TV panel debate on Inside Story with Aljazeera English on 30 May amid the Asia Security Summit at the 10th Shanghri-La Dialogue of the International Institute for Strategic Studies (IISS) in Singapore from 29 - 31 May, 2015.
The other discussants were Malcohm Cook, Senior Fellow of the Institute of South East Asian Studies in Singapore and Gordon Chang, a New Jersey-based foreign policy analyst and author of "The Coming Collapse of China" in 2010.
An April 2015 report for the Belfer Centre of the Harvard Kennedy School for Science and International Affairs prepared by the Honorable Kevin Rudd, former Prime Minister of Australia, argues the following -
(a) For the first time in history, global military and economic powers no longer reside in one single superpower but are separated between a (historically-speaking) relatively young Western superpower democracy and a rising non-liberal Eastern challenger with millennia of culture and history.
(b) China's political and economic model is not about to collapse as David Shambaugh recently suggests but is likely to sustain and grow in gravitas at least in the coming decade.
(c) There is considerable "mutual assured misconception" in the strategic thinking of both the United States as the extant global superpower and China as a rising global power.
(d) China sees America as deeply opposed to China’s rise (not to say the legitimacy of the Communist Party), and driven to do whatever it takes to prevent China usurping American regional and global power. In particular, American geopolitical manoeuvres in the region seem in China's eyes to support the conclusion that the United States is secretly out to isolate, contain, diminish, and internationally divide China and to sabotage China's Communist Party leadership. The U.S. rejects that it is undermining or containing China. and instead sees China as seeking to push the U.S. out of Asia (following the "Monroe Doctrine" - Click here )
(e) Nevertheless, realism dictates that armed conflict between the U.S. and China is highly unlikely in the coming decade.
(f) But Chinese political, economic and foreign policy influence in Asia will continue to grow significantly, while China will also become a more active participant in the reform of the global rules-based order.
(g) To keep the global order on an even keel, there is a critical need for "Constructive Realism for a Common Purpose". Both countries should manage their mutual relations by developing a common strategic narrative for U.S.-China relations and by gradually building mutual strategic trust in working step by step on selected global issues of common, though dissimilar, interests, in such areas as crafting a non-mutually-exclusive and cooperative "Asia-Pacific Community".
Following on (e) above, distinguished Yale historian Paul Kennedy remarked in 2010, that “history, unfortunately, has a habit of wandering off all on its own.” A review in The Diplomat of The Improbable War: China, The United States and Logic of Great Power Conflict by London School of Economics international relations professor Christopher Coker, 2015, points out that avoiding the "Thucydides Trap" of inevitable rivalry between an extant superpower and a rising challenger spiraling out of control requires more than relying on the law of probability.
In the coming decades, therefore, much will be demanded of the vision, courage and ingenuity of the leaders of both the United States an China in managing their relations and in crafting a new global power consensus if the path is followed to peace instead of war.
Meanwhile, in the light of rising tensions between the two Great Powers over the South China Sea and China's geopolitical intentions, it is becoming more and more pressing to find a more sustainable approach to manage the situation to avoid unwanted and potentially uncontrollable escalations. China's time-honored suggestion of "Shelving Disputes, Joint Development 搁置争议，共同开发" may well offer a decisive first step in the right direction. Click here
Notwithstanding President Xi Jinping’s growing power at home and influence abroad, some top American academics are signalling China’s imminent collapse.
The quorus is led by Dr David Shambaugh, Professor of International Affairs, Director of the China Policy Program at George Washington University and Senior Fellow at the Brookings Institution, Washington D.C., in The Coming Chinese Crackup, The Saturday Essay, Wall Street Journal, 6 March, 2015.
Similar sentiments were expressed by Michael Auslin, a scholar at the American Enterprise Institute, Washington, D.C. and a columnist for WSJ.com in The Twilight of China’s Communist Party, Wall Street Journal, 29 January, 2015.
Like arguments were advanced by Peter Mattis, Fellow with the Jamestown Foundation, Washington D.C., and Visiting Scholar at National Cheng-chi University’s Institute of International Relations in Taipei, in Doomsday: Preparing for China's Collapse The National Interest, 2 March, 2015.
Rudd dismisses Shambaugh's contention of an imminent China collapse as not sufficiently evidenced. Instead he alludes to the inevitable rise of China as an unprecedented historic development where a non-Western, non-liberal global power is seen to be challenging a West-dominated global order led by the United States as the world's extant democratic superpower. To manage this historic conundrum, Rudd advances the concept of "Constructive Realism for a Common Purpose".
China collapse predictions are not new, but the prognosis by some of the world’s most respected experts on China carries traction. In Hong Kong, for example, some politicians quietly hope for China’s regime change rather than accept the government’s current reform proposals for universal suffrage.
It is therefore opportune to examine the collapse theorists’ contentions. They are largely as follows.
First, the elite seem to be voting with their feet. 64% of rich Chinese are emigrating or intending to emigrate, according to a 2014 Hurun Research report. More are sending their children to study abroad and buying overseas properties at record levels.
Second, Xi is clamping down on dissent and “universal values”—including constitutional democracy, civil society, free press and neoliberal economics. This manifests insecurity.
Third, lip service is being paid to Xi’s mantra of following “the mass line” (serving people first) and of building the “China Dream”.
Fourth, Xi’s anti-corruption campaign is unlikely to succeed as corruption is stubbornly rooted in single-party patron-client networks, a non-transparent economy, a state-controlled media and absence of rule of law. Moreover, the campaign is mainly targeting former President Jiang Zemin’s network and seems to spare the unpopular princeling camp, of which Xi is the chief patron.
Fifth, the Party’s much-needed Third Plenum reforms are spluttering as powerful vested interests continue to block implementation.
Warnings of regime collapse and national demise were in fact clearly sounded by both Xi and his predecessor Hu Jintao, along with former Premier Wen Jiabao, if the Party fails to rid itself of widespread corruption and abuse of power. See a BBC report on remarks by former President Hu Jintao in a Party Congress in November 2012, before he was succeeded by President Xi in 2013.
Shortly before Xi was installed, soon-to-be anti-corruption supremo Wang Qishan was known to have circulated Alexi de Tocqueville’s Ancien Regime and the French Revolution among top colleagues on the Politburo Standing Committee. Click here So a sense of existential crisis already permeated even before Xi took over.
The crisis mood turned critical following disclosure of criminal evidence surrounding the saga of Bo Xilai, a blue-blooded princeling. This involved not only corruption and power abuse on a wide scale but also a rumoured “palace plot” in collusion with Zhou Yongkang, then powerful public security czar and influential Politburo Standing Committee member. This is implicating many vested interests across the country and must have deeply shaken the entire Party leadership, regardless of any faction. The fear is that if not resolutely treated, the cancer of corruption would threaten the Party’s very survival, bringing down everybody. Click here
That is why the anti-corruption campaign has been so vigorous and wide-ranging, catching many “tigers” as well as “flies”. This is also why Xi had to be given sweeping powers across the board. Zhou is now formally being tried, breaking an unspoken rule that criminal charges are never laid against a former Politburo Standing Committee member.
It is understandable that there is a pervasive sense of fear and unease among many party officials who have feathered their nests in the corrupt system for decades. Some are quietly moving their assets abroad or trying to seek overseas bolt-holes for themselves or their children.
Xi’s anti-corruption drive, however, enjoys robust public support. There is no broad-based clamour for regime change. Indeed, according to PEW Research Centre’s 2014 Global Attitudes data, China (and Malaysia) citizens were the world’s most satisfied with their countries' directions. China's rating of 87% answering positively was up two percentage points compared with the year before. Click here.
At the Fourth Plenum in November last year, the Party put the Rule of Law (or Rule by Law) at the forefront. There are moves to gradually improve judicial independence by establishing circuit high courts and by elevating the powers of judicial appointments and judiciary funding from local to provincial or regional levels. Allegiance to China's Constitution is to be upheld. That means that China’s One Party model cannot be questioned under China's laws. But that doesn't mean that Party leaders are above the law, as the current anti-corruption campaign tries to show. Click here
Xi’s call to follow “the mass line” may sound confusingly Maoist. In fact, it underscores the realization that years of unbridled economic growth has created an extremely unequal and unstable society. It is now necessary to get back to revolutionary basics – power legitimacy comes from looking after the masses’ basic livelihood and well-being. Click here
Premier Li Keqiang’s work report at the March 2015 National People’s Congress registered some tangible progress, despite slower economic growth. 2014 saw 13.22 million new urban jobs created, more than the year before. Newly created businesses increased by 45.9% or 12.93 million units. Energy intensity dropped by 4.8%, the largest in several years. Contribution by consumption and services to GDP increased slightly from 50% to 51.2% and from 46.1% to 48.2% respectively. China's economic model is beginning to shift towards more moderate but more sustainable growth. Click here
Ever mindful of former USSR’s collapse, a degree of political repression is likely to stay while the Party treads into “deep waters” of reform. To China’s top leaders, Singapore’s model of gradual and orderly development often comes to mind. Click here
Xi displays remarkable confidence in steering China towards greater heights by launching a One Belt, One Road – New Silk Road grand strategy. This aims to link China by maritime and rail infrastructure to the rest of Asia, the Indian Ocean, East Africa, the Red Sea, continental Europe and Central Asia. The creation of a related China-led but inclusive Asian Infrastructure Investment Bank has attracted support from many countries in four continents, including key US allies. Nothing less than China’s historical renaissance in the realization of the “China Dream” is at stake.
Amid uncertainties of China’s trajectory, it is only natural that some may choose to take out an insurance policy of settling their offspring or assets abroad, as in the case of Hong Kong before 1997. But all the evidence seems to show that instead of imminent regime collapse, under President Xi, China may well witness around the corner a new Asian Century with China at its very centre.
Contrary to Deng Xiaoping's famous dictum of "Hiding strengths and Biding time", as a ten-ton panda, China has no option but to emerge from hiding under the bushel. Click here
But what shapes China's new-found more assertive foreign policy? Is it purely reactive and devoid of any grand design? How does China view relations with a resurgent Japan and the United States as the world superpower? Does China have a "periphery strategy"? How does China's recent Silk Road Strategy fit into these calculations?
A Special Issue of April 2015 of the European Council on Foreign Relations (ECFR) based in London summarizes succinctly what some of China's foremost strategic scholars think on these critical questions.
The story is captured by BBC online on 10 April. Considering the growing perception that America's supremacy is increasingly being challenged by a rising China, the proscription is perhaps only to be expected.
The official reason given for the Intel chip export ban is that China's supercomputer may be used to develop more powerful nuclear weapons. While there is no doubt that supercomputers may have military applications, they are also capable of being harnessed for commercial and peaceful space explorations. Please see my live interview on RT on 13th April.
"China’s public offer to mediate peace talks between the Taliban and the Afghan government marks a notable departure in Chinese foreign policy. It is the first time Beijing is taking a genuine leadership role, on its own initiative, on a geopolitical issue both sensitive and significant". Says Andrew Small, a Transatlantic Fellow at the German Marshall Fund of the United States, in a New York Times Op-ed dated 26 March, 2015. This marks another turning of China's growing global gravitas.
This is a marked departure from Deng's famous imperative of "hiding the light under the bushel, and never assuming leadership", which broadly has served China well for past decades. Now that China becomes a ten-ton panda, this dictum has clearly outlived its usefulness.
Meanwhile, China's economic influence is gathering apace in Europe, with a massive shopping spree to acquire global brands and technologies, as reported in The Economistdated 28 March, 2015.
Initial U.S. cold shoulder notwithstanding, there is a rapid global rally behind a China-led Asian Infrastructural Investment Bank, as can be seen from the following roll-call of regional and non-regional Members and applicants.
Supported by Ascent of the RMB, the Chinese currency, all these seem to suggest that the West-dominated world order, defined by American exceptionalism and the post-World War II Bretton Woods institutions of the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB), is about to give way to a new geoeconomic and geopolitical paradigm more amenable to China's growing global clout.
According to Premier's Li Keqiang's s Work Report at the March 2015 National People's Congress, China's GDP grew by 7.4% in 2014, the slowest in 24 years.
Despite slower economic growth, 2014 saw 13.22 million new jobs created in towns and cities, higher than the year before. Newly created businesses increased by 12.93 million units, an increase of 45.9%. Energy intensity dropped by 4.8%, the largest in the past few years. Consumption’s contribution to GDP increased from 50% to 51.2% while Services’ contribution increased from 46.1% to 48.2%.
These data indicate that China's economic model is starting to shift towards slower but more sustainable growth.
For 2015, GDP target growth is pitched at 7% with inflation rate at 3%. 10 million new jobs are to be created with urban unemployment to be kept within 4.5%. Trade (import-export) is to grow by 6% with concomitant income growth at similar rates. To achieve these targets, broad money supply M2 is to expand 12% or higher if necessary to provide any necessary financial catalyst.
According to Justin Lin, former chief economist and senior vice president of the World Bank, for China to become a moderately-well-off nation by doubling her 2010 GDP by 2020, a year-on-year 6.8% growth from 2014 through 2020 would be sufficient. For China to overcome the "middle-income trap", her economy could do well to maintain about 7% growth for 20 years. Click here and here
For a quick run-down of Premier Li's Work Report highlights, the following is a selective translation of a 30-point summary chart published on Xinhua.net, a state online news platform.
Amid wild speculations, China announced a relatively-mild 10.1% increase in military budget for 2015. Albeit the second largest military budget in the world, it is much less than a third of America's $526.8 billion for fiscal year 2014 Click here, representing China's military budgets' slowest growth rate since 2010. -
Year Military expenditure growth GDP growth
2010 7.5% 10.4%
2011 12.7% 9.3%
2012 11.2% 7.7%
2013 10.7% 7.7%
2014 12.2% 7.4%
Many analysts suggest that China's military expenditure, including all hidden items, probably represents anything up to double the amount. Be that as it may, China's military capabilities and sophistication still have to continue to catch up with her Western peers, commensurate with the size and outreach of her economy.
China's military expenditure in 2014 accounted for less than 1.5% in the GDP, lower than the world average of 2.6%, in comparison with 3.8% for the United States, 2.2% for the U.K. and France, and 4.2% for the Russia Federation, according to the World Bank.It also compares with the recently increased 2.8 % (for 2015) for Japan.
An article dated 18 February 2015 by Professor Danny Quah of the London School of Economics on Brookings Online shows that as China's economy at $11.3 trillion is nearly five times larger compared with a decade ago, even slowing to 7% growth will treble the increment in the absolute size of China's economy and double the size of China's potential market for exports from her trading partners.
Likewise, a 7% slower growth rate is estimated to generate 53 million new jobs, assuming the same productivity increase at 2013 levels. This would account for over 10% of the rural migrant labor pool.
So a slower 7% growth of a much larger economy may not necessarily spell disaster for China or the rest of the world.
A front-page leader in the New York Times of 4 January 2015 shows how the West is trying to read the tea-leaves of President Xi's political stance and what it would mean for China. Grasping the tail of the elephant, various commentators perceive the animal's shape as what seems a tubular, sharp-pointed, latter-day form of Maoist dictatorship. Collective leadership which has characterized China's politics in recent decades is now dead in the water, they claim.
There is a ring of truth in this prognosis. The whole truth, however, is more complex and multidimensional.
The fallacy of the New York Times article lies in its fundamental contradictions. On the one hand it fears a lurch away from the market, the rule of law and a rebound towards cultural revolutionary rhetoric.
On the other hand, it fails to note that it was President Xi who for the first time elevated the Market to a "decisive role" in the economy with policies to built a more equitable and just society (Third Plenum). It was he who mandated that to enhance Party legitimacy, the Rule of Law (or Rule by Law) needs to be upheld regardless of ranks (Fourth Plenum). It was also he who brought about the downfall of the Bo Xilai gang who trumpeted red-revolutionary fervency.
The reality is that China is now entering into a socioeconomic and political watershed with deep and turbulent under-currents. When one of the writers of the NY Times article says Xi was the guy the Communist Party wanted from the start, he was only partial with the truth.
The whole truth is that the Party has realized that without systemic reforms, not least to fight entrenched corruption and power abuse, the whole Party boat may sink, bringing everybody down. Xi was the leader chosen to do the job and he must be given unprecedented authority to overcome powerful vested interests in the system.
However, that doesn't mean China wants or has to copy the West's election-cycle-dominated and confrontational multiparty politics. Indeed, China wants to find her own development model and path towards democracy. The D-word is by no means shunted even in high-level public addresses. However, unless a better model proves to work in the unique, historical, cultural, economic and political context of China, she is unlikely to give up the one-party rule any time soon. Click here
But while the quest continues, China wants above all to maintain political stability, which is essential for the country with 1.3 billion people to try out various reform agendas. If this means cracking down on certain forces that seem to rock the boat too much at any given time, so be it.
Perhaps President Xi could be more relaxed about liberalism. But once the big genie is lightly let out of the bottle, it would be difficult to put it back again with a population the size of one fifth of mankind, including nearly 500 million peasants, many of whom remain relatively uneducated.
Xi has the weight of China''s history on his shoulders. To him, it is better to be safe than sorry. But this doesn't mean that he is turning China back towards Maoist dictatorship.