China’s rise has been stunning – and we shouldn’t be afraid of it

Its Leninist capitalist model means that the Party’s dedicated red telephone is the most important object on any CEO’s desk.

It is not supposed to be still like this since the West has always assumed that as China became more prosperous and connected with the world, it would ineluctably liberalise.

Adopt the free market and the codicil of liberal democracy will follow – that was the assumption anyway.¹

This has proved as fanciful as US Republican delusions in the 1930s and 40s that China was going to become a vast Christian democracy under Chiang Kai-shek. Consistent growth and the restoration of great power status haven’t put the Communist Party and its state-directed economic model out of business but, instead, legitimised both.²

Unlike ‘democratic’ India, every Chinese child receives a decent education and even remote villages have electricity, telephones, sanitation and roads. There is no caste system either and initiative is rewarded rather than stifled by rentier elites. But China is also an incredibly decentralised country, in which 85% of expenditure is at the subnational level, and in which local and provincial authorities engage in a dynamic learning process to compete with one another as they mix and match development strategies. These are unencumbered by many of the obstacles in democracies based on the separation of powers. Instead, to paraphrase Deng, China will employ any cat to catch mice, regardless of whether it is black or white.³

Starting under Deng Xiaoping in 1979, China learned from the ‘little dragons’ of Japan, South Korea and Taiwan – two of which were highly authoritarian – so it, too, could rapidly industrialise and urbanise – notably through the coastal provinces opposite Hong Kong (which itself became an important source of investment capital). Two hundred million people had moved to burgeoning cities like Shenzhen before Deng retired in 1992. But it is easy to overlook the fact that the rural poverty rate also fell from 75% to 23% – partly because of the development of rural industry. The automotive giant Chery, which owns Volvo nowadays, is based in rural Anhui province rather than Shanghai.

Improved relations with the US, after Nixon’s historic visit to China in 1972, meant that defence spending could be cut, from 4.6% of GDP in 1979 to 1.4% by 1991. China also eschewed acquiring a huge nuclear arsenal. Military facilities and manpower could be redirected to civilian economic expansion, particularly in the coastal cities. The negative example of the stagnant Soviet Union was also a spur to rapid development. In the wake of the Tiananmen Square massacre in 1989, Deng calculated that accelerated economic development would lead to improved living standards for the middle class and, as annual growth regularly averaged 12%, justifiable pride in China’s ‘standing tall’ in the world.⁴

President Xi Jinping

Since 2012 China has been ruled by the now 64 year-old President Xi Jinping – its most powerful ‘core leader’ since Deng and Mao. He is also China’s commander-in-chief, having brought the PLA tightly under Party control. Quiet, steely and authoritative, he is a striking contrast to Donald Trump, a bumptious and ignorant parvenu, oddly suited to a country which generates a great deal of meaningless noise and whose political system is visibly falling apart against a backdrop of incipient civil war. The contrasts are becoming unavoidably vivid. Last October, Xi’s power was displayed to all at the 19th Party Congress in Beijing. Apart from Mao he is the only leader to have his corpus of writings elevated into eponymous “Thoughts”. Even the great transformer Deng had to be content with “Theory”. Xi also has his American-style ‘China Dream’.

Xi is fond of quoting an anthology of poems from 1100-700BC celebrating the talented officers who enabled King Wen to enjoy his repose, adding “to found a state that can last for centuries, talent is key”. The people who rule China read, and sometimes write books, and they have spent their lives being ‘stress-tested’ in a series of roles that can involve governing a province whose average size is that of Spain (46 million people) or which have particular challenges, from being in the backward interior or because of ethno-religious tensions. They think strategically, as a friend of mine discovered when the Minister of Agriculture profusely apologised for not having the fifteen years sustainability plans in ready form. He had the five and ten years plans in multiple volumes on his office shelves.⁵

Three key aims stand out:

1. One overriding challenge has been to cleanse corruption within the party and state, including the military and security services, so as to justify enduring Communist Party rule. To date some 1,375,000 of 82 million party members have been penalised for breaching discipline, with some of them ending up in Communist Party courts and jail. Much of this may just involve eating more than the mandatory ‘four dishes and a soup’ at banquets or flashing a $50,000 Swiss watch. It can, however, also involve generals who have (but now had) pallet-loads of corruptly acquired cash in their basement from selling military promotions.
2. Secondly, Xi is aware of the brittle nature of any society based on acquisitive materialism. To that end, he is engaged in ‘re-moralising’ Chinese society by blending ‘socialism with Chinese characteristics’ – meaning anything that conduces to economic growth – with traditional Confucian civilities.
3. Finally, he wants to restore China to its historic role as a great power, less by crude military might – displays of which are for internal consumption – than by offering dozens of countries ‘win-win’ economic ties (notably through the $1-8 trillion One Belt, One Road Initiative) and a pragmatic model of development for the developing world. China also supports a fair and effective international order based on the mutual respect of sovereign nations.

China’s long-term strategy is bounded by two upcoming centenaries, that of the founding of the Chinese Communist party (falling in 2021) and of the People’s Republic (2049). Though annual growth has slipped to 6.5%, the aim is to eliminate the last vestiges of (rural) poverty, blighting approximately 300 million people; to complete the urbanisation of the population to around 70%; and the realisation of a “moderately prosperous society” by the Party’s anniversary. Thereafter, from 2035-2049, the goal is the wholesale transformation of the economy, from exports to consumption, and involving everything from electric vehicles and quantum computing to industrial robots, which if Xi has his way, will be ‘Made in China’.

Panda or wolf?

China has come very far in a short space of time, and its potential to travel much further remains enormous. Some in the West find China’s rise alarming, because it confounds expectations of how modernisation supposedly works, highlights the short-termist inadequacies of our systems of government, and, above all, involves competition without confrontation.

The response from the outgoing top superpower, the USA, has been notably unimaginative. Cod history leads to warnings about the so-called ‘Thucydides Trap’ in which a rising power, like Imperial Germany in 1914, clashes with an established one such as Imperial Britain.⁶  More seriously, the ‘new’ 2018 US National Defense Strategy is like a dreary reversion to the thinking of the Cold War:

“China is leveraging military modernization, influence operations, and predatory economics to coerce neighboring countries to reorder the Indo-Pacific region to their advantage. As China continues its economic and military ascendance, asserting power through an all-nation long-term strategy, it will continue to pursue a military modernization program that seeks Indo-Pacific regional hegemony in the near term and displacement of the United States to achieve global pre-eminence in future”.

It continues⁷:

“China and Russia are now undermining the international order from within the system by exploiting its benefits while simultaneously undercutting its principles and ‘rules of the road’.”

America’s own culpable role in destabilising the international order, during its brief and illusory “unipolar full spectrum dominance moment” from 1989 to 2008, goes entirely unremarked upon – though there is some specious play elsewhere in the National Strategy with the alleged “period of strategic atrophy” under Barack Obama. There is no acknowledgement either of America’s role in almost destroying the world’s financial system in 2007/2008, though China’s Finance Minister quietly remarked to his friend Hank (Paulson), the former US Treasury Secretary, that America’s days as a teacher in this area were over.

It is not China that has been raining bombs and missiles (or using shadowy drone strikes) at enormous cost in blood and treasure on the likes of Afghanistan, Pakistan, Libya, Somalia, Syria and Yemen – and not to mention Iraq. In fact, in 1999 China itself became a victim of this US addiction to bombing when five JDAMs “accidentally” slammed into its Belgrade embassy, killing three Chinese journalists. The opening last year of China’s sole overseas military base (a modest naval facility in Djibouti to give onshore R&R to sailors deterring pirates, right next to a giant US drone base at Camp Lemonnier) caused near hysteria in the world’s pre-eminent military power, with its 700 or so overseas bases and 200,000 troops stationed overseas.

Then we have the extraordinary claim that China is “reordering the Indo-Pacific region”, as if the sudden abandonment by the Americans of the customary term ‘Asia-Pacific region’ was not in itself a provocative declaration of intent based on the ‘Quad’ of Australia, India, Japan and the US to contain China in its near neighbourhood. The Australians immediately hedged their bets by declaring they do not regard China as a military “threat” at all.

All this, however, is almost a detail in comparison with the idea that China is “undermining the international order from within the system”. In reality, China has been a consistent supporter of the UN, if only as the best guarantor of Westphalian state sovereignty, and it is the largest contributor of troops to peacekeeping missions. A Chinese police general heads Interpol.

Perhaps what the Americans really do not like is that a more powerful China would like to refashion international organisations which the West essentially shaped after 1945, while claiming the great power ‘exemptionalism’ that the US itself routinely asserts by not signing up to the International Criminal Court or the United Nations Convention on the Law of the Sea. If it can’t get its way within the myriad international organisations it has joined, then China simply creates cover versions, as it has done with the Asia Infrastructure Development Bank as a rival to the US-dominated IMF.

The present US administration often does not even pay lip service to the global commons anymore. Shortly after Trump’s first tour of Europe and the Middle East in May 2017, his National Security advisor, Herbert HR McMaster joined Gary Cohn in an op-ed⁸ that said:

“The president embarked on his first foreign trip with a clear eyed outlook that the world is not a ‘global community’ but an arena where nations, nongovernmental actors and businesses engage and compete for advantage…Rather than deny this elemental nature of international affairs, we embrace it”.

That is a straightforwardly Darwinian perspective, obviously at variance with the Chinese vision of ‘win-win’ for everyone through economic cooperation and Beijing’s support for international cooperation. President Trump has been true to his word…

• He warned Nato allies that the party was over if they did not stump up more to defend themselves.
• He withdrew the US from the Trans-Pacific Partnership, and is trying to ‘renegotiate’ NAFTA with Canada and Mexico.
• In order to oblige his Israeli and Saudi friends, Trump says he will rip up the 2015 JCPOA nuclear deal with Iran, an international agreement ratified by among others China, and the UK. This last move also virtually negates any prospect of a peaceful resolution of the nuclear crisis with North Korea since it removes any incentives from Kim Jong-un to cooperate.

The Business of China is Business – and Latin America shows how it does that business…

Talk of China’s “predatory economics” is also risible, coming as it does from a nation whose President Calvin Coolidge in 1925 opined “the business of America is business”. As the self-proclaimed “master of the deal” Trump should be able to grasp – although, apparently, he has been taken captive by all those generals in the White House whose expertise is in bombs rather than balance sheets and PNL.

Let’s turn to a region where China has been highly active in recent years, namely the 33 nations of Latin America and the Caribbean (LAC for short). It is a revealing example of the disparity between American anxiety about China’s rise and a complex local reality.

Before embarking on his first Latin American tour, Secretary of State Rex Tillerson told an audience in Texas that “Latin America does not need new imperial powers that seek only to benefit their own people. China’s state-led model of development is reminiscent of the past. It does not have to be the hemisphere’s future”.

It was unfortunate that even before he touched down in Mexico, ostensibly to repair some of the damage done by Trump in calling Mexicans drug-dealing rapists, that Tillerson extolled the virtues of generals getting rid of failing governments. He may have meant Venezuela, but among his regional audiences it brought back dark memories of US-backed military coups, the murder (and attempted murder) of presidents, and backing for right-wing death squads. These are not clichés of the left-wing imagination as I’ve been on naval bases and ships where victims were tortured and shot. Praising the 1823 Monroe Doctrine was not clever either – since it and the 1904 Theodore Roosevelt corollary that licensed military intervention are widely held to have sanctioned US meddling in the region.⁹

China’s interest in Latin America is relatively recent, roughly since the 1990s and involves its vast need for raw materials or food products, like copper, iron ore and soya beans.¹⁰ Whereas China’s trade volume with the region was $12 billion in 2000, by 2013 this had grown to $260 billion, with $250 billion of direct investment over 2015 to 2019. China’s leaders have frequently visited Latin America (Xi has been twice as president and twice as vice president), while regional leaders have been to Beijing 170 times. China became an observer at the Organisation of American States in 2004 and has joined myriad regional forums since.¹¹

There are very few signs that the Chinese presence involves ‘hard’, ‘soft’ or ‘spiky’ power. Although there is much febrile talk of China’s military modernisation, the enduring effects of the one-child policy make the son or daughter a very precious commodity. China does not have a single military base in LAC, excepting a modest satellite monitoring station in Argentina, and arms sales are a tiny $100 million to the entire hemisphere. Beijing resolutely refused too to take up the Red banner when the Russians abandoned Cuba. If they think about the island at all, it as a potential tourist destination for middle class travellers (though apparently it will need to open a lot of Chinese restaurants first). The supposedly malign global influence of cultural Confucius Institutes is also miniscule. There are a mere 24 for a total Latin American population of 639 million. Nor have the Chinese dumped any of their work force, which can be a source of tension in some African nations, where these intrepid entrepreneurs then take over poultry markets or taxi ranks.¹²

Although China has been a BRICs  nation since the bloc’s formation in 2009, there is not a single fluent Mandarin speaker in the Brazilian foreign ministry. On my annual visits to Chile I have never had a conversation with (overwhelmingly conservative) bankers, businessmen, diplomats, and military people in which anyone mentioned China – even at the vast Chuquicamata copper mine whose rows of copper plates are destined for there – although hey had a lot to say about Trump, much of it negative – because his aspersions against Mexicans reverberate throughout a very Hispano-European demographic. (And they worry that Trump will help breath new life into populists like Mexico’s López Obrador in the region’s six major elections in 2018). The absence of talk of China is, nonetheless, odd since not only does most of Chile’s copper go to China, but trade in other goods has risen by 148% between 2008-16. They include eight types of fruit, wine – where China is now Chile’s largest export market – forestry products and salmon.¹³

There are perfectly straightforward reasons why LAC states should be interested in doing business with China. Because it is so culturally alien, and a developing nation to boot, it carries no ‘imperialist’ baggage, and can address South-to-South issues in a meaningful way. Moreover when China grants loans, it does not try to impose stringent and painful austerity, as the IMF would. It is also ready to countenance debt write-offs. As even American conservatives grudgingly acknowledge, the Chinese are pragmatists when it comes to development models, basically trying anything that works, though their emphasis on both infrastructure and local governance also appeals. Like any businessmen, the Chinese also have an eye for a bargain too. Because of Brazil’s protracted ‘Car Wash’ (‘Lavo Jato’) corruption scandal there are many assets going cheaply as desperate owners try to rustle up the money for fines.¹⁴

Nor is there much evidence that China is using its economic might in LAC to alter the geopolitical orientation of these countries. The one exception concerns recognition of the so-called Republic of China (Taiwan). Of the remaining 22 states which still call it by the old style, 12 are in LAC, though only Paraguay is a big one. If China is trying to alter their behaviour it takes a great deal of investment money to change minds, as Beijing finally achieved with Costa Rica when it de-recognised Taiwan in 2007. There’s still a way to go with Honduras, El Salvador, St Lucia and St Kitts. Nor are there any signs that Chinese business involvement results in these states changing how they vote in the UN. Although China is vehemently opposed to decriminalisation of drugs or public health solutions to this curse, this has not deterred any of the LAC who advocate it. Similarly, Argentina and Chile are more likely to vote with the US when it comes to human rights issues than they are with their new friends from the Far East.

It seems absurd for the country that has ripped up its own international order in pursuit of some neocon fantasy and Trump’s nonsense about America First to accuse ‘revisionist powers’ of being bent on the same goal, even if that might be true of Putin’s Russia. Like any good businessman, Xi is taking advantage of every opportunity America’s erratic course offers him and his people. Since Europe, which for my purposes, includes Britain in the geographical sense, has no strategic conflicts with China – in a recent speech the UK Chief of the General Staff Carter did not even mention it once as a threat – Washington should really start worrying since, as we are often told, geographical distance is no longer an impediment to where we make friends in the world (as we will do if the US proves erratic and unreliable). Personally I can’t wait for that to happen, or for this country to adopt some of China’s tough-minded, pragmatic and unsentimental views of the world. In the meantime, one earnestly hopes that China’s justifiable pride in its achievements does not tip over into hubris, and that it can learn the advantages of being a magnanimous great power too.

TOMORROW IN THIS SERIES: Nigel Cameron on how Beijing is using tech to intensify an already strict oversight of its citizens.

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Michael Burleigh is an historian and commentator on world affairs. His 12 books include The Third Reich: A New History (Samuel Johnson Prize 2001) ; Moral Combat; Small Wars and Faraway Places and The Best of Times, Worst of Times: The World As It Is which appears in November.

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