China in a multipolar world

Xi
There is no doubt that the Chinese government strikes hard against terrorists like the ones in Paris. China’s long-term strategy however is a policy of peace, based on economic relations and non-intervention. ‘Our values versus theirs’ is not something we are going to hear from Beijing as a response to the terrorists’ invitation to have a full-grown clash of civilizations. Does China’s global strategy offer a hopeful alternative or might it be an illusion, an incorrect choice of priorities? This question was at the heart of a debate that took place at the Manifiesta-festival organised by the Workers’ Party of Belgium near Ostend in September. Two Marxist-inspired analysts sometimes agreed, then disagreed in their answers to those questions. Jenny Clegg, author of China’s Global Strategy: Towards a Multipolar World, entered into the debate with Jo Cottenier of the Workers’ Party of Belgium. The first contribution is Jenny Clegg’s, the second Jo Cottenier’s. The latter contribution has been developed into a new article. The two pieces are followed by questions that came from the floor at the event.

* * *


Jenny Clegg

Less than 100 years ago, China was known as the sick man of Asia, the object of imperialist intervention and division. Today we see China poised to overtake the US as the world’s largest economy, emerging as a major power, starting to take significant steps to shape the world’s future.

Looking to the future, you turn one way and see the US and China edging ever closer towards collision. Looking the other way, you see great transformations in Asia, Africa and also Europe.
China has brought about an astonishing poverty reduction having already lifted more people out of poverty than anywhere else in the world. It accounts for more than three-quarters of global poverty reduction, this being the chief reason why the world reached the UN Millennium Development Goal of halving extreme poverty. Yet China is still marginalized in the political debate in the West.

In 1979, Deng Xiaoping recognized that China was just at the first stage of building socialism, a period which would last for a protracted time. Following the world financial crisis of 2008, things however are changing faster than previously thought. This gives US strategists, who see a China threat looming, much less time to react. So they have taken a pivot to Asia and are building up their military alliances with Japan, Taiwan, the Philippines. China however will actually remain a Third World country for a long time, militarily backward and with a weak soft power, a country that has to feed 20% of the world’s population with the produce of 7% of the earth’s arable land. Let’s endeavour to bring into focus China’s place in the world, in the current context of the international situation. How we understand this context will shape how we understand China.

By its scale and speed China’s development is achieving in decades what it took other countries centuries to attain.

Undoubtedly China’s growth has been driven by cheap labour and labour intensive exports, mainly under western brands. It has also been driven by investment squeezing down consumption. It has brought with it serious pollution, inequality between towns and countryside, uneven growth in different regions, corruption, inefficiency and waste. This was recognized by China’s leadership. In 2007 prime minister Wen Jiabao described China’s economic growth model as unsustainable, uncoordinated, unbalanced, and unstable. The decision was taken to slow the rate of growth, shifting from one set of pillars, exports and investment, to a new set of pillars: innovation (plus high tech exports), services and consumption. China was to shift from traditional industries of iron, steel and coal towards the emerging sectors of green tech and advanced IT-systems. In order to support innovation and emerging industries investment flexibility is needed. The Renminbi also needs to be internationalized. So, China has embarked on a new phase of reforms, the deepening of financial markets. To this end the Communist Party of China decided at its 3rd Plenum of the 18th Party Congress in 2013 that it would allow ‘markets to play a decisive role’ (mind: not ‘the’ decisive role as it was mistranslated in the West, among others by the Financial Times) in resource allocation, whilst maintaining the dominance of public ownership. Recently another plan was announced aiming at strengthening the state sector.

On the question of the multipolar trend, since 2003 China has joined the surge in South-South cooperation, as one of the BRICS. These large developing countries are very different from each other with lots of sources of distrust and friction, but also much to gain from cooperation especially to raise trade levels, building on each other’s strengths, coordinating trade and investment, setting up joint R&D projects, reform global rules on intellectual property rights and so on. We also see them adopting similar positions on Syria, climate change, opposing sanctions against Russia etc.

A special case is China’s cooperation with African countries over the last ten years, concerning which there has been so much media hype. China’s investments in the continent exceed those of the World Bank and were are different, with a ‘no strings attached’ policy in stark contrast to the Western conditionality that imposes neoliberal policies. China’s infrastructure investment enables small African countries to realize long held dreams about development projects that were completely beyond their financial capacity. Of course African countries need to take ownership in partnerships with China, and China agrees. If China wanted to dominate Africa, why would it have set up the Forum on China-Africa Cooperation, supported the African Union, encouraged African countries to work together? Is not the basis of dominance: divide and rule? The partnerships with China offer African countries an alternative , they offer bargaining power to loosen the grip of Western powers. They offer Africans a choice and so help to restore sovereignty to governments. This is bringing an end to the era of neo-colonialism in which countries gained political independence in form but remained in a position of economic dependence and subordination.
The story of the BRICS and the example of China-Africa Cooperation offer an insight in why the multipolar trend is so important: it is the final completion of the anti-colonial and national liberation struggles of the last century.

What does all this mean for the world at large?

1. China is taking more initiatives in shaping the world of the future.
There are the examples of the Shanghai Cooperation Organisation, which India, Pakistan, and Iran are now planning to join: the trilateral summits of China, Japan, South Korea; the forums of cooperation with developing regions such as Africa (FOCAC) or the Community of Latin American and Caribbean States (CELAC). There are the New Development Bank (so-called BRICS-Bank), the Asian Infrastructure Investment Bank and the internationalization of the Renminbi.
2. These are gradually building the foundations for a different kind of international order and a departure from the current casino economy based on the central role of the US Dollar in the international monetary system. In other words: a shift from a system in which surplus capital is pumped into the circuits of speculation. China indeed pumps the surplus into investment, diverting it to the real economy. We saw China pumping 600 billion dollar worth in to its own economy in 2008, 2009. This may be considered as a ‘people’s quantitative easing’ (in Corbynite terms) and it produced a double digit growth in China, which helped prevent the world crisis and recession of 2008 from turning into a deeper depression.
3. We see China, through the AIIB and other development banks, putting up ‘seed capital’ of 150 billion US dollars into the ‘One Belt; One Road’ project to revive the Silk Road networks. Over the next 20 to 50 years we will see the largest infrastructure project ever conceived with roads, ports, railways, optical cables, oil and gas pipelines reaching across Eurasia, with maritime routes linking it with Africa. This is a game changer of the 21st century.

What about Europe’s choice?

For centuries Europe has looked across the Atlantic, fostering its Transatlantic ties. What does transatlanticism offer us today? It means TTIP; it means more military expenditure and NATO expansion. It could even drag us into a war with China in order to maintain US primacy. Europe needs to develop a Eurasian vision. Surely the Silk Road projects offer a way out of our economic doldrums. We are running out of time: that is the challenge and the choice put to Europe.

* * *
Jo Cottenier

Thanks to its policy of reform China has experienced an enormous boom, but the country has also developed a rather hybrid form of socialism. During 65 years of socialist society tremendous progress has been made. China evolved from a poverty-stricken country into the largest trading nation and second largest economic power in the world. China is no longer one of the poorest countries, it has joined the ranks of middle income countries.

The UN Human Development Index between 1980 and 2012 proved it year after year: unique achievements were realized in the domains of housing, employment and health care for women, the fight against hunger etc. In all those domains China does better than neighbouring India, a country it is more or less comparable with, taking into account their large numbers of inhabitants and the backwardness both countries started from. China could not have gained its successes without first disconnecting from the imperialist world order. That was a precondition for being able to map its own independent development course, even if this did not always follow a straight line. Only this has enabled China today to take its very own place in the world and play a unique role. This role is positive for the most part.

At the same time we should be critical about the internal developments. Though in 1978 it was the right choice for China to take steps backwards by liberalising and falling back on the market forces in the countryside, many questions may be asked about the current changeover to a market economy and the growing role of private capital. In 1993 a major shift took place, with the choice for full marketization and competition, between state owned enterprises and private enterprises, but also between state owned enterprises among themselves, as the drivers for development.

Today’s debate is firstly about China’s role in the world, a role which will undoubtedly become more important in the decades to come. China’s economy is about to surpass the US economy in terms of size. Will China succeed in bringing about what it calls a ‘multipolar world’ and what are the consequences of China’s rise for international relations?

1. A policy of respect for state sovereignty

According to Xi Jinping ‘China will never seek hegemony or expansion’. This pledge derives much of its credibility from China’s track record. This has been characterized by decades of consequent application of the Five Principles of Peaceful Co-existence. In 1982 China adopted those principles into its constitution and declared them binding in its foreign relations. Two of the principles are quite topical at the moment: one is ‘respect for sovereignty and territorial integrity’, and the other ‘the mutual non-interference in internal affairs’.
In the fight for the respect of the sovereignty of member states in the UN, China suffered defeats and learnt lessons from the handling of wars in Iraq and Libya. Because of its lenient stance (demanding that Iraq should follow UN rules regarding Kuwait, abstaining in the United Nations Security Council vote on establishing a no-fly zone in Libya), in neither conflict China has been able to prevent the US and other Western states from violently invading those two countries in order to install pro-Western regimes. That is why so far China has systematically exercised its veto regarding intervening in Syria. China demands respect for the principle that a legitimate government should not only protect its population, but is also allowed to defend itself against internal insurrection. Critics claim that consequently China is supporting dictators. One of the well-known controversies is about Beijing’s cooperation with President Bashir of Sudan. The Chinese counter-argument is that foreign intervention or exporting revolution – a policy it used to follow in the past – are not good solutions either. The population of each country will have to fight out its conflict with its government for itself. The choice to financially support and arm parties in other countries has all too often turned out to be a cover for imperialist intervention. Just think about our own Belgian history of colonialism and intervention in Congo, with the murders of Patrice Lumumba and Pierre Mulele.

The other topical principle ‘mutual non-intervention in internal affairs’ is not equal to ‘a policy of indifference’. In failing states, where chaos rules and endless civil wars are waged, China tries to act as a mediator and aims for peaceful solutions, if need be with intervention by the UN or regional organisations of states. This for example is the case in Syria, Sudan, the Ukraine and in Libya. This is also China’s attitude with regard to conflicts between states that cause a permanent state of misery or a danger for world peace. Those situations do not leave China unaffected. Since 2005 it has exerted itself more energetically for peaceful solutions, for mitigating and defusing conflicts. Some examples are the conflict between Israel and Palestine, the confrontations between North and South Korea. China takes part in various UN peace missions, such as in Sudan or Mali. The contrast with imperialist policy is very clear here: when participating in these missions China is not seeking benefits and it systematically refuses to take sides in conflicts.

2. Economic relationships that facilitate development

Is there any question of Chinese neo-colonialism or even economic imperialism in Africa and other developing countries, as claimed by various opinion makers such as Hillary Clinton, Western media and NGOs? Regarding economic contracts and investments China applies another principle of Peaceful Co-existence: ‘equality and mutual benefit’. At least for state sponsored contracts and investments, China consistently tries to apply this principle. Here too the contrast with Western practices is blatant.

In its economic and financial relations with developing countries, Western imperialism follows the Washington Consensus: extending loans for exploiting raw materials or for carrying out prestige projects such as the Inga dam in Congo. Eventually those countries are forced to ask for new loans to pay back earlier loans. Western ‘aid’ comes with conditions: the execution of structural adjustment plans, privatisations, the opening-up of countries to multinational corporations. To disguise those conditions, social aid programmes are implemented, epitomizing hypocrite relations of inequality and charity.

The Chinese model is sometimes called the Beijing Consensus. This is seldom or never about ‘aid’ but always a contract based on equality and mutual benefit. China needs food and raw materials, African countries need elementary infrastructure and resources for a ‘take off’. A striking example is the 2008 contract between China and Congo. The People’s Republic gave a loan of 9 billion dollars, 3 billion of which were to be used for putting into working order again a copper and cobalt mine, and 6 billion for public works, infrastructure, schools, housing, hospitals and universities. The work started right away, but the loan is to be paid back with 10 million tonnes of copper and 600,000 tonnes of cobalt, when the mine will be ready for operation again. It is a kind of barter, infrastructure against raw materials, with a current account with the Chinese Eximbank as ‘facilitator’. The money will be made available progressively for the execution of the work, in order to avoid corruption.

3. For a multipolar world, against hegemony

China actively tries to build a world with various growth centres, explicitly aiming at fighting US hegemony. This is the application of two more principles of peaceful co-existence: peaceful co-existence itself, on equal terms, between countries with different political regimes and the mutual agreement of non-aggression. China is building this ‘new world order’ on different fronts.

a. South-South collaboration.
The Chinese Africa policy is the best exponent of this. More than a thousand mutually beneficial contracts have been concluded, providing employment for half a million workers. China enters into those agreements with all countries, without any exceptions, and in all industries (so not only in oil or mining). The only condition it sets is the recognition that there is only one China. With these contracts, China tries to gradually create the requirements for the industrial development of those countries. In exchange for raw materials it delivers infrastructure, machines and equipment. Nowadays it is also trying to transfer its own labour-intensive industries to Africa while investing in its own high-tech sector. In this way it tries to get going a win-win cooperation and turn Africa into a growth pole.

b. BRICS
China has been the main driving force for a front of the strongest emerging countries of the 21st century, a front of Brazil, Russia, India, China and South Africa. They challenge US supremacy by their communal political actions and economic and financial cooperation. One of the strongest results is the establishment of the BRICS-development bank with a 50 billion dollar starting capital. The purpose is supporting mutual cooperation, but also aiding South-South cooperation.

c. Overtures to the European Union
By launching the OBOR-initiative (One Belt One Road) China is sending an immense invitation for cooperation to the European countries. China wants to invest in both a new silk road by land and a maritime silk road in order to stimulate economic relations with Europe. It is also a manner of driving a wedge between the US and the EU. China goes for two important ports for the supplies of goods in Europe: Piraeus in Greece and Rotterdam in The Netherlands.

d. Will the multipolar strategy lead to war or to peace?
According to the People’s Republic of China a multipolar world forms an alternative for US desire for hegemony. The different poles should form a counterbalance and should stand up for a world order in which the principles of peaceful co-existence apply. Is this a dream or is it a strategy with some chance of success? The Communist Party of China builds on the insights of Lenin, who proved that imperialism inevitably goes together with the uneven development of different regions in the world. Socialist countries and third world countries have opportunities to take advantage of the contradictions originating from this to build a counterforce. The other aspect however is equally true: uneven development brings along new tensions among ruling powers and leads to wars.

Are we seeing the making of a new international order or will war inevitably erupt? It is already obvious now that the US gears its military strategy to a possible confrontation with China, which is seen as the only real future threat to its world dominance. For making disappear the threat of war, its economic foundation, imperialism itself will have to go. War preparations the US is making in the East and South China Seas seem to confirm those fears. For years the US has been engaged in a strategy of encircling China, by means of bases, the permanent presence of its navy (along with aircraft carriers and planes) in the region. The US wants to be capable of closing off the Strait of Malacca, of disorganizing China’s defensive belt and destroying its rocket bases. The US is arming and stirring up its allies Japan and the Philippines, countries claiming territories in the East and South China Seas just like China does. China is properly aware of this and building its own defensive systems, an electronic and military belt along its coastline, together with its own air defence identification zone (ADIZ).

4. The expansion of Chinese enterprises in the West

Until now China’s foreign policy has deserved to be qualified as anti-imperialist. But then there is the new phenomenon of Chinese enterprises in the West and their adjustment to the ins and outs of capitalist market economy. The Chinese government aims at putting on the map domestic players and brands that are able to globally compete with Western monopolies. There is not yet a surge of such enterprises as has been suggested, but we have a tendency here that will get stronger. This phenomenon, of Chinese multinationals may be called into question with an eye on the future of socialism.

To the ‘open door’-policy, which has led to export-oriented growth and strong technology transfers since 1978, now has been added a ‘go out, go global’-policy. Enterprises are stimulated to go abroad, to engage in take-overs and investments in the West. This should further the conversion from a labour-intensive to a high-tech economy. Since last year the amount of FDI (foreign direct investments) leaving China about equalled the amount entering the country, nearly 100 billion dollars. At the end of 2014 there were 107 Chinese SOEs present in 8515 branches in 150 countries. Their activities, in the past mainly in the sectors of resources and mining, are shifting now towards leading industries, finances and real estate. Among those Chinese enterprises abroad 70% are SOEs, but also private enterprises are coming to the fore. A few examples: Geely bought Volvo, Lenovo bought the pc division of IBM. Also worth mentioning are China Ocean Shipping (Group) Company (COSCO) that already possesses part of the Greek port of Piraeus and intends to acquire the rest in the framework of the privatisations that the EU imposes on Greece. And finally: 50 Chinese enterprises, 49 of them SOEs, are among the 500 biggest in the world.

At the moment it is impossible to conceive the future of this trend and its consequences. There may be consequences for China’s foreign policy. How will the government of China adapt to its economy being more and more closely knit to global capitalism? How will it react if Chinese enterprises deem that their interests in the West are menaced? The main question however is most probably what this interconnectedness means for the socialist project in China itself. The biggest SOEs and private enterprises by now are prepared to enter into the competition with the most powerful Western monopolies. This substantially corroborates the social stratum of capital owners, administrators and managers who don’t want to have anything to do with Marxism anymore.

* * *

Questions

From the floor came a lot of questions. We confine ourselves here to the ones about the main theme

1. What about questionable and even racist Chinese practices in Africa?
2. Would certain African countries not ‘pay back’ China for all its investments by defecting into alliances with the US or Europe?

To those questions Jenny Clegg and Jo Cottenier responded in a rather consentient way.

1. In Africa there are sometimes racist attitudes among the people on both the African and Chinese sides. They have to be opposed (and usually are) by the officials of respective governments.
2. China may certainly run the risk of ‘ingratitude’, but will not deviate from its unconditionality. The African governments on the other hand may well take China as a model for emulation to a certain extent. It has been said that China may turn into a new imperialist power, but imperialism presupposes monopoly capitalism and resource looting, which neither China nor the BRICS in general can be accused of. The relations between China and African countries are about the exchange of investment, knowhow and end products for resources.

Remaining points of debate between Jo Cottenier and Jenny Clegg

According to Jo Cottenier the main contradiction is that between imperialism and socialism. Jenny Clegg thinks that Lenin once said “whoever expects a ‘pure’ social revolution will never live to see it”.

Another difference of opinion is on the question whether war is inevitable under imperialism or not. Jo Cottenier is certain this is the case. Jenny Clegg on the other hand believes that there is surely a danger of war, and that the peoples have to take that into account, but must not lose hope of avoiding war.

9 comments on “China in a multipolar world

  1. jock mctrousers on said:

    Thanks for that. But I have to say that most of that, from both parties, seemed to add little to the Chinese government PR (and I don’t necessarily fault it) we encounter in the MSM,

    The really interesting question was just referred to in passing:

    ” The biggest SOEs and private enterprises by now are prepared to enter into the competition with the most powerful Western monopolies. This substantially corroborates the social stratum of capital owners, administrators and managers who don’t want to have anything to do with Marxism anymore”

    I have a pile of books and articles (many recommended by folks here) on China I’ve been meaning to read for years, but in short I’m not totally up to speed…
    but I have big doubts about the much-vaunted poverty reduction figures. Seems to me, in my simple way, that much of this reduction amounts to people who had previously had adequate subsistence farmer lives with socialist healthcare, but not registering in a cash economy,( so officially below the poverty line) moving into the lowest rungs of the cash economy (so registering as an improvement int their economic condition) in the new cities, now without much healthcare, and generally appalling conditions.

    I wonder if this biggest lifting of people out of poverty is actually the biggest ever ‘enclosure’ and eviction.

  2. jock mctrousers,

    There is certainly an element of truth in acknowledging the difficulties in rural areas, but much of what I have read about that is now some years out of date.

    What is remarkable is that even as China moves towards becomming the world’ largest economy over the next decade, it is hard to follow economic and social developments in China through mainstream media.

  3. Andy Newman,

    Is that difficulty in following economic and social developments in China in mainstream media down to a lack of interest and resource in UK newspapers and other media outlets? or is it down to a lack of old fashioned PR on behalf of the Chinese state?

    Or is it a combination of the two?

    The BBC (yes I know we can debate the merits or otherwise but most alternatives are dreadful) has Carrie Gracie who pops up on the World Service and on BBC news programmes (see http://www.bbc.co.uk/news/correspondents/carriegracie).

    I suppose the problem for any party which has been in power for 66 years is that celebrating the undoubted reductions in poverty and the increase in general prosperity is also saying that before now life was a bit crap and it’s taken us this long to get our act together.

    When a government tries to control the production and release of statistics then outsiders (and some insiders) aren’t going to trust those statistics. That leads to less trust in stories coming out of places like China (and that is not to laud the UKs own so-totally-independent statistics).

  4. Neil,

    There is a vigorous and independent civil society in China , academia, think tanks, public intellectuals, and the standards of public debate are arguably at least as robust as in Britain.

    Certainly there is no need to rely only upon the official statistics of the party

  5. Andy Newman,

    The vigorous and independent civil society in China doesn’t seem to get much coverage in the West. We do tend to get official party statements and commentary by Western based commented, be they economists or political commentators.

    We don’t get much access to the discussion inside China, which I suppose is your original point.

  6. jock mctrousers on said:

    I don’t think you’ll get much better than Michael Pettis blog for reliable info on China, but you’ll have to be well serious about extracting it. He seems to me a REAL economist, he can write beautifully, he really knows China and his stuff, but you know … it really strains my attention span…
    MICHAEL PETTIS CHINA Financial Markets
    http://blog.mpettis.com/