In the second installment in a new series of AEI.org Exclusive Interviews, Evan Sparks interviews AEI's Philip I. Levy.

This summer, China will host the summer Olympics for the first time. Its international debut as a superpower is already being hampered by protests in Tibet and Xinjiang, demonstrations along the route of the Olympic torch, and pledges by some Western leaders not to attend the games' opening ceremony. The Chinese leadership's crackdown no doubt chagrined those in democracies who advocated giving China the games. In 2001, the New York Times editorialized that even though China's human rights record was poor, "there is reason to hope that the bright spotlight the Olympics can shine on the Chinese government's behavior over the next seven years could prove beneficial to those in China who would like to see their country evolve into a more tolerant and democratic society." Now that the People's Republic is in the spotlight, there is little in the way of visible evolution toward democracy.

Resident Scholar Philip I. Levy

But might China be evolving subtly toward democracy? That is Philip Levy's intriguing argument in a new AEI working paper, "Economic Integration and Incipient Democracy." Whereas conventional democratization theory focuses on benchmarks and indicators of progress on the road to popular rule, Levy suggests that we are overlooking an increased potential for change. "The enhanced potential for progress comes from an increase in the means for achieving democratic change," he writes. Levy freely acknowledges that "China's on the absolute bottom" on scales of democratization. But he points to three changes within China that may indicate the growth of democratic potential--there and elsewhere.

The three elements of democratic potential are also necessary for the dramatic--upwards of 10 percent--economic growth that China has enjoyed. They are communications technology, the rise of alternative leaders, and rule of law. All have sprung up in China along with greater integration into the world economy, and all pose, to some extent, a threat to the Chinese regime. If you were the Chinese leadership, Levy says, "you would not want 400 million cell phones floating around." It's difficult to reverse these trends, leaving the Chinese government in a potentially perilous situation. "They face some difficult choices," Levy adds. "To the extent that they are gaining legitimacy from the economic well-being and the prosperity, a lot of these tools of democracy come with it. They're essentially dual-use technologies." These potential tools for democracy build up subtly, in ways not factored into conventional democracy measurements, for some time until they suddenly become apparent. "In short," says Levy, "they can be seen. We're just not looking."

Which is not to say that incipient democracy happens fast. Levy pointed to the centuries-long incubation of liberal traditions in Great Britain and its colonies. "If you're measuring year by year," he adds, "you wouldn't expect to see much." In an echo of Zhou Enlai's assessment of the French Revolution as "too soon to tell," it may have been far too presumptuous to have expected visible democratic progress in China in the years before the Olympic Games.

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Levy did not work closely on China issues until joining the State Department's policy planning staff in 2005, where he worked on, among other things, the Bush administration's "responsible stakeholder" policy toward Beijing. Levy had previously focused on trade issues, first as a senior economist at the President's Council of Economic Advisers and as a professor at Yale. And there is indeed a trade component to Levy's theory. The emergence of these subtle indicators of incipient democracy has been a result of China's growing trade ties with the outside world. "Free trade has been having an effect," he said. "It's very hard to imagine that you'd see things like the Xiamen protests [over pollution], like [the protest over the monorail] through Shanghai . . . in the time of Mao."

The response from the developed world, then, should be to continue trade with China. "You have a substantially greater chance of democracy in China with the kind of economic integration--the trade--that they've had than you would if China had been off in isolation."

Concerns about human rights, security issues, and product safety in China, combined with fears of globalization and the weakening dollar, have clouded the outlook for further free trade. With a potentially disastrous Olympics coming up, will there be any stomach for closer economic integration with China? Levy warns against throwing up our hands on democratic change in China: "The danger is [that] if you rely on you on those conventional measures, you may reach the erroneous conclusion [that] 'we've achieved nothing through this opening policy, and we'd be more true to ourselves and to our principles if we just shut off trade with China.'" He continues: "Something has happened [there]; you can document it; you can look and see what happened; and we have every reason to think that this has increased the extent to which people's voices are heard--without crossing the threshold."

Beijing's Olympics may themselves be a sign of this incipient democracy. The Olympics represent China's wealth, which was driven by the "dual-use" indicators of democratic potential. They are also occasioning flashes of protest within China, a hint of something "incipient" growing just out of sight.