Interviews

 

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).

In a New Year’s address, Chinese President Xi Jinping lauded the country’s accomplishments in 2017 and gave a road map for China’s priorities in 2018.

2017 has been a big year for China – from President Xi’s travels to Davos to hosting the first Belt and Road Initiative Forum to the 19th CPC Meeting. China is taking the lead across the world and at home. So what’s the outlook for the country this year?

To discuss President Xi’s speech and the future of China in 2018: Victor Gao, a Chinese international relations expert Dan Wang, a China analyst with The Economist Intelligence Unit; Martin Jacques, author of “When China Rules the World” and a senior fellow in politics and international studies at Cambridge University; Jacques deLisle, a professor and director of the Center for East Asian Studies at the University of Pennsylvania.

Part One:

 

Part Two:

Global Times

The recent slowdown has called previous narratives about China’s rise into question for some. How should we view this economic slowdown? What role will the US play? Global Times (GT) London-based correspondent Sun Wei interviewed Martin Jacques (Jacques), a senior fellow at the Department of Politics and International Studies, Cambridge University, and a visiting professor at Tsinghua University, Beijing, about these questions.

GT: Nobel Prize winner Joseph E. Stiglitz claims in an article that the “Chinese century” has begun and that Americans should take China’s new status as the No.1 economy as a wake-up call. Professor Joseph Nye of Harvard University explains in an essay why the “American century” is far from over. Obama said last year the US will lead the world for the next 100 years. What do you think of these debates?

Jacques: The US is still the dominant power in the world in probably every sense. China is only challenging it economically by virtue of having a huge population. China’s rapid transformation is clearly already having profound economic consequences, and beginning to have serious political, cultural, intellectual, moral, ethical, and military consequences as well. That’s in a way what President Xi Jinping‘s government represents. The Chinese dream imagines a different place in the world and a different future for China.

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29/09/15 – Guardian

John Harris’ ‘Long Read’ piece for The Guardian (29 September 2015) includes an interview with Martin Jacques and an assessment of his editorship of Marxism Today from 1977 – 1991.  

John Harris 

In May 1988, a group of around 20 writers and academics spent a weekend at Wortley Hall, a country house north of Sheffield, loudly debating British politics and the state of the world. All drawn from the political left, by that point they were long used to defeat, chiefly at the hands of Margaret Thatcher. Now, they were set on figuring out not just how to reverse the political tide, but something much more ambitious: in essence, how to leave the 20th century.

Over the previous decade, some of these people had shone light on why Britain had moved so far to the right, and why the left had become so weak. But as one of them later put it, they now wanted to focus on “how society was changing, what globalisation was about – where things were moving in a much, much deeper sense”. The conversations were not always easy; there were raised voices, and sometimes awkward silences. Everything was taped, and voluminous notes were taken. A couple of months on, one of the organisers wrote that proceedings had been “part coherent, part incoherent, exciting and frustrating in just about equal measure”.

What emerged from the debates and discussions was an array of amazingly prescient insights, published in a visionary magazine called Marxism Today. In the early 21st century, that title might look comically old-fashioned, but the people clustered around the magazine anticipated the future we now inhabit, and diagnosed how the left could steer it in a more progressive direction. Soon enough, in fact, some of Marxism Today’s inner circle would bring their insights to the Labour party led by Tony Blair, as advisers and policy specialists. But most of their ideas were lost, thanks partly to the frantic realities of power, but also because in important respects, Blair and Gordon Brown – both of whom had written for the magazine when they were shadow ministers – were more old-fashioned politicians than they liked to think.

At the core of Marxism Today’s most prophetic ideas was a brilliant conception of modern capitalism. In contrast to an increasingly dated vision of a world of mass production and standardisation, the magazine’s writers described the changes wrought by a new reality of small economic units, franchising, outsourcing, self-employment and part-time work – most of it driven by companies and corporations with a global reach – which they called “Post-Fordism”. Computers, they pointed out, were now being built from components produced in diverse locations all over the world; iconic companies had stripped down their focus to sales, strategy and what we would now call branding, outsourcing production to an ever-changing array of third parties. As a result, economies were becoming more fragmented and unpredictable, as the bureaucratic, top-down structures that had defined the first two-thirds of the 20th century were pushed aside.

The unhappiness with China among segments of Hong Kong society stems from the city’s failure to understand its privileged relationship with Beijing, prominent China expert Dr Martin Jacques said. In a wide-ranging interview with Celene Tan, the British-born author added that China has learnt from the past and will be patient in drawing Taiwan closer to the mainland. He also spoke about China’s territorial claims and President Xi Jinping’s anti-corruption campaign. Below is an excerpt of the interview, the first part of which was published yesterday.

As China takes on more global responsibilities, it is faltering in its effort to pull Hong Kong and Taiwan closer to the mainland. Why are the people in these two territories so resistant to China? How can they be swayed by Beijing?

Hong Kong had been under British rule for 155 years. The whole of Hong Kong’s modern experience was under British colonial rule, so it grew up, in a sense, deprived of its birthright, which was China, because it was cut off from China. It was brought up with a kind of adopted birthright, which was Britain, and looked West.

One-hundred-and-fifty-five years is a long time — many, many generations — so it’s left deep roots in the way in which Hongkongers see the world. They were very ignorant, by the end of British rule, about the country to their north. They were Chinese, but they knew very little about China. On the other hand, they were very knowledgeable, in many ways, about the world to their west, particularly Britain and, to a lesser extent, other countries in Europe and, of course, the United States.

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China has shown enormous capacity for reform in the past three decades without the need to move towards a Western-style system — a point greatly underestimated by the West, said prominent China expert Martin Jacques in a wide-ranging interview with TODAY’s Celene Tan this week. Dr Jacques also said that the Chinese Communist Party does not need economic growth to legitimise its rule and he believes China will grow to be a benign power. Below is an excerpt from the interview.

The latest issue of Foreign Affairs painted a picture of China as a country facing the classic challenges of the middle phases of development. It said China’s existing institutions may not be able to manage the country’s problems in the long term and Beijing seems unlikely to adopt the reforms that could help because they would threaten the Communist Party’s hold on power. What are your views on this?

China has done extraordinarily well over the past 35 years. It has shown an enormous capacity for reform, not only economic reform, but also political reform. Because if you’re growing at roughly 10 per cent a year, your economy is doubling its size every seven years. Now, more like every 10 years with the current growth rate. It’s impossible for the institutions to cope with this level of change without being constantly reengineered and reinvented. Generally, this has been greatly underestimated in the West. Foreign Affairs is a sort of journal of the United States foreign policy establishment — generally they don’t recognise this political reform because the only political reform they recognise is that which is moving China closer to the West. So, if it’s not doing that, then it’s not acknowledged, really.

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SINGAPORE — China’s rise has to be viewed with the right lens and many in the West fail to understand the Asian power because of a lack of knowledge of the country’s unique history and culture, said prominent China expert Dr Martin Jacques.

In an interview with TODAY, the British-born author said it is a mistake for the West to think that Beijing is unwilling to implement political reforms in its institutions simply because the reforms China has taken do not move towards a Western-style system.

Instead, China’s vast economic transformation in a mere few decades means that institutions in the country have been constantly re-engineered and reinvented to cope with the level of change, said Dr Jacques, whose book When China Rules The World has sold over 250,000 copies worldwide. “Generally, this has been greatly underestimated in the West — they don’t recognise this political reform (in China) because the only political reform they recognise is that which is moving China closer to the West,” he said.

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Onlangs publiceerden we citaten en een samenvatting van een pessimistisch artikel over China van professor Shambaugh. Indirect in antwoord daarop publiceerde Xinhua al op 13/3 een soort interview met Martin Jacques. We nemen het hier volledig over.

Het Westen heeft de neiging nu eens voor, dan weer tegen te zijn in het beeld dat het schetst van  China’s toekomst, maar de opkomst van China is een blijvend verschijnsel, aldus de Britse academicus Martin Jacques in een interview met Xinhua.

In een commentaar op het opflakkerende debat over “De eeuw van China” noemt Martin de reden hiervoor eenvoudig: het feit dat de ontwikkeling van China blijft doorgaan.

“Westerse commentaren over China zijn grillig en hebben de neiging negatief te zijn. En dan, van tijd tot tijd, lijken ze wakker te worden en zich te realiseren dat de trend zich doorzet” verklaarde de auteur van de internationale bestseller “When China Rules the World”.

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The Western portrayal of China’s future tends to “blow hot and cold”, but the heat of China’s rise is here to stay, British scholar Martin Jacques said in a recent interview with Xinhua.

Commenting on a resurfacing “Chinese Century” debate among global media, Martin said that the reason behind this hot discourse is simple: the fact that China’s development continues.

“The Western commentary about China’s rise is erratic, and tends to be a bit negative. And then from time to time, they sort of wake up and realize that the trend continues,” said the author of the international best-seller “When China Rules the World”.

In an article for the Vanity Fair magazine, U.S. economist Joseph E. Stiglitz, a Nobel laureate, foresaw the arrival of a “Chinese Century” in 2015 on the grounds that China has surpassed the United States to become the world’s largest economy in terms of GDP based on purchasing power parity.
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China Premier Rutte brengt volgende week een vierdaags werkbezoek aan China. De Britse Chinakenner Martin Jacques zou in zijn plaats nú aanhaken bij de Chinese concurrent van de Wereldbank.

Martin Jacques verslikt zich in zijn met veel melk aangelengde thee. „Wow, de altijd trouwe Britse poedel loopt opeens weg van zijn Amerikaanse baasje. Dit is zonder overdrijving een historisch moment”, grijnst de Britse auteur van When China rules the world, het meest geciteerde, bediscussieerde en bekritiseerde boek over de onstuitbare opmars van China.

Als eerste westerse natie besloot het Verenigd Koninkrijk de toorn van de Verenigde Staten te trotseren door politiek en financieel kapitaal te investeren in het Chinese initiatief om een concurrent van de Wereldbank op te richten, de zogeheten Aziatische Infrastructurele Investeringsbank. Volgens de historicus Jacques een „zeer opmerkelijk moment in de wording van de nieuwe financiële institutionele wereldorde”. „Ik word er vaak van beticht dat ik de snelheid van de opmars van China als wereldmacht zwaar overdrijf, maar mijn grootste fout is eigenlijk dat ik niet heb voorzien hoe snel de oude pikorde aftakelt. Die orde, opgebouwd door de Amerikanen vanaf 1944, is op veel verschillende manieren aan het afbrokkelen, om niet te zeggen aan het desintegreren. De Wereldbank is aan het afglijden en wie weet nog van het bestaan van de G7 of de G8?” Duitsland, Frankrijk en Italië hebben inmiddels het Britse voorbeeld gevolgd.

Martin Jacques, die gastcolleges geeft aan de Nationale Universiteit van Singapore, wil weten of Nederland ook aandeelhouder en mede-stichter van de Chinese tegenhanger van de Wereldbank wordt. „Nog geen beslissing? Echt niet? Ik kan Nederland alleen maar adviseren de knoop snel door te hakken, dit is een heel belangrijk moment om Chinese bonuspunten te winnen. Het is niet slim om in het slinkende Amerikaanse kamp van refusniks te blijven hangen.” Bovendien, voegt hij er aan toe: „China wil niet langer wachten op hervormingen van de Wereldbank en het IMF die er toch niet komen door de blokkade van het Amerikaanse Congres. China accepteert niet langer dat bijvoorbeeld Nederland en België een zwaardere stem hebben in Washington.”

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Updated and expanded new Chinese edition just released.

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Turkish edition just published!

When China Rules the World is the first book to fully conceive of and explain the upheaval that China’s ascendance will cause and the realigned global power structure it will create.

New edition available now from:

Amazon UK
and all good booksellers.

US second edition is available now via: 

Amazon US