This is the transcript of a talk Martin Jacques gave at a Forum organised by China Daily at the G20 in Osaka on 25 June 2019.

There is no point in building castles in the air. We must live in the here and now. I am sure the great majority of us wish we were not where we are. We would prefer that the era, beginning in the late 1970s, of globalisation and multilateralism, and that was characterised by relative stability and cooperation in the relationship between the US and China, was still in place. It is not. And it will not return for a very long time. The reason for the breakdown in that old order is profound, as is invariably the case with great historical shifts. We need to understand the causes.

The period between the late 1970s and 2016 was marked by three underlying features: a new phase of globalisation, the hegemony of neo-liberalism in the West, and a stable modus vivendi between China and the United States. Two things served to undermine this era, one was an event, the other a much longer-term process. The event was the Western financial crisis in 2007-8, the worst since the 1930s. It fatally wounded neo-liberalism in the West, led to many years of supine economic growth, a stagnation in living standards in most Western countries and a backlash against globalisation. The result was the undermining of the authority and credibility of Western governing elites and the governing institutions, together with the rise of anti-establishment populism. In the United States it created the conditions for the rise of Trump and a profound shift in US policy both domestically and internationally.

The longer-term process I referred to concerned the changing balance of power between China and the United States. In the late 1970s the Chinese economy was tiny compared with the US. Furthermore, the US believed that unless China became a western-style country, with a western-style political system, its modernisation would prove unsustainable. And likewise it never imagined that the Chinese economy would ever come to rival the size of the US economy. After the financial crisis the US slowly began to realise that on both counts it was profoundly mistaken: China was no longer a relatively insignificant junior partner, but now a peer competitor, and China’s political system was far more robust than it had assumed. This dawning realisation persuaded the US establishment that China’s rise had to be resisted, at a minimum slowed. While Trump was the initiator of this turn against China, it is important to recognise that it has widespread bipartisan support.

The Trump administration is seeking to reverse the norms of the previous era from the late 1970s until 2016: to weaken globalisation, undermine global trade by embracing protectionism, displace multilateralism in favour of US power, sideline the WTO, and wound China through the imposition of tariffs and the introduction of sanctions against its tech industries, most notably Huawei. It is a sobering reminder that history never travels indefinitely in one direction. In 1914 it was generally believed that the trend towards globalisation that had dominated the period after 1870 was irreversible: they were wrong. The world was soon to be ravaged by two world wars, protectionism, the division of the world into autarchic economic blocs, and the worst-ever economic crisis. The world can go backwards as well as forwards. Trump’s economic policy is a reversion to the nationalistic and isolationist thinking that informed US policy in the nineteenth century and in the twentieth century prior to the Second World War. It is now America’s response to its declining position in the world and the fear that its dominant position would be usurped by China.

How does the rest of the world respond? In the longer run the trend towards globalisation will be resumed. An increasingly globalised world means the growing interdependence of nations in a multitude of ways, from economic and cultural to environmental and the overarching challenge of climate change. These arguments and imperatives have not gone away even if they have now been displaced in some degree by the tide of nationalistic populism. At the heart of America’s shift is the question of China. How does China respond?

The shift in America’s position is not for the short-term. It is the beginning of a new era which seems likely to last for twenty years or more; bear in mind, in this context, that the previous era of globalisation lasted for rather more than three decades. China will have to learn to live in a world that is increasingly divided and in which the US seeks to isolate it. We will all be casualties of this new regime, including, of course, China and the US. In my view, though, the US will be a much bigger loser than China. The US will cut itself off from China, the world’s biggest, most dynamic and competitive market, and its competitiveness will suffer greatly as a consequence. China is the rising power, the US the declining power. The US’s retreat into autarchy and isolationalism will only serve to hasten its decline. At some point, still a long way in the future, it will come to recognise this fact, that it needs China, and a new kind of relationship with China based on equality.

China is patient. It is one of its great strengths. In contradistinction to the US, it thinks long-term. It understands now is not forever. China will be a very different and new kind of great power. Its rise has been remarkably peaceful in a way that the equivalent rise of the US, or indeed the UK, France, Germany and Japan, was not. They all fought many wars of expansion: China has not. It has a different way of thinking born of a very different history. China will find the way to resist America’s attempts to weaken and isolate it: we can be sure of that. China’s rise will continue. But at the same time it will, and should, keep its lines of communication with the US open, avoiding giving the US any reason or excuse to further poison their relationship. China’s caution is already manifest. It has responded to America’s protectionist moves against it, and its attempts to hobble Huawei, but very cautiously, seeking not to exacerbate the relationship and give the US cause to further up the ante. This is most important. Always avoid sacrificing the long-term for short-term gain. China, meanwhile, must intensify its efforts to build bridges and strengthen its relations with as many countries as possible. In this way it will seek to resist the US’s attempts to isolate it while at the same time demonstrating to the world its multilateral objectives and values.

A version of this talk also appeared in an article on the China Daily Global website.

This article was published in JPI Peace Net and presented to the Jeju Forum for Peace and Prosperity in May 2019, South Korea, in the opening plenary session “Destined for War?: The Future of US-China Relations and its Implications for the Korean Peninsula”. Speakers included Martin Jacques, Prof. Graham Allison and Mr. Li Zhaoxing. The panel was moderated by Prof. Chung-in Moon.

Martin Jacques with Prof. Chung-in Moon, Prof. Graham Allison and Mr. Li Zhaoxing

Forty years of relative stability in the US-China relationship are at an end. That stability had depended on two things. First, a huge inequality in the relationship, with the US by far the dominant partner. Second, the long enduring American illusion that the only future for China, if it was to be successful, was to become like America. History has undermined both propositions. Over a period of 40 years, the most remarkable in global economic history, China overtook the US economy and is now 20% larger in terms of GDP purchasing power parity. Furthermore, it is patently clear to everyone that China is never going to be like the US. The US hugely miscalculated, a victim of its own hubris. Its response is a volte face: a desperate search to find ways of reversing China’s rise or at least slowing it down. The US is right that the underlying reason for China’s rise is economic. So it is logical to start with a trade war. But it will not stop at that. It will encompass all aspects of their relationship. We are watching the birth of a new cold war. And the most likely scenario is that it will last a long time, my guess is at least twenty years.

But this will not be a rerun of the last cold war. There are only two similarities: the US is one of the adversaries; and a Communist Party is the governing party in the other. (In truth, though, the Chinese and Soviet Communist Parties have barely anything in common.) Otherwise the circumstances are now entirely different. During the cold war, the US was still a rising power. Now it is a declining power. The Soviet Union failed: China is the antithesis of failure. It has achieved the most remarkable economic rise in human history. China is in the ascendant; the US is an angry and divided country desperately trying to hold on to what it had and the world which it created.

So what is likely to happen in this new cold war? So far it is being fought overwhelmingly on economic terms. This is China’s ground. Apart from its far superior growth rate, which is still three times that of the US, its standout economic achievement over the last decade has been its sharply rising capacity for innovation. The speed with which Alibaba and Tencent have joined the Silicon Valley tech giants in the premier league of technology has been quite remarkable. Huawei is the global leader in telecommunications, most notably 5G: the US doesn’t even have a player in the field. Of course, most Chinese companies lag well behind their American equivalents in terms of productivity, but the direction – and speed – of travel is irresistible. You may remember that even five years ago, the West was still questioning whether China could ever be innovative rather than imitative. No one asks that question anymore. China is a technology superpower in the making. It is this, above all, that has stunned the US. The underlying motive for the attack on Huawei has little to do with security; above all, it is about a fear of China’s competitive challenge. The argument about security is a typical cold war-style diversion.

The US faces a great danger with the trade war. Tariffs, and a growing willingness to cut itself off from the dynamism of the Chinese economy (now the most dynamic in the world), will make the US economy increasingly less competitive: as a result, it will emerge from the trade war and protectionism, whenever that might be, seriously weakened. Both economies, of course, will suffer, but in the long term the US economy will be much the bigger loser.

One of the central characteristics of the last cold war – in which overt economic conflict was very much a secondary factor, with the two economies largely insulated from each other – was military competition between the US and the USSR. This time it will be very different. While military strength remains America’s most coveted form of power, this is not the case for China. The two most important modes of Chinese power, both historically and in the contemporary context, are economic and cultural. For the West, in contrast, they have most typically been military and political. In Chinese thinking, one recalls Sun Tzu, war is something to be avoided rather than embraced. This does not mean that China will not develop a formidable military capacity, but it will not behave in anything like the same fashion as the US (or indeed the Soviet Union). Nor does it mean there will not be war between the US and China, but it makes it rather less likely. The Chinese believe in the very long run; and in the long run they are confident that their economic and cultural power will be decisive. Such thinking engenders patience. All of this tells us that China will be a very different kind of great power to the US.

People have found it very difficult to understand China, a problem that has been compounded by the speed of its rise. We have become habituated to Western ways of thinking and behaving, the legacy of more than two centuries of Western hegemony. China is profoundly different, the product of a very different history and culture. Rather than seeking to understand the difference that is China, we see China through a western prism and expect and require the Chinese to behave accordingly. Entirely unsurprisingly, they don’t. We condemn their lack of western-style democracy. But trends and events increasingly require us to pause for thought. We might not like it, or choose it for ourselves, but Chinese governance has been extraordinarily successful over the last few decades; a global force for good, taking 800 million Chinese out of poverty and saving the world from a cataclysmic depression after the Western financial crisis.

As the world once more enters dangerous waters, in my view our concern should not so much be China but the United States. One of the remarkable things about China is how relatively peaceful it has been during its rise: contrast that with the US in its equivalent period, notably between 1860 and 1914, with the wars of westward expansion against Spain, Mexico, the annexation of Hawaii and the conquest of the Philippines. The same can be said, by the way, of the UK, France and also Japan, all of which fought many wars of expansion during their rise. In contrast, China’s rise has been characterised by an extraordinary restraint, a fact that is largely, if not overwhelmingly, ignored. What concerns me most of all is how America will respond to and deal with its decline. Trump is the first clear expression of and response to this process and it is not encouraging: the authoritarian turn, the erosion of democracy and the separation of powers, the drawing on some of the most regressive aspects of American history, the rejection of diversity at home and plurality in the world. The fact is that imperial countries find decline extremely difficult and painful; my own country, the UK, is a classic illustration. America is almost totally unprepared for its own decline. One must hope that it is not too a harrowing experience either for the US or for the rest of the world.

Which brings me finally to Korea. This has so far shown us, in chronological order, the worst of Trump (‘we will have no choice but to totally destroy North Korea’) and the best (‘the US must pursue a chance to avert nuclear war at all costs’). In a way, Korea is a test case: the longest lasting legacy of the cold war which has so far been impervious to all attempted solutions. After the Singapore summit, which was seemingly beyond almost everyone’s expectations, the Hanoi summit was a great disappointment. Where from now? It is difficult to see progress in the context of a rapidly deteriorating relationship between China and the United States and Trump’s turn towards a cold war. Can the Korean peninsula provide a shaft of light? It seems unlikely; but the Singapore summit, and Trump’s embrace of Kim Jong-un and warm words about North Korea’s economic future, cannot be erased. But the rational part of my brain tells me that pessimism is in order.

Edited by Intaek HAN (Research Fellow, Jeju Peace Institute)

Distributed by Hyeun Jung CHOI (Research Coordinator, Jeju Peace Institute)

This talk was delivered by Martin Jacques at the Third Symposium on International Ccpology at Fudan University on November 24 2018.

There is a profound ignorance in the West about Chinese governance. The dominant attitude is still essentially dismissive. There are two main reasons for this. The first is that Chinese governance is based on entirely different values and principles to those that inform Western governance. The idea of Western democracy has been the main calling card of the West since 1945 and, for countries like the US and the UK, much longer. In Western eyes, the legitimacy of any political system is measured by the extent to which it approximates to universal suffrage, a multi-party system, the separation of powers and the rule of law. Such is the commitment to these notions that it is not an exaggeration to suggest that Western democracy is viewed in terms that are akin to the ‘end of history’. They are regarded as indispensable for good governance and cannot be improved upon in their essentials. The second reason is the legacy of the cold war, which continues to exercise a profound influence on Western thinking – and elsewhere too, though usually to a rather lesser extent. Communism and Communist Parties are still deeply associated in the western mind with the history, experience and fate of the CPSU.

The rise of China has served to shift Western views about China in some degree, most obviously a respect for the country’s economic progress and the huge reduction in poverty; in terms of attitudes towards Chinese governance, though, there has been little or no change. This is evident in a numbers of ways: the priority given in the West to the Chinese record on human rights, the speed with which China is condemned and demonised for its present policy in Xinjiang, and the gathering hostility towards China in the United States, with its political system occupying a crucial place in the increasing antagonism. The conclusion I would draw from this is that any fundamental shift in Western attitudes towards Chinese governance in a more sympathetic or benign direction is very unlikely over the next decade and probably much longer.

And yet there are much deeper forces at work that will require – and will eventually serve to compel – precisely such a shift in Western attitudes. These can be summarised as follow.

First, the extraordinary economic rise of China cannot be separated from China’s governance. On the contrary, China’s governance has been absolutely fundamental to this achievement. It could not have been attained without it. This irresistible fact will continue to gnaw away at perceptions of China: in the long term facts speak far louder than ideological prejudices and assumptions.

Second, the West is in deep relative decline which has been greatly accelerated by the Western financial crisis from which it has barely emerged. The Chinese economic crisis that was widely forecast in the West never happened – instead it happened in the West. And, as we have seen, this then predictably led to a profound political crisis in Europe and the United States. The people have lost faith in the governing elites and their institutions, and the consequences of this still remain deeply unclear. The political systems in the West now face by far their greatest challenge since 1945.

Third, we should look at these two developments in a broader context. The rise of the West to a position of global hegemony lent Western political leaders and institutions great status and prestige amongst their peoples. The authority, power and influence they enjoyed on the global stage served to greatly enhance their position at home. The precipitous decline of the West, in contrast, is having – and will have – exactly the opposite effect, serving to undermine, weaken and diminish the status of their leaders at home. My own country, the UK, is a classic example of this phenomenon. British political leaders enjoy hugely diminished status, power and influence both internationally and nationally. This can only serve to weaken the respect, trust and faith that people have in their political systems and institutions. Exactly the opposite is the case in China. The rise of China has greatly enhanced the respect the Chinese people have for their leaders and institutions. The fact that China now has the second largest economy in the world, that it enjoys a quite new kind of global influence, that the country feels increasingly aligned with the great achievements of earlier periods of Chinese history, lends its leaders and institutions, above all the Chinese Communist Party, with a new kind of authority, charisma and respect which is only likely to strengthen further as China’s rise continues in the future.

These three factors together are bound to progressively weaken the standing of Western governance and enhance that of Chinese governance, both at home and abroad. In other words, we must see attitudes towards Western and Chinese governance in the context of a much longer timescale and in an essentially dynamic way. Western attitudes may seem to be relatively static, even frozen, but from the vantage point of, say, 2040, it will surely look very different.

Which brings me to the Chinese Communist Party. Comparisons with the Soviet Communist Party serve to obfuscate rather than enlighten. They are profoundly different just as, if you like, Russia and China are profoundly different. One of the most important differences, probably the most important, is that the CPSU never enjoyed widespread popular support – it was concentrated in the very small industrial proletariat and extremely limited amongst the peasantry who constituted the great majority. The CPC was exactly the opposite: its support was overwhelmingly amongst the peasantry and very limited in the very small proletariat. The CPC, as a result, had very broad support and very deep roots, which gave it great confidence. In contrast, the CPSU from the outset depended on coercion and authoritarian rule to get its way.

A classic illustration of the CPC’s strength was Deng’s reforms in 1978. China, at that point, was not in a good place and yet Deng felt able, willing and had the courage to introduce what represented a fundamental shift in CPC philosophy. Such profound shifts can only be undertaken by parties that are deeply rooted and enjoy great historical self-confidence. This, of course, brings us directly to what might be described as the birth of the modern era of the Chinese Communist Party.

The significance of Deng’s reforms has, in historical terms, been greatly underestimated. They involved two major changes in communist thinking. Hitherto, socialism had been seen as synonymous with the state and planning. Deng now redefined socialism to include the market. His second innovation was to abandon the idea of socialism in one country, or socialist autarchy, and embrace the concept of a single world with China seeking to integrate itself, and become interdependent with, the rest of the world. The novelty and courage enshrined in this shift was to have huge consequences, economic, political and intellectual. It required so much to be rethought, not just economically but also politically, a different kind of state had to be constructed, with a different role based on a different mindset and skills. Deng’s radical thinking unleashed a quite new intellectual energy which over time was to utterly transform the thinking and energy of the people. It was to create a new mentality, in effect a new people. It is impossible to explain China’s rise without understanding the intellectual dynamism and innovation that lay at the heart of the reforms.

One of the great problems of the communist tradition had been the tendency for it to ossify, to become backward-looking, to become akin to a tablet of stone, the belief that victory was inevitable, that success was historically guaranteed. This was the very antithesis of Deng’s thinking: nothing was guaranteed, China had to make and invent its own future. The result was not only the transformation of China but increasingly the transformation of the world as well. While the West betrays growing signs of a hardening of the arteries, a retreat into the past, a failure to embrace the future other than as a retread of the past and present, China is exactly the opposite. This is the huge achievement of the Chinese Communist Party.

It is inconceivable that Western countries could adopt a Chinese-style political system – it runs counter to their history, traditions and beliefs – just as, for the same reasons, China cannot and should not be expected to move towards a Western-style political system. Western countries can and should learn from the Chinese way of doing things, as China has over time learnt much from the West. Over the last two centuries the major direction of travel has been from the West to China. Increasingly that will be reversed, as China rises and becomes the home of modernity, and the West declines. And the Chinese political system, including the pivotal importance of the Chinese Communist Party, will be no exception to this.

What are the key attributes of the Chinese Communist Party in this respect?

First, the most challenging single aspect of Chinese governance is the demographic size and geographical spread of the country. Finding ways to bind such a huge country together and ensure inclusivity, an area where the US and the UK, far smaller though they may be, have been found deeply wanting, is one of the great strengths of Chinese governance, in which it enjoys a unique understanding. The fact that China, moreover, is, in effect, a sub-global system in its own right, accounting for one-fifth of the world’s population, means that the CCP has a special insight into the demands of governance in the era of globalisation, as the Belt and Road project illustrates.

Second, the Chinese Communist Party’s ability and capacity to transform a developing country is second to none: it is the exemplar for all others. In an era in which the imperative of transforming the developing countries, home to 85% of the world’s population, is arguably the greatest task of our era lends a unique significance and special responsibility to the role of the CPC.

Third, it is clear that the Westphalian system faces a growing and multifarious crisis. The nation-state form was a Western invention, specifically a European invention, which spread as a result of Western influence to assume an almost global universality, though in many respects it was, and has proved to be, a poor fit for many countries outside the West. The fact that China is primarily a civilization-state and only secondarily a nation-state gives it a special insight into and sensitivity about this question. As China’s global influence grows apace, these attributes will become increasingly important in seeking to find ways of resolving a myriad of problems around the world. Again, this lends the CPC a special role and capacity. 

Four, it is becoming increasingly clear that China is to the fore in the practice and the concept of modernity: its bold and ambitious attitude towards and relationship with technological innovation and the industries of the future, its recognition of the pivotal importance of climate change to the future of humanity, and its embrace of globalisation, multilateralism and the developmental challenge are three examples. This stands in stark contrast to the trend in the United States epitomised by Trump which rejects globalisation, climate change and even reason, and sees America’s future in terms of a return to some golden age in the past.

Five, the CCP has pioneered a new kind of competence in statecraft which has raised the global bar in terms of governance. All countries will need to learn from China in this respect. A combination of accountability, experience, competence, education and meritocracy have underpinned the remarkable achievements of the Chinese government with, of course, the CCP being the key to this.

Finally, a word of caution. The rapid deterioration in relations between the US and China is very unlikely to be a temporary phenomenon. We have almost certainly entered a new era characterised by growing enmity between the two countries, thereby bringing an end to the long period of relative cooperation which dates back to 1972. We can already feel the draughty winds of a new cold war-like assault on China emanating from Washington. An integral part of this will be an attempt to demonise and smear the Chinese Communist Party. So far, the rise of China has taken place in relatively benign conditions; for the foreseeable future, something more like the opposite is likely to be the case. This will present the CCP with a great challenge, one very different from both the Deng era and the more recent Xi era. China will be faced with the imperative of seeking friends and building bridges with as many countries as possible as the US seeks to isolate it. 

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

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

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People's Daily, 12/05/17

The following piece featured in People’s Daily, 12th May 2017. Click to expand.




People's Daily, 12/05/17

The following is an English translation of a People’s Daily article written by Martin Jacques. 

The trend towards globalisation that dominated the world from around 1980 – driven by the neo-liberalism of Ronald Reagan and Margaret Thatcher and Deng Xiaoping’s economic reforms – began to lose momentum with the Western financial crisis in 2007-8 and came to something of a shuddering halt in the West with Brexit in the UK and the election of Donald Trump as US President in 2016.

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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.

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The rise of China continues unabated. In a Western world that is constantly seduced by bearish sentiment about China’s economic and political prospects — and ultimately by the idea that its rise is unsustainable — this deserves to be constantly repeated. Otherwise we find ourselves diverted from the most fundamental geopolitical trend of our time, that China is in the process of changing the world as we know it.

This is not to ignore, or brush away, the many problems that China faces. The most important of these during the course of the last year has been the government’s twin struggle to reform the economy while maintaining its target growth rate of 7.5 percent. It is possible that the latter will prove unachievable and that the growth rate might settle down more in the region of 5 to 6 percent, but, especially in the context of what is clearly a major structural shift in the nature of the economy — which may already be rather more advanced than previously thought — this should be regarded as perfectly acceptable. What we should not expect is a hard landing, entailing a much lower growth rate, or some kind of implosion. This remains an extremely unlikely scenario.

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The term Chinese Dream has been used several times by President Xi Jinping since the Chinese Communist Party’s 18th Congress in November 2012. The term has become a major focus of discussion in China. The paper below was given as a keynote speech at a major conference held in Shanghai last December.

The Chinese Dream is a new departure – both as a political idea and slogan. It is, for one thing, immediately accessible and, as a result, populist. Everyone knows about dreams, we all have them, whether in our sub-conscious or conscious state. Dreams belong to everyone. There is also a sense of freedom about dreams. When we dream we are not constrained by material circumstance or the real world, on the contrary we are allowed to escape from those kind of restraints. Dreams empower: they are highly personal, each and every one of us their author. The evocation of the word dream summons us all to be bold, to imagine the world not as it is but as it might be, how we would like it to be.

The term Chinese Dream is of the present: its moment has arrived. It would not have been appropriate in 1978. That was not the nature of the time. The term Chinese Dream urges the Chinese to move on, to think anew and afresh, to turn over a new page, to begin a new chapter. The Chinese Dream announces the beginning of something new but also the end of something: the end of the era of Deng Xiaoping.

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Updated and expanded new Chinese edition just released.


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