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The Chinese success at the G20 Summit of Hangzhou

Giancarlo Elia Valori

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In a letter written in December 2015, Xi Jinping proposed some national and global objectives for the G20 Summit of September 4-5, 2016. For the CCP Secretary the aim of the G20 system – which he recalls was born at the beginning of the 2008 financial crisis – would be to develop concrete goals leading to a multipolar and shared global economy.

In that letter Xi Jinping said that, if said goals were reached, China would provide its decisive contribution, even partially changing its production system.

The win-win strategy is the declared goal of the Chinese Secretary. Over and above the wording of this concept, this has a very specific meaning.

As shown by statistics, 77% of all the goals set at the previous G20 Summit held in Antalya have been achieved.

Furthermore, considering that data shows that the G20 countries account for approximately 90% of the world GDP, we can realize that, over and above declarations of principle and set phrases, for China the Hangzou Summit was the ideal forum to start redesigning its place in the world.

In his opening speech at the G20 Summit in China, Xi Jinping clarified – in modern terms – a concept of the old Maoist tradition, whereby each country must take its own specific path to development.

In other words, there are no models to be imported in an already globalized world, possibly after a long and ruinous war for “democracy”.

Each country has its own vocation, its system, its shih, namely its natural form, just to use a term of Taoist philosophy.

While recalling the effort – a true “Great Leap Forward”, unlike Mao’s autarkic line of the 1950s – which has led China to be the second largest economy, Xi Jinping clarified – always between the lines – another important point.

According to the CPC Secretary, China will not slow down the pace of its reforms, which means that today it will still tend to strengthen its internal market and its fight against corruption.

According to the latest data, the Party has sanctioned as many has 300,000 officials this year only.

Xi Jinping’s fight against corruption wants to convey the message that the Party is resuming the central role it has always played in Communist China and intends to open itself to foreign markets in the best possible way.

Hence without foreign entrepreneurs’ actions manipulated by the corruption of State’s and Party’s cadres, executives and leaders.

In addition, Xi Jinping wants to change the old equation of China’s development, with a view to increasing competitiveness on an equal footing with the most technologically advanced Western economies.

In other words, so far China has made social and industrial dumping towards the West’s “mature” productions, characterized by low growth rate and average value added.

Thanks to this system, China is overcoming underdevelopment and is “standing up” – to use again Mao Zedong’s terminology.

Currently the strategy is changing: China will play on equal terms in the global technology and capital market.

In that way, over the years, China had become what some US economists called “the global sweatshop”, thus using for the Chinese factories a terminology reminding us of Charles Dickens’ novels.

According to the CPC Secretary, Xi Jinping, now the Chinese capital will be used, on the one hand, to create a supply-side economy within the country and, on the other hand, to enter the new labour-saving technological sectors, which will be the majority in future productive systems.

Hence, with a view to avoiding the huge Chinese population creating problems of internal political stability which could not be solved, even by force, Xi Jinping is enlarging the Chinese domestic market.

This is the reason why, however, he wants the West to keep on contributing to the upgrade of the Chinese economy.

Globalization is still one of China’s primary goals.

Hence the reference made by Xi Jinping to the renewal of the technological drivers of this global production phase is particularly significant.

And this is the reason why China still requires an open and competitive global market.

Instead of absorbing “old” productions, as in the days of the “Four Modernizations”, China wants to participate in the creation of the new technologies – not only the digital ones – which will characterize the economy in the coming years.

Initially Deng Xiaoping wanted to compete with Hong Kong in attracting foreign companies.

Now Xi Jinping will participate, on an equal footing with the West, in the definition of the next economic growth cycle.

A cycle in which, incidentally, Italy will participate only marginally.

Its current leadership has not even the faintest idea of the issues raised by Xi Jinping in his speech delivered to the G20 Summit.

Therefore the Chinese leader’s line is even clearer: in the near future, development will be based on a range of tax, monetary and geopolitical tools, of which Xi Jinping’s China is fully aware.

Hence it will maintain a flexible fiscal policy and it will support some tax cuts. It will also increase government spending, in contrast to the private capital crisis, while it will maintain and increase the yuan-denominated funds deposited abroad.

This project is reminiscent of the Eurasian project to be undertaken jointly with Russia.

The project consists in replacing the US dollar, or at least being side by side with it, as world exchange currency.

Again between the lines Xi Jinping conveys the message that globalization is perfect because it helps us to manage the still substantial Chinese overproduction.

In addition, China needs to cut production costs – and here the Western advanced management counts – as well as   change its costly and unproductive real estate market.

Finally, China must improve the distribution network efficiency and avoid financial asymmetric shocks.

All this can be read between the lines in the speech delivered by Xi Jinping.

And it is also worth recalling the attention paid by the Chinese CPC Secretary to the “green” economy because it improves the whole economic performance and avoids the parallel health and infrastructure costs and even the cost of adapting the Chinese production to the world market.

According to Xi Jinping, who is still a serious expert of Marxism, it is the new climate of global collaboration which generates the new economic growth drivers, not vice versa.

Without a political decision on the new production formula there will be no transformation of the global economy.

Hence the issue lies in enhancing international cooperation and involving also the marginal countries we must rescue from the jihad or from the long fratricidal wars, as well as particularly ensuring a level playing field in the international system.

China has not appreciated the US policies of vast “ocean” alliance for trade globalization – the TTIP for the European Union and the TTP for Asia, namely the strategies put in place by President Obama.

Types of trade policies that – while speaking of the British economic growth – Carl Schmitt called “thalassocratic”.

In fact, China is both land and ocean.

It has not accepted the North American TTP because it suspects there is a US desire of leadership in global trade.

China wants to take advantage of the void of the US global policy – which has been blocked by the EU for the TTIP and has seen only 13 countries advocating the Asian TTP, clearly targeted against China – and fit in it, also to avoid becoming a regular purchaser of US goods and distorting its monetary policy, which is designed to promote the yuan internationalization.

Furthermore, so far neither Hillary Clinton nor Donald Trump have fully clarified their projects towards China.

Using again Taoist concepts, the “emptiness” of US policy must be replaced by the “fullness” of the new Chinese geoeconomy.

Moreover, the current European leaders attended the Huangzou G20 Summit having in mind the next EU Summit of Bratislava, which shall deal with the Brexit issue.

Currently no EU Head of State or Government has the ability, the culture and the strength to evaluate operations longer than six months.

Conversely the British Prime Minister, Theresa May, has already had confidential contacts with Xi Jinping and has spoken of a “golden age” in bilateral relations between Great Britain and China.

At the G20 Summit, Prime Minister May also met five other European countries to negotiate the new trade system after the Brexit.

The British Prime Minister wants to ward off the danger of a new US approach vis-à-vis Great Britain and is opening to China with a view to becoming a global hub, not only at financial but also at productive level.

China is expected to invest approximately 40 billion pounds in Great Britain, not to mention the building of the nuclear power plant Hinkley Point C and later of Sizewell in Sussex.

Great Britain wants to use China with a view to positively stepping up Brexit, thus decreasing its economic risks. Great Britain will replace the tired old Europe, with the rich, powerful and vibrant China.

This means applying to the European economy – that Great Britain is leaving – the “Four Is”, the four key priorities which provided the slogan of the Huangzou G20 Summit, in the most genuine and authentic Chinese tradition.

The future economy shall be “Innovative, Invigorated, Interconnected and Inclusive”.

In other words, China does no longer intend to support global growth only with financial means, as happened during the US-led globalization.

In fact, China founded the Asian Infrastructure Investment Bank (AIIB) in December 2015 and aims at including the nations marginalized from the first wave of globalization. The AIIB has already 57 members.

Indeed China aims at a global economy which will implement new value creation mechanisms, especially manufacturing and non-financial ones.

And here the link between the Russian Federation and China will be strengthened permanently.

The starting point will be the joint initiative for the Russian Far East and the Chinese North-East.

The G20 spoke about the new Russian-Chinese Eurasia and the Chinese leaders said to the leaders gathered for the Summit that this would lead to “big surprises.”

The systems and organizations on the basis of which the Chinese and Russian project will be implemented are the Shanghai Cooperation Organization and ASEAN, through the Eastern Economic Forum.

Hence, in this regard, we can say that, for Xi Jinping, the G20 held in China was a great success.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board. In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France

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East Asia

China’s soft power and its Lunar New Year’s Culture

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Authors: Liu Hui & Humprey A. Russell*

As a common practice, China has celebrated its annual Lunar new year since 1984 when the leaders of the day decided to open mysterious country in a more confident and transparent way. So far, the lunar new year gala has become a part of Chinese cultural life and beyond. The question then arises why China or its people have been so thrilled to exhibit themselves to the world, as its economy has already impressed the world by its rapid pace and tremendous capacity.

As it is well-known, in international relations, peoples from different cultural and ethnical backgrounds need to enhance their understanding which eventually leads to mutual respect and tolerance as the key to the world peace and stability. China is well-aware of this norm. As a rising power with 1.3 billion people, it is necessary for China to introduce its culture and notion of the peaceful rise to the audiences globally. Joseph Nye, Jr., the founder of the concept of the soft power, has argued: “The currency of soft power is culture, political values, and foreign policies. During the information age, credibility is the scarcest resource.”In light of this, China has been steadily involved in cultural promotions abroad.

China is an ancient civilization but diplomatically it is a new global player in terms of its modern involvement into the world affairs, particularly in terms of reform and openness. Yet, since China has aspired to rejuvenate itself as one of the leading powers globally, it is natural for the world en bloc to assume Beijing’s intention and approach to the power transition between the rising power like itself and the ruling powers such as the United States and the G-7 club. Consider this, China has exerted all efforts to project but not propagate its image to the world. Here culture is bound to play the vital role in convincing the countries concerned that “culturally China has no the gene of being a threat to other peoples,” as Chinese President Xi has assured. The annual lunar gala is evidently a useful instrument to demonstrate Chinese people, culture and policies as well.

Culturally speaking, the Chinese New Year celebrations can be seen as follows. In a general sense, similar themes run through all the galas with the local cultural and ethnical ingredients, for instance, Chinese opera, crosstalk and acrobatics, as well as the lion-dancing or the dragon-dancing from time to time. Yes, the galas play the role of promoting the Chinese communities over the world to identify themselves with the Chinese culture which surely strengthen the cultural bonds among the Chinese, in particular the younger generations. Moreover, the dimension of the Chinese culture can be found beyond the country since its neighbors like Japan, Vietnam, South Korea and Malaysia, as well as Chinese communities in many other areas also perform those arts at the holiday seasons. The message here is clear that China, although it is a rising great power, has never abandoned its cultural tradition which has emphasized the harmony among the different races and ethnics.

Recently, the lunar new year celebrations across China have invited professional and amateur artists from all over the world. Those foreign guest artists and many overseas students studying in China have been able to offer their talents in either Chinese or their mother tongues. No doubt, this is a two-way to learn from each other because Chinese performers are benefited from the contacts with their counterparts globally. In terms of public diplomacy, Beijing aims to send a powerful and sincere message to the world: China can’t be in isolation from the world because it has aspired to be a great and inclusive country as well. To that end, the rise of China is not going to challenge the status quo, but will act as one of the stakeholders.

As usual, realists have difficulties and even cultural bias to accept the rhetoric from a country like China since it has been regarded by the ruling powers of the world as an ambitious, assertive and communist-ruled country with its unique culture. To that challenge, the Chinese government and the people have done a great deal of works to successfully illustrate Chinese practice of harmony at the societal level idealized by Confucius’ doctrines. This social harmony is made possible only by the realization of the Taoist ideal of harmony with nature – in this case, harmony between humans and nature. This explains why panda and many other rare animals are now viewed as new national symbol of China. Although they are unnecessarily an indispensable part of the lunar new year gala, the viewpoint is that the rise of China would not be completed at the cost of the ecological environment like many other countries did in history.

Practically speaking, the lunar new year celebrations are being conducted in a rich variety of ways such as concerts, cuisines, folk entertainments and even forums and receptions around the world. Major global commercial centers have also served to create a Chinese holiday atmosphere, adapt to the needs of Chinese tourists, attract active participation from local residents, and provide such diversities of cultural and social events. What is worth mentioning is that some Chinese-North American non-profit, non-partisan organizations are beginning to celebrate Chinese lunar gala in partnership with other local counterparts. For instance, the Chinese Inter-cultural Association based in California, recently hosted a Chinese New Year party in a Persian restaurant in partnership with a local non-profit, non-partisan organization called the Orange County Toastmaster Club, part of Toastmaster International. Also, in another Chinese New Year celebration that was open to people of all races in Pasadena, two Americans played the guitar and sang songs in fluent Chinese! Both galas were attended by people of all racial backgrounds around the world. Given this, it is fair to say that China’s soft power supported by its annual lunar new year festival is on the rise globally with a view to promoting mutual respect and friendship among the peoples of various cultural, ethnical and racial origins.

Yet, though the impressive feats are achieved, it has noted that China still has a long way to go in terms of its twin-centennial dreams. First, as a developing country with its unique culture, it is necessary for China to promote its great ancient culture abroad, but it is also imperative to avoid “introducing” China rashly into the globe. Essentially, soft power is more the ability to attract and co-opt than to use force or give money as a means of persuasion. Thereby, it is the very ability to shape the preferences of others through appeal and attraction. As cross-cultural communication is a long process, Nye admitted a few years ago, in public affairs, “the best propaganda is not propaganda.”

This is the key to all the countries. In 2014,President Xi formally stated, “China should increase its soft power, give a good Chinese narrative, and better communicate its messages to the world.” In light of this, Chinese lunar new year gala surely acts as soft power to project the image of China internationally.

* Humprey A. Russell (Indonesia), PhD candidate in international affairs, SIPA, Jilin University.

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East Asia

China’s step into the maelstrom of the Middle East

Dr. James M. Dorsey

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The Middle East has a knack for sucking external powers into its conflicts. China’s ventures into the region have shown how difficult it is to maintain its principle of non-interference in the internal affairs of other states.

China’s abandonment of non-interference is manifested by its (largely ineffective) efforts to mediate conflicts in South Sudan, Syria and Afghanistan as well as between Israel and Palestine and even between Saudi Arabia and Iran. It is even more evident in China’s trashing of its vow not to establish foreign military bases, which became apparent when it established a naval base in Djibouti and when reports surfaced that it intends to use Pakistan’s deep sea port of Gwadar as a military facility.

This contradiction between China’s policy on the ground and its long-standing non-interventionist foreign policy principles means that Beijing often struggles to meet the expectations of Middle Eastern states. It also means that China risks tying itself up in political knots in countries such as Pakistan, which is home to the crown jewel of its Belt and Road Initiative — the China–Pakistan Economic Corridor (CPEC).

Middle Eastern autocrats have tried to embrace the Chinese model of economic liberalism coupled with tight political control. They see China’s declared principle of non-interference in the affairs of others for what it is: support for authoritarian rule. The principle of this policy is in effect the same as the decades-old US policy of opting for stability over democracy in the Middle East.

It is now a risky policy for the United States and China to engage in given the region’s post-Arab Spring history with brutal and often violent transitions. If anything, instead of having been ‘stabilised’ by US and Chinese policies, the region is still at the beginning of a transition process that could take up to a quarter of a century to resolve. There is no guarantee that autocrats will emerge as the winners.

China currently appears to have the upper hand against the United States for influence across the greater Middle East, but Chinese policies threaten to make that advantage short-term at best.

Belt and Road Initiative-related projects funded by China have proven to be a double-edged sword. Concerns are mounting in countries like Pakistan that massive Chinese investment could prove to be a debt trap similar to Sri Lanka’s experience.

Chinese back-peddling on several Pakistani infrastructure projects suggests that China is tweaking its approach to the US$50 billion China–Pakistan Economic Corridor. The Chinese rethink was sparked by political volatility caused by Pakistan’s self-serving politics and continued political violence — particularly in the Balochistan province, which is at the heart of CPEC.

China decided to redevelop its criteria for the funding of CPEC’s infrastructure projects in November 2017. This move seemingly amounted to an effort to enhance the Pakistani military’s stake in the country’s economy at a time when they were flexing their muscles in response to political volatility. The decision suggests that China is not averse to shaping the political environment of key countries in its own authoritarian mould.

Similarly, China has been willing to manipulate Pakistan against its adversaries for its own gain. China continues to shield Masoud Azhar (who is believed to have close ties to Pakistani intelligence agencies and military forces) from UN designation as a global terrorist. China does so while Pakistan cracks down on militants in response to a US suspension of aid and a UN Security Council monitoring visit.

Pakistan’s use of militants in its dispute with India over Kashmir serves China’s interest in keeping India off balance — a goal which Beijing sees as worthy despite the fact that Chinese personnel and assets have been the targets of a low-level insurgency in Balochistan. Saudi Arabia is also considering the use of Balochistan as a launching pad to destabilise Iran. By stirring ethnic unrest in Iran, Saudi Arabia will inevitably suck China into the Saudi–Iranian rivalry and sharpen its competition with the United States. Washington backs the Indian-supported port of Chabahar in Iran — a mere 70 kilometres from Gwadar.

China is discovering that it will prove impossible to avoid the pitfalls of the greater Middle East. This is despite the fact that US President Donald Trump and Saudi Arabia’s powerful Crown Prince Mohammad bin Salman seem singularly focussed on countering Iran and Islamic militants.

As it navigates the region’s numerous landmines, China is likely to find itself at odds with both the United States and Saudi Arabia. It will at least have a common interest in pursuing political stability at the expense of political change — however much this may violate its stated commitment to non-interference.

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East Asia

Chinese extradition request puts crackdown on Uyghurs in the spotlight

Dr. James M. Dorsey

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A Chinese demand for the extradition of 11 Uyghurs from Malaysia puts the spotlight on China’s roll-out of one of the world’s most intrusive surveillance systems, military moves to prevent Uyghur foreign fighters from returning to Xinjiang, and initial steps to export its security approach to countries like Pakistan.

The 11 were among 25 Uyghurs who escaped from a Thai detention centre in November through a hole in the wall, using blankets to climb to the ground.

The extradition request follows similar deportations of Uyghurs from Thailand and Egypt often with no due process and no immediate evidence that they were militants.

The escapees were among more than 200 Uighurs detained in Thailand in 2014. The Uyghurs claimed they were Turkish nationals and demanded that they be returned to Turkey. Thailand, despite international condemnation, forcibly extradited to China some 100 of the group in July 2015.

Tens of Uyghurs, who were unable to flee to Turkey in time, were detained in Egypt in July and are believed to have also been returned to China. Many of the Uyghurs were students at Al Azhar, one of the foremost institutions of Islamic learning.

China, increasingly concerned that Uyghurs fighters in Syria and Iraq will seek to return to Xinjiang or establish bases across the border in Afghanistan and Tajikistan in the wake of the territorial demise of the Islamic State, has brutally cracked down on the ethnic minority in its strategic north-western province, extended its long arm to the Uyghur Diaspora, and is mulling the establishment of its first land rather than naval foreign military base.

The crackdown appears, at least for now, to put a lid on intermittent attacks in Xinjiang itself. Chinese nationals have instead been targeted in Pakistan, the $50 billion plus crown jewel in China’s Belt and Road initiative that seeks to link Eurasia to the People’s Republic through infrastructure.

The attacks are believed to have been carried out by either Baloch nationalists or militants of the East Turkestan Independence Movement (ETIM), a Uighur separatist group that has aligned itself with the Islamic State.

Various other groups, including the Pakistani Taliban, Al Qaeda and the Islamic State have threatened to attack Chinese nationals in response to the alleged repression of Uyghurs in Xinjiang.

ETIM militants were believed to have been responsible for the bombing in August 2015 of Bangkok’s Erawan shrine that killed 20 people as retaliation for the forced repatriation of Uighurs a month earlier.

The Chinese embassy in Islamabad warned in December of possible attacks targeting “Chinese-invested organizations and Chinese citizens” in Pakistan

China’s ambassador, Yao Jing, advised the Pakistani interior ministry two months earlier that Abdul Wali, an alleged ETIM assassin, had entered the country and was likely to attack Chinese targets

China has refused to recognize ethnic aspirations of Uyghurs, a Turkic group, and approached it as a problem of Islamic militancy. Thousands of Uyghurs are believed to have joined militants in Syria, while hundreds or thousands more have sought to make their way through Southeast Asia to Turkey.

To counter ethnic and religious aspirations, China has introduced what must be the world’s most intrusive surveillance system using algorithms. Streets in Xinjiang’s cities and villages are pockmarked by cameras; police stations every 500 metres dot roads in major cities; public buildings resemble fortresses; and authorities use facial recognition and body scanners at highway checkpoints.

The government, in what has the makings of a re-education program, has opened boarding schools “for local children to spend their entire week in a Chinese-speaking environment, and then only going home to parents on the weekends,” according to China scholar David Brophy. Adult Uyghurs, who have stuck to their Turkic language, have been ordered to study Chinese at night schools.

Nightly television programs feature oath-swearing ceremonies,” in which participants pledge to root out “two-faced people,” the term used for Uyghur Communist Party members who are believed to be not fully devoted to Chinese policy.

The measures in Xinjiang go beyond an Orwellian citizen scoring system that is being introduced that scores a person’s political trustworthiness. The system would determine what benefits a citizen is entitled to, including access to credit, high speed internet service and fast-tracked visas for travel based on data garnered from social media and online shopping data as well as scanning of irises and content on mobile phones at random police checks.

Elements of the system are poised for export. A long-term Chinese plan for China’s investment in Pakistan, dubbed the China Pakistan Economic Corridor (CPEC), envisioned creating a system of monitoring and surveillance in Pakistani cities to ensure law and order.

The system envisions deployment of explosive detectors and scanners to “cover major roads, case-prone areas and crowded places…in urban areas to conduct real-time monitoring and 24-hour video recording.”

A national fibre optic backbone would be built for internet traffic as well as the terrestrial distribution of broadcast media. Pakistani media would cooperate with their Chinese counterparts in the “dissemination of Chinese culture.”

The plan described the backbone as a “cultural transmission carrier” that would serve to “further enhance mutual understanding between the two peoples and the traditional friendship between the two countries.”

The measures were designed to address the risks to CPEC that the plan identified as “Pakistani politics, such as competing parties, religion, tribes, terrorists, and Western intervention” as well as security. “The security situation is the worst in recent years,” the plan said.

At the same time, China, despite official denials, is building, according to Afghan security officials, a military base for the Afghan military that would give the People’s Republic a presence in Badakhshan, the remote panhandle of Afghanistan that borders China and Tajikistan.

Chinese military personnel have reportedly been in the mountainous Wakhan Corridor, a narrow strip of territory in north-eastern Afghanistan that extends to China and separates Tajikistan from Pakistan since March last year.

The importance China attributes to protecting itself against Uyghur militancy and extending its protective shield beyond its borders was reflected in the recent appointment as its ambassador to Afghanistan, Liu Jinsong, who was raised in Xinjiang and served as a director of the Belt and Road initiative’s $15 billion Silk Road Fund.

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