China reaches out

Tuesday, 16 September 2014 00:01 -     - {{hitsCtrl.values.hits}}

President Xi of China is scheduled to visit India and Sri Lanka. The Middle Kingdom of ancient times is asserting itself on the world stage. The current leaders of China are driven by a ‘manifest destiny’, a strategic view that China is destined to play a dominant role in their region and the world. Historically, from the time of the Emperors, China has considered the rest of the world, including its neighbours, especially those untouched by Chinese culture, as inferiors. For over 2,000 years, what is now called the South China Sea has been a meeting point for diverse cultures and for global trade. A more historically accurate name for that expanse of ocean would be ‘Malay Sea,’ since it was the Malays of Malaysia, Indonesia and the Philippines who traversed this stretch of ocean on a regular basis. The Portuguese were the first Europeans to reach this expanse of ocean, and they knew it as the Cham Sea, so called after the Hindu, Malay-speaking mercantile state which was located in a part of today’s Vietnam. The South China Sea is known to the Chinese as the South Sea, to Vietnam as the East Sea, to the Philippines as the West Philippine Sea – it lacks a neutral name! China today is establishing footholds far from its own shores, in this part of the ocean, to allegedly try to turn it into a Chinese lake! China’s claims, which extend to rocks and shoals located within a few miles from the coast of the Philippines, Malaysia and Indonesia, are asserted by a history of alleged visits by Chinese fleets, which ignores the non-Chinese people who for millennia have been the region’s principle inhabitants. It is indeed remarkable in historical fact, how little direct impact China made in this region. The visitors from the Indian sub continent brought the first extraneous cultural wave into this part of the world. They made Buddhism, Hinduism and Indian scripts pre-eminent. Traders from the Arab and Persian markets chasing the spice trade were next, bringing Islam. Hot on their heels, aggressively trying to dominate the spice trade, came the Europeans. The Chinese did not play a big role, other than during the early Ming Emperor’s period, when Admiral Zheng He took his massive armada fleets around the world, arriving at Galle in southern Sri Lanka and taking captive the local satrap and leaving behind a plaque in Arabic, Persian, Tamil and Chinese, to be found in the Galle Maritime Museum to this day. China’s centralised power China’s centralised power goes back a long time. In 221 BC, when China was first unified, in Europe, Rome was still fighting Carthage over the western Mediterranean. Later Rome collapsed, China too collapsed many times, but by the end of the Han dynasty in 220 AD, the Emperors had institutionalised the teachings of Confucius, which emphasised the value of social hierarchy and personal morality, as the basis of government. By the Tang dynasty in the 7th century, China was one of the most illustrious and wealthiest nations. However, China did not industrialise in the way Western nations did. Although Europe learnt of gun powder from China in the Middle Ages, by the 19th century Europeans were far more skilled in using gun powder for military conquests than China. Britain used force upon China in the 1830s, forcing China to open its doors to trade and addictive opium from India. In 1842, Britain grabbed Hong Kong. In the 1890s Japan humiliatingly defeated China in battle. The victory of Maoism in 1949 can be connected to this humiliation, among other factors. As a further reaction to this alleged international humiliation, China seems to be emulating the policy laid out by American President James Monroe, the ‘Monroe Doctrine’. Monroe prescribed a policy of refusal to countenance any interference in the Western hemisphere, America’s backwater, by any European nation; all such inclusions would be treated as acts of aggression. Conceptually there are similarities between China’s policy in East Asia and the Monroe doctrine. When President Xi, at his 2013 California summit with President Obama, said that ‘the vast Pacific has enough space for two large countries like the United States and China’, some analysts say it was not only holding out the possibility of peaceful coexistence, but also an assertion of China’s legitimate interests in the region; interests which it has always had, but not aggressively promoted, until recently. There is an asymmetry; the USA has four of its 10 air craft carrier groups stationed in the Pacific, while China is still building its first one. But the direction in which China is heading is clearly indicated. There are linkages between President Xi’s controversial attempts at home to clamp down on corruption and ram through tough economic and financial reforms. A foreign distraction is often useful to distract critics of domestic policy. There are always linkages in consolidating power at home and throwing a nation’s weight around abroad. An international equivalent of ‘bread and circuses’! China spreading its influence China is spreading its influence in a planned and structured manner to all parts of the globe. It is using its fast-developing economic power to expand its influence in both economic and political terms far beyond the Asian region. Analysts claim that in 2011 China was the world’s sixth largest international investor. Sri Lankans are well aware of the strong influence China has over Sri Lanka’s economic development. Through a mixture of grants, soft and commercial loans, China is involved in a large number of infrastructure development projects in all parts of Sri Lanka. Politically, too China is asserting itself. Recently the Chinese Ambassador in Sri Lanka met with the leaders of the Tamil National Alliance shortly after the TNA team had returned from India after a series of meetings with political leaders and officials. The TNA team has told the newspapers that the meeting was at the express request of the Chinese Ambassador. The TNA stated that they had covered a lot of ground in discussions with the Ambassador, including the visit of the TNA delegation to India. China is expanding its sphere of influence in all parts of Asia. There is an ongoing dispute over some rocky outcrops in the South China Sea, the Scarborough Shoals, around the Philippines, Vietnam, Japan and Taiwan. The row between Japan and China over five islets that lie between them resurfaced again recently, when the Japanese Government decided to buy the three islands it does not already own from their private owner. China reacted with outrage and sent two naval patrol boats to waters near to the islets, which the Japanese call Senkaku and the Chinese call Diaoyu. A Chinese newspaper, the Global Times, recently went as far as to question Japanese sovereignty over the prefecture of Okinawa! The dispute borders around both countries’ Exclusive Economic Zones, in terms of the Law of the Sea Convention, ratified in 1982. On the Asian mainland, China is extremely conscious of the potential effect the democratisation of Myanmar, promoted by the ASEAN nations and the Western liberal democratic nations, may have on the region. Internal unrest in Tibet, fuelled by a spate of recent self-immolations, and an ongoing dispute with India over the Indian state of Arunachal Pradesh are also live international political issues. The Indian Army is raising a number of new mountain divisions to station on the border with China and in Ladakh. 2012 being the 50th anniversary of the 1962 invasion of India by the People’s Liberation Army of China, there is a resurgence in India, among the media especially, on the 1962 episode, where the PLA advanced into India, gave the Indian Army a bloody nose and pulled back into China. It is reported that Deng Hsiao Ping, visiting the United States, had mentioned to President Jimmy Carter that China, which was having a border dispute with Vietnam at that time, would teach Vietnam also a lesson in the manner China taught India a lesson in 1962. True to form, the PLA advanced across the China-Vietnam border shortly thereafter. The battled-hardened Vietnamese veterans of the Vietnam war against the US put up a spirited defence, unlike the ill-prepared, ill-equipped and badly-led India forces in 1962. To the north, while relations with Russia seem stable, there is a history of border disputes, while with Mongolia, China has ongoing issues over access to Mongolia’s humongous mineral wealth, which Chinese-owned, both State and corporate entities, are eyeing. The freedom of the seas also has become an issue to China, with over 70% of its raw materials and oil and gas coming through the southern seas and the Straits of Malacca. One Chinese leader referred to this as ‘China’s Malacca Dilemma’. The Chinese also have deployed naval assets to assist the international policing operation against Somali pirates off the coast of East Africa, mainly in self-interest, to protect its shipping routes. The first Chinese aircraft carrier is undergoing sea trials. The Chinese interest in the political unrest in the Maldives Islamic Republic is also said to be based on the fear of the possibility of Islamic fundamentalist pirates locating themselves on an uninhabited Maldivian atoll and preying on ships carrying raw material to China across the southern seas. China’s demographic shift In China, today, non-State owned businesses are prospering, while State-owned enterprises are in retreat. Over the next few years China will undergo a huge demographic shift. The proportion of people over 60 in the total population will increase from 12.5% in 2010 to 20% in 2020. A Report by the Chinese Academy of Social Sciences says that China’s ‘demographic dividend’ – the availability of lots of young workers which helped fuel economic growth – will soon disappear. Many Chinese are now familiar with the concept of the ‘Lewis turning point,’ named after an economist from St. Lucia, in the Caribbean, Arthur Lewis, who said that industrial wages will start to rise quickly when a country’s rural labour surplus dries up. Already this has been seen in China; manufacturing industries are moving away from the coastal areas, where they were first promoted, as rural migrants no longer leave their villages and migrate to work in the sweat shops on the coast. Factories are being moved inland, where labour is more plentiful. However, the new system, by which farmers are allowed to market their surplus produce on their own, has seem a rise in rural small farm incomes, and such agriculturalists are reluctant to work long hours in factories. The one child policy implemented for many years has resulted in a fast-rising population of retired people, whose pensions will have to be paid for by taxes raised from a shrinking pool of current workers. This policy has now been relaxed. A big increase in the age of retirement in China is long overdue. The official retirement age of 60 for men and 50 for women was fixed in 1951, when the average life expectancy in China was 46, compared to today’s 73. These are the pressing economic and social issues facing China. Battle lines are clearly drawn Zhu Feng, an international affairs expert at Beijing University has said: ‘We are the 800 pound gorilla in the room. China is learning to be a great power.’ Teufel Dreyer, a Professor at the University of Miami, says, of China: ‘There is a debate at the top. Some leaders assert that China must assert its interests in a more straightforward way, to get its hands on resources it needs to power its economy. Others say the country must continue to give priority to domestic development and solving internal social challenges.’ Recently Red Princeling and former Chairman of a State-owned company, Qin Xiao, now heading an independent think tank – the Boyuan Foundation – made a speech at one of China’s most prestigious universities, Tsinghua, accusing the party hierarchy of substituting the enlightened values of democracy, freedom and individual rights, with ‘Chinese’ ones such as stability of the status quo and the interests of the State being paramount. Qin founded the Boyuan Foundation in 2007, together with investment banker and Red Princeling He Di, saying that ‘China needs someone to stand up and speak’. Quin in an interview with a newspaper published in Guangdong Province, the Southern People’s Weekly, said: ‘The Arab Spring showed that no matter how well a country’s economy performed, people will not accept dictatorial, corrupt government.’ Also Wang Changjian, a scholar at Communist Party’s training academy for cadres, has pointed out that there seems to be a phobia against political reform. In China the battle lines are clearly drawn between the Universalists, who believe China must eventually converge on democratic norms, and the Exceptionalists, who believe that China must preserve and perfect its authoritarianism. While Qin and the Boyuan Foundation represent the Universalists, Zhang Weiwei represents the Exceptionalists. Zhang recently wrote China’s evolution should be ‘as if the Roman Empire had never collapsed and had survived to this day, turning itself into a modern state with a central government and modern economy, combining all sorts of traditional cultures into one body with everyone speaking Latin.’ This Exceptionalist point of view, which is a confluence of nationalism, rapidly-growing military capability and deeply-held feelings of victimhood are worrying. However, Chinese officials keep articulating the need for a ‘harmonious world’ and decry the use of military force to resolve disputes. Where will China be in 20 years? It is interesting to see where China will be in two decades’ time. Will the Exceptionalists carry the day and will China end up being a seething pot of nationalist hate, bent on taking revenge from the world, for the past injustices imposed on China by the imperialist powers? Or will the Universalists win through and, will China end up a rich and affluent, extra large size ‘XL’ Singapore Inc., with warlike intentions only being manifested in corporate board rooms? Non-Chinese planners project that China in 20 years will be a near peer power, bumping up against the United States of America in terms of economic and military capability, having aggressive intentions with its neighbours and nation states which do not do China’s bidding, perceived to be within its legitimate sphere of influence, like Sri Lanka. But change can be difficult. Consider the events in Hong Kong, where the Occupy Central Movement is pushing for China to honour its treaty commitments to Britain, on Deng Hsiao Ping’s ‘one country , two systems’ and ensure the survival of the democratic attributes of Hong Kong, voting through universal franchise for leaders, an independent public service and judiciary, a free press, etc. Ratcheting up the profile of China in the international sphere will prove equally difficult. For example, China has vetoed interventions Western powers sought in Syria and Darfur, but has not taken a position of Putin’s antics in the Ukraine, although China takes a dim view of such centifrugalism within China! Steering China through this maze of contradictions will not be easy. President Xi has a challenging agenda before him. Challenging neighbours and building alliances with friends further away may turn out to be a useful distraction for the Communist Party cadres. (The writer is a lawyer, who has over 30 years of experience as a CEO in both State 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.)