China, Myanmar and Africa

Tuesday, 20 August 2013 00:00 -     - {{hitsCtrl.values.hits}}

A recent 10-day tour of the People’s Republic of China (PRC), covering four cities – Beijing, Xian, Shanghai and Guiyang, gave a group of Sri Lankan professionals a glimpse of the potent might of the Dragon Kingdom. It contrasted with a tour one of the touring party had made in 1982 of Hong Kong, Taiwan, Singapore and the People’s Republic, which showed the same Chinese descendants of Confucius and the Emperor of the Middle Kingdom, once resplendent in the Forbidden City in Beijing, thriving under four diverse systems of government. The PRC is well on its way to dominate the world, as it did before the Europeans colonised huge parts of Asia, Africa and Latin America and fought the Opium War to force China to open up its markets. But the visitors also realised that China has to learn some hard lessons before this can happen, peacefully. The choking smog and the formidable Forbidden City in Beijing, the awesome Terra Cotta warriors and the entrepreneurial Muslim street of Xian, the mercantilist might of Shanghai and the awesome Huangguoshu water fall near Guiyang are all mind boggling, but the lessons to be learnt are something else, entirely. Lessons from Myanmar The content of the lessons can be drawn from Myanmar. As long as Burma, or Myanmar as it is now known, was under as military dictatorship, the dominant neighbour was the People’s Republic of China. Both countries share a long, lawless border. The day-to-day management of relations with Naypyidaw, Myanmar’s new capital city was delegated by Beijing to the provincial government, in the neighbouring province of Yunan and the military command located there. China has insisted that all flights between Myanmar and China are required to transit Kunming, the capital of Yunan province, notwithstanding the fact that there are direct flights from Myanmar’s Yangon (formerly Rangoon, the earlier capital) to other international airports in Seoul, Singapore, Bangkok, Hong Kong and Ho Chi Mihn City. China claimed the first call on exploitation of Myanmar’s natural resources, which also created resentment. Villages where the natural resources were located opposed the presence of Chinese managers and workers. The People’s Liberation Army was highly influential in Chinese investment in Myanmar and deeply involved in business ventures and enterprises. There is a word in international relations which describes this phenomenon – Finland-isation – how the former USSR dominated Finland and other small neighbours. Today, some analysts talk of Bhutan-isation – how India dominates Bhutan and lords it over smaller South Asian neighbours. However, when Myanmar’s military dictators began to open and liberalise their governance and the economy by negotiating with oppositionist Aung San Suu Kyi, whom they had earlier placed under house arrest and refused to recognise an election which was won resoundingly by her party, the ruling general’s found the overwhelming influence of China stifling. Over time, Myanmar, which was a virtual isolated client state of the People’s Republic of China, has today opened up its doors and is the target of investors from all over the world. This change was manifested by a session of the Davos, Switzerland-based World Economic Forum’s East Asian sessions being held in Naypyidaw recently, ironically in a brand new gleaming convention hall built by a Chinese state owned construction company and donated to Myanmar’s military junta as a magnanimous gesture of bilateral amity. The economic environment in Myanmar for foreign investors has been transformed by emerging democratic trends and the removal of most Western sanctions, earlier imposed on the military junta. This new positive investment climate was reflected by the more than 900 business executives from across the globe who gathered in Naypyidaw for Myanmar’s first-ever East Asian Economic Forum. The Chinese presence was noticeably absent; there were only 16 participants from mainland China according to the Economic Forum’s official documentation. It was during the economic summit that news broke that China’s state telecom giant China Mobile had scrapped the idea of a joint bid with Vodafone, for the tender floated by the Myanmar government for the expansion of its mobile phone network. The reason is said to be the strong anti-Chinese sentiment in Myanmar. The world’s leading mobile phone service providers are bidding for this contract, which is probably for the last frontier in mobile connectivity. Myanmar’s mobile phone service is rudimentary and this is going to be a lucrative contract. Only one in 10 Burman’s has a mobile phone. News just in is that the contract has been awarded to Norway’s Telenor and Qatar’s Ooredoo. China loses Myanmar Myanmar was at one time a part of the British Raj. It gained independence after the Second World War. It started off as a democracy, but soon after, the military took over. Before the European imperialists arrived in Asia, it was China that dominated the Asian continent, including its immediate neighbours like Myanmar. The domination of Myanmar’s economy by its powerful neighbour China was much resented during the time of the military dictatorship. But the Burmese generals had no choice. The Western world turned its back on Myanmar after the military refused to accept the popular mandate given by the voters to Aung San Suu Kyi at the last free and fair election held in the country and imposed economic sanctions , which were crippling. Only neighbours with strategic interests like China, and to a lesser extent, India, still maintained economic relations with Myanmar. ASEAN maintained a strategic influence allowing Myanmar membership. But after General Thein Sein took over as president and held out a hand of reconciliation to Aung San Suu Kyi, the West reversed its policies and reduced economic sanctions and allowed its entrepreneurs to look into investments in Myanmar and access its resources. The resentment built up over the years against Chinese domination among Burmese military men, officials and even ordinary villagers who were at the butt-end of Chinese arrogance, exploded. There were public protests at sites where Chinese investors, either government parastatals or the PLA, were exploiting Burmese natural resources, to which the military government took a very laid back attitude. China got the message. The question being asked in Beijing’s foreign policy establishment is – ‘how did we lose Myanmar?’ Dominant force in the past At one time, China was a dominant force in the world. In the Sung era (960-1126), the Chinese had a massive bout of technological innovation – gunpowder, movable type and sternpost were all discovered. This resulted in a huge surge of economic activity in the 10th to the 13th centuries. The discovery and adoption of a variety of rice which permitted two crops a year from well irrigated land led to massive surpluses being produced. On the industrial side, one scholar estimates that within a few years of the Battle of Hastings in England (1066), China was producing as much iron ore as the whole of Europe centuries later. When the Italian adventurer Marco Polo was in China at the end of the 13th century –’a sort of black stone’ – coal, was being burnt for providing heat. Chinese sailors in Sung dynasty times already used the magnetic compass. Naval expeditions were using huge seagoing sampans to reach the Persian Gulf, Aden and East Africa in the 15th century. Admiral Cheng Ho arrived in Galle in 1410 with a fleet, kidnapped the local ruler and his family and left behind a plaque in Chinese, Arabic, Tamil and Persian commemorating his visit. It is now in the Galle Maritime Museum. Gavin Menzies in his book – ‘1421 – the Year the Chinese discovered the World’ – says that there is evidence that Admiral Cheng’s fleet sailed west from Galle to Calicut and on across the Indian Ocean to Malindi on Africa’s east coast and Sofala near Madagascar, and even rounded the Cape. This was the height of ancient Chinese oceanic power. Thereafter, China turned inwards – the limitations of the Confucian ethos, the overconfidence and arrogance buttressed by great resources and remoteness made it difficult for China to learn from outside. In the early 15th century, the Ming dynasty by imperial decree forbade Chinese ships to sail beyond coastal waters. Chinese shipyards lost the technological capacity to build the big ocean going sampans. Admiral Cheng Ho’s groundbreaking voyages were forgotten. This vacuum was filled by European explorers who heralded the European colonisation of Asia, in search of spices. They were competing with Arab traders who held the monopoly up to then. In the Indian subcontinent also, there was no large naval power, compared with the Chola or East Asia’s Sri Vijaya empires of earlier times. From around 1500 to the time of the Second World War, Europeans dominated the sea lanes of Asia. For the next few decades, the United States of America and the USSR divided the world into spheres of influence. Japan, secure under US protection, dominated world trade, the East Asian miracle and the crash soon followed. After the break-up of the Soviet Union, the United States dominated, until China emerged. China’s liberalisation After China’s economy was liberalised, it allowed private business, agriculture and animal husbandry, and foreign investors were allowed to come into the coastal areas adjoining Hong Kong and open up factories for labour-intensive manufacture, exploiting China’s vast pool of cheap labour. China’s rise as an economic powerhouse was preordained from the day Deng Hsiao Ping unshackled the economy in 1979. Indigenous Chinese capitalism re-manifested itself, last seen in the pre revolutionary days, in Shanghai and Hong Kong, along with private businesses, affluent consumers, humming export factories, stock markets, which are the darlings of investors and Chinese bureaucrats and officials in business suits, female consumers in the latest Western fashions, a change from Mao’s tunic. The China Price is something no other nation-based manufacturer can match, such as the Shanghai and Guangzhou World Trade Fairs. China, however, has abandoned Deng’s advice: “China should adopt a low profile and never take the lead”, for a much more aggressive international posture. Other than in and around China’s immediate neighbours like Singapore, Malaysia, Thailand, the Philippines and Indonesia, where the presence of a large Chinese Diaspora facilitated the expansion of influence, China pushed even further out, into Southeast Asia, Laos, Cambodia and Vietnam. As China’s foreign reserves and terms of trade improved, China went further afield to Sri Lanka, the Maldives and even West Asia and Africa, which was a key source of raw materials for China’s industry. Lessons from Africa There are lessons from Africans too, where in the same manner as the Burmese, Africans have expressed reservations about China’s dominant influence. Nigeria’s Central Bank Governor recently commented: “Africa must shake off its romantic view of China and accept Beijing as a competitor as much as a partner capable of the same exploitative practices as the old European colonial powers.” Governor Lamido Sanusi reflects the growing number of senior African bureaucrats who fear that Africa’s emerging industries are being drowned in a sea of cheap industrial products from China. He further said: “Africa is opening itself up to a new form of imperialism; China takes primary goods from us and sells us manufactured ones. This was also the essence of colonialism”. An estimated one million Chinese reside in Africa today, up from a few thousand a decade ago. Sanusi went on to say that “China is no longer ‘a fellow underdeveloped economy’; China is the second largest economy in the world, an economic giant capable of the same forms of exploitation as the West. China is a major contributor to the de-industrialisation of Africa and thus, African underdevelopment.” Sanusi says that Africa must respond to Chinese predatory trade practices such as currency manipulation and subsidies, which give Chinese exports an advantage. He commented: “The days of the Non Aligned Movement that united emerging nations after colonialism are long gone. Africa must realise that China – like the US, Russia, Britain, Brazil and the rest – is in Africa not for African interests but its own.” Between Africa’s Sahara desert (in the north) and the Kalahari desert (in the south) lie many of the raw materials desired by China-based industries. 90% of Chinese imports from Africa are minerals. 30% of Africa’s imports from China are machinery and electrical goods, textiles, chemicals, plastics and rubber. China is Africa’s top business partner, with trade exceeding US$ 166 billion. In Ghana, a crackdown on Chinese gold miners by Ghanaian authorities and hostility from local villages has led to arrest and deportations of Chinese citizens. Ceylon’s early apprehensions There always have been apprehensions over Asian imperialists. Way back in 1947, Ceylon, expressed concerns over the domination of Asia generally and South Asia specifically, by India and China. The issue was raised at the Asian Relations Conference held at New Delhi in March-April 1947. The Ceylonese delegation expressed concerns that small countries in Asia might be faced with aggression, not necessarily political, but economic and demographic, by their big brothers like China and India. Ceylon, at the time, was having a running battle with India over the nationality of the Indian plantation workers and traders living in the island. Although China had made assurances that Chinese immigrant communities would never seek political power in other Asian states they were residents in, the subsequent history of Malaysia, Singapore, the Philippines, Indonesia and Thailand presents a contrary story. The Burmese delegation spoke of apprehensions of brown or yellow exploitation replacing white colonial exploitation. But in ancient times, there have been contacts – the earliest recorded mission from China to Sri Lanka took place during the time of the Han Dynasty’s Emperor Ping (1-6 CE). Between the first and 10th centuries, Sri Lanka’s kings, it is recorded, sent at least 10 missions to the Middle Kingdom. In the fifth century, the Buddhist scholar Fa Hsien visited the Maha Vihara in Anuradhapura. Archaeological evidence at Anuradhapura, Polonnaruwa and especially Yapahuwa has turned up Chinese artefacts such as ceramic ware and coins belonging to the Sung dynasty. Chinese seagoing sampans would have berthed at Gokanna, the modern Trincomalee, and traders would have gone cross country to Anuradhapura to trade with traders from the West, Jews, Moors and Europeans, who also came to Anuradhapura over land after their vessels docked at Manthai, the modern Mannar. The South West and North East monsoon winds would have propelled these vessels. Dependence on monsoon wind power meant that the traders would have been compelled to stay in Sri Lanka during the inter monsoon period, their prolonged presence would have a substantial impact. Anuradhapura had a separate area for traders designated by royal edict and special taxes were levied on foreign traders at the ports of Manthai, Gokanna, Magampura and in the capital city Anuradhapura. The pair of guardian lions at the bottom of the ascent of the stairs to Yapahuwa bears a striking resemblance to ancient Chinese sculptured lions. Growing Chinese influence Whatever the ancient history, how can one discount the Rubber Rice Pact, the initiative to settle the border war between India and China, the BMICH, the assistance provided in the war against the LTTE, ships, aircraft, weapons and armaments, NORINCO’s store at Boosa in Galle of T56s and ammunition, which were supplied on a payable when able basis, the Nelum Pokuna Centre for the Performing Arts at the former CMC grounds in Colombo, Hambantota Magampura Harbour, Mattala airport, Hambantota’s international conference centre, Norochcholai, loans, equipment and grants for Maga Naguma. Today, China has a huge footprint in Sri Lanka. Chinese construction workers have been issued work visas to undertake construction projects in Sri Lanka. Financing, in the nature of grants, concessionary and commercial loans from Chinese state banks are flooding the country. The Chinese construction workers have generally received bad press in Sri Lanka. Reports of protected animals like pangolins, tortoises and monkeys, considered delicacies in China being killed for consumption, lack of adequate safety standards, Chinese workers being killed on construction site accidents etc. turn public opinion negative. How such behaviour in Myanmar and Africa led to total alienation is a good case study for both Sri Lanka and Chinese policymakers. The lessons from Myanmar and Africa should be closely studied by concerned Sri Lankan policymakers. China, by its close collaboration with the military dictators, built resentment among the Burmese people. In Africa too, the people are beginning to see the downside of Chinese investment. Overwhelming economic influence, if not handled sensitively, can have negative consequences. For the PRC to be a positive force in its inevitable world dominant role, the sooner these lessons are learnt in a peaceful and constructive environment, the better for us all. (The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)