Thirty years ago China’s share of world trade hovered below 1% but has increased more than tenfold since. Every year since the turn of the millennium, China has provided a quarter of the international economy’s annual growth.
China’s entering the mainstream of the global economy was symbolically completed when it became a member of the World Trade Organization (WTO) in 2001. This added 800 million workers to the international labor force. China is now the biggest market and the biggest economy in the world. The West’s economy and political elite are forced to ride the shock waves caused by China’s rise. Western retailers source most of their stock from China. Millions of blue-collar workers have lost their jobs in the West as production is relocated to the Far East, and China’s huge untapped rural labor reserve will not run out in the coming decade. The entry of China and India into the global labor market reduced the global capital to labor ratio by 55 to 60%. This is the single most important ratio explaining the phenomenon we call globalization. The development of Chinese capitalism is fundamentally different from the previous British or American models though, where the technological innovations of their own inventors fuelled progress. China, on the other hand, imported ready-made solutions from the more developed parts of the world. China is also becoming an international financial power. It has become the leading holder of US Treasury debt and thus is now officially the American government’s largest foreign creditor. China has also accumulated the largest foreign currency reserves in the world.
In 1820, China and India combined accounted for about half of the world output, while Europe only accounted for 24% and the US only 2% (!). China only exported, the West – primarily Britain, the hegemonic power of the 19th century – imported. A huge global trade imbalance was accumulated to China’s advantage and China held an incredible amount of British silver. Today’s situation is surprisingly similar. In the 19th century this led to the opium wars and to the end of the once mighty Chinese empire. In 1978 China accounted for less than 1% of global GDP. What the West sees now is indeed the re-emergence of China in an incredibly fast way.
China’s middle class is expanding at an unheard of speed, and its wealthy few are becoming the wealthy many. Chinese society is undergoing rapid transformation, which alters people’s self-identity as well. A poll published by the Chicago Council on Global Affairs already in 2007 indicated that the Chinese believed that, in ten years’ time, their country will be just as powerful and influential in the world as the United States. At the same time the majority of Americans, Chinese, Indians and South Koreans polled were of the opinion that China would pull ahead of the US in the global race. Clearly China is no longer just an economic power but also a political force to be reckoned with, often flexing its muscles to further increase American unease.
The turn of the new millennium saw the emergence of new centers of gravity, often in the form of non-centralized conglomerates of states with large differences among them and without a single political will. The most important such center of gravity is South-East Asia, which has a growing influence on the global economy and world politics. With the boom in the Chinese economy, the slow but steady recovery of Japan’s economy, the reinvigoration of the “small tigers” and the strengthening regional roles of India and Australia, South and East Asia looks set to become the key focal point of the next world order. But with that role and power comes increased responsibility, in particular for the region’s leading country: China. Issues that have been considered domestic in nature — such as setting the yuan’s exchange rate, the efficient organization of the textile industry, health care reforms, better and more transparent governance or curbing corruption — will have a direct global impact.
As Asia rises, so does the West’s economic, demographic, political and military significance erode. The days of the global rules and institutions established by the West are numbered. Most Chinese researchers, politicians and even the man in the street are convinced that, things will soon be back to normal as China is becoming the world’s biggest economy just as it had always been until the beginning of the 19th century. (As late as the 18th century, China was the world’s largest trading nation, conducting one third of global trade, with India as runner up boasting one sixth of global trade.)
By 2015 the era of G7/G8 – in other words: the era of absolute Western domination with US hegemony – is over. The 21st century will refashion the global political order as well as the global financial world. The hegemony of the dollar — just as of the USA — will come to an end. International institutions need to be reformed. It is just absurd for Belgium to have greater voting weight in the International Monetary Fund than India. At the moment international organizations are functioning inefficiently and are on the decline, which is not surprising, as they are institutions of the post-war West-centered world. We are living in an era of G20 but this seems only an interim solution. The question is what world order follows? Suggestions are plenty.
There is Robert Haass’s vision of a non-polar world order, more precisely a non-polar disorder, which is inevitably unstable in the long run. G3 is more of a Chinese idea. It is a multiple variable geometry in which different G3 setups can be envisaged (China, USA, Russia; China, EU, USA; China, Japan, USA) according to the needs of and relevance to the issue in question. G2 (a Sino-American tandem) seems for the time-being to be a weird animal to the Chinese. In 2009, some began talking about a G2 in the model of the G7, G8 or G20 and envisioned an Obama-Hu Jintao duo deciding the fate of the world. China was abashed by that talk of a G2 and was quick to deny any speculations about a bipolar USA-China world order. China has at least two problems with the G2 setup: for the time-being, it does not want to expose itself as a real global power nor wants it to be drawn too close to the US.
Chinese politicians and scholars treat the West’s loss of influence as granted, but there are people in China who worry about the possibility of America’s rapid decline. The more realistic observers in Beijing believe that America’s collapse (no matter how realistic this is anyway) would have disastrous implications, because China is not yet ready to build an alternative world order. Hence the objective should be to compel the USA to show more willingness to cooperate rather than bring it down.
“The rise of China is granted by nature. In the last 2,000 years China has enjoyed superpower status several times…China’s decline is a historical mistake which should be corrected” — the political scientist Yuan Xuetong wrote in the Journal of Contemporary China in 2001, the year when the image of the USA’s invincibility was shattered. “Isn’t it possible that China, like all rising powers of the past, including the United States, wants to reshape the international system to suit its own purposes, commensurate with its new power?” Robert Kagan asked four years later in the pages of the Washington Post.
China is preparing itself, trying to identify the weaknesses and strengths of its rivals. Its vast administration, including the army and intelligence services, is busy calculating, analyzing, generating strategies, and suggesting dos and don’ts for China’s rise. Meanwhile, the Chinese economy is growing at breakneck speed and beginning to reshape the global market. Chinese foreign policy has restricted its attention to local, or at most regional affairs, but the isolationist, policy of the nineties is inappropriate in the 21st century. It is unclear whether China’s true character is soft power or hard power. They have been undecided for centuries, even though China has been involved in wars or armed conflicts with almost all of its neighbors. Chinese political leaders seem to be uncertain at this point how to define the future role of China in the emerging world order. It is indeed a major problem for the West that it does not see where China is headed; but it is even a bigger problem for the whole world that China itself does not know either. Having said this China is reinforcing its global security focus. Chinese President Xi Jinping already announced the setting up of the Chinese National Security Commission (CNSC). The CNSC has three major tasks.
– To advise the Politburo (which oversees the Communist Party) and the highest levels of the leadership on security strategy.
-To coordinate between different departments throughout the party, the government, the military, and society.
– To conduct crisis management and risk management, for both internal and external security threats.
In July 2015, the Chinese government passed a new national security law that will strengthen its role in China’s national security policy. The Chinese Security Commission decided to establish high-level communication mechanisms with the US National Security Council as security issues between China and the US already affect the entire globe, and especially the Asia-Pacific region. The hotline proposed by China between the Chinese National Security Commission and the U.S. National Security Council is meant to handle emergency situations.
The transformation of the international order, the end of a hegemonic system, the appearance of a new power has often brought disaster in history. The only exception to this rule was the changeover of power between the British Empire and the United States in the 20th century, but this was a special case for two reasons. Firstly, the two nations were closely related culturally (in the broadest sense); secondly, that changeover happened during global wars in which the two Anglo-Saxon powers fought side by side. The map of the world is being redrawn again at the beginning of the 21st century. In a Huntingtonian world the birth of a new world order and the emergence of new global powers inevitably lead to a crisis or a global conflict. Zakaria and Khanna, two well-known analysts of current times are less pessimistic, they talk about a world coming to terms with a natural multipolarity by the emergence of the second and the third world.
On a historical scale, America’s rise to global power status was extremely quick: on the eve of World War II the US Army was smaller than that of the Dutch but by 1944 America’s military output was double that of the Axis powers. The USA climbed to the top of the world with unprecedented speed and stayed there for a short century. In 2000 the United States was the strongest power in history, whose global supremacy was uncontested. Its budget showed a healthy surplus, its military might was unparalleled, its economic clout colossal. However, since 2001 the US’s global position weakened. There is a lot of discussion about the end of the US supremacy and also on why has America’s global dominance come to an end and how China found its way up? One obvious explanation is the dynamics of history: it is simply impossible to stop the emergence of new powers. If a civilization, culture, country or region can improve the efficiency of its economy, if it can put human, technological and financial resources at work in a massive way, and if the external environment is favorable, it will become successful. If this happens in a big enough country, it will become a world power. Another explanation is the mistakes committed by the United States: its misguided energy policy, its immensely expensive wars have not produced any tangible results but have emptied the federal coffers, eroded America’s international image and gave China the chance to build up its economy, diplomacy and military almost unnoticed by the hegemon. In the meantime the US economy has become dependent on China (and vice versa for that matter): what China produced the USA bought, and as a result China now holds trillions of dollars in US government bonds. The arrival of the turning point has been accelerated by the profound demographic and economic changes, the pace of globalization, 9/11, America’s military failures and the economic crisis. As the Japanese prime minister said at the end of an international summit in late 2008: “History teaches us that crises create new order.” The shift of geopolitical power towards Asia coincides with the end of a golden age of the West, which brought rapid growth, low inflation and considerable improvements in the standard of living, as well as with an economic crisis unseen in 60 years.
The American intelligence community predicted a fundamental reshuffle of the world as we know it in the next few decades already a decade ago. The international order, as it was created in the wake of World War II, will be unrecognizable by 2025 — they say, adding that the pace at which wealth and political power will move from West to East is unprecedented in modern history. The world will become ever more dangerous, but richer at the same time, which does not mean that the majority of the Earth’s population will not face food and water shortages. Today’s oil powers may become tomorrow’s beggars, while developing countries and regions that build their economies on hard work will see stunning growth. The rise of the non-Western world, which began in the 1950s with Japan and continued in the ’60s with the Asian tigers, became a full-blown trend with the emergence of China, India and Brazil and will continue for decades.
It remains to be seen whether China’s rise will happen peacefully in the long run. The West is instinctively wary of geopolitical changes and knows also that dictatorships do not last long. Still, China needs peace in the world to be able to strengthen its economy, annex Taiwan at some stage and build an international order in which Asia and China play a central role. For the time being, China is not aiming at global hegemony or confrontation. Since the mid-nineties, China has been claiming to be a responsible, peaceful and cooperative partner of the West. A confrontation with America is unlikely to pay any dividends and is therefore not a realistic option. However it is encoded into Chinese culture that everything must have a counterbalance. A power without a counterbalance is unnatural and dangerous. Power must be balanced internationally without encroaching upon the independence or sovereignty of nation states. After the collapse of the Soviet Union the Chinese hoped that the Cold War era would be replaced by a multipolar world order, and were disappointed to see the dawn of total American hegemony. China was shocked by the US intervention in Kosovo in 1999; bilateral relations were all but frozen, and China was afraid that the USA would use Taiwan and Japan to keep China at bay. This was the general view held by Chinese politicians and defense analysts at the turn of the millenium. But the world has changed immensely since then. Niall Ferguson talked about the end of Chimerica – a marriage between the US and China in a completely intertwined economy where America consumes and China produces, China lends, America borrows, China exports, America imports. This cooperation was obviously a pretty problematic one therefore did not last for long. Both USA and China maintain strong suspicions of each other’s intentions. Accordingly, both sides are hedging their bets and securing their positions should relations deteriorate. As long as the question of Taiwan is not resolved peacefully and definitively, hostility between China and the USA remains a realistic risk. Nonetheless, as long as the USA does not pose a threat to its vital national interests, China is willing to tolerate the current global framework but with an ever-growing determination to gradually change it from inside.
According to Kissinger, the United States must be aware of its supremacy but act as if global security depended on all global actors. This strategy can divide the psychological burden of responsibility and will allow the principles of freedom and democracy to dominate international politics. In other words: share power to hold on to power. Kissinger believes that China, with four thousand years of history behind it, must know something about survival, hence the West should avoid being condescending. Kissinger is convinced that China’s rise will be the greatest challenge to the West as well as to China itself. Its political mentality, institutional culture and traditions do not predestine the US to accept easily the loss of its status as the world’s number one power and become one of many global actors. Also, for the US multilateralism has a different meaning and importance than to European countries and the EU. For America multilateralism is the means of achieving its end of a stable world order with the USA as the leading power. For Europe multilateralism is the end itself.
Having said all this, in 2015 US’s global military superiority is still beyond question. The US Navy commands a fleet bigger than the next 50 largest fleets together; America spends over a billion dollars a day on defense. The US economy is world leader not only in term of output but also in the use of cutting-edge technology. America’s intellectual and cultural impact — from Harvard through Hollywood to McDonald’s — is the biggest soft power in the world. Not to mention the fact that the USA is not a status quo power, America is not afraid of change. Apart from its unwavering faith in democracy and in its own specialness, its embrace of change is one of its key distinguishing features.
The rise and reinforced international profile of China and Asia poses some inconvenient but crucial questions for the West. As Asia rises and Europe stagnates, an overhaul of international organizations naturally seems inevitable, however difficult that may be. The French president suggested that India should be given a permanent seat on the UN Security Council, but when the possibility of the EU being given a single seat on the Security Council (instead of the two currently held by France and the United Kingdom), he called it very unlikely that the EU — which has trouble agreeing on much less contentious issues — could find consensus on such a sensitive and crucial question.
What guaranteed the prosperity of the West, apart from its military might, was that the world order that emerged in the wake of World War II was shaped by Western ideas, rules and values. Global politics undergo seismic shifts the global order is realigned and the global value set might also be rearranged to a certain extent. This latter is much less talked about but equally important – in the long run, certainly. We are witnessing not only the competition of economies and military capabilities but of values as well. And what we experience is a new phenomenon: the rise of alternative values and institutions in the world in parallel with a certain level of democracy fatigue even in the West.
In parallel with the global power reshuffle new social models are appearing. These new societal models are not hybrids combining elements of Western society. They tend to be forms of state capitalism or non-liberal (pseudo) democracies, where elections are held regularly but a populist elite rules the country nonetheless. Many developing countries go through this stage in their development; the question is whether they will be able to move on and turn themselves into real democracies. At the same time Western liberal democracy shows signs of ageing and becoming rickety as cowardly political elites motivated only by polls discredit democracy altogether. Postmodern politics is drifting towards dim-witted media politics.
Does China’s rise really mean that the universal expansion of the Western world and of liberal democracy have come to a halt? When China broke with dogmatic communism and opened itself up to the world, it spent three decades adopting Western principles, particularly in the areas of foreign and economic policy. China is opening a new chapter: it wants to create a new model of its own, which can become an alternative to the Western model and will surely be popular in all countries that have a dislike for the American dominated Western world order. When the “Chinese model” crystallizes it can offer the developing world (Africa, Latin America and the Middle East) an alternative to the Western liberal model. The new China does not only rebuff the West-dominated present, it also rejects eurocentric historiography and the eurocentric worldview as false and distorted, because — it claims — these advocate the global supremacy of Greco-Roman culture and underplay the world’s oldest culture (i.e. that of China).
The fact that autocracy and state capitalism seem to prevail and flourish in the biggest country in the world is a powerful signal for many countries. There are speculations that the global system might soon have a viable Third Way (as opposed to the Western and the clear cut third world dictatorship models) which could be a desirable option for many Asian and African countries in the 21st century. It is not a certainty though. But if democracy is challenged by a strong and vivid alternative model on the global scale, remilitarization and old-school power politics could come back into fashion. China will have a responsibility as regards how to tackle these developments and their consequences in the long run.
Francis Fukuyama asks in 2010 whether liberal democratic principles are really universal or have been revealed not to be. His answer is that they are universal – but this is not as sure as it was a decade ago. He asks what the democratic world can do with Putin’s transformation of Russia into an ”electoral authoritarian” state, the undermining of democratic institutions by Hugo Chavez in Venezuela, and the rise of China as a successful authoritarian modernizer. Are these systems true and viable alternatives of old-fashioned democracy? They are most probably not in the long run, but liberal democracy is not the only alternative to all-out dictatorship in worldwide politics anymore. As he puts it: “The next phase of global history will be a challenging one, as America and Europe stumble to get back their economic balance. It seems doubtful that either the US or Britain will achieve the degree of growth in the next generation that they did in the previous one. But one of the great advantages of democracy is that it does not depend for its legitimacy on continuing high levels of economic growth, as the Chinese system does. As we move forward, it is important to keep in mind the simple power of the idea of a government by, for, and of the people. We need to match those high ideals with unglamorous but steady investments in institution-building if liberal democracy is to deliver on its promises.”
Robert Kagan says that ideology still matters in geopolitics, and one should add perception as well to ideology. China’s strength comes partly from the fact that the world sees it as strong, the future great power. At the same time, part of America’s weakness stems from the fact that it sees itself as a declining power. A change in these perceptions could cause significant shifts in times of uncertainty and global transition. Is China potentially an even bigger a power than we imagine or – as Ari Van Assche puts it – does the West only make a dragon out of a dragonfly?
China is changing geopolitics, surely. Is China going to change the rules of the game? It is doubtful, but this is still a puzzle to the Chinese themselves. China might as well be much less powerful as it seems, based on a shaky “Leninist corporatism” whose development is completely based on stealing know-how and institutions from the West as Will Hutton points out. But there is a high probability that reality will prove otherwise.
Chicago Council on Global Affairs: World Public opinion, 2007.
Zhao Kejin concludes that “today it seems that EU states are taking a case-by-case approach toward China’s initiatives to constructively reform the Bretton Woods system. They tend to support reform of the international monetary order, thus accepting RMB’s inclusion in the SDR, yet they are not committed to sharing governance of the old institutions, as this would limit European influence and prestige.” In: China’s National Security Commission. Carnegie-Tsinghua Center for Global Policy. July 14, 2015.
Robert N. Haass: The age of non-polarity – What will follow US dominance. Foreign Affairs. May/June, 2008.
Yan Xuetong: The rise of China in the Chinese eyes, Journal of Contemporary China, 2001, Vol. 10.
Kagan, Robert: The Illusion of managing China. Washington Post, 15 May 2005,.
Kejin, Zhao: China’s National Security Commission. Carnegie-Tsinghua Center for Global Policy. July 14, 2015.
See more in Khanna, Parag: The second world – empires and influence in the new global order. Random House, New York, 2008. and in: Zakaria, Fareed: The post-American world. W. W. Norton & Co, New York, 2008.
According to the Global Trends 2025 report.
Ferguson, Niall – Schularick, Moritz: “Chimerica and global asset markets”. 2007. and “The end of Chimerica”. 2009. Harvard Business School. Working Paper 10-037.
A small note: things in the balance of the international order can change unnoticed and sometimes scholars and politicians got carried away by perceptions of visible trends while obviously disregarding the ones less obvious. One good example is the surprise at the collapse of the Soviet Union. In his book (My Country, My People) published in the US in 1935 Lin Yutang described China as a tired old man (in comparison with the dynamic, youthful West.) Some seventy years later my book on the future of Europe bore the subtitle: “The Old Lady and the Bull” (a reference to ancient Greek mythology) describing Europe as an old lady instead of the young girl who she used to be when she had been taken by Zeus disguised as a bull. Probably both of us were right at a certain moment in time, but the lifespan of truths in geopolitics seems to get shorter and shorter.
Is the Age of Democracy Over? Spectator. February 10, 2010.
An example: According to a 2009 survey by Penn, Schoen and Berland Associates, 81% of Chinese think the USA will stay ahead of China in innovation, while 41% of Americans think so. (in Newsweek, 28 November 2009.)
Van Assche, Ari: Are We Making a Dragon out of a Dragonfly? – Understanding China’s Role in Global Production Networks. Burgundy Report, CIRANO Network, 2009RB – 03. January 2009.
Hutton, Will: The Writing on the Wall: Why We Must Embrace China as a Partner or Face it as an Enemy. Free Press/Little, Brown.
Power is a drug – What China is the U.S. fighting against?
At the basement floor of the Chinese National museum in Beijing, there’s a curated collection of China’s imperial history from antiquity to the fall of the Qing Dynasty. The basement is where a multitude of visitors from around the country gather, entry is free for foreigners. At the end of the collection, is a British “waist sword” presented to Emperor Qianlong in 1793 by the London expedition, as a symbol of friendship. According to the archives, during a court etiquette kerfuffle a young British boy stepped forward and resolved it with his plucky antics, the Emperor gifted a scented pouch to the child.
The British child became a lifelong learner of Chinese court etiquette, culture and language. A predecessor to the thousands of “China Hands” plying their trade in Shanghai, Hong Kong and Beijing from the 1990s onwards. In 1839, the British Parliament enraged by the Chinese incineration of Opium stocks and the Chinese court’s refusal of “free-trade” based on narcotics smuggling, debated on a military reprisal. The young child had become a distinguished statesman and became the prime supporter of a naval strike. He stated that a nation that coerced others to kneel in their presence, would grow accustomed to kneeling in the presence of their superiors. This hawkish Lord, the son of the original Secretary of the British Mission in 1793 (Sir George Staunton), was the plucky child who had neutralized the initial diplomatic embarrassment. The British sword is placed at the end of the gallery, in a massive national museum at the heart of Beijing. Five millennia of immense material progress and near suicidal collapses, human frailties merged with ingenuity. And at the end of the imperial age, a colonial sword hangs in the balance.
The primal lesson that China learned from its disastrous encounter with modernity, was to criminalize all forms of narcotics and adopt Victorian rectitude against leisure. China has had two disastrous encounters with synthetic drugs, between the fall of the Han Dynasty and the establishment of the Sui when large volumes of the elite became addicted to a mineral hallucinogen and its Century of Humiliation during the 19th Century. Most Western observers consistently italicize the latter, by extension disputing this version of history that the Communist Party purports, as a form of self-victimization that the state narrates to itself as an excuse for “expansionism”. But the proof lies in the other former colonial territories in Asia, Hong Kong and Guangzhou boomed when the East India Company (EIC) secured favorable trade terms, the British possessions in India and South East Asia, became narcotics production and repackaging centers to satisfy the China market. “Bukit Chandu” in Singapore literally translates into “the hill for storing packaged opium” right beside the mega-port’s historical Telok Blangah district. The Qing Dynasty smuggled correspondence to London in the hope of appealing to Queen Victoria’s morality on the opium epidemic, only to be intercepted by Lord Melbourne and erased from memory.
But the British Empire is history, its sins expunged. Not exactly, the second historical lesson that modern China learned was the Western self-belief in exceptionalism; it’s habitual for Washington and the EU to utilize moral language in the service of their ends. Washington inherited Britain’s global empire through the Atlantic Charter and utilized moral metaphors for its global causes since 1945. The Cold War, the neo-liberal rollout in the 1990s, the War on Terror, all these utilized universalist values in the service of American corporates, security aims and commodities expansion. Since the 1980s, American political scientists and anthropologists have globally preached against the sins of otherization. But unironically, the rollout continues. The modern resurgence of a Post-Capitalist China that organically merged Maoism with corporatized industrialism, is considered an abomination that the post-Fukuyama American elite finds abhorrent. Having proven incapable of neutralizing Islamic terrorism, the internal decline of the American economy and its multifaceted problems must be blamed on an “other”. It is heretical that the Chinese state, the most exoticized possession subjected to almost two centuries of evangelization and persuasion, is out competing the colonial metropoles. There is growing realization in the US elite that the military industrial complex in the US is exhausting national resources and over-extending American power at a point where domestic needs are being over-looked. There is a massive community of lobbyists, academics, columnists and politicians gearing up for a “civilizational clash” with Beijing and profiting from it. To the extent that ideological nemesis like the Charles Koch and George Soros can find common ground and establish a diplomacy-focused institute to counter the American blood lust.
But there is no American decline, the NYSE and NASDAQ are posting record highs and employment continues to spike. The abovementioned are just instances of bad Chinese propaganda. The Trump tax cuts have energized corporate performance since 2017 and real-estate speculation has revived across the US. This is the classic bubble model of economic expansion that the US system has relied upon since Reaganomics in the 1980s. But the signs of decay are numerous, the American elite is not acting on a position of strength against Beijing. Infrastructure decrepitude, education and income inequality are at their worst since the 1920s. The public trust in electoral officials erodes daily from the latest Trump scandal while the frequently touted calls to reindustrialize America are not actualizing. The American middle class continues to be squeezed by high personal debt and the rapid vaporization of industrial employment. Reagan’s America triumphed against Moscow while riding on an economic high in 1989,Trump’s America buys most of its iPhones from Beijing because Tim Cook still can’t find enough industrial engineers to redo designs at a moment’s notice.
Both Beijing and Washington are rushing to embrace 5G technology to gain dominance over the heart of development in the next decade. You can see the signs in America where there is a general reluctance to discuss anti-Trust action against Google, Facebook and Amazon because they collectively form the best chance against China’s BAT consortium on a global scale. AI and industrialization are globalized technologies that rely on layers of legal specialization, patents and distributed supply chains. These are classic outcomes of the neo-liberal world that Washington wanted since 1991. But the crux lies in the fact that the US has to enjoy market dominance over these fields, or else. The prospect of impoverished peasants building multinational corporates that out-compete is abhorrent. The possibility that the Friedman/Hayek consensus of turbo-charged laissez faire, is less efficient that industrial policy and greasy Chinese engineers who don’t fully open their markets cannot be countenanced. As mentioned in previous articles, the US targeted Tokyo and Seoul respectively in 1985 and 1998 under similar circumstances. But the Chinese example is simply too massive for the US to contemplate, an entire middle class larger than the US national population that is partially denied to Wall Street or Silicon Valley. And therein history returns to haunt, substitute opium for social media, what do you get?
Why do you think the Chinese placed that sword at the end of a national gallery?
Ecology and productivity in today’s China
As a political decision maker, the Chinese Minister of Natural Resources, Lu Hao, is at the centre of a great transformation of today’s China.
Former Governor of Heilongjiang from 2013 to 2018, he was also First secretary of the Communist Youth League and later vice-mayor of Beijing.
He is also a full member of the Central Committee of the Communist Party of China (CPC), although he was born only in 1967, in Shanghai or probably in Xi’an.
The effective political systems favour and foster the careers of the best young people.
As President Xi Jinping has often pointed out, this is the right time for a comprehensive and in-depth ecological analysis of Chinese development.
Once the economic development of a country that initially hosted the “second processing activities” of global economy was over, China is now getting ready to be a large global economy, an advanced economy having no obligations towards “old” technologies and markets – hence also fully ecological.
Since the 18thCPC Congress, President Xi Jinping has been vigorously supporting the idea of a fully Chinese “ecological civilization” and certainly the choice of Lu Hao as Minister of Natural Resources goes in this direction.
As both President Xi and Minister Lu Hao underline, now also soil erosion has become a very severe phenomenon in China.
Currently the annual soil erosion of both agricultural and non-agricultural land totals approximately 5 billion tons.
The area currently down to agriculture in China is worth about a third of the available land.
The desertification area is now equal to 2,622,000 square kilometres, i.e. 27.3% of all the land surface available.
Despite the many efforts made to reverse this trend – and not only recently -currently China is the country with the lowest per capita share of forests in the world.
Pollution is still heavy, especially in the case of water, but President Xi (and Minister Lu Hao) have quickly got to work.
President Xi Jinping stated: “Clean waters and green mountains are as valuable as mountains of gold and silver”.
The President not only wants a high GDP, but above all a strong and stable “green” GDP.
The First World markets pollute the Second but, above all, the Third World – and today China is not Third World for anyone.
Being subject to pollution is like being subject to foreign powers.
Hence President Hi Jinping’s fundamental idea is that protecting the environment and increasing productivity are mutually reinforcing goals.
Just like Minister Lu Hao, President Xi Jinping believes that there is a scientific and rational connection between environmental protection and economic development and that the purpose of the CPC action is to enhance the people’s quality of life and their happiness index.
Hence President Xi Jinping’s fundamental idea is to strictly follow the scientific and technological criteria, by increasing the use of natural resources and – precisely for this reason – also developing the blue economy, while respecting the objective laws of nature and, hence, also the laws of socialist and rational economic development.
At the 18th CPC Congress, President Xi Jinping – and certainly also Minister Lu Hao – spoke of building a “beautiful China”.
As written in the documents of the 18th CPC Congress, “To meet the people’s desire for a better life is our mission” – hence President Xi Jinping (and Minister Lu Hao) maintain that “building an ecological society and civilization, which is connected to the people’s well-being, is our goal and the true future for the Chinese nation”.
President Xi Jinping’s policy line is – first and foremost – to “first protect, then scientifically demarcate the use and protection of nature, and later adhere to the red line of environmental and ecological protection”.
Here the primary concept is “protection first”.
The old industrialist and productivist criterion, whereby “merely keeping pollution under control” is enough, is now meaningless.
Therefore, whoever is in charge of the area where pollution has occurred must be considered – to all intents and purposes – liable both legally and practically.
We know that every year at least eight million tons of plastic are thrown into the oceans, and over half of this quantity comes from five Asian countries: China, Indonesia, the Philippines, Thailand and Vietnam.
This problem can be slowly solved with better collection, wider information and what President Xi Jinping precisely calls “ecological civilization”.
Furthermore, as early as 2017 China has begun its “action against air pollution, with the closure of over 150 coal-fired steel factories to reduce particulate matter in the air by at least 15% a year.
Again as from 2017, China has already achieved the 2020 target for the use of solar energy, with the even more ambitious goal of soon reaching the production level of 213 GW, five times higher than the current US annual production.
Considering the current technology data, it is like covering – only with solar panels – a surface larger than the Greater London area, namely 1,500 square kilometres.
Furthermore, also thanks to Minister Lu Hao’s action, in 2019 China rose from the 41stto the 33rd place in the world list of nations that are actively involved in climate change.
A great leap forward, although the greenhouse gas emissions increased in China both in 2017 and in 2019.
China, however, can currently meet the Paris Agreement criteria by stopping its greenhouse gas emissions within 2030, but only by increasing its renewable energy production by 20% and by using greater nuclear energy sources – a policy of which little is still said in the silly West.
Hence tripling the share of non-fossil fuels by the end of 2030 and establish a full market for Chinese emission trading.
If – as is very likely thanks to President Xi Jinping and Minister Lu Hao – China manages to do so, the global project to reduce the global temperature increase to “much less” than two degrees Celsius will be successful.
China is therefore fundamental for the ecology of the whole planet.
Moreover, China plans to increase the area of forests absorbing carbon dioxide by 45,000 square kilometres and it is slowly succeeding in reaching this goal, also thanks to the organization of natural parks, considering that China currently has over 12,000 perfectly organized natural parks and reserves.
There is a public health problem adding to the challenges outlined so far.
In China about 2.8 million children -mainly newborn babies – die due to pollution-related problems.
If we do not want to change the balance between generations – and certainly President Xi Jinping and Minsiter Lu Hao are very careful not to do so – the pollution issue becomes pivotal.
Just think about the retirement, employment and demographic transition between generations, with a burden of newborns’ deaths equal to 2.8 million a year.
The Chinese Climate and Ecological Policy System introduced in 2017, which Minister Lu Hao is greatly expanding, also provides for the careful monitoring of over 1,700 energy-producing companies and for the further final control of over three billion tons of greenhouse gases.
The size of China is still an outstanding issue and has led the country to have – in spite of everything – as many as 10 billion tons of CO2 released into the environment – about a quarter of the world total amount.
In any case, however, they are less than 23% compared to the Chinese CO2 production in the previous year.
As to water pollution, the State will spend as much as 30 billion for “cleaning” and purifying springs and water flows.
China will also improve its basic price system, with a view to fostering environmental protection and rural areas – a policy for the total cleaning of urban water and major springs, organized by Minister Lu Hao and supported by President Xi Jinping.
The first goal is to purify urban waste water, the major source of stable pollution of springs. Then China plans to “ecologizing” the Yangtze River and Lake Bohai, two other water flows that affect China’s whole rural and urban water system.
The project, however, will be completed and the cleaning of the big rivers and major water basins and reservoirs will go ahead.
There is a project to reduce the use of industrial water by 23% within 2020, when the first large national share of renewable energy will be massively used in China.
The law on the “prevention of soil and water pollution” entered into force on January 1, 2019, but it also provides for the census-taking of all Chinese land – to be carried out every ten years – as well as the establishment of monitoring stations everywhere – with data that can be spread at every level – and also the checking of toxic and noxious substances in soils and waters, with data that must become public – at least partially. It finally provides for the creation of funds for cleaning land and water, which every local and regional authority must envisage in the budget.
“Rehabilitation systems” for polluting agricultural or industrial companies are planned.
With specific reference to the desalination of sea water for industrial and human use, it should immediately be noted that China is one of the 13 countries with the lowest water availability in the world.
Moreover, most water resources are concentrated in the South, while Northern and Western regions tend to suffer from drought.
As President Xi Jinping and Minister Lu Hao point out, population growth, mass urbanization, climate change and gradual reduction of water reserves are all conditions that make the water issue crucial for continuing China’s economic development.
In addition to reorganizing national water reserves – as can be seen in projects such as the Diversion of Northern Waters – water is never really sufficient and, hence, the other fundamental issue of President Xi Jinping’s and Minister Lu Hao’s water scheme is desalination and the recycling-purification of waste water.
Here the real problem is desalination, considering that 43% of the Chinese population lives in the 11 coastal provinces, which anyway account for 13.7% of the Chinese territory.
In coastal areas, however, the water supply is even lower than the national average.
Nevertheless, coastal areas account for over 65% of China’s national GDP.
However, the water resources of China’s coastal areas are only about 28% of the total national ones.
Hence desalination is a solution.
Currently over 150 countries use this system.
Moreover, China’s desalination project has lasted for at least 60 years.
Currently, however, after a series of regional and sectoral attempts, a real desalination industry has developed in the Hebei Province, as early as the first project in Datang Wangtang in 2005.
The specific membrane technology is already well- developed, but also microfiltration is available – with a national production exceeding 10,000 square metres per day for each of the approximately 150 plants, but with additional 71 sea desalination plants, operating at a reduced pace, and with 35% of the total water resources used for people’s personal use.
Only 35% of water resources, however, is used for energy production and for other industrial uses, including paper and metal production.
The desalination plants are mainly located in four regions, namely Zhejiang, Shandong, Liaoning and Hainan.
The main technologies are Reverse Osmosis (RO) with UF (Ultra Filtration) membranes and Multi-Effect Distillation (MED), which is thermal desalination.
In China, 120 are RO plants and 7 are the largest ones with MED technology.
With regard to soil protection, it has been ascertained that 402 industrial sites and 1,401 agricultural areas record a high concentration of heavy metals.
36% of agricultural areas and 28% of industrial sites are contaminated.
China defined the regulations carefully and made them even stricter in 2016, but the final regulatory framework was designed in August 2018.
As already seen, the criterion used is prevention.
The relevant authorities must therefore evaluate each project ecologically, before its implementation.
The law lays down each party’s responsibility, with a sequence of obligations no one can escape.
However, the real problem in China is the relationship between arable land and urban areas.
New buildings have reduced the area down to agriculture by almost 60% compared to 1990.
2.47 million hectares – equivalent to the surface of the US State of Vermont – were reclaimed on the basis of the new legislation on the rebalancing between agricultural land and housing areas.
Nevertheless, only 37% of the land reclaimed on the basis of this legislation is reused for agricultural purposes, while 44% remains merely unploughed land and 19% becomes forests.
Moreover, the climate and bio-chemical change of soils is often at the basis of China’s great internal migrations, which are a further structural distortion of an already anomalous – and now stable-concentration of people from internal towards coastal areas.
According to the 2016 data, the Four Modernizations and the subsequent reforms pushed over 200 million migrants to the Chinese coasts.
In the future, however, the real core of the issue for China will be harvesting electric power from the dynamics of ocean wave movements.
Many energy market analysts believe that the market for this type of electricity will increase by 10.25% a year until 2023.
The market is expanding especially in Europe, which was the first continent to develop this technology, but now the idea has spread to the United States, Australia and, above all,China.
Currently there is a device available for harnessing the power of ocean waves known as “Penguin”, which is moored to the seabed at 50 metres depth. Only 2 meters are visible above the sea water surface.
This 1,600 ton device is around 30 m long.
It is manufactured by a Finnish company.
Devices for producing wave-based energy -with an average capacity of 40 MW – are already available in the Caribbean, Antigua, Bermuda and Curaçao, through a mechanism that will be operational in late 2019.
Nowadays also the microgrid technology is available, i.e. a mix of energy sources, users and storage systems that, in this case, combines solar sources with those from the ocean wave cycle, as currently happens off the Australian coast.
Today the energy available from waves, and hence from tides, is 8.2 GW for the whole China.
It is a huge amount.
China’s research for this type of technology is currently based on a vertical turbine, developed by the Harbin University, as well as on a horizontal axis turbine, studied by the University of Zhejiang, and on other prototypes.
Hence the potential energy available from the Chinese wave cycle is probably much greater than expected – by over 25% – and this does not regard the technologies currently applied, but the physical potential of wave movements, which can be easily calculated.
As early as the 1970s China has developed this sector, starting from Jangxia (3900 Kw), and later in the regions of Bachimen, Shandong and Maluan Bay, which are already active only partly.
There have also been attempts – far from useless – to produce energy from the sea heat exchanges.
But what are the structural limits of the Chinese marine renewable energy project?
In general terms, a certain and stable lack of investment in the sector, which enables Western technologies to evolve more rapidly and, above all, more suitably for the future massive consumption of “sea wave-based” energy.
We also need to consider the nature of places on the Chinese coast, with the spreading of typhoons and dangerous situations, and finally the use of oceans for security, desalination or fishing operations.
Still today, a massive spreading of these wave-based energy technologies is needed, as well as a common base between universities, government, local authorities, Party and users to create a strong and stable market for this type of energy.
The Inertial Sea Wave Energy Converter (ISWEC) could be the solution.
It is a device placed inside a float, with an operating criterion based on an inertial system to exploit the sea wave movements to produce energy.
The stability of the float and of the device is ensured by a gyroscopic inertial system, which works when the hull oscillations caused by the movement of waves induce the rotation of the gyroscope platform that is then converted into electricity by the power generator.
The additional aspect is that this system can be fine-tuned and adapted to the changes in sea conditions, which allows to relate the frequency of maximum productivity to the frequency of the incident wave.
Everything is regulated by the spin engine of the gyroscope flywheel and by the real-time dataon the area’s weather conditions.
You can also easily secure the system, if special sea conditions or other phenomena occur.
The hull of the float has dimensions of 8 m width, 15 m length and 4.5 m height, as well as a draft of 4 metres.
The two gyroscopes inside the “buoy”, i.e. the floating positioning system, have an installed electric power of 130 kW, as well as a sensor platform capable of immediately collecting data from the local sensors, to be related to the remote sensor data and the updated weather forecasts.
They can also predict the wave characteristics and finally generate the short-term control signal for all the device operations and drives.
The average annual productivity per each floating position system is 250 MWh, which allows to save 68 tons of CO2 emissions each year, and the structure will obviously occupy a sea area of approximately 150 square metres where fishing will be forbidden.
The device is the result of research carried out by the Polytechnic of Turin, developed by a spin off and put into operation thanks to an agreement between ENI, CDP, Cassa Depositi e Prestiti, Fincantieri and Terna.
As Arthur Rimbaud wrote in one of his poems, “Eternity.
It is the sea mingled with the sun.”
The Belt and Road Initiative: Towards a New World Order
President of the People’s Republic of China Xi Jinping and President of the United States Donald Trump met on the sidelines of the G20 Summit in Osaka on June 29 to discuss the resumption of trade and economic talks between the two countries. The United States also promised that it would not introduce additional tariffs on Chinese goods. The world collectively breathed a sigh of relief, as the trade war between the world’s two largest economies is fraught with serious risks for global economic growth.
Time will tell whether these agreements will turn out to be the calm before the storm or whether the two sides will be able to find mutually acceptable solutions. However, no matter how the events that broke out between the United States and China in 2018–2019 occurred, the economic war gives us grounds to say that we have become witnesses to yet another manifestation of the gradual disintegration of the existing world order. This process is gaining momentum and directly affects almost every area of intergovernmental relations.
In these circumstances, we are witnessing the ever-increasing efforts of leading states, either by themselves or with other countries, to promote various integration mechanisms that would satisfy their immediate interests and at the same time create a platform for their participation in shaping the future world order. The biggest and most ambitious of these projects is, of course, the Belt and Road Initiative put forward by President of the People’s Republic of China Xi Jinping in the autumn of 2013.
Without dwelling on the multitudinous interpretations of the Belt and Road Initiative, I will take the liberty of highlighting the international significance of this initiative. Let us recall that President of the People’s Republic of China Xi Jinping first put the idea forward when the established world order was only just beginning to show signs of its obvious failures. The global economy struggled to overcome the effects of the global financial crisis in 2008–2009. In the Middle East, the seemingly unshakable authoritarian Arab regimes started to fall one after another. The “reset” of the Russian-American relations was spluttering, and a serious conflict was brewing around Ukraine. In short, the international system had entered a period of increased instability marked by reduced manageability at the global and regional levels.
No less obvious was the fact that the deepening disagreements between the two great powers and the emerging fragmentation of the international system made it practically impossible to reach any kind of common agreement on restructuring the decaying world order. For example, the repeated attempts to reform the United Nations invariably fell flat. By the same token, it was impossible to even start a serious discussion about revising the rules of the game on the global financial markets following the crisis in 2008–2009. Arms control mechanisms have also stalled noticeably.
In this context, the Belt and Road Initiative should not be viewed as an exclusively economic project (or perhaps not even as an economic project at all), but rather as an attempt to find an alternative approach to reformatting the world order. Not “from above,” that is, through the radical transformation of the old and the creation of new global governance institutions, but rather “from below,” through the consistent implementation of specific regional and continental projects envisaging the most diverse and flexible formats for getting potential participants involved. It is no coincidence that President of the People’s Republic of China Xi Jinping has declared that the Belt and Road Initiative was intended to put his country’s idea of creating a community of common destiny for humankind into practice.
The Chinese initiative did not encroach on the fundamental principles of the liberal world order in any way. On the contrary, when delivering his keynote speech at the World Economic Forum in Davos, Switzerland in early 2017, President of the People’s Republic of China Xi Jinping stressed Beijing’s commitment to continuing the process of globalization and protecting the freedom of global trade from the looming protectionism.
Despite the cautious wording and the ostentatious flexibility and openness of the Chinese initiative, it nevertheless raised a great deal of suspicion. And these suspicions were voiced not only in the United States, but also in Europe, India and partly in Russia. Political leaders and corporate leaders across the globe felt that it was about more than just the implementation of a single, albeit extremely ambitious project, but rather about the onset of the reformatting of the entire world order. Sensing a threat to their interests and their positions in the world, some countries set out to boycott the Belt and Road Initiative, block the geographical expansion of the project and create a negative reputation surrounding it.
Such an obstructive approach appears counter-productive, primarily for those planning to boycott and sabotage the project. In the six years since the Belt and Road Initiative was launched, not a single significant alternative project has been put forward. What is more, over the years, the old Transpacific and Transatlantic integration projects have been shelved.
It is obvious that sabotage is not a constructive response to the implementation of the Belt and Road Initiative. Rather, a constructive response would be for other countries to develop their own projects, with the worthiest rising to the top. For example, Beijing’s far-reaching plans should push the European Union to finally move forward with concrete integration initiatives after years of fruitless discussions. On the other hand, critics and skeptics of the Belt and Road Initiative should become more involved in the project itself in order to lay down the rules of international cooperation together with China.
President of the Russian Federation Vladimir Putin welcomed the Belt and Road Initiative and noted that “combining the potentials of such integration formats as the Eurasian Economic Union, the Belt and Road Initiative, the Shanghai Cooperation Organization and the Association of Southeast Asian Nations could become the basis for a greater Eurasian partnership.”
Russia needs to clearly define its long-term priorities and interests within the project, taking its real possibilities and limitations into account, and then implement it together with China and the other participants in a coordinated manner. This task is far more complicated that any national project. But it is also far more important than any national project being implemented today.
Naturally, the foundation of the emerging new world order cannot be limited to the Belt and Road Initiative. This is just one example of the formats in which the new world order will develop. The main principle of building a new world order “from the bottom up” is the creation of regional and continental “coalitions of likeminded states” – states that share common approaches to various measures of international interaction. The Belt and Road Initiative meets these criteria, as do the Shanghai Cooperation Organization, the Eurasian Economic Union and many other entities. Maybe something will come of the resurgent Russia–China–India triangle.
Countries will find it easier to protect their own interests as part of flexible and fluid coalitions dealing with specific issues. On the other hand, these “blocs” may later form the basis of the future world order. This process will, by definition, be slow and unequal, but there is simply no other realistic way of overcoming the current crisis of how to control the global system.
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