The west’s bears have always well outnumbered the bulls when it comes to the Chinese economy. A new problem is all too often seen as an intimation of impending crisis, a hard landing, consequent social instability, and perhaps the eventual collapse of the regime. Dream on.

The bears, it goes without saying, have a dreadful record. After 35 years of extraordinary economic growth, China is still growing at 7% annually. True, that is lower than before, but still at a rate that dwarfs anything in the west.

One of the great weaknesses of so much western economic commentary is that it fails to look much beyond the next quarter’s, or even month’s, results. In contrast the Chinese understand where they have come from, where they are and where they need to go. Nor are they complacent: the Chinese leadership readily admits it faces quite new economic challenges.

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03/03/15 – People's Daily

There is an overwhelming assumption in the West that China’s Achilles heel is the state: that it lacks legitimacy. This is the underlying reason why Westerners believe that China’s transformation is unsustainable: that the political system cannot survive. It would be wrong to suggest that attitudes have not shifted: the endurance of the reform period, now over 35 years old, and the scale of its achievement have bred a growing if still grudging respect, and a less apocalyptic view of Chinese political change. Few now regard it to be imminent and many have extended their time horizons somewhat into the future.

Nevertheless, most Westerners still regard China’s present political order as lacking legitimacy and as ultimately unsustainable. In the post 1945 period, Westerners have come to believe that Western-style democracy – essentially universal suffrage and a multi-party system – is more or less the sole source of a government’s legitimacy. This is a superficial and ahistorical position. Western-style democracy does not ensure the legitimacy of a regime in the eyes of its people: Italy is perhaps the classic example, with successive governments over a long historical period experiencing a chronic lack of legitimacy. And what of China? Although it does not have Western-style democracy, there is plenty of evidence – for example the Pew Global Attitude surveys and the work of Tony Saich at the Harvard Kennedy School – that the Chinese government enjoys high levels of support and legitimacy, much higher indeed than those of Western governments.
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The UK’s decision to become a founder member of the Asian Infrastructure Investment Bank (AIIB) is a major historical event. Until then no Western country, with the exception of New Zealand, had signed up to join, not least because of intense American pressure. The UK, moreover, cannot be counted as any old Western nation; on the contrary, ever since 1945, it has been the US’s closest ally. For British politicians, Conservative and Labour alike, the ‘special relationship’, as it has been known, was sacrosanct. A decade ago, the UK stood shoulder to shoulder with the US in the disastrous invasions of Iraq and Afghanistan.

So how do we explain Britain’s about-turn?

The UK is certainly not what it was. Along with the other major European nations, its relative strength in the world has declined precipitously, accelerated in the recent period by the western financial crisis. Today its economy is barely bigger than it was in 2007. Unsurprisingly in such circumstances, economic and commercial considerations have loomed ever larger in the public mind while foreign policy concerns have come to be seen as something of a luxury. This shift in priorities has been accentuated by the dismal failure of the military adventures in Iraq and Afghanistan, not to mention the more recent one in Libya.
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Martin Jacques is the author of ‘When China Rules the World: The End of the Western World and the Birth of a New Global Order’ (Penguin, 2012), and a senior fellow at the Department of Politics and International Studies at Cambridge University.

To all intents and purposes, Europe – including the UK – is more or less frozen. It is still living in the dark shadow cast by the financial crisis. This is the era of stagnation, and it may last for another decade or more. So we can expect that not too much will happen in 2015 – except, of course, in terms of the political fallout from such a condition. While the US is clearly more dynamic, this is overshadowed by its tumultuous decline as a global power. Which brings us to China.

The preoccupation of the western media and financial analysts with China’s reduced economic growth rate has served, once more, to divert attention from the continuing enormity of the changes taking place in China: from the anti-corruption drive and judicial reforms, to the Shanghai free-trade zone and the rise of consumption. However, as 2014 drew to a close, what began to capture global attention was China’s growing dominance in east Asia.

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16/12/14 – People's Daily

As China rises, so its relationship with the rest of the world becomes ever-closer. At the same time, it also grows more complex. There are bound to be setbacks as well as advances. Overall, however, one must conclude that 2014 has been a very good year as far as China’s global rise is concerned. More and more countries around the world want to build a closer economic relationship with China, which increasingly they see as crucial to their own future prosperity. China is pioneering a new paradigm in international relations in which military concerns are no longer paramount – as has been the case in the post-1945 American world order – and, in their place, economic relations, based on trade, investment and loans, are assuming primacy.

This trend – embodying the notion of win-win co-operation – is most apparent in China’s relationship with the developing world but it is also becoming a growing feature of, for example, China’s relationship with many European countries. This is even true of the UK, which has been a relative laggard in its relationship with China: since December 2013 it has been enthusiastically seeking Chinese investment in its nuclear industry and trying to make London the European hub for the renminbi.

The most dramatic example of this primacy of the economic, however, is East Asia. The United States introduced its ‘pivot to Asia’ – now described as ‘rebalancing’ – in 2012 in an attempt to reverse its decline in the region while at the same time seeking to constrain and contain China’s rise. The key plank of the pivot was – in time-honoured American tradition – to strengthen its military alliances with Japan and South Korea, and also the Philippines. Yet the reason for America’s decline in East Asia was not military but economic. Similarly, the reason for China’s rise was not military but economic. In other words, the very conception of the pivot was fundamentally flawed.

2014 offers powerful evidence that the US strategy will fail. The launch of the Asia Infrastructure Investment Bank with 21 members – notwithstanding powerful American pressure to dissuade countries from joining – shows that the main trend in the region is economic partnership and co-operation, with China at the heart of the process, rather than military alliances. Japan, South Korea and Indonesia were the only East Asian countries that refused to join, and since then Indonesia has announced its intention to sign up. We can expect the process of economic integration in the region to accelerate, with the US, it would seem, increasingly an outsider. Even its attempt to seize the trading initiative – the deliberately divisive TPP – is in serious trouble.

This offers an insight into what the world might be like when China possesses the largest economy. If American power has been characterised, above all, by its military might, together with its predilection to interfere in the political affairs of other countries, China offers a very different example. The American worldview is based on the notion of enemies and allies – a fundamentally military logic. China thinks in terms of economic development and mutuality. China, in fact, does not have enemies – the nearest example is Japan – and nor does it have allies. On the contrary, all countries, including Japan, are viewed as actual or potential partners. This is a very different conception of the world, which also finds reflection in the style of Chinese political leadership, quiet and reserved rather than lecturing and hectoring.

The roots of these differences, of course, are historical. While Europe – the progenitor of the United States – sought to extend its influence around the world through military conquest and direct political rule resulting in vast colonial empires, China’s influence in East Asia and beyond was based on a combination of economic and cultural rather than military and political power. While Europe sought to impose its values on the world by force and subjugation, China’s sense of itself as the most advanced civilization – the Middle Kingdom, the land under heaven – was expressed in a desire to prioritise the domestic – or stay at home – rather than conquer the world.

A fundamental feature of the China Dream concerns China’s evolving relationship with the world: this, of course, is still very much work in progress. Ever since China was forced by its own weakness at the end of the nineteenth century to submit to the Western norms of the international system, it has enjoyed very little international influence. That is changing rapidly, but we are still only at the very beginning of this process. Based on little contemporary experience or historical knowledge of China, the world is watching to see how it will exercise its growing power. Inevitably, because China is so unfamiliar and also so huge, there is some apprehension. But what has been most striking so far is how relatively little hostility there has been towards China’s rise, and even a sense of expectation. China must do everything in its power to ensure this continues.

The reforms that count tend to conform to the western model, writes Martin Jacques

In the west there is an underlying assumption that the Achilles heel of China is its political system. Since the country lacks western-style democracy, its system of governance is unsustainable. Ultimately, China will be obliged to adopt our kind of political system.
Yet China’s governance system has been remarkably successful for more than three decades. It has presided over the greatest economic transformation in modern history.

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Hong Kong’s chief executive says he is willing to hold talks with the demonstrators who have camped out for days now in the city’s financial center. This came as a response to a request from the protesters.

Students are demanding more freedom on choosing the candidates for Hong Kong’s next leadership election in 2017. They also want the Chief Executive, CY Leung, to resign. Leung has said he will not resign. Beijing has called the protests illegal and has supported the Hong Kong leadership. Chinese Foreign Minister Wang Yi said the protest was illegitimate when he met with U.S. Secretary of State John Kerry. Yi also urged protesters to withdraw.

Martin Jacques, a senior fellow at Cambridge University and author of “When China Rules the World: the End of the Western World and the Birth of a New Global Order”, joins CCTV America to discuss the latest developments in the demonstrations.

“For 155 years, the British ruled Hong Kong but they never gave universal suffrage. So, Hong Kong under the British was never a democracy. It became an issue only during the handover of Hong Kong from the British to China. For the British it was not important to give universal suffrage when they ruled it,” Jacques said.

30/09/14 — Diplomacy Magazine (Gaiko)

Gaiko is the leading publication in Japan on foreign policy issues

In April this year the World Bank’s International Comparison Program projected that during the course of 2014 China’s GDP (measured by ppp) would exceed that of the United States. Although widely anticipated to happen in the next several years, hardly anyone expected it to be this year. But, it should be noted, the West has consistently underestimated the speed of China’s rise. As a result, it has been, and remains, consistently behind the curve of China’s rise, with the consequence that it constantly underestimates the extent to which the world has changed because of China’s transformation.

Of course, economic power does not translate immediately and directly into political power. On the contrary, if we look at the rise of previous hegemons, notably the UK in the nineteenth century and the US in the twentieth century, there has always been a significant time lag between their emergence as great economic powers and their subsequent arrival as major hegemonic powers enjoying broader political, cultural and military as well as economic influence. That said, however, economic power was the fundamental pre-condition for, and prelude to, their emergence as global hegemons. The same will be true of China.

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