excerpts from the book
When China Rules the World
The End of the Western World and
the Birth of a New Global Order
by Martin Jacques
Penguin Books, 2012, paperback
p40
From the sixteenth century to the 19305 European nations, in a
remarkable display of expansion and conquest, almost uniquely
(the nearest similar example being Japan) built seaborne empires
that stretched around the world. The colonies, especially those
in the New World and, in the case of Britain, India and the Malay
Peninsula were to be the source of huge resources and riches for
the imperial powers. Without them, Europe could not have achieved
its economic take-off in the way that it did.
p49
The British fought the Chinese in the First Opium War of 1839-40
over the right to sell Indian-grown opium to the Chinese market,
which proved a highly profitable trade both for Britain and its
Indian colony. The increasingly widespread sale and use of opium
following China's defeat predictably had a debilitating effect
on the population, but in the eyes of the British the matter of
'free trade' was an altogether higher principle. China's ensuing
inability to prevent the West from prying open the Chinese market
hastened the decline of the Qing dynasty, which by the turn of
the century was hopelessly enfeebled, with foreign rule entrenched
in the numerous so-called treaty ports. When European and American
expeditionary forces invaded China in 1900 to crush the Boxer
Uprising, it was evident that little, other than imperial differences,
stood in the way of China being partitioned in a similar manner
to Africa.
... Stalked by the threat of Western invasion
and fearful that it might meet the same fate as China, following
the Meiji Restoration in 1868, Japan embarked on a carefully calculated
process of rapid modernization. It sent teams of specialists to
study the European systems of education, their armies and navies,
railways, postal systems and much else. It rejected the idea that
it was any longer a meaningful part of Asia and instead coveted
acceptance as a Western power. It even emulated the Western model
of colonialism, occupying Taiwan, Korea and part of China. The
Meiji project of modernization was testament to the comprehensive
character of European hegemony. Every other country lived in the
shadow of Europe and was obliged, willingly or unwillingly, to
adapt to and adopt some of its characteristics, or face the threat
of colonization.
p50
It has been estimated that the slave trade may have reduced Africa's
population by up to a half as a result of the forcible export
of people combined with deaths on the continent itself.
p51
By 1790 the total population of the United States was 3, 929,000,
of whom 698,000 were slaves.
p52
The American economy hugely out-performed the European economies
in the period 1870-I950 and this underpinned the emergence of
the United States as the premier global power after 1945. Largely
eschewing the formal colonies which had been the characteristic
form of European global influence the United States became the
first truly global power: the dollar was enshrined as the world's
currency, a new constellation of global institutions, like the
IMF, the World Bank and GATT, gave expression to the US's economic
hegemony, while its military superiority, based on airpower, far
exceeded anything that had previously been seen. The United States
succeeded in creating a world system of which it was the undisputed
hegemon but which was also open and inclusive, finally reaching
fruition after the collapse of the Soviet bloc and with the progressive
inclusion of China. By 1960, if not earlier, the United States
had supplanted Europe as the global exemplar to which other societies
and peoples aspired. It demonstrated a new kind of cultural power
and influence, through Hollywood and television soaps, and also
through such icons of its consumer industry as Coca-Cola and Levi
jeans. Its universities increasingly became magnets for the best
scholars and students from all over the world. It dominated the
list of Nobel Prize winners. And it was the power and appeal of
the United States that lay behind the rise of English as the world's
first true lingua franca.
p95
For roughly two thousand years, China has been united.
p109
By 1949 China had suffered from an increasingly attenuated sovereignty
for over a century. After 1911 it had experienced not only limited
sovereignty but also, in effect, multiple sovereignty, with the
central government being obliged to share authority with both
the occupying powers (i.e., multiple colonialism) and various
domestic rivals. Most countries would have found such a situation
unacceptable, but for China, with its imposingly long history
of independence, and with a tradition of a unitary state system
dating back over two millennia, this state of affairs was intolerable,
gnawing away at the country's sense of pride. The Communists were
confronted with three interrelated tasks: the return of the country's
sovereignty; the reunification of China; and the reconstruction
of the state and the restoration of unitary government... In 1949,
with the defeat of the Nationalists by the Communists in the Civil
War, the country was finally reunified (with the exception of
the 'lost territories', namely, Taiwan, Hong Kong and Macao).
he key to the support enjoyed by the Communist regime after 1949
- and, indeed, even until this day - lies, above all else, in
the fact that it restored the independence and unity of China.
It was Mao's greatest single achievement.
p111
It is estimated that 25 million died as a result of the famine
and malnutrition consequent upon the Great Leap Forward in i958-60.
The Cultural Revolution between 1966 and 1969 - although its effects
lasted into the mid seventies - led to the death of around 400,000
people as a result of maltreatment and was to deprive a whole
generation of their education.
... The Communist Party directed its venom
against many Chinese traditions, from the long-standing oppression
of women to Confucian notions of hierarchy, and carried out a
sweeping land reform in the name of class struggle.
p113
China was only finally able to begin the process [of modernization]
after the 1949 Revolution. The building blocks of modernization
were numerous: the restoration of China's unity and sovereignty,
the establishment of a viable and effective state, sweeping land
reform, the destruction of many of the old class and elitist divisions,
and the emancipation of women from their previous subjugation.
p125
In contrast to Europe and the United States, [the countries of
East Asia] are characterized by a form of hyper-modernity: an
addiction to change, an infatuation with technology, enormous
flexibility, and a huge capacity for adaptation.
... Turbo-charged growth means a continuing
revolution in the living standards of most of society, huge shifts
in employment patterns, rapid urbanization, sweeping changes in
the urban landscape and accelerated access to a growing range
of consumer products, all within less than a generation.
p155
Confucian-based societies of China, Japan, Korea, Taiwan and Vietnam...
Confucian rule was based on the idea of an ethical order. Rulers
were required to govern in accordance with the teachings of Confucius
and were expected to set the highest moral standards. There was
an elaborate political hierarchy that presumed and required an
ascending ladder of virtue on the part of office-holders. The
political structure was seen as synonymous with the social order,
the overall objective being a harmonious and balanced community.
... The Confucian family was possessed
of two key characteristics. The first was filial piety, the duty
of the offspring to respect the authority of the father, who,
in return, was required to take care of the family. As the state
was modeled on the family, the father was also the role model
for the state, which, in dynastic times, meant the emperor. Second,
although the Chinese were not by and large religious, they shared
with other Confucian societies a transcendental belief in ancestral
spirits: that one's ancestors were permanently present. Deference
towards one's ancestors was enacted through the ritual of ancestral
worship, which served to emphasize the continuity and lineage
of the family and the relatively humble nature of its present
living members. The belief in ancestral spirits encouraged a similar
respect for and veneration of the state as an immortal institution
which represented the continuity of Chinese civilization. The
importance of the family in Chinese-culture can be gleaned from
the special significance - far greater than in Western culture
- that attaches to the family name, which always comes before
the given name.
Socialization via the family was and remains
a highly disciplining process in Confucian societies. Children
learn to appreciate that everything has its place, including them.
People learn about their role and duties as citizens as an extension
of their familial responsibilities. It is through the family that
people learn to defer to a collectivity, that the individual is
always secondary to the group. Unlike Western societies, which,
historically at least, have tended to rely on guilt through Christian
teaching as a means of constraining and directing individual behaviour,
Confucian societies rest on shame and 'loss of face' discipline
in Confucian societies is internal to the individual, base on
the
Socialization process in the family, rather
than externally induced through religious teaching as in the West.
... Such is the power of this sense of
belonging - to one's own family, ) but then by extension to society
and the state - that it has resulted in a strong sense of attachment
to, and affinity with, one's race and nation - and, by the same
token, a rejection of foreigners as 'barbarians', or 'devils',
or the Other. All the Confucian countries share a biological conception
of citizenship. The strong sense of patriotism that characterizes
all of these societies - China, Japan, Korea, Taiwan and Vietnam
- has generally been ascribed to a reaction to overbearing Western
pressure, including colonialism. But this is only part of the
picture, and the rather less important part: the power of identity,
the rejection of outsiders and the strength of native racism is
primarily a consequence of the nature of the indigenous process
of socialization."
p179
For the Chinese leadership, the objective of economic reform was
never Westernization, but rather a desire to restore the Party's
legitimacy after Mao through economic growth, and thereby build
a strong nation and state. Political stability was accorded the
highest priority.
p184
The Chinese leadership has displayed great patience and considerable
competence at tackling a succession of difficult and elusive problems.
At the end of the nineties, for example, the government was faced
with three extremely difficult domestic issues: closing a very
large number of loss-making state enterprises; overhauling the
state banks, which were saddled with a large and rising proportion
of non-performing loans, mainly to indebted state enterprises;
and strengthening the weak fiscal position of central government.
A decade later, the government had fundamentally overcome these
problems, having greatly reduced the problem of indebted state
enterprises, transformed the condition of the banking system and
improved its own finances.
Given its scale and speed, China's economic
transformation is surely the most extraordinary in human history...
The government's economic strategy, shrewd and far-sighted has
been very successful, resulting in stellar economic growth an
rise in per capita income from $339 in 1990 to over $4,000 in
2010. Economic growth is no longer confined to a few 'islands'
but has spread out in waves to most provinces of China... In a
remarkably short space of time, China has become the centre of
global manufacturing... In 2011, China became the world's largest
manufacturing country in terms of output, bringing to an end a
period of 110 years during which the United States had occupied
that position.
p186
[China] has borne witness to the greatest poverty-reduction programme
ever seen, with the number of people living in poverty falling
from 250 million at the start of the reform process in 1978 to
80 million by the end of 1993, 29 million in 2001, and 26 million
in 2007, thereby accounting for three-quarters of global poverty
reduction during this period.
p247
Confucius's life (551-479 BC) preceded the Warring States period
(403-221 BC), when numerous states were constantly at war with
each other. The triumph of the Qin dynasty (221-206 BC) brought
that period to an end and achieved a major unification of Chinese
territories, with the emergence of modern China typically being
dated from this time. Although Confucius enjoyed little status
or recognition during his lifetime, after his death he was to
become the single most influential writer in Chinese history (though
his ideas were not always dominant; between AD 500 and AD 850,
for example, they were largely eclipsed by Buddhism. For the next
two thousand ears China was shaped by his arguments and moral
precepts, its government informed by his principles, and the Analects
became established as the most important book in Chinese history.
Confucianism was a syncretic mode of thinking which drew on other
beliefs, most notably Taoism and Buddhism, but Confucius's own
ideas remained by far the most important. His emphasis on moral
virtue on the supreme importance of government in human affairs,
and on the overriding priority of stability and unity, which was
shaped by his experience of the turbulence and instability of
a divided country, have informed the fundamental values of Chinese
civilization ever since. Only towards the end of the nineteenth
century did his influence begin to wane, though even during the
convulsions of the twentieth century - including the Communist
period - the influence of his thinking remained persistent and
tangible.
p249
The [Chinese] state has, ever since Confucius if not earlier,
been perceived as the embodiment and guardian of Chinese civilization,
which is why, in both the dynastic and Communist eras, it has
enjoyed such huge authority and legitimacy. Amongst its constellation
of responsibilities, the state, most importantly of all, has the
sacred task of maintaining the unity of Chinese civilization.
Unlike in the Western tradition, the role of government has no
boundaries; rather like a parent, with which it is often compared,
there are no limits to its authority. Paternalism is regarded
as a desirable and necessary characteristic of government.
p259
In the post-Cold War era, China presents us with an intriguing
and unforeseeable paradox: the most extraordinary economic transformation
in human history is being presided over by a Communist government
during a period which has witnessed the demise of European Communism.
p260
In the Confucian view, the exclusion of the people from government
was regarded as a positive virtue, allowing government officials
to be responsive to the ethics and ideals with which they had
been inculcated.
p260
The Confucian system constituted the longest-lasting political
order in human history and the principles of its government were
used as a template by the Japanese, Koreans and Vietnamese.
p260
[The Chinese] state has consistently been seen as the apogee of
society, enjoying sovereignty over all else. In European societies,
in contrast, the power of government has historically been subject
to competing sources of authority, such as the Church, the nobility
and rising commercial interests. In effect government was obliged
to share its power with other groups and institutions. In China,
at least for the last millennium, these either did not exist (there
was no organized and powerful Church) or were regarded, and saw
themselves, as subordinate (for example, the merchant class);
the idea that different sources of authority could and should
coexist was seen as ethically wrong.
p261
[In China] only two institutions were formally acknowledged and
really mattered: one was the government and the other the family.
The only accepted interest was the universal interest, represented
by a government informed by the highest ethical values, be it
Confucian teaching or later Marxism-Leninism-Maoism.
p261
Given [the] lack of any kind of independent tradition of organization
either in the Confucian period or more recently in the Communist
period, it is hardly surprising that China has failed to develop
a civil society, certainly in any recognizable Western form.
p262
Chinese politics has traditionally placed a very high premium
on the importance of moral persuasion and ethical example. Public
officials were required to pass exams in Confucian teaching. They
were expected to conform to the highest moral standards and it
was to these, rather than different interest groups or the people,
that they were seen as accountable.
p262
The commitment to ethical standards as the principle of government
has combined with a powerful belief in the role of both family
and education in the shaping and moulding of children.
p262
Through a combination of filial piety, on which the Chinese place
greater stress than any other culture, a sense of shame, and the
fear of a loss of face, children learn about self-discipline.
In a shame (rather than a Christian guilt) culture, Chinese children
fear, above all, such a loss of face.
p263
One of the most fundamental features of Chinese politics concerns
the overriding emphasis placed on the country's unity. This is
remains by far the most important question in China's political
life. Its origins lie not in the short period since China became
a nation-state, but in the experience and idea of Chinese civilization.
The fact that China has spent so much of its history in varying
degrees of disunity, and at such great cost, has taught the Chinese
that unity is sacrosanct.
p264
In the Chinese mind, stability and social order rank far higher
than civil and political freedoms.
p264
[China] lost as much as a third of its population (around 35 million
people dead) in the overthrow of the Song dynasty by the Mongols
in the thirteenth century. It has been estimated that the Manchu
invasion in the seventeenth century cost China around one-sixth
of its population (25 million dead). The civil unrest in the first
half of and mid nineteenth century, including the Taiping Uprising,
resulted in a population decline of around 50 million.
p266
The underlying reason for the legitimacy of the Chinese state
is that it is seen by the people as the embodiment and guardian
of Chinese civilization, enjoying, as a consequence, something
akin to a spiritual significance.
p266
The attitude of the Chinese towards the state is very different
to that of Westerners. For the latter, the state is an outsider,
a stranger, even an interloper, whose presence should, as far
as possible, be limited and confined... In China, in contrast,
the state and society are seen as on the same side and part of
the same endeavour: the state enjoys the status of an intimate
and is treated like a member of the family, not just any member
but the head of the family - the patriarch himself. We can only
understand the immense authority of the Chinese state in these
terms, an authority which has been reinforced by the fact that,
unlike in the West, it has had no serious rivals for over a millennium.
p267
For developing countries in particular, the ability to deliver
economic growth, maintain ethnic harmony, limit the amount of
corruption, and sustain order and stability, are equally, if not
rather more, important considerations than democracy.
p267
The right to vote was not established in the developed world,
except for a very small and privileged minority, until well after
their industrial revolutions had been concluded (with white men
in the United States constituting the nearest to an exception).
p267
The European powers never granted the vote to their colonies:
it was still seen as entirely inappropriate for the vast tracts
of the world that they colonized, even when it had become an accepted
fact at home. The only exceptions in the British case were the
so-called dominions like Australia and Canada, where shared racial
and ethnic characteristics were the underlying reason for the
display of latitude... Much hypocrisy attaches to the Western
argument that democracy is universally applicable whatever the
stage of development.
p268
Much hypocrisy attaches to the Western argument that democracy
is universally applicable whatever the stage of development.
p268
Japan did not achieve anything like widespread suffrage until
well after its economic take-off. None of the first Asian tigers
- South Korea, Taiwan, Hong Kong and Singapore - achieved take-off
under democratic conditions: South Korea and Taiwan were governed
by far-sighted military dictatorships, Hong Kong was a British
colony bereft of democracy, while Singapore enjoyed what might
be described as a highly authoritarian and contrived democracy.
All, though, were blessed with efficient and strategic administrations.
p269
There is little demand for democracy from within China. Indeed,
if anything, there has been a turn away from democracy since Tiananmen
Square. A combination of a fear of instability following the events
of 1989, the disintegration of the Soviet Union, and what are
seen as the difficulties experienced by Indonesia, Thailand and
Taiwan as democracies - and also the Philippines and India -
have reinforced the view of most Chinese that this is not an immediate
issue: that, on the contrary, it is liable to represent a distraction
from the main task of sustaining the country's economic growth.
Implicit in this is the not misplaced view that any move towards
democracy is likely to embroil the country in considerable chaos
and turmoil. This is a key reason why democracy, for the great
majority of Chinese, commands little support.
p277
The contrast between the level of satisfaction faction of the
Chinese in their economic situation and with the economic competence
of their government as compared with that of the populations in
all the other countries polled: the Chinese are hugely more satisfied
than anyone else.
p282
The task of the [Chinese Communist] Party is to govern, while
the people are left free to get on with the business of transforming
their living standards and enjoying the rewards of rising incomes
and a growing variety of consumer goods. Money-making, meanwhile,
has replaced politics as the most valued and respected form of
social activity, including within the Party itself. The Party
has actively encouraged its officials to enter business, not least
as a means of galvanizing economic growth. Political loyalty has
in some degree been replaced by money as the measure pf political
worth of Party cadres, resulting in a decline in the Party's identity,
a loss of its spiritual appeal and a process of internal decay.
p283
[The Party] prioritizes technical competence, entrepreneurship
and knowledge over, as previously, revolutionary credentials,
military record and class background, with a technocratic class
rather than revolutionaries now in charge of the Party.
p283
There have been drastic changes in the social composition of the
Party leadership over the last twenty years. Between 1982 and
1997 the proportion of the [Chinese] central committee who were
college educated rose from 55.4 per cent to 92.4 per cent. By
1997 all seven members of the standing committee of the central
committee's political bureau (the top leadership) were college-educated
in technical subjects like engineering, geology and physics, while
eighteen of the twenty-four political bureau members were also
college-educated.
p283
The large-scale shift of [Chinese Communist] Party and government
officials into the private sector has almost certainly been the
biggest single reason for the enormous increase in corruption
as some exploited their knowledge and connections to appropriate
state property, gain access to cash reserve, and line their own
pockets. The problem poses a grave challenge to the Party because,
if unchecked, it threatens to undermine its moral standing and
legitimacy.
p296
[The United States] was a country established by European settlers
who, by war and disease, largely eliminated the indigenous population
of Amerindians; who, having destroyed what had existed before,
were able to start afresh on the basis of the European traditions
that they had brought with them; who engaged in an aggressive
westward expansion until they came to occupy the whole of the
continent; and who were to grow rich in important measure through
the efforts of their African slaves.
p309
White racism has had a far greater and more profound - and, deleterious
- effect on the modern world than any other. As white people have
enjoyed far more power than any other racial group over the last
two centuries, so their influence - and their prejudices - have
reached much further and have had a greater impact, most dramatically
as a result of colonialism.
p310
There are relatively few surnames in China ... according to some
estimates, 100 surnames cover 85 per cent of Chinese citizens
- the three most common being Wang (92 million), Li (91 million)
and Zhang (86 million) compared with 70,000 surnames covering
90 per cent of Americans.
p317
Tibet was originally brought under loose Chinese influence by
the Qing dynasty in the early decades of the eighteenth century,
but its rule grew weaker until towards the end of the century
the Qing intervened again and established a form of tributary
rule. In the nineteenth century Chinese influence slowly waned
until the Qing eventually reasserted control in 1910. Tibet enjoyed
considerable autonomy in the decades after the 1911 Revolution,
when China was in a state of division. Following the Chinese invasion
in 1950 a new agreement was reached, but the promised autonomy
never materialized and the resulting tension culminated in a major
uprising in 1959 which was crushed by China, with the Dalai Lama,
together with some 80,000 Tibetans, going into exile. Most countries
now recognize Chinese sovereignty over Tibet.
p319
Since 1950, Tibetan living standards and life expectancy have
been transformed, with annual economic growth averaging 12 per
cent over the last seven years and incomes rising by more than
10 per cent annually over the last six years. The Tibetans are
widely viewed by the Chinese as a backward and primitive people
who should be grateful for the fact that the Chinese are seeking
to bring them civilization and development.
p321
Xinjiang is a huge desert region some 2,000 miles to the west
of Beijing, fragmented by large mountain ranges. Although it accounts
for one-sixth of China's surface area and is three times the size
of Texas, it is sparsely populated, only 4.3 per cent of the territory
being inhabitable, with the consequence that less than 2 per cent
of China's population live in Xinjiang. Historically it is home
to a diverse range of ethnic groups, including the Uighur, Han,
Kazakh, Hui, Kyrgyz and Mongol. In 1949, more than 90 per cent
of the population was Uighur, a Turkic people of Islamic faith
who have more in common in terms of culture, language and religion
with the peoples of what we now know as the Central Asian republics
than with the Han Chinese to their east. Over the last sixty years
there has been a steady migration of Han into Xinjiang which has
accelerated rapidly in recent years after the government introduced
a drive to open up the western regions, and especially the oil
and gas industry, almost a decade ago. The oil and petrochemical
sector now accounts for 60 per cent of the Xinjiang economy, Xinjiang
being China's second largest oil producer, with abundant reserves
of oil and gas.
p322
The Xinjiang economy has been growing at around 11 per cent per
annum for the last six years, which is above the national average.
During this period, large numbers of Han have been encouraged
to settle in the region, with an inflow of 1.2. million workers
in 2008 alone.
p326
In the Chinese perception there is a clear racial hierarchy. White
people are respected, placed on something of a pedestal and treated
with considerable deference by the Chinese; in contrast, darker
skin is disapproved of and deplored, the darker the skin the more
pejorative the reaction.
p335
Though once comprised of countless races, China is now dominated
by what the Chinese regard to be one race, the Han Chinese, with
the other races - described as 'nationalities' - accounting for
less than 9 per cent of the population (though this is still 105
million people).
p338
Taiwanese writer Lu Liang
Deep down the Chinese believe that they
are superior to Westerners and everyone else. No other people
from a developing country possess anything like this sense of
supreme self-confidence bordering on arrogance.
p338
The fact that the Chinese regard themselves as superior to the
rest of the human race, and that this belief has a strong racial
component, will confront the rest of the world with a serious
problem. It is one thing to hold such attitudes when China is
relatively poor and powerless, quite another for those attitudes
to inform a country when it enjoys huge global power and influence.
Of course, there is a clear parallel with European and Western
attitudes, which have similarly been based on an abiding sense
of superiority rooted in cultural and racial beliefs. There are,
though, two obvious differences: first, China's hubris has a much
longer history and second, the Chinese represent one-fifth of
the world's population, a far larger proportion than, for example,
Britain or the United States at their zenith have ever constituted.
Precisely how this sense of superiority will inform China's behaviour
as a global superpower is a crucial question.
p339
Yan Xuetong, one of China's leading international relations experts
The rise of China is granted by nature.
The Chinese are very proud of their early achievements in the
human history of civilization. In the last 2,000 years China has
enjoyed superpower status several times, such as the Han dynasty,
the Tang dynasty and the early Qing dynasty... This history of
superpower status makes the Chinese people very proud of their
country on the one hand, and on the other hand very sad about
China's current international status. They believe China's decline
is a historical mistake which they should correct.
... The Chinese regard their rise as regaining
China's lost international status rather than as obtaining something
new.
p339
Lucian Pye
The most pervasive underlying Chinese
emotion is a profound, unquestioned, generally unshakeable identification
with historical greatness. Merely to be Chinese is to be a part
of the greatest phenomenon of history. The rise of China and its
restoration as the number one nation in the world is widely regarded
as a matter of historical inevitability.
p340
The roots of China's sense of difference, superiority and greatness
lie not in its recent past as a nation-state but in its much longer
history and existence as a civilization-state. There are two key
elements to this. First, there is China's belief in its cultural
superiority, which dates back at least two millennia. Second,
there is the idea of China's racial superiority, which is closely
linked to its cultural hubris and which anchors that hubris in
nature: that to be born Chinese, rather than as a 'foreigner',
'barbarian' or 'foreign devil', carries a special status and significance.
Together they constitute what might be described as the Middle
Kingdom mentality.
p341
The most likely motif of Chinese hegemony lies in the area of
culture and race. The Chinese sense of cultural self-confidence
and superiority, rooted in their long and rich history as a civilization-state,
is utterly different from the United States, which has no such
legacy to draw on, and contrasts with Europe too, if less strongly.
The Chinese have a deeply hierarchical view of the world based
on culture and race. As a consequence, the rise of China as a
global superpower is likely to lead, over a protracted period
of time, to a profound cultural and racial reordering of the world
in the Chinese image. As China draws countries and continents
into its web, they will not simply be economic supplicants of
a hugely powerful China but also occupy a position of cultural
and ethnic inferiority, or subordination, in an increasingly influential
Chinese-ordered global hierarchy.
p426
An important characteristic of the Chinese model has been the
idea of strong government and the eschewing of the notion of democracy...
In contrast to the now discredited Washington Consensus, it rejects
shock therapy in favour of a process of gradual reform based on
working through existing institutions. It is predicated upon a
strong developmental state capable of steering and leading the
process of reform.
p432
The economic zones that Chinese firms are building in Nigeria
and elsewhere ... are designed to encourage Chinese investment
in African manufacturing while also seeking to persuade China's
older industries to move to Africa. A recent Chinese government
survey of 1,600 companies shows the growing use of Africa as an
industrial base: in fact, manufacturing's share of total Chinese
investment is now 22 per cent, which is not far behind mining's
share of 29 per cent. Some African countries, furthermore, have
made Chinese industrial investments a precondition for resource
deals: in Ethiopia, two out of three Chinese firms are now in
manufacturing. There has also been talk of a Chinese Marshall
Plan, with a fund of $500 billion drawn from the country's vast
currency reserves, that would lend money to Africa and other developing
countries.
p433
In late 2009 China became a larger importer of Saudi oil than
the United States while over ninety Chinese companies were active
in the kingdom, employing around 20,000 Chinese workers, with
the China Railway Construction Corporation, as part of a China-Saudi
consortium, winning a contract to build a high-speed rail line
between Mecca and Medina.
p434
At the heart of China's strategy in the Middle East lies Iran,
with which it has long enjoyed a close relationship. The two countries
have much in common. They are both very old civilizations with
rich histories of achievement and a strong sense of superiority
towards other states in their respective regions. They have also
both suffered at the hands of the West, which they deeply resent,
believing they would prosper rather more in a world no longer
dominated by it.
p435
The US regards Iran as an alternative power broker in the region
and a major potential threat to its interests - hence its long-running
hostility towards Iran.
p451
In the mid 1990s, the EU's share of global trade was over 25 per
cent, now it is around 20 per cent, and by 2030 it will be roughly
10 per cent; only nine European multinationals feature in the
world's top fifty companies.
p452
By the end of 2010 China had become Germany's largest non-European
export market, overtaking the United States, and it is predicted
that China could become Germany's largest single export market
by 2015.
p453
Volkswagen sells more cars in China than it does in Germany.
p453
Germany's economic resilience owes much to it that it has maintained
a highly competitive manufacturing sector that has increasingly
orientated itself towards the developing world and, above all,
China. This contrasts sharply with the experience of the other
main European economies, namely France, UK and Italy, which have
singularly failed to achieve this.
p453
The failure of the European Union to recognize the fundamental
reconfiguration of the global economy, and realign itself accordingly,
has been replicated by the failure of the major national economies,
bar Germany, to reorient themselves towards the developing world,
above all China. This suggests that most European economies will
find it extremely difficult to resume a robust growth path, given
that their trading relationships are dominated by the stagnant
economies of the developed world rather than the developing economies
which are driving global economic growth and likely to continue
to do so in the future.
p456
The Western financial crisis marked a precipitous and irreversible
decline in Europe's position. Its place in the world will never
be the same again. A combination of the financial crisis and the
sovereign debt crisis has divided and fragmented the Union. Most
countries face an era of austerity, low growth and reduced public
provision. The future of the eurozone remains in doubt. The EU
- and its member countries - will experience a diminished role
in the world: other countries are already less keen on becoming
trading partners, with alternative and more attractive suitors
on offer; European influence and representation in international
bodies is steadily declining, as the recent reforms in the IMF
illustrate; and their aid and assistance will be less sought after
by developing countries as wealthier and more generous donors,
notably China, take their place.
p458
It is likely that the United States and Europe will slowly drift
apart.
p460
China needed the US to a far greater extent than the US needed
China. The United States possessed the world's largest market
and was the gatekeeper to an international system the design and
operation of which it was overwhelmingly responsible for. China
was cast in the role of supplicant ... the United States acted
towards China 'like a self-appointed Credentials Committee that
had the power to accept, reject, or grant probationary membership
in the international club to an applicant of uncertain respectability.
p463
The [George W] Bush administration abandoned the previously consensual
multllateralist US foreign policy in favour of a unilateralist
policy that, amongst other things, embraced the principle of pre-emptive
strike. The US turned away from its previous espousal of universalism
and towards a nationalism which denied or downplayed the need
for alliances. The new strategy placed a priority on military
strength and hard as opposed to soft power, a position made manifest
in 2003 with the invasion of Iraq. The principle of national sovereignty
was subordinated to the desirability of intervention for the purpose
of regime-change. A new and aggressive America was borne.
p480
According to Financial Times research, in 2009-10 China lent more
money to the entire developing world than was lent by the World
Bank: specifically, the China Development Bank and China Export-Import
Bank (often known as the China Exim Bank) signed loans of at least
$110 billion to other developing country governments and companies
during those two years, while the equivalent arms of the World
Bank made loan commitments of $100.3 billion. Already, in other
words, the China Development Bank and the China Exim Bank are
becoming more important institutions in the funding of the developing
world than the World Bank. Meanwhile the WTO, with the demise
of the Doha round - effectively torpedoed by China and India -
together with the growing popularity of the various ASEAN-related
agreements, presently looks rather less important than it did
a decade ago when trade liberalization was in full swing. The
process of trade liberalization in East Asia since 2000, indeed,
has largely bypassed the WTO, with China playing a key role through
the various ASEAN-related agreements.
p481
The Chinese are in a Catch-22 situation: if they start selling
US Treasury bonds, or cease buying them, the dollar will plummet
and so will the value of their dollar assets. So a Faustian pact
lies at the heart of the present relationship between the US and
China, which is neither economically nor politically sustainable.
In the first few months of 2011, there was evidence to suggest
that the Chinese had begun to diversify their purchases away from
the US dollar, probably by buying European government debt rather
than US dollar assets...The United States' position as the global
financial centre and the dollar as the dominant reserve currency
are on a Chinese life-support system.
p482
A World Bank report in 2011 predicted that the dollar's predominance
would come to an end some time before 2025, to be replaced by
a monetary system based on the dollar, euro and renminbi.
p510
Las Vegas, the once unchallenged gambling capital of the world,
has been overtaken by Macao: in 2010 the latter's gaming revenues
were four times greater than those of Las Vegas.
p512
Mainland Chinese made 54 million trips overseas in 2010 compared
with 28 million in 2004, and the Chinese government expects this
to rise to 100 million by 2015, though HSBC predicts 130 million.
The World Travel and Tourism Council estimates that by 2018 the
value of Chinese tourism will almost be as great as that of the
United States. The impact will be greatest in East Asia, especially
South-East Asia, and Australia where destinations will seem as
if they have been taken over by Chinese tourists, a phenomenon
that hitherto has been a most exclusively Western, but which will
happen on a far grander scale with the Chinese.
p520
China has already become the largest trading partner of a growing
number of countries around the world, including Brazil, Argentina,
Chile, Russia, South Africa, India, and Egypt.
p521
With 6.3 million undergraduates and 0.5 million postgraduates
studying science, engineering and medicine, China already has
the world's largest scientific workforce.
p523
By 2020 the renminbi could enjoy full convertibility, enabling
it to be bought and sold like the dollar. By then, most, if not
all, of East Asia, perhaps including Japan, will be part of a
renminbi currency system. Given that China is likely to be the
main trading partner of most if not all East Asian nations, it
will be natural for trade between them to be conducted in the
renminbi, for the value of their currencies to be fixed against
it rather than the dollar, which is often the case now, and for
the renminbi to be used as the reserve currency of choice. As
the dollar continues to weaken with the relative decline of the
US economy, it will steadily, perhaps even rapidly, lose its global
pre-eminence, to be replaced by a basket of currencies, with power,
perhaps initially being shared by the dollar, euro and yen, together
with the renminbi, depending on when it acquires convertibility.
When the renminbi is made fully convertible, it will become one
of the three major reserve currencies, along with the dollar and
the euro, and is likely to rapidly replace the dollar as the world's
major currency.
p535
The main political impact of China on the world will be its Confucian
tradition, its lack of a Western-style democracy or tradition,
the centrality of the state and the relative weakness of any civil
society that is likely to develop. Even a more democratic China
will be profoundly different from the Western model.
China will act as an alternative model
to the West embodying a very different kind of political tradition
- a post-colonial society, a developing country, a Communist regime
a highly sophisticated statecraft, and an authoritarian Confucian
rather than --democratic polity.
p538
The profound differences in the values of China (and other Confucian-based
societies like Japan and Korea) and those of Western societies
- including a community-based collectivism rather than individualism,
a far more family-orientated and family-rooted culture, and much
less attachment to the rule of law and the use of law to resolve
conflict - will remain pervasive and, with China's growing influence,
acquire a global significance.
p557
In a desperate attempt to remain a global power with a metaphorical
seat at the top table, [Britain] has tenaciously hung on to the
coat-tails of the United States, constantly walking in its shadow,
seemingly always prepared to do its master's bidding. Its foreign
policy has long been a clone of that of the United States and
its defence and intelligence policies are almost entirely dependent
on and deeply integrated with those of the US. The UK's dependence
on the US is a measure not simply of its own weakness and of its
failure to find an independent place in the world following the
collapse of its imperial role, but also of how traumatic it has
found the idea of no longer being a great power. The relationship
with the United States has been a surrogate for its lost past.
Even now, though the palest shadow of the fighting machine it
once was - its increasingly threadbare military resources testament
to its rapid historical decline - Britain still seems to find
the need to intervene militarily whenever and wherever it can,
Iraq, Afghanistan and Libya being classic recent examples: the
imperial mentality lives on regardless of shrunken means or changed
circumstances.
p557
Europe's continuing existential crisis underlines how difficult
it is for countries to adjust, not least psychologically, to a
world in which their importance is greatly diminished. Europe's
decline, furthermore, will certainly continue into the indefinite
future. Its remarkable role over the last 400 years will never
be repeated and will become an historical curiosity in the manner
of the Greek and Roman Empires, whose present-day incarnations
as Greece and Italy reflect the grandeur of their imperial past
in little more than the survival of some of their historic buildings.
p557
In a desperate attempt to remain a global power with a metaphorical
seat at the top table, it has tenaciously hung on to the coat-tails
of the United States, constantly walking in its shadow, seemingly
always prepared to do its master's bidding."' Its foreign
policy has long been a clone of that of the United States and
its defence and intelligence policies are almost entirely dependent
on and deeply integrated with those of the US. The UK's dependence
on the US is a measure not simply of its own weakness and of its
failure to find an independent place in the world following the
collapse of its imperial role, but also of how traumatic it has
found the idea of no longer being a great power. The relationship
with the United States has been a surrogate for its lost past.
Even now, though the palest shadow of the fighting machine it
once was - its increasingly threadbare military resources testament
to its rapid historical decline - Britain still seems to find
the need to intervene militarily whenever and wherever it can,
Iraq, Afghanistan and Libya being classic recent examples: the
imperial mentality lives on regardless of shrunken means or changed
circumstance.
p557
Europe's decline will continue into the indefinite future. Its
remarkable role over the last 400 years will never be repeated
and will become an historical curiosity in the manner of the Greek
and Roman Empires, whose present-day incarnations as f Greece
and Italy reflect the grandeur of their imperial past in little
more than the survival of some of their historic buildings.
p558
The dominant ideological force during the Bush era was neo-conservatism,
which was predicated on the belief that the United States could
and should assert itself in a new way. In the wake of 9/11, Washington
was in thrall to a debate about empires and whether the United
States was now an imperial power and what that might mean. The
Bush administration represented the most extreme expression so
far of an aggressive, assertive and expansionist America, but
even after it was widely seen to have failed as a result of the
Iraq debacle, there were not many in the United States who drew
the conclusion that the country was in longer-term decline, that
far from it being on the eve of a new global dominance, its power
had, in fact, already peaked; on the contrary, there was a widespread
perception that the United States simply needed to find a less
confrontational and more consensual way of exercising its global
leadership.
p558
America's huge burden of debt will prevent the country at every
level of government, especially federal, continuing to live in
the manner to which it has become accustomed. The demands of debt
will be relentless and unforgiving. If America has enjoyed the
intoxication of over-consumption for the best part of three decades,
now it faces the prospect of a permanent hangover. The fact that
Washington DC is paralysed by the political polarization that
presently afflicts the country will make the task of coming to
terms with the debt crisis that much more difficult and protracted.
These, of course, are still early days in what will be a long
process of decline, with many acts to follow over this and future
decades.
p560
The West is habituated to the idea that the world is its world;
that the international community is its community; that international
institutions are its institutions; that the world currency - namely
the dollar - is its currency; that universal values are its values;
that world history is its history; and that the world's language
- namely English - is its language. The assumption has been that
the adjective 'Western' naturally and implicitly belongs in front
of each important noun. That will no longer be the case.
p585
The 2008 financial crisis marked a fundamental shift in the relationship
between China and the United States. Nothing could or would be
quite the same again. The management of the US economy was revealed
to have been fatally flawed, a lightly regulated financial sector
almost allowed to shipwreck the entire economy. In a few short
months, the crisis served to undermine a near-universal assumption
of American, and Western, economic competence; in contrast, China's
economic credentials have been considerably burnished. The crisis
at the same time exposed the huge levels of indebtedness that
have sustained the American economy, accentuated since by the
financial rescue package, while underlining the financial strength
of the Chinese economy, now the world's largest net creditor with
its massive foreign exchange reserves. Although hardly new, the
crisis finally woke Americans up to the fact that China had become
their banker, with all this meant in terms of the shifting balance
of power.
p585
The financial crisis [2008] raised the curtain on a new and protracted
period of painfully low growth and greatly reduced expectations
in the West, with the American economy - like its European counterparts
- facing the prospect of years of austerity, with swinging reductions
in both government and personal expenditure, combined, for Americans
at least, with the urgency of greatly reducing its trade deficit.
Burdened by sovereign debt crises in Greece, Ireland, Portugal,
Spain and Italy, the European integration project threatens to
unravel, condemning the euro to oblivion in the process. Meanwhile
the Western economies continue to teeter on the brink of another
recession, with a further banking crisis and a full-scale slump
not to be excluded. In contrast, the Chinese, buoyed by huge foreign
exchange reserves, large trade surpluses and a high level of savings,
can look forward to many more years of fast economic growth. All
this adds up to an extraordinary and irreversible shift in power
from the West in general, and the United States in particular,
to China.
p588
American ruling circles have only been obliged seriously to entertain
the idea that their country might be in decline since the financial
crisis [2008]. Although the notion of decline is now widely discussed,
there is still little understanding of what it might mean or what
should be done in response. As is typical of countries confronting
decline, the United States is locked in old ways of thinking.
Its intellectual arteries have hardened to the point where imagining
a world no longer characterized by American ascendancy - let alone
one in which China might be dominant - is, for the present at
least, well-nigh impossible.
p597
As a result of the huge and growing volume of both its exports
and imports, China has, in a remarkably short period of time,
become the largest trading partner for a formidable array of countries
all over the world, including Brazil, Australia, Japan, India,
Pakistan, Russia, Chile, Egypt, South Africa and South Korea.
The phenomenon is most marked in East Asia where China is already
the largest market for the exports of a majority of countries
in the region.
p601
Perhaps as early as 2015, a majority of trade in East Asia could
be paid for in renminbi. Given that until now the dollar has been
overwhelmingly the currency of choice in the settlement of East
Asian trade, its future role in the region would be greatly reduced.
Within the same kind of time-frame, the renminbi could become
one of the world's three major trading currencies, displacing
the yen, and before long overtaking the euro.
p619
In the late 1990s, the Chinese government embarked on a major
reform of state-owned enterprises (SOEs) amid widespread speculation
in the West that privatization would lead to a huge diminution
in their size and role. The outcome was quite different. As a
result of the 'grasping the big, letting go of the small' strategy,
although the number of SOEs was greatly reduced, the bigger ones
were restructured, subsidized, consolidated and enlarged, such
that in 2008, SOEs still held 30 per cent of total assets in the
industrial and service sectors. The top 150 SOEs, far from being
lame ducks, have become enormously profitable. The aim was to
create a cluster of internationally competitive Chinese companies,
most of which were state-owned.
p620
Unlike in Japan and Korea where privately owned firms overwhelmingly
predominate and virtually always have, most of China's best-performing
companies are to be found in the state sector.
p620
At the heart of the Chinese model is a hyperactive and omnipresent
state, which enjoys a close relationship with a powerful body
of SOEs (state-owned enterprises), a web of connections with the
major firms in the private sector, and has masterminded China's
economic transformation. The Chinese state is a highly dynamic
institution that has been subject to a constant process of reform.
Based on experimentation and trial and error, it has been continuously
restructured, with institutions regularly re-purposed and incentivized.
This picture contrasts with the neo-liberal view that is still
dominant in the West, which sees the state as inevitably prone
to ossification, atrophy and anachronism.
p621
State competence has virtually disappeared from the Western agenda
over the last 30 years in the face of the neoliberal revolution
and its overwhelming preoccupation with the market and privatization.
A growing anti-state mentality has diverted and distracted attention
from the need for a state that is competent and-able-to deliver.
p621
The fact that the majority of Americans have experienced declining
real living standards for more than three decades - and that this
condition also applies, albeit more recently, to an increasing
number of West European countries - is likely to undermine the
social contract that has underpinned the stability of Western
societies for much of the post-war period.
p623
Over the last two centuries the West has enjoyed a highly privileged
relationship with the developing world, first as colonies, then
as weak post-colonial societies. As a result, the West has enjoyed
privileged access to their natural resources on very favourable
terms. But the growing economic power of many developing nations,
combined with their own increasing demand for commodities, means
that commodity prices have risen substantially, with the result
that they have become increasingly expensive for the developed
world.
p623
The profundity of the [economic] crisis will, in a variety of
ways, bring into question the forms of governance and political
assumptions that inform Western society. Economic crises of this
kind are not acts of nature but man-made events - the consequence
of policies, priorities, philosophies and interests. They reflect
on the competence, attitudes and ideology of the ruling group.
p623
The political class allowed itself to become the captive of the
financial sector and its interests, thereby paving the way for
the financial crisis. The American government has since found
itself in a state of near paralysis, beleaguered by a polarized
society, its authority constantly questioned and impugned, decision-making
too often bought by powerful lobbies, of which Wall Street remains
by far the most influential. It is difficult to think of a time
when the American government has seemed less capable of responding
to and dealing with the profound challenges that the country faces.
p623
The failure of European governance has, if anything, been even
more spectacular, as illustrated by the crisis of the euro and
the potential unraveling of the European project. The contrast
with the competence and foresight displayed by the Chinese government
in its stewardship of the country's transformation over the last
three decades is sobering.
p629
For Americans, the armed forces are the ultimate symbol of their
country's status and global power: they are deeply enshrined in
American popular consciousness and inspire powerful patriotic
emotions. The stars and stripes, the most visible of all national
flags, flies proudly from countless buildings and, in middle America
especially, outside, many homes.
p630
Declining imperial nations find the process of orderly retreat
inordinately difficult. They are so desirous of holding on to
past privileges and capabilities, there are so many vested interests
committed to preserving the status quo, the idea of greatness
is so addictive and beguiling, that the retreat from an imperial
role and its associated commitments is almost always hugely reluctant,
extremely painful, riven with conflict and, as a consequence,
piecemeal and pragmatic.
p630
The Pentagon's huge military budget is no longer, for the most
part, fit for purpose, diverting vast amounts of the country's
resources into areas which have little value when it comes to
he primary task of refurbishing the American economy.
p630
As the pressure of austerity inexorably squeezes the [US] federal
budget, it seems entirely safe to predict that the education system
will remain starved of resources, while the military-industrial
complex will be far better funded than the country's true needs
could possibly justify.
p630
The politics of decline in America will lead to dysfunctional
outcomes because great powers far from breaking with the imperial
paradigm tenaciously seek to hold on to it as a result of the
many powerful interests that are bound up with its retention,
thereby only serving to hasten the process of decline.
p631
Chinese exports overtook American exports in 2007 and by 2011
exceeded them by a staggering 30 per cent. Similarly, Chinese
fixed capital investment overtook that of America in 2009 and
already exceeded it by more than 40 per cent in 2011. In 2010,
Chinese manufacturing output surpassed that of the United States,
as also did car sales, energy consumption and, perhaps most surprisingly,
patents granted to residents. China's external financial wealth,
of course, already hugely exceeds that of the United States: it
enjoys total net foreign assets of $2 trillion, while America
has net debts of $2.5 trillion.
p636
It is conceivable that American global power will unravel far
more quickly than anyone previously imagined and that within two
decades its influence could be a pale shadow of what it is now.
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