Geopolitics, globalisation

The following article by Martin Jacques appeared in Gulf News, 27th February 2018. 

The Belt and Road Initiative marks a new stage in China’s rise. Launched in 2013, it built on China’s going out strategy which took shape around the turn of the century. If the lines of continuity are clear, the differences are even starker. The going out strategy saw China developing closer relations with Southeast Asia, Africa and Latin America, to name the most prominent. In contrast, the BRI is an overarching project designed to transform the Eurasian land mass, presently home to around two-thirds of the world’s population.

We have never seen the like of it before, a project on the grandest of scales and in that sense consonant with China’s own traditions.

Although Europe is part of the Eurasian land mass, the central aim is the transformation of the developing countries that comprise most of the continent. The developmental logic runs roughly as follows. China transformed itself — the most remarkable transformation in human history, one never likely to be repeated — by massive investment, in which the state was instrumental and which was largely directed towards infrastructure.

The result was spectacular economic growth and a massive reduction in poverty. If it worked for China, then why could it not for other developing countries? China doesn’t see itself as a model, but it does believe that these lessons are of more general application.

Spectacular though Belt and Road maybe, it would be wrong to underestimate or dismiss its chances of success. After almost four decades of continuous growth, China has a formidable record of delivery. Belt and Road should not only be taken seriously, it should be assumed that it in the long run it is likely to be largely successful.

By 2050, Eurasia will surely look very different, growth will have taken root in many countries and Eurasia will have moved to the centre of the global economy and geopolitics. For the more sceptical, it should be born in mind that by 2030 the Chinese economy is projected to be twice the size of America’s.

For various reasons, most importantly the closeness of the US’s relationship with the Middle East, China has moved relatively cautiously in expanding its ties with the Middle East. But the pace has quickened since the Western financial crisis.

The most important single aspect of China’s relationship has been its dependence on the Middle East for half its oil imports. But the Chinese approach has consistently focused on the need to establish a much broader economic relationship. In this context, the Middle East countries have shown great interest in the Belt and Road Initiative.

All the Middle Eastern states, bar five, are members of the Asian Infrastructure Bank, and three of the 12 directors are from the region.

Apart from the obvious economic importance of China to the Middle East, there are two key reasons why the latter is showing such interest in Belt and Road. Firstly, these countries — and perhaps most notably the Gulf states — occupy a key strategic position with regard to both the land and maritime routes.

This lends their ports an obvious significance and enhances the potential of their accompanying economic zones. The second is that with the decline of fossil fuels now firmly on the agenda, they need to diversify their economies with some alacrity, Saudi Arabia being the most compelling example.

The UAE has been well to the fore in broadening its relationship with China. China is the UAE’s second largest trading partner while the UAE is China’s second largest partner in the Gulf region.

The Khalifa port is one of the fastest growing in the world and, with Cosco’s decision to establish its own container terminal, is set to almost double in size. The Kamsil industrial zone is expanding rapidly with major Chinese investments.

A UAE-China investment fund was established in 2015 and the UAE sees itself as becoming a major financial hub. Lying on the key trading routes to Africa, Europe and the Indian subcontinent, the UAE is well-placed to be a major beneficiary of the BRI.

A study of China’s inexorable rise as a world power asks vital questions of America’s response.

The central theme of this excellent book by Gideon Rachman, chief foreign affairs commentator for the Financial Times, is what he terms “easternisation”: the remorseless shift in the global centre of gravity from the west to the east. His theme is not new; indeed, the book is something of a latecomer in this argument. But he pursues this fundamental truth with an impressive single-mindedness and explores its ramifications from south-east Asia and Russia to Europe and the Middle East in an insightful manner, often providing little nuggets of revealing and unexpected information. Since the financial crisis, the west’s decline and China’s rise have accelerated, though many could be forgiven for thinking the opposite was the case given the constant refrains about China’s economic “difficulties”. Rachman, rightly, will have none of it. And he demonstrates how, by the year, the world is being redrawn in the most profound ways by this shift in power.

Read more >

The forthcoming G20 summit comes at an appropriate moment in the evolution of China’s own relationship with the global economy and its governance.

China’s formal entry into the global economy was marked by its admission to the WTO in 2001. For more than a decade after that, with economic growth averaging around 10%, trade expanding to the point where China became the world’s biggest trading nation, and overseas investment growing very rapidly albeit from a very low base, China chose to take a back seat while learning the ropes of its newly acquired status. During this period, China preferred to play a relatively passive role. As a result, it was frequently criticised by the United States for being a free rider: enjoying the benefits of globalisation without contributing to the global public goods that were needed.

Read more >

中国是目前世界上发展最迅速的国家之一,处在影响未来全球经济及其治理的关键位置,而杭州峰会正处在一个历史性的重要时刻

在过去几年里,中国在国际社会中扮演的角色越来越主动,更多地成长为经济全球化的塑造者。有两个标志性例子可以证明:一是筹建亚洲基础设施投资银行,该银行吸纳了来自欧洲及亚洲的多国成员,将成为亚洲地区基础设施建设投融资最重要的机构;另一个是提出“一带一路”倡议,致力于打造最具雄心的跨国发展战略。此外,海外投资、人民币国际化、中国企业“走出去”等,都说明了中国的全球影响力在多个层面迅速扩展。

Read more >

Following its publication in The Observer, this article has stimulated a great deal of interest and debate in the UK and the US. It received almost 500,000 unique visitor views and trended on Twitter. 

In the late 1970s Martin Jacques was one of the first to herald the emerging dominance of neoliberalism in the west. Here he argues that this doctrine is now faltering. But what happens next?

4830

Donald Trump seeks a return to 1950s America, well before the age of neoliberalism. Photograph: H. Armstrong Roberts/Retrofile/Getty Images

The western financial crisis of 2007-8 was the worst since 1931, yet its immediate repercussions were surprisingly modest. The crisis challenged the foundation stones of the long-dominant neoliberal ideology but it seemed to emerge largely unscathed. The banks were bailed out; hardly any bankers on either side of the Atlantic were prosecuted for their crimes; and the price of their behaviour was duly paid by the taxpayer. Subsequent economic policy, especially in the Anglo-Saxon world, has relied overwhelmingly on monetary policy, especially quantitative easing. It has failed. The western economy has stagnated and is now approaching its lost decade, with no end in sight.

After almost nine years, we are finally beginning to reap the political whirlwind of the financial crisis. But how did neoliberalism manage to survive virtually unscathed for so long? Although it failed the test of the real world, bequeathing the worst economic disaster for seven decades, politically and intellectually it remained the only show in town. Parties of the right, centre and left had all bought into its philosophy, New Labour a classic in point. They knew no other way of thinking or doing: it had become the common sense. It was, as Antonio Gramsci put it, hegemonic. But that hegemony cannot and will not survive the test of the real world.

Read more >

It is difficult to underestimate the significance of the recent transformation in relations between the UK and China. There are many examples in recent years of countries moving towards a closer relationship with China: the distinctiveness – and significance – of the British case lies in the fact that the UK has regarded itself – and been seen as – America’s closest ally ever since the Second World War.

Read more >

Illustration by Matt Kenyon
Illustration by Matt Kenyon

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.

Read more >

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.
Read more >

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.
Read more >

ÀúÊ·µÄÁíÒ»ÃæÕ¹¿ª

Updated and expanded new Chinese edition just released.

cin-hukmettiginde-dunyayi-neler-bekliyor-kitabi-martin-jacques-Front-1

Turkish edition just published!

When China Rules the World is the first book to fully conceive of and explain the upheaval that China’s ascendance will cause and the realigned global power structure it will create.

New edition available now from:

Amazon UK
and all good booksellers.

US second edition is available now via: 

Amazon US