East Asia

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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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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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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There is understandable concern that the recent food contamination scandals in China, starting with the Fonterra melamine dairy product crisis in 2008 and book-ended by the fresh concerns over botulism this August, could have a corrosive effect on the trading relationship between China and New Zealand.

The relationship matters a great deal to New Zealand. China is now by some margin the country’s second largest trading partner, having rapidly overtaken the United States and long outdistanced Europe. And we are only at the beginning of what will in time become New Zealand’s most important economic relationship.

New Zealand is right to be concerned. China has for long taken a tough line with countries deemed to have offended it.

A classic example is Norway. Norway and China were on the verge of signing a bilateral trade agreement in 2010 when the Nobel Peace Prize was awarded to the imprisoned dissident writer Liu Xiabo. In response, China broke off trade negotiations and they have been in cold storage ever since, with signs of a thaw becoming evident only this year.

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The following essay appeared in an edited, cut-down form on the China Daily website.

The challenges that China faces over the next decade are a product of changes in the country’s external environment together with the consequences of China’s home-grown transformation.

The external context has shifted in two profound respects. A decade ago, the Western economies still seemed in relatively robust health and were growing at a reasonable rate. Since 2008, that picture has changed dramatically. The Western economies are mired in a deep structural crisis which shows no sign of being resolved. This is the worst crisis of Western capitalism since the 1930s and it seems likely that the crisis has not yet even reached its halfway point. In other words, the Great Recession will last at least until the 19th Communist Party Congress, and perhaps even, in the case of Europe in particular, the 20th Congress in 2022.

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26/10/12 - BBC News Magazine and Radio 4

This is the script of the Point of View talk first broadcast on BBC Radio 4 on October 26th, 2012, also available on the BBC News MagazineMissed the programme? Download it as a podcast or listen again on BBC iPlayer.

I was on a taxi journey in Shanghai with a very intelligent young Chinese student, who was helping me with interviews and interpreting. She was shortly to study for her doctorate at a top American university. She casually mentioned that some Chinese students who went to the US ended up marrying Americans.

I told her that I had recently seen such a mixed couple in Hong Kong, a Chinese woman with a black American. This was clearly not what she had in mind. Her reaction was a look of revulsion. I was shocked. Why did she react that way to someone black, but not someone white? This was over a decade ago, but I doubt much has changed. What does her response tell us – if anything – about Chinese attitudes towards ethnicity?

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The historic enmity between the two countries – now resurfacing in a dispute over sovereignty – threatens stability in East Asia

The large-scale demonstrations that erupted across China on Sunday, in response to activists from Japan landing on disputed islands in the East China Sea, were a fierce reminder that it takes little for the deeply rooted animosity between the two countries to rise to the surface. The islands lie near to Taiwan and not far from the Chinese coastline; they are a long way from the main Japanese islands, but not so far from Okinawa, one of Japan’s southernmost islands. How can such small, uninhabited islands – known by the Japanese as the Senkaku and by the Chinese as the Diaoyu – arouse such anger and passion?

The reason lies deep in history. The islands were for a long time regarded as Chinese, but they were taken by the Japanese – along with Taiwan and much else – following China’s humiliating defeat in the Sino-Japanese war of 1894-5. It marked the beginning of Japanese expansionism in East Asia, with the subsequent colonisation of Korea as well as Taiwan. This reached its zenith after 1931 with the Japanese occupation of north-east China, and from 1937 with the Japanese conquest of further swathes of the country. This expansion was carried out with particular brutality – the Japanese looked down upon other East Asians as their inferior – the most famous example being the barbarity that was displayed in the taking of Nanking. There the Chinese claim more than 300,000 were killed.

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