China

This year marks the 40th anniversary of China’s reform and opening up. what do you think of the role the reform and opening up has played in china’s extraordinary changes?

China’s transformation started in 1949, but only in 1978 did China’s economy start to take off in an extraordinary way. It was only then that the Chinese worked out what the appropriate economy strategy was for the country. This was the stroke of genius of Deng Xiaoping.What he proposed was very radical and represented a major shift in the communist tradition. Basically he said two things: firstly, socialism is not synonymous with the state and state planning,but that socialism had to combine both the state and the market. And secondly, he argued that China needed to see itself as part of the whole world, including the capitalist world. China had to live with and compete with and learn from the capitalist world, and not just the socialist world.

This was an intellectual revolution which required a complete rethink and unleashed enormous intellectual energy. This ignited a long process of transformation in China.1978 is one of the most important dates in the 20th century, it prefigured the 21st century: the transformation of China and later the world.

China vows to continue opening up. Some people see this as an opportunity, but some say it’s a threat. How do you evaluate these contradictory views?

One of the great things since 1978 is that China is always thinking, always experimenting, always learning, always trying to work out what is the best way in the situation, in the circumstances that it faces, which are constantly shifting. There’s a general idea of where to go and how to do it. But there’s not a tablet of stone about how to do it; instead of a tablet of stone, you “cross the river by feeling for the stones.” The Chinese combine a general set of principles with a very strong dose of pragmatism.

Itis obviously a lot more complex because China’s economy is many, many  times larger now than it was, and China’s impact on the world is now also huge: there are so many more factors China has to consider both internally and globally. China is very interestingly different and distinctive from both the old Soviet mentality and also the West. It has learnt from the West, but it is also very distinctive from the West. It is very important to maintain that. I think one of the reasons for the success of China is its capacity to draw different elements together from different places, different experiences, different traditions, and then combine them in a very unique Chinese way.

Of course, some people think China should be more like America. Now? Really?America is in big trouble, it is in serious long-term decline, which is part of the reason why we got Trump. No, China has to be distinctive. It has to combine those elements which it needs to learn from the West with its socialist and Chinese traditions.

Earlier this year, you wrote an article arguing that the fortieth anniversary of the beginning of the reform period is a cause for celebration and reflection not only in China, but around the world. Can you specify what are the issues that the world, including the Western countries, should reflect on most?

1978 led to the the most extraordinary economic transformation in the modern era. This is much more remarkable than America’s transformation between the 1860s and 1914. It’s a very important event to study. But the West doesn’t think in these terms about 1978, because they don’t really understand any of this.The West is very ignorant about China.

But I would say look, reform and opening up has transformed China. Then,during the 1990s, China began to transform the world and, as a result, the world is now very different from what it was before because of China’s impact. Since 1978 China has been the most important engine of global change. So every country should study China and the Chinese experience.That doesn’t mean that China is a model, but it does mean China is an interesting and important example from which to learn. Many developing countries understand this but the West is still in partial, sometimes total, denial.

On  October 4th, the US Vice President Michael Pence made a speech at the Hudson Institute, claiming that US has rebuilt China over the last twenty five years. The US President Trump also mentioned this many times on different occasions. Are you surprised by Pence’s speech?

Not really. You have got to say that the Trump administration,including the Vice President, is many ways remarkably ignorant. Their reaction to American decline is to reassert American nationalism and to try and bully the rest of the world.It’s nonsense to say America is the major reason for China’s transformation over the last 25 years. That tells me that they know nothing about China’s transformation. What planet are they living on to make that kind of remark? It’s obviously just cheap self-serving propaganda. Has America made a contribution to Chinese rise? Yes. It has. As China itself has frequently said, China has been the beneficiary of the era of globalisation which the US played a key role in shaping.

Some American scholars believe that the US has adopted an engagement policy toward China, which has greatly benefited China. But now believe that China has “betrayed” the US and does not intend to follow the US way in terms of its political system. What do you think?

I think a very big political shift has taken place in America. It is not just the Republicans. The Democrats have also shifted to a more anti-Chinese position. Now the question is why, and this is a question that the Chinese themselves need to reflect on.

Until about 2010, America was generally relatively benign towards China.The period after 1972, following the Nixon Mao accord,was characterised by relative stability in the US-China relationship. There were two assumptions that underpinned American attitudes towards China. The first was that China’s economic rise would never challenge America’s economic hegemony. And the second assumption was that China would, in time, become like the West, because they assumed that unless China became like America it could never succeed, its transformation would fail. It would be unsustainable both economically and politically. From 1972 until the Western financial crisis, the relationship remained very unequal, though less so over time.America was the major power. China was the junior partner.

From around 2010, it became increasingly clear that these two positions were wrong. Firstly, because China’s economic transformation continued very successfully and in 2014 overtook the US economy according to GDP measured by ppp. And secondly, it became clear that China was not going to be like America. The political system was not going to become like America’s. Furthermore, China would not accept American global leadership and do whatever America wanted it to do. Two things served to dramatize the situation: one was the Western financial crisis of 2008, the worst in the West since 1931. Suddenly the West was in deep trouble. And, on the other hand, China was not in trouble and China’s rise continued.It shook the confidence of the West. Until this point,America did not believe it was in decline. It had, of course, been in decline for some time, but it was in denial about it. Trump was the product of, and gave expression to, this new uncertainty, angst, disappointment and a growing mood of anger and frustration. This historically explains the shift in the American attitude towards China.

US President Trump frequently summed up his approach to foreign policy with two words: America First. The US has withdrawn from various international mechanisms and is creating barriers for trade, technical exchange, and personal exchanges with a lot of countries. Do you think this will reverse the globalization process and maybe make the world more differentiated or more difficult to access?

I definitely think the era of neo-liberalism has come to an end.There are lots of elements and dimensions to this. Clearly, there’s a reaction to the globalization era in the West. And the ideology of that period in the West, namely neo-liberalism,is in crisis;Trump is a reaction against it. The uber or extreme globalization, which was the western ideology of this period, has hit the wall.

I also think that the whole American view of itself and its role since the end of the second world war has come to an end. I don’t see any simple reversion to the previous era of American multilateralism and leadership. I think that era is over and is unlikely to be revived in its old form. I don’t think we should be so surprised by this because if you look at American history over a much longer period, for example from the War of Independence against Britain until 1939, it was largely dominated by American nationalism and isolationism. The period after 1945 until the election of Trump in 2016, during which America saw itself in terms of multilateral institutions, broad alliances and leadership, was the exception rather than the rule.

Before the second world war, America was always for itself. It was very nationalistic, for long it existed in splendid isolation on its continent. It thought of itself in its own terms. Historically it was very aggressive.It was built on violence, built on slavery, built on wars. Wars against the Amerindians, against Britain, against Spain, against Mexico. That’s how it expanded. So this latest period of American development has been an exceptional period. And Trump lies within the old tradition. He’s reacting against the post-1945 period, he is reverting to the past, by so doing he wants to make America great again, making America as it used to be. Of course, he cannot succeed. Times have changed profoundly.

I don’t think we should expect the Trumpian era to be short lived. There will be no easy or simple return to the status quo ante before Trump.This period could last twenty years, thirty years; a reaction against western-style extreme globalisation. In the long-run, of course, globalization will continue but in the next decade, perhaps much longer, it will suffer setbacks and could even be reversed in certain respects.

Meanwhile, there’s a different globalization taking place, which is what I’ll call Chinese-style globalization with Belt and Road being its most prominent feature. We are moving into a much more complex period, with a much more divided and fragmented world. In this context I think the Pence speech was quite ominous. It was a speech that could have been given in the cold war, it was a very broad attach on China, an attempt to demonize it.It’s not going to be the same as the cold war, but there will be some similarities.

For decades, China has benefited a lot from globalization and the multilateral trading mechanism. What challenges will the current situation bring for China? And what’s your advice on China’s next step on reform and opening up?

I think that what is now deeply preoccupying the Chinese leadership is how to respond to the shift in America, how to understand it and how to deal with it. I think the fortieth anniversary is a reminder of things we should not forget. The wisdom of Deng Xiaoping: keeping your lines of communication open, keeping your curiosity about the world and making as many friends as possible. And I think that those are still good advice.

The following article was published on CGTN.com on August 1 2018

British Foreign Secretary Jeremy Hunt visited Beijing on July 30 in his first major overseas trip since taking office. The occasion, the 9th China-UK Strategic Dialogue, is an event that has served to reinforce the ties between the two countries.

An extensive range of topics was discussed during the meeting, including the reaffirmation of the “Golden Era” raised by the previous British prime minister, the agreement to defend free trade and multilateralism, and the expectation from China’s side of the UK’s ambitious participation in the Belt and Road Initiative.

Both countries have apparent drives to deepen bilateral partnership. For the UK, the Brexit has raised many concerns about its economic growth potential, which largely depends on its future relations with the European Union.

“Brexit is hanging over everything,” said Nathan King, a CGTN correspondent based in Washington, DC. “The UK was attractive to China before Brexit because it was the door to the EU market. Now it’s less attractive.”

Other experts expressed similar concerns. Martin Jacques, a senior fellow at the Department of Politics and International Studies at Cambridge University, said that no one knows where the UK is heading to in this post-Brexit period.

In the middle of this uncertainty, the British leaders are being much more cautious towards China, whose attitude he thinks should actually be reversed.

From a Chinese perspective, the trade friction with the US has inevitably influenced its economic performance, making it important to strengthen financial cooperation with other major countries.

However, there are also concerns from experts that the UK is not as an ideal partner for China as it seems to be. “China should not rely on the UK for anything,” said Philippe Le Corre, a senior fellow at the Harvard Kennedy School.

While China wants to use WTO as the platform for globalization, Washington thinks otherwise. The Trump administration has spoken against WTO, and is in favor of bilateral deals with the EU.

Martin Jacques disagreed, saying that the EU-US deal is just a conversation, which is not finalized.

Looking forward, the UK could largely benefit from China’s strategy of reform and opening up. King suggested that the biggest export of the UK is essentially financial services like insurance, gamut, and health, which will benefit most once China opens up.

According to Peter Ho, economist and research fellow at the London School of Economics, the UK is now the second largest platform for RMB. Therefore, if the UK is able to sustain its global financial impact, it will play an important role in the internationalization of RMB.

Moreover, being the first major Western country to join the Belt and Road Initiative, the UK could act as an endorser of the initiative.

“The UK is a country with a long history of trading across a different continent, and this could help to explain to the rest of the world what the Belt and Road Initiative is and calm people’s nervousness about the rising Chinese power,” King said.

The following article by Tim Robertson appeared in the Diplomat on August 7 2018.

On July 6, Tenzin Gyatso, the 14th Dalai Lama, celebrated his 83rd birthday in Ladakh, the Himalayan region in the Indian state of Jammu and Kashmir. On the other side of the world’s highest mountain range sits Lhasa, the Tibetan capital that he fled in 1959 during the Tibetan Uprising. The Dalai Lama has never been allowed to return. His has been a life lived in exile. But even Lhasa, home to the Jokhang Temple and Potala Palace, was a world away from the place where Tenzin Gyato was born.

Takster is a small village in the far northeast of the Tibetan plateau, in the region of Amdo (these days, it’s part of the Chinese province of Qinghai). In his biography, Freedom in Exile, the Dalai Lama writes of Takster:

It was a small and poor settlement which stood on a hill overlooking a broad valley. Its pastures had not been settled or farmed for long, only grazed by nomads. The reason for this was the unpredictability of the weather in that area. During my early childhood, my family was one of twenty or so making a precarious living from the land there.

When Thupten Gyatso, the 13th Dalai Lama, died in 1933 a search party was appointed to find his reincarnation; they first reached Takster just before Tenzin Gyatso’s third birthday. Shortly thereafter, they sent word to the Regent in Lhasa that they’d found the new Dalai Lama; they then waited several months to receive official confirmation.

At the time, control of China was divided among former military cliques. Ma Bufang, the Hui Muslim warload who ruled over Qinghai, “began to make trouble,” in the words of the Dalai Lama; thus, the boy destined to become the religious and political leader of Tibet was taken with his family to Kumbum monastery, “several hours away by horse.” Two years of diplomatic toing and froing followed and eventually, with the payment of a ransom, Ma Bufang allowed the party to leave Kumbum monastery and travel onwards to Lhasa.

***

Takster is a footnote in the long history of Tibet; it would be all but unremarkable if it were not the birthplace of the 14th Dalai Lama.

Today, it’s still a small, isolated village. For tourists visiting China – taking in the sights of Beijing, Shanghai, Xi’an, Chengdu, etc. – this side of the country’s extraordinary rise often remains invisible: away from the big cities, there is still widespread impoverishment. In places like Takster it’s clear that China’s growth has disproportionately benefitted wealthy urbanities; today’s reality is the very opposite of the peasant-led revolution Mao Zedong hoped would remake China.

But Takster also tells another story of modern China, with its resurgent Han nationalism and persecution of religious and ethnic minorities.

It’s seven kilometers from Takster to the next closest village. The roads leading up the mountain from Ping’an are all relatively new up until the final village, after which they’re pot-holed and often unsealed. The villages scattered up the mountain, where the majority of people are Hui Muslims, are fairly typical of the region: there’s a small middle school, and stores where shopkeepers stare at their phones while waiting for customers. I spot a large government building with the requisite Chinese Communist Party (CCP) insignia and men work in a small square, laying pavers and planting trees.

Takster is somehow different, though. At first sight, it looks like the other villages. Vegetation is sparse, there are old cars and decrepit motorcycles parked haphazardly, and all the homes are small, one-story dwellings with large courtyards. But all the gates are closed and locked, which is unusual in a village where everyone knows one another and many people are related. It’s around 10:30 a.m. when we arrive, but there is no one around. Even the police are nowhere to be seen. We park in front of a requisitioned school desk with two police shields leaning against it, but the comically small chairs are empty.

The Dalai Lama’s former home isn’t exactly inconspicuous; the CCP have “renovated” it and you can see the gold roof as you drive toward Takster. But that’s the best view we get; the house is behind a four-meter high grey brick wall and, on the day we’re there, the wooden gate, draped in Tibetan khatags, is locked.

In lieu of people, the house is watched over by a lone security camera, aimed at the entrance. One hundred meters down the road a dog emerges from a house, then the sound of someone hammering metal begins to ring out over the village. As we make our way toward the only sign of life we’ve seen or heard since arriving, a Chinese-speaking Tibetan man emerges from a dwelling attached the former home of the Dalai Lama. Looking at me, he asks: “Where are you from?” But before I can answer he turns to my driver and, more alarmed, asks, “Are you Tibetan?” When the driver answers in the affirmative, the villager – with an obvious sense of urgency – tells us to leave quickly because the place is heavily surveilled. His voice is foreboding and his jerky, hurried gestures make it clear that this isn’t a place to loiter.

My now visibly anxious driver and I hurry back to the car, hoping that the makeshift police checkpoint is still unoccupied. Although few words are spoken in our brief encounter with the local villager, much is conveyed: Tibetans understand the reach, power, and unjustness of the CCP. They’ve spent their whole lives being persecuted because they’re Tibetans.

Beijing obviously doesn’t want Takster becoming a pilgrimage site for Tibetans; the Dalai Lama represents a challenge not to Chinese power per se, but to its national(ist) narrative. Martin Jacques, author and scholar of modern China, has argued that China is different from other nation states and is better understood as a “civilization-state.” The CCP’s claims to legitimacy are closely linked to its ability to foster an image of itself as the guardian of China’s 6,000 year old civilization. The claim, therefore, that Tibet is culturally, linguistically, and geographically distinct from China and its civilization undermines the CCP’s claims to legitimacy.

Yet, if, as Beijing claims, Tibet is an intrinsic part of China and if the emerging superpower is, as it claims, a benign force (unlike Western imperial powers), then it doesn’t make sense to ban people from visiting sites like Takster. If Takster is part of China in the same way that, say, Shanghai is, then all Chinese people (including Tibetans) should be free to go there. But, of course, Takster is not the same as Shanghai, nor are Tibetans, in the eyes of the CCP, the same as Han Chinese. There is a tension, in other words, between the myth-making that passes for official Chinese history, the national narrative that’s the basis for so much state propaganda, and the lived reality for China’s minorities.

China today is unrecognizable as the socialist utopia envisioned by Mao. Since his death in 1976, the CCP has shown itself to be flexible on matters that were once ideological imperatives. Thus, the once nominally atheist state has, in recent years, seen a resurgence in religiosity amongst its citizens. The CCP has allowed this – even encouraged it in some instances – to the extent that it remains apolitical. But if religious belief is accompanied by or becomes the basis for calls for independence or autonomy or greater freedom, then it’s ruthlessly repressed.

***

With each passing year, as the Dalai Lama grows older, there are whispers about what will happen when he dies: it’s unthinkable that Beijing would allow a Tibetan search party to carry out the task of finding his reincarnation unimpeded.  The Dalai Lama has made some vague comments that he may be the last reincarnation or that his reincarnation may be found outside Tibet in, say, India or Nepal. But until he passes and Beijing reveals its hand, this all remains hypothetical.

When we are a few kilometers out of Takster, my driver relaxes a bit, puts on some Tibetan rap music and we resume the conversation we’d been having earlier. “What do you think will happen,” I ask, “when the Dalai Lama dies?”

“Maybe I will have a bit more freedom,” he replies unconvincingly. He qualifies it with, “But I don’t really know, though.” He thinks it’s inevitable that the CCP will try to install their own pliant “Dalai Lama” (like it did when the Panchen Lama, the second highest ranking lama in the Gelug tradition of Tibetan Buddhism, died in 1989); a figurehead the CCP can point to as evidence of its acceptance and respect for minorities, but someone who’s just an extension of its authority.

A few weeks later I am in Dharamshala, India with a Tibetan friend who’s spent most of his life in exile. When I tell him about my visit to the Dalai Lama’s birthplace and relate the conversation I had with my driver, he is dismissive of that prediction. It is impossible, he says, that Tibetans living in Chinese-occupied Tibet would stand for such an affront to their faith. If the CCP interferes with the search for the Dalai Lama’s reincarnation, he warns, it could be the fire that sparks a revolution.

These two responses are not necessarily reflective of the views of the majority living in occupied-Tibet and those in exile, but they are emblematic of the gulf between the lived experiences of the two communities. Both suffer because of China’s occupation, but they suffer in very different ways and this shapes their hopes, aspirations and expectations.

All Tibetans share a culture and history, but China, in addition to occupying Tibetan land, has driven a wedge between its people. Many of those living in Chinese-administered territory can’t leave, while many of those living in exile have never set foot in Tibet.

The on-going Chinese-Tibetan conflict is not generally treated as an urgent matter by the international community. Beijing restricts access to Tibet, so the flow of information is tightly controlled, and China is an increasingly powerful force in the world. But the longer China is allowed to remain unaccountable for its occupation of Tibet and the oppression of its people, the harder it will be to bridge the divide between a people whose lived experience of isolation, occupation, and exclusion have been so different.

Tim Robertson

 

The following interview with Martin Jacques originally appeared in the New Internationalist.

Yohann Koshy: How did China respond to the global financial crisis?

Martin Jacques: It was essentially a Western crisis but China had to respond because the American and European markets, on which it was quite dependent, went down very badly initially and [it did this] by having a huge stimulus programme. It pumped very large amounts of money into the economy and the consequence was that Chinese growth went down slightly but remained very high. It was pushing 9 and 10 per cent during this period and, in fact, went up to 12 and 13 per cent.

In the longer period, basically what happened was a serious attempt to shift the centre of gravity of the Chinese economy. In 1978, China’s economy was a 20th the size of the US economy. The reforms over the following decades were about becoming an export-driven economy, dependent on cheap labour that came from powerful migratory movements from the countryside to the main cities, with, of course, very strong input from the state.

But since the financial crisis the shift has been towards an economy that is increasingly dependent on domestic rather than foreign consumption, with much greater dependence on research and development, and with a lower growth rate. The new norm for a growth rate is between 6.5 and 7 per cent, which China has maintained to this day. But when the economy is growing at that rate, given the size of the whole country, the global impact is still enormous: China’s been responsible, since the Western financial crisis, for somewhere between 40 and 50 per cent of global growth. Without the Chinese economy, the global economy would be in a mess.

Could China be going down the route of financialization like the Western economies? Blackrock, the huge hedge fund, was recently granted a licence to start operating there.

Well, I don’t think the Blackrock announcement itself constitutes anything like that. I think the Chinese will very strongly resist going down that path. Of course, they need a strong financial sector. They will need to develop capital markets [financial venues where cash can be raised for investment]. But the thing is that the Chinese economy is very different to the US economy. It’s still got tremendous manufacturing capacity and emphasis on the importance of scientific and technical labour. The state is very fundamental to the way in which the Chinese economy works. They’ve also been much more able to deal with special interests in the way the Western economies haven’t. The banking sector became [dominant] within Western societies during the neoliberal period from the late 1970s through to the financial crash. It seems to me there’s very little evidence of this happening in China.

And when Mark Carney says he’s worried about shadow banking in China…

The main debt problem in China is corporate debt. The state-banking system, but also to some extent the shadow banking system, has built up indebtedness because it’s sometimes over-lent to schemes, plans and investments which weren’t that sound, and that has increased. But it is not, like the US or Britain, the state which is indebted… So it’s a problem but it’s an internal, rather than external problem. What really did for the smaller Asian economies during the Asian financial crisis [in the 1990s] was that they held major assets in foreign currencies and suddenly, as their currencies fell, their debts increased rapidly.

Also, the Chinese population itself is not indebted. They tend to have very big savings, which is one of the reasons behind the country’s financial strength… You have to say that the economic management of the Chinese economy has been quite remarkable. They’ve gone for 35 years without a serious crisis. Compare that with the West!

A key development since the crash is China creating the New Development Bank and Asian Infrastructure Development Bank, which even Britain and Germany signed up to – much to US displeasure. Why are they creating these alternatives to the World Bank and the IMF?

After 2007-08, the Chinese realized… they couldn’t rely on the interests of US economy and the global economy being aligned. They had to develop their own institutions. The Americans had also dragged their feet on reforms to the IMF because they wanted to retain control of it.

In this situation you don’t want institutions like the IMF and World Bank, which are essentially Western institutions whose primary function is serving Western economies. You need something with a much more expansive and inclusive view of the world… This is why we’ve seen the Asian Infrastructure Development Bank, the New Development Bank (the BRICS bank), and we’re going to see a much bigger development of this altogether with the Belts & Road initiative [a massive infrastructure programme that aims to improve connectivity between Europe, the Middle East, Asia and Australasia]. The vehicle for the global transformation for the next period will be this Belts & Road initiative.

I understand why Chinese investment has been welcomed by governments. However, in Ecuador there are indigenous communities protesting against rapacious Chinese mining companies. In Gambia, local fishers are being crowded out by Chinese firms. At a moral and political level, how should China deal with these struggles? Because there is no development without conflict.

You’re right: there is always conflict in development. China has, with great speed, developed a presence in many different developing countries. On the one hand, this has led to growing demand for commodity producers [in poorer countries] – from oil to metals like iron ore – and that’s had a powerful effect on their economies. On the other hand, China is also extremely competitive in lots of industries and this can have negative effects. There are plenty of examples where China on the low-end of manufacturing has out-competed with firms in the developing world that haven’t got the scale and level of investment to compete.

In terms of the relationship with places like Africa and southeast Asia, Chinese companies have been a major factor in developing the beginnings of a serious manufacturing capacity in places like Ethiopia, which by and large never really had one before. I think that China’s relationship with Africa has been basically very positive. I’m not saying there haven’t been problems. For example, there is a lot of resentment about Chinese companies bringing Chinese labour into some of the infrastructural developments. But the reason I think it’s been broadly positive is that China was a new source of demand for commodity producers in Africa. That means they were no longer just dependent on Western demand; it became a competitive market, which bid up the price of commodities during that period and meant that they were in a better economic situation.

Secondly, and this is why I deeply resent the argument that China is the new colonial power in Africa, China understands the problem of developing countries. One of the big problems is developing infrastructure that delivers transportation, energy and the necessary building blocks of a more developed economy. What China has done in all the major countries in Africa is to provide road systems, railways and so on. For the Chinese it’s all about development.

China has not always behaved well. If you take Myanmar, it got far too close to the military regime [that is persecuting the Rohingya] and a weakness of the Chinese is… [that they often arrive in new countries without being] sufficiently sensitive to local opinion. That has definitely happened in Myanmar and Sri Lanka. So those kind of tensions are real and important. And no doubt the Chinese will make many more mistakes. The question is whether they learn from them. So now they’re learning how to deal with civil society in other countries because they don’t have a civil society in the same way as most countries.

Let’s end with the US. There is growing bellicosity between the two superpowers. However, their economies are also dependent on each other. China owns more US debt, in the form of Treasury bonds, than any other country, which in turn allows the US to spend beyond its means and buy China’s products. Is this sustainable?

The difficulty in the West is the inability to make sense of China. Listen to the BBC’s Today Programme, read The Guardian: there is little sense of this shift in the world. How many articles have there been on the Belt & Road initiative, which is the most important global project of this era?

Ironically, Trump was the first leading US politician to recognize US decline: this is the premise of ‘Make America Great Again’. He is, however, deluded in the belief that he can reverse it. I do think there is going to be a trade war, but nothing will [reverse China’s rise]. These are deep historical forces at work, just like the rise of Europe in the 16th and 17th centuries were deep historical trends. So America has to come to terms with the rise of China and renegotiate its relationship with China. At the heart of any answer to your question is this: how is the West going to handle its own relative decline?

Martin Jacques, former editor of Marxism Today, is the author of When China Rules the World (Penguin).

The following article by Martin Jacques was a contribution to the debate ‘Should the West worry about the threat to liberal values posed by China’s rise?‘, part of Economist Debates. It was originally published on the Economist website.

For long the West has thought that history is on its side, that the global future would and should be in its own image. With the end of the cold war and the implosion of the Soviet Union, this conviction became stronger than ever. The future was Western; nothing else was imaginable. Of course, already, well before the end of the cold war, in 1978 to be exact, China had started its epic modernisation such that, in the annals of history, 1978 will surely prove to be a far more significant year than 1989. During China’s rise, hubris continued to shape the West’s perception and understanding of China. As the latter modernised it would become increasingly Western, it was supposed: Deng’s reforms marked the beginning of the privatisation and marketisation of the Chinese economy—its political system would in time become Western, otherwise China would inevitably fail.

China’s political system did not turn Western. The state continues to be a very powerful force in the country’s economy. China remains very distinctive from the West—and has gone from strength to strength in the process. China never had the long-predicted economic crisis that so many Westerners forecast, nor the great political revolt that was destined to deliver Western-style democracy. Instead economic crisis and political crisis befell the West. The Western financial crisis in 2007-08 was the worst since the early 1930s. By 2015-16 its political consequences were upending Western politics, sounding the death-knell of neo-liberalism, undermining the governing elites and weakening governing institutions.

The West—both the United States and the European Union—is, in historical terms, in precipitous decline. The developing world, led by China and India, now accounts for just under 60% of global GDP, compared with around 33% in the mid-1970s. The great story of the post-war era has been the rise of the developing world, representing around 85% of humanity, and the decline of the old developed world, accounting for around 15% of humanity. The developing world has learnt much from the West but it is not, and will not be, Western. China is the classic case in point. It is not even mainly a nation-state. It is, first and foremost, a civilisation-state, a concept that the West has not begun to try and understand. The relationship between state and society is profoundly different from that in the West, and so is its tradition of governance. It was never expansionist in the manner of western Europe and America. China has a very different culture and history to that of the West. We should not expect it or require it to be Western.

The rise of Europe transformed the world. The rise of America did the same, though enjoying strong lines of continuity with Europe. China will likewise transform the world, but probably on a much greater scale than either Europe or America, mainly because it is that much larger. To think otherwise is both unrealistic and ahistorical. Western hegemony has left a huge imprint on the world, but it was never destined to last for ever. Hegemons are never eternal. To expect China to become a Western-style country in an American-shaped world was always an illusion. But nor should we expect China to delete that world and replace it with something entirely different.

That would be the antithesis of the Chinese tradition. China has an essentially hybrid view of the world, yin and yang. Unlike the Western tradition, which majors on singularity, Chinese thinking values plurality. In this, it also differs profoundly from the Soviet tradition, which had a Manichean and monolithic view of the world. The Chinese are highly pragmatic. There are many things that they greatly admire, and draw from, in the Western tradition, and will continue to do so. Unlike the West, they do not consider themselves to be a model for anyone else and have therefore not sought to impose themselves on others in the manner of the West. It is noteworthy, for example, how few wars China has fought. That is one reason why, for many centuries, East Asia was far more peaceful than Europe. Do not expect the Chinese to behave in the same aggressive military fashion that Europe did in its days of imperial pomp, or as America still does.

But equally we should not expect “Western values”, masquerading in this debate as “liberal values”, to survive pristine and unaltered. There are many traditions and many civilisations that inform the world. The West comprises a very small minority of humanity. The future will not be singular in the manner that the West has long believed it should be, but plural and hybrid, no doubt with a strong Chinese flavour. The East Asian tradition, China included, for example, is far more communal, collective and familial than the individualism of the West. Do not fear the future: it will be different, in some respects it may be worse, in many others it may be much better. Bear in mind too, that there is not much liberal, and nothing that is democratic, about the American world order, or the European one before, which was in fact much worse. In both cases a small minority of humanity in effect ruled the world. Internationally, the age of the West has been highly authoritarian.

The greatest danger is not the rise of China but how the United States will react to China’s rise and its own consequent loss of primacy. The rise of illiberalism in America is not an accident. It coincides with the dawning recognition of American decline and a desperate desire to prevent it. It should be remembered that the heyday of Western democracy corresponded with the zenith of Western hegemony. But can the West’s democracy survive the decline of Western global dominance? If the West is able to retain and renew its best values, in a world in which it enjoys a much diminished role and China is predominant, such a world will be the better for it.

Martin Jacques

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.

The following article by Martin Jacques appeared in China Daily, 20th January 2018.

As momentous historic events go, China’s reform period was relatively unheralded. Little did anyone realize at the time – probably no one, in fact – that 1978 would enter the history books as one of the most important years in modern history.

We should not be surprised. At the time, the Chinese economy was a mere one-twentieth of the size of the US economy, with a per capita GDP roughly on a par with that of Zambia, lower than half of the Asian average and lower than two-thirds of the African average. China’s impact on the world was very limited, even in East Asia.

Although its growth rate had averaged a little more than 5 percent from 1960-1978, this compared rather unfavorably with economies like Japan and South Korea. For the majority of the world’s population, China was largely forgotten or ignored, usually both. Even in China, there was little anticipation that the country stood on the eve of a remarkable transformation. When chairman Mao had died in 1976, the country was relatively isolated. The “cultural revolution” (1966-76) continued to cast a long shadow, the leadership was divided, and Deng Xiaoping had only very recently begun to emerge as the country’s key leader. Notwithstanding the unquestioned achievements made since 1949, the future did not look particularly promising.

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The following is an English translation of an article by Martin Jacques that appeared in People’s Daily, 9th January 2018

The 19th Chinese Communist Party Congress marked a new moment in China’s arrival on the global stage. Congresses of the Chinese Communist Party, even in the modern era, have invariably attracted little attention in the West. They have been regarded as neither particularly relevant nor important, rubber-stamp occasions that were difficult to understand or decipher and best left to the China experts. The 19th Congress broke the mould. It was widely reported and recognised in the West as an event of major global importance. Instead of treating the Congress as a somewhat bizarre tribal occasion, some of the coverage displayed a greater sense of seriousness and inquiry. It was widely acknowledged that this was one of the most important political events of 2017. The coverage was further evidence that China has moved to the centre of the global stage. 

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The following is an English translation of an article by Martin Jacques that appeared in the People’s Daily, 22nd December 2017.

At the end of 2017 uncertainty dominates the outlook for the future. As we can now see with great clarity, the Western financial crisis of 2007-8 proved the most important turning point in the West since 1945. For a decade, the Western economies have been mired in varying degrees of stagnation, not least with regard to living standards. And it was the Great Recession that begat the Great Populist Uprising in 2016. The latter signalled the end of the hegemony of neo-liberalism in the West, which began in 1980 with the arrival of Reagan and Thatcher and was characterised by hyper-globalisation, privatisation and a huge growth in inequality. The Uprising was driven by large swathes of the population in both the United States and Britain whose living standards had more or less stagnated for four decades. It was a popular revolt against the governing elites by those who felt left behind and who held these elites responsible for their deteriorating situation. Politically the new mood was articulated most clearly, though not solely, by the right, notably Trump in America and the Brexiteers in the UK. 

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Updated and expanded new Chinese edition just released.

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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:

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US second edition is available now via: 

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