Martin Jacques delivered the keynote address at the 32nd Annual Camden Conference in Camden, Maine, US on February 22, 2019. The talk was titled “What China Will Be Like as a Great Power”. Watch the speech below:
This is a recorded version of a live interview CGTN, to discuss China’s reform and opening-up policies, and the China-US relationship, during a special Town Hall program recorded at the George Washington University on December 11 2018.
CGTN America presented a special town hall filmed at The George Washington University in Washington, D.C. on China’s dramatic transformation, and the path forward towards the 21st century.
Speakers on the panel were:
– Zhou Jingxing, minister-counselor and chief of Political Section, Chinese Embassy in U.S.
– Martin Jacques, senior fellow at the Department of Politics and International Studies at Cambridge University. He is also author of “When China Rules the World”.
– Yukon Huang, Senior Fellow with the Asia program at Carnegie Endowment for International Peace. He is also the author of “The China Conundrum”.
– Robert Hormats, former U.S. Under Secretary of State and Vice-Chairman at the Kissinger Associates.
In March 2018, the Abu Dhabi Ideas Weekend welcomed some of the brightest and most interesting minds from the UAE and around the world to discuss four of the most important moonshot challenges facing our planet. The event was inspired by the world-famous Aspen Ideas Festival that has been taking place in Colorado since 2005, as a place for scientists, artists, politicians, business leaders, historians and educators to discuss some of the most fascinating ideas of our time. The 2018 Abu Dhabi Ideas Weekend topics included: “Polarisation: Bridging the gaps”, “Cancer: An end in sight?”, “Artificial Intelligence: Our super-intelligent friend?” and “The Modern Silk Road: A new era of globalisation”.
Martin Jacques delivered the talk below, which was on how China’s Belt & Road Initiative will change the world.
In conversation with him is Julian Gewirtz, a Fellow in History and Public Policy at the Harvard Kennedy School of Government.
In October 2017, China’s 19th Party Congress adopted the ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’ – giving the Chinese leader a status unmatched except by Mao Zedong and Deng Xiaoping.
George Magnus, author of the new book, ‘Red Flags: Why Xi’s China is in Jeopardy’, joined the Asia House Bagri Foundation Literature Festival to discuss the implications of this “new era” for China. He was in conversation with Martin Jacques, author of the global bestseller ‘When China Rules the World: The Rise of the Middle Kingdom and the End of the Western World,’ and Dr Yu Jie, Head of China Foresight at LSE.
This event took place on as part of the Asia House Bagri Foundation Literature Festival 2018.
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.
The following article by Prof. N. A. de S. Amaratunga appeared on Lankaweb on July 27 2018.
Dr. Gunadasa Amarasekera, poet laureate, who has nothing but contempt for the politics and politicians of this country and who has been exploring our past civilization in an attempt to dig out a suitable remedy for our ills, as revealed in his many political analyses such as Ganadura Mediyama…”, has authored another book on the subject titled Sabyathva Rajya Kara” which means Towards Civilisation State”. He has in his previous works attempted to show that Sri Lanka cannot continue to have an alien political system. He has argued in his works that only a political system based on our civilizational consciousness would succeed in governing this country and bring dignity and freedom to its people. The present system has the pretense of freedom, equality, independence and human dignity but in practice the people are denied of all this basic human rights. Instead they are blind folded by a façade of democracy, franchise, human rights, constitutions, judicial independence, freedom of expression etc. Moreover, it has produced a set of politicians who are corrupt to the core with involvement in crime and vice. The divisive nature of party politics and the ensuing violence has destroyed the unity in the village. What is worse is the failure of intellectual discourse to bring forth any meaningful and effective solution. Nobody has seriously challenged this fraud and attempted to see whether there is any plausible alternative.
Amarasekera’s contention had always been that if Sri Lanka is to find a home grown arrangement of government it has to be rooted in our civilization. Amarasekera is not without likeminded intellectuals of international repute. For instance, Martin Jacques a scholar on modern China who in 2009 has published the book titled When China Rules the World” in which he has put forward the concept of Civilisation State as against the Nation State. Then there was Samuel Huntington who published his book titled Clash of Civilisations” in 1996 where he dwelt on the lasting strength of civilization consciousness and its impact on politics. Before all this Amarasekera had put forward his theory of Jathika Chinthanaya” in his Ganadura Mediyama…” published in 1989 where he describes the characteristic features of the Bauddha Rajya” that existed in this country from the time of King Devanampiyatissa until 1815. He clearly shows that those features were rooted in our civilization. Unfortunately neither Huntington nor Jacques had realized that apart from China there had been civilisation states in other countries like Burma,Cambodia and Sri Lanka. Martin Jacques’ conceptualization of the state in China as a Civilisation State has prompted Amarasekera to take his arguments further and show us that his ideas are not farfetched and are in fact already in practice and most successfully at that in China. He does this eminently well in his little book Sabyathwa Rajyak Kara”.
What is the nature of a Civilisation State as against a Nation State? The former, says Jacques, is well integrated with the people while the latter by its very nature is not, as it advocates less government control over affairs that eventually impact on everyday life. He distinguishes between civilization and civilization state. He says there have been many civilisations but what is remarkable about the Chinese case is that civilization” and state” largely coincide not just over a relatively brief period but over an extraordinarily long one. And he says it is difficult to think of another similar example. This is where Jacques is wrong says Amarasekera. He shows that Sri Lanka has a longer history of a Civilisation State than China. Further Sri Lanka’s system under the kings were more democratic than in China in the sense that the king did not have unlimited power. Perhaps ironically that ancient system may have been more democratic than the present presidential system! Trevor Ling had identified three pillars which supported that ancient state; the King, the people and the Sangha. If the king was not suitable to rule the country the people can get together with the Sangha and get rid of the king.
Definitions apart we could glean an idea about this matter by looking at the spectacular advances China has made in a comparatively short period in its history. In comparison India which had a similar history in relation to culture, science and technology has badly faltered. In the nineteen forties China was an under developed isolated country and today it is the second most powerful country in the world. India, on the other hand, which was ahead of China in the nineteen forties is still struggling with its poverty. Different systems account for the extraordinary contrast between China and India. China’s economic transformation is said to be the best in human history. Jacques says those who look at China through the Western prism may say that China’s state is its Achilles’ heel but in fact it is its strongest asset. There is wide spread belief that modernization implies Westernization which is not the case as seen in China.
It was Joseph Needham, scientist and historian, who first opened our eyes to the wonderful achievements of China. He spent several years in China in the nineteen forties studying its science and civilization. He published the first volume of his monumental work Science and Civilisation in China” in 1954 which catalogued the scientists and their work from early times. He has clearly shown that China was several centuries ahead of Europe in science and technology until the 15th Century. He asked the pertinent question; how did the West overtake China and India which were ahead of them in science and technology. This so called Great Needham Question” has been answered by several Sinologists and the reasons given by them varied from too much state control to flawed scientific method. Needham’s own answer had been that Buddhism and Taoism had a restraining effect on scientific advancement. This point of view may not be correct particularly in relation to India where Buddhism was the catalyst for scientific enquiry and where the golden era of science coincided with the golden era of Buddhism. Leaving all this aside the fact of the matter is that China from the twentieth century onwards has risen out of the ashes like a Phoenix and advanced in leaps and bounds and may soon be the most powerful country in the world. According to Martin Jacques the reason for this stupendous transformation is the effectiveness of the Civilisation State. And failure of India to keep pace is due to the lack of such a state.
India from about the 5th Century BC till about the 6th Century AD was leading the world in science and technology. This was the Indian Buddhist era. The decline of Buddhism and the resurgence of Brahmanism heralded the end of science. Brahmanism was based on Vedic texts which exalted the virtues of sacrificial ritual, yaga homa”, super natural power and discouraged scientific enquiry. There was no scientism in the men who practiced Brahmanism. Whereas most of the scientists in India during this period were Buddhists. Indian science made radical, significant and lasting contributions to world science mainly in the fields of mathematics, medicine and astronomy. Kings who supported science and education were Buddhists. Indian mathematics is considered as the mother of all mathematics and its greatest mathematician, astronomer and philosopher Aryabhatha born in 476 AD was a Buddhist who lived in the centre of Buddhist heartland, capital of Magadha Empire, Pataliputhra. According to leading Indian scientist Dr.Neelantha Dhar progress of science in India was obstructed by the decline of Buddhism and nothing significant happened in science after the 6th Century AD. Thus India perhaps had a Civilisation State during the Buddhist era from 5th Century BC until 6th Century AD and lost it thereafter. Kings of this period were enamoured by Buddhism and based their policies on the principles of Buddhism. Civilisation and State coincided. Brahmanism and later foreign invasions caused the collapse of this State. If one were to compare the present India with China one could understand what has happened for the two countries had a similar past. Today China exports six times more than India and is the number one exporter in the world. Its GDP is 3rd in the world and is five times larger than that of India. There are only 13.4% below poverty line in China whereas the figure for India is 29.8%. Martin Jacques says comparing the economies of China and India is chalk and cheese and he says India must learn from China. With regard to poverty alleviation and employment China is doing better than USA.
In Sri Lanka too during the period of Buddhist influence science, medicine, agriculture, building of tanks, stupas and irrigation canals, architecture, metalogy etc. developed in pace with India. The first hospital in the world was built in Mihinthala in the 4th Century BCE. Buddhism which encouraged scientific enquiry was the life blood of this civilization. Thus developed the civilizational consciousness which is entrenched in the minds of people, which attaches them to their language, religion and country and make them strive for its advancement and protection. The Civilasation State, if it is to survive and succeed, must have this binding consciousness. It had been the case in China which enabled it to bounce back after every fall. And it was not so in India which seems to have lost its civilization consciousness and not found it yet. Thus as Amarasekera cogently points out in his book Sri Lanka has the potential to find its consciousness and develop its Civilisation State.
In Amarasekera’s opinion Sri Lanka is caught up in the trap of democracy” designed by our colonial masters whose aim was to continue their hegemonic grip on the country. The slavish attitude of our leaders towards the Western powers and their life style no doubt had helped the imperialists to keep hold of that grip. This was evident soon after independence which made national leaders like Anagarika Dharmapala leave the country in disgust. It is evident at present also when our leaders seem to collude with the Western powers to subvert the independence and sovereignty of the country. The colonialists have left behind their legacy and their servants to ensure their hold on the country and pursue their agenda. It is a sad commentary on the intelligentsia of the country that we have failed to escape from this colonial yoke. Amarasekera attempts to address the intelligent people of this country and to make them understand the damage that has been done to the country due to the divisive nature of party politics which is an inherent feature of the Westminister system of parliamentary democracy. This system of democracy is divisive by design and a divided nation is an open field for the marauding imperialist.
Amarasekera asserts that we must find our own political system based on our civilization consciousness. Prof.Weiwei Zhang of Fudan University, China in his book titled The China Wave – Rise of a Civilisation State” says the story of China is not about the rise of an ordinary country but a different type of country. Therefore, we cannot emulate China just as much as we should not ape the West. But we could adopt the concept of Civilisation State. Our aspirations, believes, values, religion, morals, desires and attitudes are different. These are the factors that had moulded our consciousness over thousands of years. These factors provide the basis for the civilization the Sinhalese built in their history of more than 2500 years. The consciousness we harbour of these factors is our civilization consciousness. It is the guiding light and the driving force of our lives without which we are lost. Amarasekera shows us why the ruins in Anuradhapura are not ruins for us as they are etched in our consciousness. Amarasekera describes how we have lost our way and how we have arrived at our pathetic state and the peril the country faces today.
A governing State which is closely integrated with the civilization consciousness of its people and is designed to function on the basis of those factors and deliver on them could be termed a Civilisation State. Therefore, we have to develop our own system. According to Amarasekera we had ventured into such a project in 1956 when we elected the SLFP Government, not by accident but because we were driven by the civilization consciousness. That phenomenon was a political manifestation of that consciousness. Mr.S.W.R.D.Bandaranayaka succeeded in tapping this consciousness so to speak but he could not develop a civilization state. Mrs. Sirimavo Bandaranayaka perhaps did better in that regard. In this respect the most successful leader was Mr. Mahinda Rajapaksa. Hence Amarasekera at the end of his monograph suggests that Mahinda Rajapaksa must jettison the SLFP which has seized to be the political arm of the civilization consciousness of the people and find a new party to fill this void and continue the effort to build a Civilisation State. The task of course is not easy given the complexities both inside and outside the country but to remain silent is to court disaster.
Prof. N. A. de S. Amaratunga
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.
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.