I recently read an interesting article by John Mearsheimer entitled “China’s Unpeaceful Rise“. In the article Mearsheimer takes a characteristically provocative stance. He dismisses any possibility of China growing robust while remaining the benign giant of East Asia. Rather, Mearsheimer asserts, China will seek hegemony in its region just as the U.S. did in the Western Hemisphere more than a century ago.
Although I appreciate Mearsheimer’s use of the United States as a hegemon case study, his overreliance on the single example mutes his otherwise incisive thesis. To me, the case for China’s unpeaceful rise could be made more cogently by pointing to the country’s outmoded political system. Authoritarian governments are flawed in many ways; and the 21st century, as we have seen, isn’t a hospitable milieu for such anachronisms. To put it tritely, history is not on the side of China’s Communist Party. It seems inevitable that the CCP will go the way of all Chinese dynasties. Corruption, irresponsiveness to its public’s needs, and outright incompetence will lead to the CCP’s demise either from within China or from outside the country. The latter possibility predicates a stronger China than currently exists. Hence, China’s rise, or more precisely China’s rise with the CCP at the helm, is what will lead to conflict. If China does not maintain its strong economic growth, the CCP probably won’t have the means or confidence to become involved in a serious international conflict (although, if it were in its death throes, it might use war as a means to distract its citizens from its own weakness).
At some point I will write more about this. I just wanted to give kudos to Mearsheimer for being ahead of the game. He published his China article in 2006 which was long before it became popular among political scientists and China hands to jump from the ‘economic engagement will solve everything cult’ to the ‘oh crap! What have we been doing for the past thirty years?! club’.
On Sunday, The Washington Post reported that difficult times lay ahead for U.S.-China relations as the Obama administration appears ready to approve a multi-billion dollar weapons sale to Taiwan and President Obama prepares to receive the Dalai Lama. Both sensitive issues were in play just prior to Obama’s visit to China last November. But, in true diplomatic fashion, the U.S. put the weapons deal on hold and declined a visit from Tibet’s spiritual leader to smooth the way for what was widely regarded as Obama’s most important overseas trip to date. At the time, I was wary that the Obama administration was falling into a trap all too familiar to past U.S. administrations. The one where America tries too hard to win the cooperation of an intransigent China only to find that its naive gift giving has not been reciprocated thereby making its efforts to create a tit-for-tat relationship entirely tributary. Fortunately Obama has shown himself to be a quick student of U.S.-China relations. After giving China ample opportunities to prove its goodwill and cooperative spirit on everything from nuclear nonproliferation to global climate change, the Obama administration now looks set on toughening its diplomacy toward China. It’s about time.
These days, communist China is beginning to look a lot more like its imperial predecessor. The People’s Republic of China’s (PRC) awesome wealth and power have transformed its once formidable foes like Taiwan and Japan into cowed tributaries of yore. Now, it is no longer considered shrewd to speak of changing the Middle Kingdom. Scholars and politicians who used to pontificate about slowly molding China in the image of western liberal democracy have learned a harsh lesson: you don’t change China—China changes you.
During the early years of China’s economic reforms, the country was seen as a humble backwater. Its plucky ambition attracted only benign curiosity from the West, akin to the curiosity adults bestow upon a child playing by himself. In time, this mild curiosity gave way to amusement and ultimately to intense interest and concern.
Today, Eastern and Western states alike shift their eyes from the United States to China, trying to decide with which power to cast their fate, asking: which is the true Rock of Gibraltar?
Judging from recent political developments in Taiwan and Japan, East Asia may well have already chosen its favorite: China. In March 2008, Taiwanese voters elected Kuomintang (KMT) candidate Ma Ying-jeou President of the Republic of China. Ma’s victory and his party’s overwhelming success in the 2008 legislative elections were pleasant news to the ears of Chinese Communist Party (CCP) officials. The KMT, once the archenemy of Communist China, had morphed over the years into a more tolerant, less Red Scare-crazed political organization. By 2008, it had become a veritable pussycat compared to Taiwan’s ruling Democratic Progressive Party (DPP). The KMT promoted engagement and eventual reunification with mainland China, while DPP firebrand and two-term President Chen Shui-bian spearheaded his party’s provocative pro-Taiwanese independence stance. Evident by the outcome of the 2008 elections, the people of Taiwan were prepared to bridge the Taiwan Strait and strengthen ties with a government they once sought to eradicate. It wasn’t Beijing’s charm that drove the Taiwanese towards its colossal neighbor. It was a mixture of economic opportunism and political fatalism.
When trying to instill a sense of responsibility in others people often recite the adage: no one can make you do anything. The saying is true enough and does a superb job of emphasizing freewill and self-control but it fails to address the fundamental problem of coercion. Granted, theoretically speaking, no one can force another to do something; however, one can do everything in one’s power to make a person’s life extremely difficult if they refuse one’s wishes. China has for years been squeezing Taiwan in such a way. It hasn’t forced Taiwan into its fold per se. However, communist China has worked tirelessly to preclude the Taiwanese people from choosing independence. At its crudest the PRC has resorted to harassing and intimidating Taiwan.
Beijing has been especially crafty in its political marginalization of Taiwan. Through a series of cunning Cold War political maneuvers, in 1971, Beijing succeeded in stripping Taiwan of its United Nations membership and replaced the island nation as a permanent member of the United Nations Security Council. How, you might ask, did the CCP execute such an astounding feat? The answer is quite simple: it waited patiently. No, the PRC didn’t undergo a rapid liberal-democratic makeover. The CCP didn’t moderate its politics or lessen its human rights abuses. Chairman Mao’s party only needed to bid its time until the world was willing to give it what it wanted.
By 1971, the political milieu in which the CCP operated had changed greatly. During the 1960s, numerous newly independent third world countries were admitted to the UN General Assembly. China courted these countries and cultivated them into a support base for its UN membership bid. Thus, the PRC gained the votes it needed to wage its coup. Plenty objected to allowing Chairman Mao’s mad experiment in communist statecraft into the ranks of the UN’s supreme governing body. But what could be done? The PRC had the numbers it needed to impose its will; so the opposition stood by impotently as they were defeated by their own beloved democratic process.
Ironically, the PRC’s UN victory took place in the midst of Mao’s infamous Cultural Revolution, one of the darkest periods in modern Chinese history. Unfortunately, irony is lost on those blinded by the fog of war. The Nixon administration, caught up in Cold War power politics and struggling to extricate its country from a sticky situation in Vietnam, looked to its new Security Council colleague and saw a potential partner—what it should have seen was a cold opportunist.
In the years after the Second World War, Sino-Soviet relations soured to such an extent that the two communist powers ended up in a series of brief but bloody border conflicts in 1969. Aware that its two great Cold War foes had turned on one-another, U.S. National Security Advisor Henry Kissinger and others in the Nixon administration, being the realists that they were, thought that they could win the allegiance of China and thereby shift the Cold War balance of power in the United States’ favor. Of course, as history has been written: the Nixon administration’s China diplomacy was an indubitable success—it helped to isolate the Soviet Union even further, and it delivered China from the dark recesses of the communist underworld to the light of liberal democracy. Even today, to say that 1970’s U.S.-China rapprochement was a resounding victory for U.S diplomacy is to speak the gospel truth. In actuality, the U.S. sold itself too cheaply and set U.S.-China relations on a dangerous course.
The Nixon administration’s dealings with China were the beginning of a deeply flawed negotiating pattern with the PRC that has seriously undermined the interests of democratic states the world over. The pattern has been one of give and take: the rest of the world gives and Beijing happily takes. U.S.-China trade, the foundation of U.S.-China relations, has been skewed horribly to benefit the PRC at the expense of average Americans. The U.S. trade deficit with China has ballooned over the past decade without U.S. officials taking any serious actions to rectify the matter. All the while, the PRC has utilized unfair trade practices including currency manipulation, investment restrictions, and appallingly lax labor and environmental regulations to suck money from foreign coffers. Of course, U.S. officials won’t admit that they have been steadily losing ground to a Mandarin-styled oligopoly; they won’t even acknowledge that China has made a mockery of its World Trade Organization membership—which China was able to gain with the support of the United States. Rather, U.S. officials have tended to argue that China is a backward country that can benefit enormously from Western tutelage. But China should not be mistaken for postwar Japan; South Korea; or Taiwan. The PRC is not eager to emulate foreign populist political systems nor is it in a position to have such systems imposed on it. On the contrary, the CCP has fashioned its own quasi-democratic one-party political system that cannot realistically support true democratic reform. Therefore, real catalysts for change will have to come from outside, not inside, China’s current political system. This means that efforts by the U.S. and other democratic countries to change China by working with the CCP are futile at best and extremely counterproductive at worst.
By no longer questioning the legitimacy of the CCP as a governing power, the world community obviates any leverage it might exert on the PRC. The Tiananmen Square Massacre of 1989 was a missed opportunity for democratic states to band together and demand democratic reforms in China. Likewise, the weak response of the world community to the 2008 Tibet unrest heartens the CCP in its claim that the strife of China’s minorities is an “internal issue” and only concerns the Chinese government. It is blatantly obvious by now that China’s economic strength is making it less and less susceptible to foreign influence and, conversely, more influential with other states. The supposed win-win trade relationships China has been developing with other countries may well be the CCP’s underhanded means of subjugating its adversaries. Currently, states are too preoccupied with economic issues to consider China as anything but a trade partner. But China is more than—a market—a lender—a supplier—it is an economic and a political actor. So, when China signs trade pacts with Taiwan and ASEAN there is more than money at stake.
The recent general election in Japan is a perfect example of how China has used trade to gain political power. For decades, Japan’s center right Liberal Democratic Party produced prime ministers that have for the most part either outraged or mildly offended Beijing. But, this summer’s elections brought a new party and a new kind of prime minister to power. The victorious Democratic Party of Japan and its president the new prime minister of Japan, Yukio Hatoyama, appear ready not only to support strengthening ties with China (as did previous Japan’s previous prime minister, Taro Aso) but to reduce Japan’s military cooperation with the United States. Prime Minister Hatoyama and his party are committed to reorienting Japan towards Asia which some have equated with turning Japan’s back on the United States, its greatest ally. This may seem an abrupt shift in policy but it has been a long time in the making. Japan’s trade relationship with China has been growing for years. China has supplanted the U.S. as Japan’s largest trade partner and the political consequences are now becoming manifest.
In essence, the United States’ flawed China strategy can be described as all carrots and no sticks. The danger for the U.S. and other countries is that the CCP has gained so much economic and political clout that it now holds most of the cards. Before when the U.S. had relatively more power than it does today, U.S. officials made too many concessions to China. They were content to believe that they could tolerate the PRC’s human rights violations, bad trade practices, unwarranted arms build-up, and general bad neighborliness in the international community because trade, they thought, was the panacea for all of China’s ills. First wealth then freedom became the mantra in Beijing and Washington. Unfortunately, wealth and freedom are not inextricably linked.
The China of today must be a rude surprise to the naïve scholars and government officials who once claimed that the CCP’s authoritarian rule would be demolished by China’s growing middle class. Karl Mark famously called religion the opiate of the masses; however, in China, money is the drug of choice. China’s middle class is more interested in accumulating wealth than accumulating civil liberties. Powerless peasants and remote ethnic minorities are the only people left that persistently challenge their illegitimate authoritarian government. Foreign powers like the United States now tread lightly when nearing the PRC’s turf. At present, the U.S. is carefully trying to decide whether honoring its commitment to protect Taiwan by selling it more than $6 billion worth of military hardware is worth incurring China’s wrath. The prospects of the dealing going through don’t look good especially considering that President Obama is scheduled to visit Beijing in November and a cooperative China seems to be vital to the United States’ economic recovery. So the CCP’s intransigence wins again. China’s influence in East Asia grows stronger, its economic ties tighten, and freedom—once a major issue, and then an afterthought—becomes an after-afterthought.
This week, China’s People’s Liberation Army Navy (PLAN) celebrated its 60th anniversary. Delegations from 29 naval forces took part in the celebrations in Qingdao harbor which lies approximately 830 km south-east of Beijing.
The theme of the four-day event was “Harmonious Ocean.” Chinese navy commander Admiral Wu Shengli expounded on the theme stating, “the ocean is the common home to navies of the world. It is the responsibility of every navy to protect maritime security while establishing a peaceful and harmonious maritime environment.” In the spirit of such naval harmony, a fleet review was held on Thursday of 21 ships from 14 foreign navies. The host country showed off 25 of its naval vessels and 31 aircraft.
Possibly the biggest story of the military gala was the display of China’s Xia- and Han-class nuclear-powered submarines. Although many military experts were anticipating the unveiling of China’s most advanced nuclear-powered submarines, the Jin- and Shang-class subs, a glimpse of any Chinese submarine is rare. Chinese officials purportedly displayed the submarines to allay foreign countries’ concerns about the growth of China’s naval power and its lack of transparency.
Submarines are a perfect metaphor for the secretive nature of China’s sustained arms buildup. But they also represent a material challenge to the U.S. Navy’s power in East and Southeast Asian. The stealth and destructive capabilities of submarines offer China an asymmetric advantage that could put the U.S. Navy’s dominant position in the region at risk.
In October 2006, a Song-class diesel-powered Chinese submarine stalked the U.S. aircraft carrier U.S.S. Kitty Hawk in the Pacific Ocean. The submarine was only detected by U.S. naval forces after it surfaced within torpedo range of the carrier. It was a chilling revelation to the U.S. military. The incident showed that China could threaten its multi-billion dollar aircraft carriers with vessels that cost a fraction of the price.
Curiosity surrounding Chinese submarines has mounted as the PLAN fleet has swelled and its activities have increased. According to information recently released by U.S. Navy intelligence, China now has more than 50 attack submarines and Chinese submarine patrols doubled in 2008.
Concerns about China’s mysterious nuclear submarines might not have been erased by their presentation at the celebrations. At least, the public finally got to see stealthy Chinese naval vessels that have been the source of so much anxiety.
The Looming Aircraft Carrier
If the unveiling of China’s submarines was the biggest story of the anniversary celebrations then the biggest story that wasn’t was China’s aircraft carrier.
Military analysts and Chinese officials have long been talking about the possible construction of a Chinese aircraft carrier. Some experts even believe China might produce–or already be producing–multiple aircraft carriers the first of which could be commissioned by 2015.
China’s intent to build a carrier is clear. In March, Chinese Defense Minister Liang Guanglie announced that China would not remain the sole world power without an aircraft carrier. However, no formal announcement regarding plans for an aircraft carrier was made during the anniversary celebrations.
Chinese officials all the way up to President Hu Jintao, who is also chairman of China’s Central Military Commission, have tried their best to reassure the rest of the world about China’s good intentions. The “defensive nature” of China’s military was often mentioned during the four-day event. Concurrently, officials have asserted their country’s right to expand its military power and build aircraft carriers.
Although some might see China’s message of peace and its pursuit of weaponry as contradictory, Chinese military officials see the two as mutually dependent. Zhang Xiaolin, a professor with the strategy and research office of the PLA Navy Command College asserted in an interview with Chinese state media, Xinhua, that, “The PLA Navy will not alter its nature of peace, even if it has aircraft carriers.” Zhang added, “China has chosen to rise peacefully. Only a mighty military power can guarantee such a peaceful rise and contribute more to the maintenance of the world peace.” However, there is more to China’s arms build up than peace and security. Prestige is another driving force for the country that some experts have described as “insecure.” Chinese Admiral Hu Yanlin was quoted in China Daily as saying, “building aircraft carriers is a symbol of an important nation. It is very necessary.” Admiral Hu is not alone in his opinion, many government officials have made similar comments on the matter.
Lots has been said in promoting the building of a Chinese aircraft carrier about prestige and security. A few Chinese officials have even mentioned fighting pirates and protecting shipping lanes. But no one has definitively outlined China’s plans for its future aircraft carriers. U.S. Admiral Gary Roughead told reporters in Qingdao that, “it is not clear what the intent is of the use of an aircraft carrier, I would say that it may cause concern with some of the regional navies and nations.”
Aircraft carriers are meant to project a country’s power well beyond its borders. Being that China hasn’t had a serious military conflict in over three decades; and, historically, most of its military conflicts have been land wars with its neighbors, it is hard to see why China feels the need for aircraft carriers.
China’s perplexing pursuit of aircraft carriers aside, the U.S. Navy and other foreign navies are stepping up their cooperation with the PLAN in order to strengthen ties and head off potential problems with the rising power. The thinking behind such cooperation might reflect the old adage: keep your friends close and your enemies even closer.
In case you haven’t heard by now, Chinese action star Jackie Chan made a complete fool of himself at last weekend’s Boao Forum for Asia in Boao on China’s island province of Hainan. While participating as a panelist in one of the forum’s discussions entitled “Imagine Asia: Tapping into Asia’s Creative-Industry Potential,” the martial arts legend was asked about censorship in China (hardly a surprise considering that Chan’s latest film “Shinjuku Incident” was banned in China). Chan didn’t respond with the superior incisiveness one would expect from a speaker at a world-renowned international forum that draws current and former heads of state as guests and orators. Instead, Chan made a gross display of pandering to China’s authoritarian government, the Chinese Communist Party (CPC), in which he insulted Chinese the world over. He questioned the merits of freedom saying, “I’m not sure if it is good to have freedom or not [...] If you are too free, you are like the way Hong Kong is now. It’s very chaotic. Taiwan is also chaotic.” Then, as if he hadn’t fully expressed his allegiance to his CPC shepherd, Chan deepened his disgrace by stating, “I’m gradually beginning to feel that we Chinese need to be controlled. If we are not being controlled, we’ll just do what we want.”
Now I’m a big proponent of free speech, and I would never suggest that Mr. Chan not be allowed to speak his mind. However, I don’t think someone like him should be invited to speak at an event like the Boao Forum that deals with serious subjects of which his opinion is of no real value. Sure, Chan attended the forum under the guise of businessman. He is, after all, an entrepreneur and the Vice Chairman of the China Film Association, as was noted in the event program. But Chan is far from a world business leader, and any sort of substantive contributions he could make to discussions about the entertainment industry would be (and were as we saw) precluded by his interest in maintaining good relations with the CPC. Chan likes attention; he also likes doing business. Losing an audience and market like China by crossing the CPC is something Chan would never do. He is a spokesman for the government of Hong Kong, a major face of the 2008 Beijing Olympics, a huge donor to last spring’s Beichuan, Sichuan earthquake relief effort, and founder of two charitable organizations that operate in Hong Kong and mainland China. Clearly, Chan has invested a lot in his image as a patriot. Moreover, Chan has invested a great deal in his business ventures in China. He has a clothing line, restaurants, and fitness clubs to look out for. On top of all of this, Chan has his main business to protect: namely, filmmaking. China is a growing market for movies and Chan wants a piece of the action. Even with all of his patriotism he hasn’t been able to guarantee that all of his films will be shown in the mainland. So, when confronted with questions about censorship, arguably the single most important issue facing the Chinese entertainment industry today, how can anyone expect Chan not to parrot Communist drivel?
There is no excusing Chan’s comments–a fact the star may soon learn as he confronts outraged Chinese calling for boycotts against his films and live performances. He should be ashamed of having slandered his people in order to duck a sticky question and win favor with the CPC. However, the organizers of the Boao Forum should have used better judgment when selecting speakers for their event. Chan had no business speaking at the forum.
Hopefully some good comes of Chan’s reprehensible behavior. At the very least, the man ought to learn that he should be guided by morals, not the self-serving rhetoric of an authoritarian regime.
Last year was the 30th anniversary of China’s economic reform and opening up. Economic reforms introduced under former Chinese leader Deng Xiaoping in 1978 have brought tremendous prosperity to China. According to a World Bank report on China’s poverty reduction agenda, between 1981 and 2004, over 500 million Chinese were lifted out of poverty. In other words, in less than a quarter century, China helped raise a population roughly equal in size to that of the European Union out of extreme indigence. No less impressive of China’s economic successes, at least visually, are modern Chinese cityscapes. Urban areas that were once defined by drab communist-style buildings have given rise to sleek new structures that make Mao Zedong’s China seem more fable than reality. From Shanghai’s magnetic levitation train to Beijing’s Zhongguancun Science Park, the changes brought by China’s reforms are glaring. These changes or “developments” are evidence that China is, as it confidently refers to itself, a developing country. But what exactly is it developing into?
Words without Meaning
For so long the adjective “developing” has been tossed around as if there were a universal agreement on its meaning. On the contrary, the concept of national development is largely open to interpretation. The World Trade Organization (WTO) does not have definitions of “developed” or “developing” countries. Rather than define the terms and label its members, the WTO allows its member countries to each proclaim their own developmental status. Likewise, neither the United Nations (UN) nor the International Monetary Fund (IMF) has firm definitions of the terms. In the Statistical Appendix to the IMF’s 2006 World Economic Outlook report, it states that the classification of countries within the report as either “advanced economies” or “other emerging market and developing countries” “has evolved over time with the objective of facilitating analysis by providing a reasonably meaningful organization of data.” Although the UN does not clearly define “developing” and “developed” countries, its Millennium Development Goals at least help frame some subjects that may be relevant to national development. The subjects include poverty and hunger, gender equality, education, health, environmental sustainability, and international cooperation. Essentially all concepts of national development relate somehow to one, if not all, of these subjects. Yet there are no well-articulated, widely-agreed-upon pair definitions of “developing” and “developed” countries. So when we speak so forthrightly about national development it is with a murky lexicon that we craft our assertions.
The Perils of Progress
Without really knowing what it means to develop it is impossible to say if a country like China is developing or when it can be considered fully developed. It is undeniable that China is making outstanding progress in areas such as poverty reduction, economic productivity and education. And, the kind of progress China is making is generally considered tantamount to development. But what about the sacrifices China is making for this progress? When one looks at the path China is on from a cost-benefit perspective it becomes apparent that the progress the country has made over the last thirty years may be offset or outweighed by future problems.
Grave troubles are already plaguing the Middle Kingdom. Environmental degradation, while a problem during the Mao years, has intensified since the advent of China’s economic reforms. During its years of autarky China’s industrial production was mainly focused on satisfying domestic demand, no small task in itself for a country experiencing exponential population growth. After opening up to the rest of the world, China quickly found its niche in the global economy as an export-oriented industrial powerhouse. Growing demand for Chinese exports has meant massive trade surpluses for the country in recent years. But the “world’s factory,” as China has become known, has paid a serious price for its profits. In 2007, The World Bank reported that China is home to twenty of the world’s thirty most polluted cities. Smoggy skies and muck filled waterways have become the norm in many parts of China. The country’s edacious fossil fuel consumption has given it the dishonorable distinction of being the world’s largest emitter of carbon dioxide. CO2 emissions have only risen with China’s economic successes: factories burn more coal as they ramp up production and more cars are put on the road as an increasing number of Chinese accumulate the wealth for big purchases. Dioxin and other pollutants have claimed nearly 70 percent of China’s rivers, lakes, and reservoirs. And, according to environmental activist organization Greenpeace, “at least 300 million people in China do not have access to clean drinking water.” China’s severe environmental problems run the gamut from deforestation to desertification caused by overgrazing and excessive pressure on water resources. Just providing the bare necessities for 1.3 billion people in a country approximately the size of the United States would, understandably, place enormous stress on the environment. However, when the national objective is to continually raise the standards of living of over a billion people through industrial hyper-production, air, land, and water become canvasses for pollution Pollocks.
Stay the Course?
It is easy to mistakenly conclude that China’s environmental problems should be ancillary to the country’s economic productivity. Throughout history numerous countries have gone through dirty industrial periods on their way to becoming rich service-based post-industrial economies. China appears to have a winning formula that will give it the wealth needed to finance its way to a cleaner, better future. Besides, the rest of the world isn’t in any hurry to reduce carbon emissions or stop deforestation at the expense of GDP; so why should China change its tack?
Unfortunately, the world can’t afford another hyper-consumptive superpower like the United States. Truth be told, the world can’t even afford for the U.S. to continue burning through resources at its current rate. By most accounts, the world will be in a very grim place if we do not fundamentally change our consumer cultures fast. Environmental damage and resource scarcity are reaching critical levels.
In the long run, the best thing for China is for it to totally reevaluate its goals and change its conception of development. China can draw upon its many strengths to forge a new path to a more satisfying future. Chinese already drive fewer cars, own fewer major household appliances, spend less money on luxury goods, and save a higher percentage of their income than their “developed” counterparts–in the Bizarro World we have come to live in these are considered liabilities. A new, improved conception of development needs to treat such realities as positives.
Now that the world is in the midst of a financial crisis, everyone is pleading with China to consume more, with the hope that increased Chinese consumption will revitalize international trade. Ironically, just before the financial crisis, there was a massive push for combating global climate change which would undoubtedly require reining in ballooning consumption trends. It is evermore apparent that conventional conceptions of “development” are fraught with contradictions.
China has the ability to insulate itself from the schizophrenia inherent in mainstream, GDP-obsessed ideas of development. It can reject the misguided ideals that have led the “developed” world astray. No longer should China, or the rest of the world for that matter, see a new car and a big-screen TV as symbols of success or progress. But for China to change it has to want to change.
Oil & Automobiles
Regrettably, thirty years of openness have left China nearly as deluded as the “developed” countries. The ruling Chinese Communist Party (CPC) can’t seem to decide weather it wants a green environment or just greenbacks. At times, the CPC shows tremendous support for environmentalism and a more enlightened sense of progress. Other times, the Party fosters a nascent consumer culture while turning a blind eye to its negative repercussions. In June 2006, China’s Ministry of Construction ordered municipal authorities to restore bicycle lanes to city roadways. Over the years China, the bicycle capital of the world, has seen its roads flooded with cars and its bicycle lanes have fallen victim to the onslaught of new vehicles. So the Ministry’s order was a victory for clean transportation. However, in a bid to stimulate a slowing economy, China’s government lent a hand to the country’s auto sector earlier this year. In order to entice more Chinese to buy cars the government cut the sales tax on small-engine vehicles in half. Among other measures the government took to bolster China’s auto industry, it urged a more evolved credit system aimed at encouraging Chinese to buy cars on credit (fewer than 10 percent of Chinese vehicles are purchased on credit). Thus, the CPC broke two windows with one stone. First, its auto stimulus plan helped make China the world’s number one car buyer, adding to the country’s air pollution headache. Second, the government blatantly undermined the well-founded thriftiness of its people by condoning the kind of buy-on-credit consumerism that helped create the current financial mess.
Another discouraging outcome of the financial crisis has been the shopping spree Chinese companies have gone on to snatch up cheap assets while prices are low. China’s state-owned oil giants China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corporation (Sinopec) and China National Petroleum Corporation (CNPC) have been buying up oil and natural gas assets from Kazakhstan to Iraq. The companies have all been gearing up for what looks like a bright future for fossil fuels in China. According to industry news company STP Group, CNOOC plans to increase the crude oil refining capacity of its oil refining base in Huizhou, Guangdong Province. The company’s plans call for expanding the base’s crude oil refining capacity to 22 million tons from its current capacity of 12 million tons and adding 1 million tons of ethylene production capacity between 2011 and 2015. CNPC has indicated strong government support for the industry’s growth. Bloomberg reports CNPC has said the government “will offer preferential lending rates for overseas oil investments and may tap the country’s $1.95 trillion foreign-exchange reserves to help companies buy fields abroad.” In light of these events, one must conclude that fossil fuels are becoming more and more crucial to China’s development plans.
There is still hope for China, though. The country’s renewable energy industry is emerging as a true force. Despite the CPC’s backtracking on environmental spending (the government reduced its stimulus budget for environmental protection from RMB 350 billion to RMB 210 billion) Chinese wind and solar power companies are seeing reasons for optimism in their own country. The financial crisis cut demand for Chinese greentech exports but China’s domestic demand has picked up some of the slack. China is the fastest growing market for wind power and leading Chinese wind turbine manufactures Xinjiang Goldwind Science and Technology Co. and Sinovel Wind Corporation Ltd. are seeing the benefits. The good fortunes of domestic investment in wind energy have made Xinjiang Goldwind and Sinovel among the world’s top ten wind turbine manufacturers. And, as confirmed by a senior official from China’s National Energy Agency, the government is still committed to a very ambitious long-term wind power expansion plan. China aims to increase its wind power generation capacity from 10 gW as of the end of 2008 to 100 gW by 2020. The prospects for Chinese solar power technology companies also appear good. Although Chinese solar tech companies like Suntech Power Holdings Co., Ltd. and LDK Solar Co., Ltd. have seen their stock prices drop sharply over the past few months, the CPC appears to see solar power as an integral part of China’s energy solutions. Last month, the CPC introduced a substantial subsidy for energy produced by solar projects. Renewable energy as a whole is in a position to become a cornerstone of a truly evolved China. By the end of this year, China intends to obtain 10 percent of its energy from renewable sources. The fact that China is making clean energy a greater priority is encouraging. However, the rate at which it is advancing its use of clean energy may be far too slow to avoid the environmental problems it is headed towards.
Choose the Right Path
Taking cues from the “developed” world has served China well in many respects. If China had remained shut off from the rest of the world it surely wouldn’t have raised hundreds of millions of its citizens out of poverty. Nor would it enjoy many of the great technologies it has today. On the other hand, China also wouldn’t be suffering so many pollution problems. Moreover, if China hadn’t chosen to follow popular ideas of development it wouldn’t be in the incipient stages of consumerism. A consumer culture will likely bring China new troubles like obesity related illnesses, traffic jams, epidemic indebtedness and myriad mental stresses caused by keeping up with the Joneses. In fact, such problems can be seen in the country today. By no means should China isolate itself. It will, however, help China immensely if it can reject the things that we know are wrong with popular conceptions of development. The Middle Kingdom must have the courage to deny the code of “developed” and “developing” countries alike: wealth before well-being. China now occupies a position of great prominence in the world community. It has the strength and influence to help lead the world towards a better future. What is needed for China, what is needed for the world, is a paradigm shift.
Last Sunday, the Democratic People’s Republic of Korea (DPRK) launched one of its Taepodong-2 missiles. The missile passed over Japan and, according to the North American Aerospace Defense Command (NORAD), pitched its payload into the Pacific Ocean. The launch was a blatant violation of U.N. Resolution 1718 which was unanimously approved by the U.N. Security Council following the DPRK’s testing of a nuclear weapon in October 2006. The resolution was meant to halt the DPRK’s nuclear weapons and ballistic missile programs as well as encourage the rouge state to return to the Six-Party Talks.
China, which approved the resolution, responded to Sunday’s launch in an impotent manner that has come to characterize it’s behavior in the U.N. While many called for punitive measures against the DPRK, China urged calm and, along with Russia, made it clear that it would use its veto power in the Security Council to strike down any sort of stringent legislative response to the latest incidence of North Korean brinkmanship.
Surely, all involved in this predicament would like to avoid escalating the conflict. But how does ignoring the DPRK’s provocative behavior, yet again, not strengthen the country’s position as a belligerent, destabilizing force in East Asia? China needs to get off the fence. Calls for calm in difficult times are always reassuring. But, considering that North Korea’s launch didn’t catch anyone by surprise, the already calm crowd at the U.N. needs China to use its influence to show the DPRK it is playing a game of sticks-and-carrots, not chowing down at an all-you-can-eat salad buffet.
It is time for China to decide whether it really wants to be a superpower or just an economic power. Economic powers exert great influence on global economic affairs; superpowers are leaders the world can look to for guidance. So far, China has not shown that it is worthy of the leadership responsibilities inherent in the role of superpower. Its opposition to intervening in other countries’ “internal affairs,” even when it means stopping atrocious human rights abuses in countries like Sudan, Zimbabwe, and Myanmar, is the antithesis of how a superpower ought to act. Moreover, such behavior begs the question: should China be a permanent member of the Security Council, let alone a superpower?
To ask such a question might seem rash to some. But when a permanent council member actively undermines the legitimacy and relevancy of the U.N., this question must be raised. I would have raised the same question of the U.S. and Britain following the invasion of Iraq. In fact, the Iraq War is an example of what the world faces if the U.N. Security Council does not quickly become a force to be reckoned with. If the U.N. does not enforce its resolutions, if states like the DPRK are permitted to violate resolution after resolution without consequence, the U.N. will become totally irrelevant.
China is right to worry about North Korea’s commitment to the Six-Party Talks in the event of strict measures being taken against the DPRK. There is a strong possibility that North Korea will forgo future negotiations if the world does not bend to its strong-arm tactics. But, as U.S. Ambassador to the United Nations Susan Rice stated yesterday in an interview with Judy Woodruff on The Newshour with Jim Lehrer:
The U.S. view is frankly that to strengthen the Six-Party Talks and to ensure their continued viability North Korea needs to understand from this experience that the international community will uphold its end of the bargain and it needs to uphold its end.
North Korea has a long history of manipulating the international community by negotiating in bad faith and stooping to brinkmanship. The North Korean problem will not go away unless powerful countries like China and the other Security Council members put an end to North Korea’s extortionist tactics and force it to honor its commitments.
The U.N. still has the potential to bring about a more peaceful world. The institution can still fight to protect human rights, promote social welfare, and prevent violent conflicts. However, it desperately needs good leaders who are willing to stand together and confront the messiest problems facing the world. China can play a major part in these missions. It only needs to accept the responsibilities of a leader and, in addition to empowering the U.N., China could become a true superpower.
After watching the London G20 Summit last week, it is quite clear that the national leaders in attendance were carefully abiding by an unspoken rule: we came here to fix the economy…so be nice.
With a spirit of congeniality pervading the summit, Obama and the American delegation were able to discuss contentious issues with their Chinese and Russian counterparts without hitting any sticking points. In an April 1 meeting on the sidelines of the summit, Obama and Russian President Dmitry Medvedev touched on some topics that have strained U.S.-Russia relations in recent years including Iran, North Korea, Georgia, and U.S. plans for missile defense installations in Europe. Nothing major came of these discussions. And, as was the case with the Georgia and missile defense issues, on some things the two leaders had to agree to disagree.
Despite the lack of earthshaking progress, the meeting between Obama and Medvedev did produce an agreement on general U.S.-Russia relations and a joint statement agreeing to bilateral intergovernmental negotiations to work out a new, more comprehensive replacement for the Strategic Arms Reduction Treaty (START). In the new treaty, the Russians and the Americans are seeking to reduce the number of offensive strategic arms of both countries below the levels stipulated in the 2002 Moscow Treaty on Strategic Offensive Reductions. Also, the two parties expressed their intentions to include verification measures in the new treaty.
The successes of Obama’s first meeting with the Russian president, modest as they were, set the foundation for future negotiations. More than anything else, the meeting seems to have been aimed at “resetting” U.S.-Russia relations. A senior administration official speaking after the meeting between the two presidents drew attention to the apparent warming of relations between the U.S. and Russia by pointing back to the tensions that arose from the Georgia crisis: “I want to remind you also where we were six months ago when we talked about the relations being at a lowest point since Cold War times.” Clearly Obama and his delegation weren’t expecting miracle diplomacy on the sidelines of the G20. In very pragmatic fashion Obama treated the summit as an opportunity to make a positive first impression on his fellow leaders while introducing his agenda and searching for common ground on which to build.
Obama handled his meeting with Chinese President Hu Jintao in much the same way as he did his meeting with Medvedev. He stated his government’s position on Tibet and expressed his concern about human rights. The one subject of discussion that was curiously absent from Obama’s talk with Hu was currency–a topic that has gotten a lot of press for comments made by both Chinese and American officials. Similar to Obama’s meeting with Medvedev, the meeting with Hu was relatively uneventful, producing a new name for the U.S.-China Strategic Economic Dialog (i.e. the U.S.-China Strategic and Economic Dialog) and an invitation for Obama to visit China.
What is notable about both Obama’s meeting with Hu and Medvedev is how unimportant the huge issues he discussed seemed. Just last summer, stories about Tibet, China’s human rights issues, and the possibility of world leaders boycotting the Beijng Olympics ran constantly in the media. Only a few months ago conflict in Georgia looked like it might send Russia and the U.S. back into Cold War mode. Now, at the G20 summit, presidential-level discussions of these issues seemed like quaint sideshows.
Everyone at the summit appeared to be determined not to lose sight of the urgent issue at hand. Where once politicians might have butted heads on matters deemed vital to national pride or national security, at the summit no one seemed willing to get their pulse up over anything not related to the economic crisis. French President Nicolas Sarkozy, who upset Chinese officials by meeting with the Dalai Lama in Poland last December, and his delegation made amends with China by issuing a joint statement with the Chinese reaffirming the French government’s adherence to the one-China policy. Thus, a France-China conflict that had simmered since the Paris-leg of the Olympic torch relay was disrupted by protesters last spring, was put to rest.
Surely global politics have not changed for ever. One day talks of missile shields and human rights will cause politicians’ tempers to flare and dialogues to break down again. Sometime in the future outraged leaders will storm out of a summit meeting declaring their disgust with the course that discussions are taking. But, for the time being, the leaders of the world’s most powerful countries appear to be trying their best to prioritize and deal with the most serious economic crisis in generations.
When the global financial crisis began to take shape in the United States all eyes immediately turned to China to see how it’s economy would respond to the rapid deterioration of its largest market. A lot of discussion since the onset of the crisis has surrounded the extent to which China has or has not decoupled from the U.S. economy. The implication being the weaker China’s ties to the U.S. economy prove to be the better its chances are of maintaining its own robust economic growth. But there is more to the modern global economy than U.S.-China trade. In fact, one of the most intriguing stories of the last couple decades has been China’s accelerated integration with the highly-developed economies of East Asia. Although Japan remains the largest economy in the region, China is the fastest growing. In 2007, China surpassed Germany to become the world’s third largest economy behind Japan and the United States; and, if current GDP trends hold, China should claim the number two spot within the next few years–a fact that is not lost on its neighbors.
As much as China has depended on the United States as a market for its products, the export driven economies of Japan, South Korea, and Taiwan have depended on China’s increasing consumption and cheap labor for much of their growth. This has meant a boon of foreign direct investment (FDI) for China. Japanese and South Korean companies have placed considerable bets on the continued strength and vitality of the Chinese market. Toyota Motor Corporation and Honda Motor Co., Ltd., Japan’s two largest automobile manufacturers, have each established joint ventures in China with extensive manufacturing and distribution operations throughout the country. But they are not the only Japanese enterprises putting down roots in the world’s most populous country. Companies as diverse as food & beverage colossus Suntory Ltd. and pharmaceuticals giant Takeda Pharmaceuticals Co., Ltd. have also set up shop along with thousands of other Japanese firms.
Japan’s FDI (balance of payment basis) in China during the mid- to late-90s was substantial and, after a precipitous drop off in 1999, it has increased every year since, save a small dip in 2006. According to preliminary figures prepared by the Japan External Trade Organization, Japan’s 2008 FDI in China totaled USD 6.497 bln more than 18 times greater than its total of USD 360 mln in 1999. However, in terms of percentage of total outward FDI, Japan’s FDI in China has been steadily declining since 2004.
More telling than Japan’s FDI numbers are its import/export figures and no such figures are more symbolic than those of 2007. That year was a watershed in the history of world trade. It was the first year in modern Japanese history that China was its largest trading partner. Prior to 2007, the United States held that claim. Thus, Japan’s economic ties with China have grown tighter. And, having racked up USD 109.1 bln from exports to China in 2007, Japan will be hard pressed if its greatest trading partner cannot weather the current economic storm as finding new markets may be well near impossible.
South Korea’s need for China to keep steaming along may be even greater than Japan’s. Since 1988, South Korean companies have established more than 19,000 ‘New Overseas Enterprises’ in China. Of these enterprises approximately three-fourths have been established in the last eight years. The degree to which South Korea has staked its own future on that of its neighbor is astonishing. Although Japan has invested many billions of dollars in China, its total FDI for 2008 only represents 5 percent of its total outward FDI of that year. In contrast, over the past two decades nearly one-fourth of South Korea’s total FDI has been in China. Similar to Japan, South Korea is heavily dependent on the Chinese market for its exports. According to the Korea International Trade Organization, the total value of South Korea’s exports to China in 2008 was approximately USD 91.38 bln, nearly twice the total value of its exports to its next largest market, the United States. South Korea has changed its orientation so fast, turning away from the U.S. towards China, that its current trade structure does not resemble its trade structure of 10 years ago in least. In 1999, the U.S. was by far the largest recipient of South Korean exports followed by Japan and China. However, by 2008 China had leapfrogged the U.S. and Japan to become the largest buyer of South Korean exports.
Finally, even the Republic of China (Taiwan) has decided to hitch its wagon to China’s star. Despite tight government restrictions on direct investments in the People’s Republic of China, Taiwanese companies have, by both official and surreptitious means, invested heavily in China. Shu-Ching Jean Chen of Forbes.com states that “Taiwanese companies have been for some time the top investors in China, having stealthily channeled more than $100 billion worth of investment to the mainland indirectly, through third-party intermediaries.” Hence, the presence of Taiwanese companies and capital in China, while relatively inconspicuous, is significant. Moreover, Taiwan shares with South Korea and Japan a newfound dependence on the 1.3 billion consumers in China. A decade ago, China was only Taiwan’s seventh-largest trading partner. But, by 2008, China had become Taiwan’s largest trading partner and market for exports, buying up almost twenty percent of its total exports.
Japan has not thrown its lot in with China in the dramatic fashion of South Korea and Taiwan. The U.S. may no longer be Japan’s number one market but it still runs a close second and it remains the top recipient of Japan’s FDI. Regardless, it is clear that the balance in East Asia has shifted towards China. For the time being at least, decisions China makes will be as important (if not more so) to the economic well-being of the East Asia region as decisions made by the United States. Some might feel unnerved to realize that tremendous powers now lie in the hands of an authoritarian government. A certain amount of disquietude is justifiable. If the Great Leap Forward and the opening up of China’s economy have taught us anything its that things change quickly in a country with a highly centralized authoritarian government running the show. There is always the chance that the Communist Party will react hastily or inappropriately to the future economic problems that are waiting to hit China. In an effort to raise employment the Party might take protectionist measures which would most certainly hurt all the countries of East Asia. Or, in order to deflect attention from its shortcomings, the government might encourage or turn a blind eye to violent expressions of nationalism. Laid off workers in China have already began to show their anger at executives, as witnessed after lay offs at Panasonic Electronic Devices (Beijing) in late-February of this year (See Article). Anger over layoffs at a foreign company could very easily go from a workers’ rights demonstration to an anti-foreigner riot if the Party decides ‘it’s either us or them.’ The possible scenarios whereby China could make Japan, South Korea, and Taiwan regret ever having cozied up to it are countless.
To date, the Party has responded well to the financial crisis. It has sought to combat the financial crisis in a calm but proactive manner. In November of last year, China announced its USD 586 billion stimulus package. Unlike the U.S., China has also seen foreign direct investment as key to its recovery. Just last month the government, seeking to facilitate foreign investment, relaxed FDI rules. These are positive signs for all the nations of the world. It is vital to the international community that both the U.S. and China make good decisions as they try to work their way out of the current economic troubles. But it is extremely important to the countries of East Asia that China feels the weight of its responsibility as the emerging leader of the region and acts accordingly.
If you have lived in China long enough you have probably heard the ‘ethnic diversity spiel.’ It is usually given by a Chinese friend, colleague, or tour guide when any topic related to race is broached and it goes something like this: China has 56 ethnic groups the largest of which is Han. Then, almost without exception, the speaker proudly announces: I am Han.
The lesson the listener is supposed to draw from this factoid is that China is a diverse country. However, considering that more than 90 percent of Chinese are ethnically Han and the vast majority of the 55 other ethnic groups are concentrated in the peripheries of the country, it is understandable that the listener is rarely convinced.
More to the point, the kind of diversity the Chinese talk about when describing their country is not the kind of diversity most outsiders think of. In countries like the United States, Canada, France and England with long histories of relatively open immigration, ethnic diversity tends to be interpreted to mean a population composed of first, second–sixth generation citizens from all corners of the globe. Walking the streets of New York, Paris, London, or Vancouver one sees people of all races and creeds–people who are not just residents but citizens of the countries in which they live. China’s metropolises, on the other hand, are quite different. Even in the most cosmopolitan cities of China you won’t find anything comparable to a Little Italy or a Little Havana. In the major trade hubs of Shanghai and Shenzhen you will see a fair number of Japanese, Koreans, Filipinos, French, Dutch, and Germans but virtually all of these people are expats. They live, for the most part, in a separate world from the locals. Many just come and go from the country on business. Others settle with their compatriots in little pockets around their respective cities. They send their children to foreign schools, shop at foreign grocery stores and generally socialize with other expats. However, the expats, as isolated from the general populace as they are, are the closest thing China has to true ethnic and cultural diversity as most outsiders would understand it.
So what impact will China’s lack of diversity have on its future development?
For years people have been watching China, speculating about its economic growth. Some have viewed China’s increasing wealth positively, often arguing that China’s economic growth will lead to more and more political reforms and eventually democracy. Others who are more skeptical of China’s economic might warn that the Chinese Communist Party (CCP) has no intention of giving up power and that a CCP desperate to hang on to power and flush with cash to fund its military is neither good for the Chinese people nor the international community. But what most everyone agrees is that China will continue to increase its power and influence.
Long before the global financial crisis and the slowdown of China’s economy, people began to question China’s development model. By most accounts China was set to keep growing for years and years and would almost certainly surpass the United States as the preeminent world power. But when people started to look beyond GDP numbers and really consider China’s social and political issues they found reasons to doubt the inevitability of its rise to preeminence. Now, many are wondering whether, in the long run, India will be more successful than China due its well established democratic system of government. Still, it seems a forgone conclusion that the United States will not be able to maintain its position a top the world hierarchy. Either the democratic behemoth or the communist giant will win out. How could the U.S. be expected to compete? After all what does it have that neither China nor India can easily acquire? The answer is diversity.
For centuries America has been at the forefront of social development. The country itself is the greatest experiment in social cohesiveness ever. Founded by immigrants, sustained by immigrants, the United States has experienced great social turmoil and been faced with enormous social challenges due to its unique history and demographics. Black marks like the brutal conquest of Native Americans and the enslavement of African Americans have and continue to test American race relations. Bigotry and racism are still very real problems in America. Yet the diversity of the American population is exceedingly the country’s greatest strength. It has given rise to a hotbed of creativity. A hotbed that has produced such remarkable things as jazz music, the internet and the atomic bomb.
Although certain minority groups within the United States may be disgruntled with the government, the U.S. has been much more successful at satisfying its citizenry than has the Chinese government its. While the threat of violence and even terrorist acts by disgruntled minority groups exists within the U.S., that threat pales in comparison to the threat the Chinese government faces from Tibetan and Uighur separatists. During the lead up to the Beijing Olympics China was plagued by domestic terrorism. China’s official media, Xinhua, reported that during August 2008, at least 23 security officers and one civilian were killed by Uighur separatists in China’s Xinjiang Uighur Autonomous Region. Likewise, violent riots by ethnic Tibetans in China’s Tibet Autonomous Region, Sichuan and Gansu provinces illustrates the long road China has ahead of it to build a “harmonious society” with anywhere near the comparative racial harmony of America.
It is impossible to say if and when China will ever surpass the United States as the most powerful nation in the world. Maybe we are even wrong to be paying so much attention to China when it could be India that will prove more successful. Or, what if we have it all wrong? What if there is something to America’s social dynamics and, in the end, a special synergy causes it to spring up once again to lead the world? Perhaps we will learn something about power as we watch the drama of China’s rise unfold.