In the past, China's economy has been largely self-sufficient. It has been able to live in isolation from the outside world, and has often done so. Even at the height of its imperial power, China spread its culture by diplomatic and economic relations rather than by military conquests, as noted by Edward Luce in his book The Retreat of Western Liberalism. This approach to foreign policy has continued until now.
China strives for a multipolar world, characterised by equality amongst countries. It regards sovereignty as the cornerstone of the international order and rejects any interference in the internal affairs of another country, for whatever reason. It is worth noting that China is the only permanent member of the UN Security Council that has not fired a single shot outside its own borders in the last 30 years.
Today, China is no longer so self-sufficient. While 18% of the world's population lives in China, the country holds only 7% of the world's arable farmland, and imports just 5% of the world's oil, while producing far more goods than it consumes. For all these reasons, China today is highly dependent on world markets.
The BRI is by far the largest development program since the Marshall Plan for post-World War II reconstruction in Europe.
China's dependence on world trade and the (in essence) military “encirclement” of the US (see below) has prompted China to take the initiative for a New Silk Road. Two thousand years ago, during the Han Dynasty, the original Silk Road connected China to the Mediterranean Sea via Eurasia. Like the historic trade route, this new Belt and Road Initiative (BRI), launched in 2013, has also become a vast network of sea and land routes.
At the same time, there are over 1,600 projects under way in construction and infrastructure works, transport systems, airports, seaports and also cultural exchange initiatives. Hundreds of investments, loans, trade agreements, as well as dozens of Special Economic Zones (SEZs), worth a total of US$900 billion, are spread over 72 countries, covering approximately 3 billion people, or 65% of the world's population. The BRI is by far the largest development program since the Marshall Plan for post-World War II reconstruction in Europe.
Today, China has 20 times more merchant ships than the US, making it the largest merchant fleet in the world.
Martin Jacques describes the New Silk Road as Chinese-style globalisation. The BRI is strongly reminiscent of the Netherlands' trade strategy 400 years ago. At the time, the British and French were literally on the hunt for land to conquer. They organised military campaigns to subdue societies and steal wealth. Amsterdam, on the other hand, was striving for an “empire of trade and credit”. It was not about territory, but about business. In the seventeenth century, the Dutch built a gigantic fleet, installed trading posts on major routes, and then tried to secure them. Angus Maddison (The World Economy: A Millennial Perspective) and Parag Khanna (Use It or Lose It: China's Grand Strategy, Stratfor, 9 April 2016) both note that the Netherlands then had 25 times more ships than England, France and Germany combined.
Today, China has 20 times more merchant ships than the US, making it the largest merchant fleet in the world. The SEZs are “commercial garrisons of a supply chain world, enabling China to secure resources without the messy politics of colonial subjugation,” says think tank Stratfor.
Changing North-South relations
China's enormous growth in the heart of Asia has acted as a catalyst for the entire continent. The world's economic centre of gravity is shifting rapidly towards the poorer economies of Asia, dramatically increasing demand for raw materials, to the benefit of many countries in Latin America and Africa.
The industrialisation of East Asia shows the “flying geese” pattern. As a country upgrades economically, wages rise and less sophisticated production tasks shift to poorer regions with lower labour costs. This first happened in Japan, then in South Korea and Taiwan, and today this process is in full swing in China. And because of rising wages, Chinese companies are now relocating production to countries such as Vietnam and Bangladesh, and also increasingly to Africa. If this trend continues, an industrial base on the African continent is possible.
Confronting US hegemony
Most socialist revolutions did not occur in the heart of capitalism, but in the poorest and most underdeveloped countries. An advanced social system then had to be built on a weak economic foundation, which led to many handicaps and contradictions.
In China, that situation has changed radically in 70 years. China's technological leap and spectacular economic growth have laid solid foundations for building a socialist society.
Of course, Washington is not thrilled. Even worse, China is threatening to surpass the US economically. All this is feeding the “new Cold War” between the US and China with the threat of a “hot war”.
During the 2019 budget discussions, the US Congress stated that “long-term strategic competition with China is a principal priority for the United States”. This is not only about the economic aspect, but about an overall strategy conducted on several fronts. The aim is to maintain dominance in three areas: technology, the industries of the future, and armaments.
Trump is aiming for a full reset of the economic relations between the US and China. The growing trade war is the most striking, but it is only the leading edge of a larger strategy that includes Chinese investment in the US and vice versa. In the first place, the strategic sectors are being targeted, with the aim of disrupting China's technological advance. In this respect, the rollout of the 5G network is crucial. It is no coincidence that Huawei, which is far ahead in the development of 5G technology, has become a central target.
The Trump government is also trying to extend this economic war with China to other countries by having restrictive clauses signed in trade agreements or by simply putting pressure on them. The aim is to create an “economic iron curtain” around the country.
An arms race and a military encirclement
The US military strategy towards China has two tracks: an arms race and a military encirclement. The arms race is in full swing. The US spends US$650 billion a year on weapons, or more than a third of the world’s total. That is 2.6 times as much as China, and 11 times its per capita spending. It also spends US$150 billion a year on military research, five times as much as China. The Pentagon is feverishly working on a new generation of highly sophisticated weapons, drones, and all kinds of robots, which a future enemy will not be able to cope with. A pre-emptive war is not excluded.
The second track is military encirclement. For its foreign trade, China depends for 90% on maritime transport. More than 80% of its oil supply has to pass through the Strait of Malacca (near Singapore), where the US has a military base. Washington can easily cut off oil flows to China. Currently, the country has no defence against it. Around China, the US has more than thirty military bases, facilities or training centres. 60% of the total US fleet is stationed in the region. It is no exaggeration to say that China is encircled and squeezed. It is unimaginable what might happen if China were to install even one military facility, let alone a base near the US.
It is in this context that China’s militarisation of small islands in the South China Sea should be seen, as well as its claim to a large part of this maritime area. Controlling the shipping routes along which its energy and industrial goods are transported is of vital importance to Beijing. It is in that same context that the New Silk Route must be seen.
Participation in environmental protection efforts
Since the end of the 1980s, China has entered a phase of development that has caused great environmental pollution. As the “factory of the world”, it is one of the biggest polluters on the planet. At present the country is also by far the largest emitter of carbon dioxide, albeit emissions per person are less than half of those of the US and about the same as Europe. China is also responsible for only 11% of cumulative emissions, compared with more than 70 percent for industrialised countries.
The situation is untenable. At the current rate, between 1990 and 2050, China will have produced as much carbon dioxide as the whole world did between the beginning of the Industrial Revolution and 1970, and that is catastrophic for global warming.
Ten years ago, the Chinese leadership changed course, and ecological issues were given high priority. In 2014, the “War on Pollution” was declared by Prime Minister Li Keqiang. A battery of measures is being drawn up, including trend-setting legislation on the environment, but its application is not always self-evident.
China has very quickly come top in harnessing solar and wind energy, in terms of global share and domestic capacity. Currently, 33% of its electricity is generated by green energy, compared to less than 17 percent in the US. China today invests about as much in green technology as the rest of the world combined. It wants to capture and store millions of tons of carbon dioxide underground in the near future.
According to NASA, China's sustained reforestation efforts have made an important contribution to global forestation, which is essential to keep emissions under control. The country is also a pioneer in the long-distance transmission of large amounts of energy (e.g. from distant solar panel fields), which is very important for the green energy supply of cities.
When Trump withdrew from the agreement in 2017, Beijing declared that it would work with others, including the European Union, and achieve the goals of COP21. The Paris Climate Accord (COP21), aims to limit global warming to a maximum of 2 degrees Celsius, with 1.5 degrees as its target.
China is also on track to comply with the agreements of the Paris Climate Agreement to reduce carbon dioxide emissions by 65% by 2030.
China also acts as a negotiator between industrialised and developing countries. It argues that global warming is a historical responsibility of industrialised countries, and they should make financial resources and technology available to developing countries in order to combat climate change. This encourages a large majority of developing countries to align themselves with the objectives of COP21 and submit climate plans to the UN General Assembly.
Clearly, China still has a long way to go, but it is moving in the right direction, as seen in the report in mid-2017 that China has achieved its climate targets two years before the agreed date of 2020. China is also on track to comply with the agreements of the Paris Climate Agreement to reduce carbon dioxide emissions by 65% by 2030.
A deviating China will transform the world
China has made many mistakes in the past 70 years. Initially, the Communist Party of China (CPC) tried to introduce socialism hastily with the Great Leap Forward (1958-1961), with catastrophic consequences. The left-wing extremism of the Cultural Revolution (1966-1976) left deep scars and led to a right-wing reaction. The introduction of market elements from 1978 onwards has given capitalist exploitation great rein. The consequences were far-reaching: a huge gap between the rich and the poor, and the creation of a top earning layer of capitalists. The room for pursuing personal gains grows exponentially and has led to rampant corruption and abuse of power. Nevertheless, this policy has allowed the Chinese economy to grow spectacularly and has dramatically reduced extreme poverty. Whether this controlled market-oriented dynamic can be kept in check remains to be seen.
The Chinese leadership has succeeded in keeping the vast and very heterogeneous country together, but this was and is done by keeping certain minority groups tightly in line. Tibetans and Uighurs feel like second-class citizens, even though there have been efforts by Chinese authorities to improve their situation. Quite a few questions remain about the unorthodox and tough approach to ethnic tensions.
For the first time in recent history, a poor, underdeveloped country has rapidly developed into an economic superpower, and is having a major impact on world affairs. China, and in its wake India, is rapidly changing the balance of power and transforming the world in an unprecedented way.
The more China follows its own course, the more it deviates from the West, and the more it holds up a mirror to the “Western system”, the more it is criticised and attacked. It seems to be very difficult for us to be open-minded about this new world player. According to Mahbubani, “the reluctance of Western leaders to acknowledge that Western world domination cannot continue is a major threat”.
Yet the West will have to learn to live with the realisation that it is no longer the centre and benchmark of the world. In fact, with the rise of populism, debatable leaders such as Donald Trump, Jair Bolsonaro, and Boris Johnson are taking the reins. In short, the stability and liveability of this planet will increasingly depend on the voices of leaders from the East such as Xi Jinping.
Figures: Marc Vandepitte and Ng Sauw Tjhoi. Reproduced by Jace Yip.