy.

As regards investments, as you know, China has been constantly receiving considerable funding from the “huaqiaos» (Editor: Chinese who moved abroad for permanent or temporary accommodation). Thus, China acquires and uses a very strong flow of investment on very favorable terms, as such financial flows are not always competitive in Europe or America, but China, as I see it, receives them anyway.

By the way, Russia has been demonstrating a reverse process: not only don’t we have our huaqiaos, i.e the businesses of Russian communities abroad, but our business take every opportunity to take their money abroad. Third, relying on the huge desire of the American business to receive immediate windfall at the expense of the very economic mechanism I have just told you about, China managed to amass the largest in the world history gold and hard currency reserves and virtually put the U.S. in a kind of dependency.

How long can such a model exist? Given the scale of human resources and the power of the political regime, this may last for a long time. However, it is not as simple as that. A real middle class has been emerging in China, and I’m not sure that this class will always be satisfied with the political system that exists there.

This political system represents a significant, meaningful restriction for the middle class, it does not allow it to move into power. But at the same time, ensuring the growth and development of the middle class is perhaps the key issue for further progress in China.

QUESTION: And what do you think about the politics of Russia’s approximation with the Chinese totalitarian regime? Can we say that Russia is friends with China hoping to get the same profit there, like other countries do?

GRIGORY YAVLINSKY: China is extremely important neighbour and partner for Russia. I believe that maintaining good relations with China is necessary for Russia. But Russian authorities have a naive feeling that China will build relations with Russia as an equal strategic partner. I think it’s absolutely not true.

The official speaks seriously and as equals only with such partners the U.S. and the EU. It does not recognise anyone else as a power and a strategic partner.

I should say that in general I do not support Dmitry Medvedev and Vladimir Putin’s policies. I believe that their attempt to maintain continuity with the Soviet period dooms the country to a very big problem for the collision with the modern life and has the effect of demodernisation.

And please note, they always talk about modernisation, but the use of Soviet methods of control, the Soviet style of living and the Soviet approach leads the country back [into the past], into the opposite direction.

QUESTION: Do you want to say that we have shifted into the past time rather than summer time.

GRIGORY YAVLINSKY: Yes, it is roughly like this. The attempt to link the pre-revolutionary, Soviet Russia and modern Russia into a single conglomerate has no prospects. This design is doomed to failure because people’s consciousness is not a puzzle, it can not be assembled this way from different pieces. The way out of the system we lived in for almost 100 years is very long, generations formed during this period and people’s consciousness is very confused and distorted.

QUESTION: Political scientists sometimes wonder whether we can see continuation of the Arab events in China as a «jasmine revolution»?

GRIGORY YAVLINSKY: I hope that nothing like this will happen there. The Chinese society today has swapped their political claims for a chance to obtain and increase their revenues. Yet such a swap has been suiting the society. However, other processes develop there in parallel. At least 10 million young people with good education, but without work have recently emerged in China. It is a serious challenge for China’s political system, more serious than 100 million poor peasants.

QUESTION: Add here another 700 million Chinese living below the poverty level completely neglected by the authorities.

GRIGORY YAVLINSKY: Yes, I know that people there live on less than one dollar a day. Consequently, everything is not so easy. There are problems in China’s political and economic system that can not be solved by means of economic growth. The Soviet Union too demonstrated GDP growth sometimes by 12-14 per cent, and we know how it all ended… But no one wants to recollect this now – today everything on the surface looks so good, the parameters, revenues, Olympic Games…

QUESTION: In pursuit for profit everyone forgot about the moral component associated with the persecution of people for their beliefs, which leads us to where we started our conversation.

GRIGORY YAVLINSKY: Unfortunately, the drama is that when the profits constitute hundreds of per cent for the absolute majority of modern politicians, bankers and transnational businesses, no restrictions exist. They cooperate with any regimes – both with the democratic and the totalitarian regimes. All the moral standards end on the level of estimated profit of 150-300 per cent, when everything is forgotten.