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 >
Read more >
Extracts from Martin Jacques’ Observer article have been translated and published in Reference News, the largest circulating newspaper in China.
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?
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
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 >
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 >
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.
Read more >