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Global Power in the 21st Century: A Review Essay

Emanuel L. Paparella, Ph.D.

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When China Rules the World: The End of the Western World and the Birth of a New Global Order by Martin Jacques (2009), “The Future of American Power. Dominance and Decline in Perspective” by Professor Joseph Nye (2010) in Foreign Affairs (Nov/Dec).

There is a close nexus between ruling and power. As Machiavelli well instructs us one cannot rule, and even less govern, without power.

To consider political-economic-military power in its various vicissitudes and intricacies conjures up not only Machiavelli’s Prince, but also Karl Marx’s Das Kapital,not to speak of Vico’s philosophy of history in his New Science concerned with the rise, dominance, decline, decay and final fall of entire civilizations. To merely repeat what these eminent authors have written on the history of power is to run the risk of reinventing the wheel. Yet, it remains beyond me how anyone can possibly grasp and explain the present status of global power without possessing at least a cursory knowledge of its historical record on a regional or global level. It would be like driving a car without a rear-view mirror; a possibility to be sure, but misguided and dangerous too. To employ another metaphor, it is not unlike a doctor prescribing a prognosis without first conducting a diagnosis.

So, as a solution to this conundrum of mine I have decided to situate my contribution within a Vichian-MacLuhan “back to the future,” framework, attempting to envision modernity as it may be lived in the 21st century. It is intriguing to me that of the two centuries within which the theme is situated, the 20th century is already in the past while the 21st century is mostly in the future. The question then is this: How does one bridge that great divide? Leonardo would have no problem with bridging any kind of divide, be it physical or mental, but he was a Renaissance man, not a logical positivist, and I am no Leonardo. Nevertheless, let us attempt it.

I will first proceed with the examination of a book and an article which take opposite views of the diagnosis of power within modernity and then propose a few interpretations and a possible prognosis of my own; which is to say that in this essay, history (which is made by man but profoundly affects man and his culture) shall take center stage as the protagonist of the human drama. I shall bypass an inane identification and description of the mediocre visionless politicians and bureaucrats who presently hold the levers of power in our brave new global world. The two nations that will be closely examined are the United States, which is still widely considered the number one superpower in the world, and China which seem to be bent on competing for that title. As far as civilizations are concerned we will of course examine and compare the age old civilization of the West and that of the far East or Asian civilization.

For over five hundred years now we have lived in a western-made world, one shaped by colonialism and imperialism wherein the very notion of being modern was synonymous with being western. It was assumed that such a state of affairs would be permanent for no other civilization could claim to be as modern and scientifically advanced as that of the West. But lo and behold, in 2009 a book came out which challenges such a taken for granted assumption. I refer to When China Rules the World: The End of the Western World and the Birth of a New Global Order by British journalist and scholar Martin Jacques.

The book has aroused a vehement debate in the United States and elsewhere about the role of China in the creation of the new 21st century world order. The book argues that the twenty-first century will be different: with the rise of increasingly powerful non-Western countries, that the west will no longer be dominant and there will be various ways of being modern. In this new era of ‘contested modernity’ the central player will be of course China which is already signaling the end of the global dominance of the West and the emergence of a world which will become increasingly disconcerting and unfamiliar to those who live in the west.

Indeed, the book’s claim was disconcerting from its first appearance, for it challenges some politically correct, almost sacred assumptions by claiming that China’s future economic strength will heavily alter the political and cultural landscape of the world. In other words, China will rule the 21st century. The book’s original subtitle is quite revealing in this respect: “The Rise of the Middle Kingdom and the End of the Western World”. So, here is a bold prediction of the end of a civilization and the rise, or perhaps we should talk of a rebirth, of another quite different civilization, one that while being intriguing to most Westerns, remains a mystery wrapped up in a riddle.

Martin Jacques forcefully argues that far from becoming a western-style society, China will remain highly distinctive. It is already having a far-reaching and much-discussed economic impact, but its political and cultural influence, which has hitherto been greatly neglected, will be at least as significant. Continental in size and mentality, and accounting for one fifth of humanity, China is not even a conventional nation-state but a ‘civilization-state’ whose imperatives, priorities and values are quite different. As it rapidly reassumes its traditional place at the centre of East Asia, the old tributary system will resurface in a modern form, contemporary ideas of racial hierarchy will be redrawn and China’s ages-old sense of superiority will reassert itself.

The whole narrative of When China Rules the World has caused a profound academic debate. This is understandable since it questions Western hegemony and the future of American power in the 21st century. On the other hand, as one could expect, the book was highly praised in China and East Asian countries, where it was perceived by some pundits as the best and most understanding analysis of Chinese society and economics. I suspect it will be mentioned by other contributors in the context of this theme too and that would be all for the good so that we don’t run the risk of reinventing the wheel. In any case, whether one agrees with it or not, the book remains a lively one full of provocations and predictions.

The book can be summarized in twelve key arguments: 1) There is not one western modernity, instead we are witnessing the birth of multiple modernities. This is perhaps the core argument. 2) Chinese modernity will be very different from western modernity. 3)We are fast moving into a world of contested modernity. 4) China will become the largest economy in the world within less than two decades and then proceed to rapidly out-distance that of the United States. 5) China’s impact on the world will not simply be economic; it will also have profound political, cultural and ideological effects. 6) For thousands of years, China was at the centre of the tributary-state system in East Asia, which only came to an end with the arrival of European colonialism at the end of the nineteenth century. 7) As the East Asian economy is rapidly reconfigured around China, we should expect elements of the tributary system to reappear 8) At its core, China is a civilization-state rather than a nation-state, a fact which will become steadily more apparent. 9) The Chinese state is very different from the western state: it has existed for over two thousand years, and for over a millennium it has had no competitors (e.g., church, merchants) nor limits to its power; it is regarded with reverence and deference by the Chinese as the guardian and protector of Chinese civilization. 10) The Chinese have a deep and living sense of their own culture and civilization which they regard as superior to all others. 11) 92% of the Chinese believe that they are of one race, the Han Chinese, unlike the other most populous nations such as India, the United States, Brazil and Indonesia, which recognize themselves to be highly multi-racial and multi-cultural. 12) The similarities between the communist period and the Confucian era are more striking than the differences. This is another intriguing assertion which belies a desire to collapse Communism into Confucianism.

What in fact strikes the reader immediately about the overall analysis is the fact that Communism, the political system which still today runs China, is somehow conceived not in Marxist-Leninist terms but a something already existing in the traditional culture of China. But the ineluctable historical fact remains that, as a philosophy and an ideology it is imported from the West unless one wishes to claim that Karl Marx was Chinese. Such an ideology, I submit, has profound western assumptions even when critical of the traditional capitalistic tenets of liberal democracy as Das Kapital indeed is. So in this book the whole issue of freedom and liberal democracy in The People’s Republic of China seems to have been side-stepped. So Jacques’ assertion that China is somehow “outside the history or experience of Western societies” is historically untenable and belies a certain disconcerting inattentiveness to both Chinese politics, from at least 1911 onwards, as well as international relations more broadly. One begins to wonder if the author has begun with a bias, conscious or unconscious, and then has gone looking for its support and justifications.

But this is not the only glaring problem with Jacques’s thesis, there are others. Take this assertion: “…China is not primarily a nation-state but a civilization-state. For the Chinese, what matters is civilization. For Westerners it is nation. The most important political value in China is the integrity and unity of the civilization-state.” He’s taking an idea – China as “civilization state” – first forwarded by Lucien Pye and misapplying it by putting it in the service of a facile historical exceptionalism. Here again history belies Jacques statement, for the very concept of nation which comes from the West is in fact very important to the Chinese. One may call the phenomenon cultural colonialism but the fact remains that following Western notions of sovereignty, many political and intellectual Chinese leaders have for over a hundred years now embraced the concept of national identity and attempted to reconcile it, as best they could, to the more international aspects of the Communist ideology. In any case both nationalism and communism happen to be distinct Western imports. This curious conundrum is in no way addressed by Jacques.

The fact that Jacques’ training is that of an economist focusing on Marxism may explain why he so cavalierly discounts the importance of nationalism in China, but he ought to know that Marxism is not an Asian ideology. The question arises: has Jacques really missed the boat here? While it is true that China has gained a great deal of economic and political and military power in the past three decades, other “Western” powers have behaved in similar ways beginning with the Romans and ending with the British Empire. It remains unclear that China will “rule the world” any time soon. It will undoubtedly be more powerful; it will get its way in some areas where in the past it did not, but global power is diffuse, capital is dynamically mobile, advantages come and go, and that pattern seems to be accelerating as globalization makes everything – production, information, understanding, faster and faster and faster.

Assertions of cultural exceptionalism thus seem untenable in a world that fragments and shifts and changes so quickly. Nostalgia for a world that never existed is simply misplaced, as with this line from Jacques: “The Chinese idea of the state could hardly be more different [than that of the “West] They do not view it from a narrowly utilitarian standpoint, in terms of what it can deliver, let alone as the devil incarnate in the manner of the American Tea Party. They see the state as an intimate, or, to be more precise, as a member of the family – the head of the family, in fact. The Chinese regard the family as the template for the state. What’s more, they perceive the state not as external to themselves but as an extension or representation of themselves.”

In this assertion we have the collapsing of Confucianism into Communism. Yet Han Feizi rejects the government-as-family metaphor, not to speak of the constant tyrannical attacks, since Mao’s era, on families and family institutions beginning with the so called “Great Leap Forward.” That misnomer is typical of a mindless progressivism that declares that anything that arrives at the end of a process is always the best and that progress always goes forward and cannot be stopped. Is Jacques asserting that the death of tens of millions of deaths is politically and culturally insignificant within the larger scheme of things? Does the refusal to answer that question make the CCP more or less legitimate than the West? So far Jacques has no ready answers to such questions.

This is not is not my lament only. There is a powerful rebuttal to Jacques’s assertions coming from a Harvard Professor Joseph Nye who wrote an article in Foreign Affairs (Nov/Dec. 2010) titled “The Future of American Power.” He begins with a definition of power as “the ability to attain the outcomes one wants, and the resources that produce it vary in different contexts…” Then he goes on to point out that “This century is marked by a burgeoning revolution in information technology and globalization, and to understand this revolution, certain pitfalls need to be avoided.”

Which exactly are those pitfalls? First, he warns against the misleading metaphors of organic decline. “Rome remained dominant for more than three centuries after the peak of its power, and even then it did not succumb to the rise of another state. For all the fashionable predictions of China, India, or Brazil surpassing the United States in the next decades, the greater threat may come from modern barbarians and non-state actors. In an information-based world, power diffusion may pose a bigger danger than power transition. Conventional wisdom holds that the state with the largest army prevails, but in the information age, the state (or the non-state actor) with the best story may sometimes win.” This is quite an eye-opener resembling Vico’s warning about the “barbarism of the intellect,” a sort of barbarism which has to do with the disappearance of the values and the narrative buttressing an entire civilization.

He then treats us to another metaphor, that of the chess game. “Power today is distributed in a pattern that resembles a complex three-dimensional chess game. On the top chessboard, military power is largely uni-polar, and the United States is likely to retain primacy for quite some time. On the middle chessboard, economic power has been multi-polar for more than a decade, with the United States, Europe, Japan, and China as the major players and others gaining in importance. The bottom chessboard is the realm of transnational relations.” He acknowledges that in the near future the most important factor will be the continuing return of Asia to the world stage. “In 1750, Asia had more than half the world’s population and economic output. By 1900, after the Industrial Revolution in Europe and the United States, Asia’s share shrank to one-fifth of global economic output. By 2050, Asia will be well on its way back to its historical share. The rise of China and India may create instability, but this is a problem with precedents, and history suggests how policies can affect the outcome.”

Next Professor Nye brands as misguided the fashionable comparison of the United States’ power to that of the United Kingdom a century ago and the prediction of a similar hegemonic decline. There will be some decline but it will not be absolute, he tells us, and it does not have to lead to decay and ultimate fall. The United States does not have geographical empire, although some have made the case for a commercial capitalistic entrepreneurial global empire. Then the Professor this to say: “Power measured in resources rarely equals power measured in preferred outcomes, and cycles of belief in decline reveal more about psychology than they do about real shifts in power resources.”

Then Professor Nye takes on frontally the issue of the rise of China and Jacques’ book asserting that “China has a long way to go to equal the power resources of the United States, and it still faces many obstacles to its development. Even if overall Chinese gdp passed that of the United States around 2030, the two economies, although roughly equivalent in size, would not be equivalent in composition. China would still have a vast underdeveloped countryside, and it would have begun to face demographic problems from the delayed effects of its one child policy… China’s authoritarian political system has shown an impressive capability to harness the country’s power, but whether the government can maintain that capability over the longer term is a mystery both to outsiders and to Chinese leaders. Unlike India, which was born with a democratic constitution, China has not yet found a way to solve the problem of demands for political participation.” So, much remains to be seen in the light of future events which remain mysterious.

On the military front Nye states that “Some have argued that China aims to challenge the United States’ position in East Asia and, eventually, the world. Even if this were an accurate assessment of China’s current intentions (and even the Chinese themselves cannot know the views of future generations), it is doubtful that China will have the military capability to make this possible anytime soon.” The U. S.- Japanese alliance and the improvement in U.S. -Indian relations mean that China cannot easily expel the Americans from Asia which validly claims to be a Pacific power. From that position of strength, the United States, Japan, India, Australia, and others can engage China and provide incentives for it to play a responsible role” Here is another eye opener for those contemplating an imminent assertion of Chinese hegemony in Asia.

On internal decay Professor Nye opines that it would be a great mistake for the US to seriously curtail immigration. “With its current levels of immigration, the United States is one of the few developed countries that may avoid demographic decline and keep its share of world population, but this could change if xenophobia or reactions to terrorism closed its borders. Although too rapid a rate of immigration can cause social problems, over the long term, immigration strengthens U.S. power. Today, the United States is the world’s third most populous country; 50 years from now, it is likely to still be third (after India and China)… When Singapore’s Lee Kuan Yew concludes that China will not surpass the United States as the leading power of the twenty-first century, he cites the ability of the United States to attract the best and brightest from the rest of the world and meld them into a diverse culture of creativity. China has a larger population to recruit from domestically to be sure, but in his view, its Sinocentric culture will make it less creative than the United States, which can draw on the whole world.” This statement ought to be a warning for the EU which is considering limiting its young Moslem immigrant population as its own native population ages.

Another informative statement is this: “Today, however, even after the financial crisis and the ensuing recession, the World Economic Forum has ranked the United States fourth (after Switzerland, Sweden, and Singapore) in global economic competitiveness. (China, in comparison, was ranked 27th.)” Also important to consider those statistics: In terms of investment in research and development, the United States was the world leader in 2007, with $369 billion, followed by all of Asia (S338 billon) and the European Union ($263 billion). The United States spent 2.7 percent of its GDP on research and development, nearly double what China spent (but slightly less than the three percent spent by Japan and South Korea). In 2007, American inventors registered about 80,000 patents in the United States, or more than the rest of the world combined. A 2009 survey by the Global Entrepreneurship Monitor ranked the United States ahead of other countries in opportunities for entrepreneurship because it has a favorable business culture, the most mature venture capital industry, close relations between universities and industry, and an open immigration policy.

A well-educated labor force is another key to economic success in the information age. At first glance, the United States does well in this regard. It spends twice as much on higher education as a percentage of gdp as do France, Germany, Japan, and the United Kingdom. The London-based Times Higher Educations 2009 list of the top ten universities includes six in the United States, and a 2010 study by Shanghai Jiao Tong University places 17 U.S. universities-and no Chinese universities-among its top 20. Americans win more Nobel Prizes and publish more scientific papers in peer-reviewed journals-three times as many as the Chinese-than do the citizens of any other country. These accomplishments enhance both the country’s economic power and its soft power. American education at its best-many universities and the top slice of the secondary education system-meets or sets the global standard.

Next Professor Nye deals with the thorny issue of decline and blames the alarmists for offering misleading metaphors and warns us that “There is always a range of possible futures, not one… As for the United States’ power relative to China’s, much will depend on the uncertainties of future political change in China. Barring any political upheaval, China’s size and high rate of economic growth will almost certainly increase its relative strength vis-à-vis the United States. This will bring China closer to the United States in power resources, but it does not necessarily mean that China will surpass the United States as the most powerful country-even if China suffers no major domestic political setbacks.” Projections based on gdp growth alone are one-dimensional. They ignore U.S. advantages in military and soft power, as well as China’s geopolitical disadvantages in the Asian balance of power…American power is based on alliances rather than colonies and is associated with an ideology that is flexible. . . . Together they provide a core of relationships and values to which America can return even after it has overextended itself. The United States is well placed to benefit from such networks and alliances, if it follows smart strategies. Given Japanese concerns about the rise of Chinese power, Japan is more likely to seek U.S. support to preserve its independence than ally with China.” On the question of absolute, rather than relative, American decline, the United States faces serious problems in areas such as debt, secondary education, and political gridlock. But they are only part of the picture.

Plenty of food for thought here! I suppose what the professor is reminding us of is that civilizations have come and gone throughout history but sometimes they have also been reborn. The phenomenon of Renaissance, well known in Europe, is after all a classical Greco-Roman civilization that is reborn anew, albeit synthesized to a phenomenon the ancient Greeks and Romans did not know, Christianity. Rinascimento, after all literally means “rebirth.” So rebirths and resurrections remain historically in the realm of possibility for any civilization, Eastern or Western. As Vico has well taught us, there are recurring historical cycles and they are not deterministic since they are not closed circles.

Finally Professor Nye offers his most intriguing insight: “It is time for a new narrative about the future of U.S. power. Describing power transition in the twenty-first century as a traditional case of hegemonic decline is inaccurate, and it can lead to dangerous policy implications if it encourages China to engage in adventurous policies or the United States to overreact out of fear. The United States is not in absolute decline, and in relative terms, there is a reasonable probability that it will remain more powerful than any single state in the coming decades…Because globalization will spread technological capabilities and information technology will allow more people to communicate, U.S. culture and the U.S. economy will become less globally dominant than they were at the start of this century. Yet it is unlikely that the United States will decay like ancient Rome, or even that it will be surpassed by another state, including China.” This new narrative, professor Nye reminds us, will require a deeper understanding of power, how it is changing, and how to construct “smart power” strategies that combine hard-and soft-power resources in an information age. The country’s capacity to maintain alliances and create networks will be an important dimension of its hard and soft power.

Indeed, power is not good or bad per se, it is the intention behind it and the how it is wielded that makes all the difference. More of it is not necessarily better if the intention is to use it badly. According to professor Nye, “a smart-power narrative for the twenty-first century is not about maximizing power or preserving hegemony. It is about finding ways to combine resources in successful strategies in the new context of power diffusion and the rise of the rest…The coming decades are not likely to see a post-American world, but the United States will need a smart strategy that combines hard and soft-power resources-and that emphasizes alliances and networks that are responsive to the new context of a global information age.”

Obviously, what we have here are two differing views of who will rule, or better who will have hegemony and power to throw around in the 21st century. It remains an open question despite the views of Professor Nye or Martin Jacques. Many in the West are understandably concerned that the view they reject may come about, many in the East believe that their time for power has finally come as confirmed by Jacques’s assertions.

I am afraid they are both wrong. The real question at this point is this: can the two views be bridged and synthesized, or are they mutually exclusive? I tend to believe that a bridge between the two, a la Leonardo, or closer at home a la Edward Said is possible and desirable (see my Ovi article on Said’s bridging of East and West at http://www.ovimagazine.com/art/2112 . To build such a bridge we need to go back to the issue of “multiple modernities”; that is to say, abandon the idea that there is only one way of being modern, the Western mode. The Western mode, as a matter of fact may be flawed to begin with.

What do I mean about the flaw in the Western conception of modernity? I have already addressed this flaw in various article in Ovi over the last five years or so, but allow me to repeat it succinctly in this context. The flaw in the Western conception of modernity lies in its misguided notion that only what arrives at the end is truly progressive and the best, that what is traditional, such as religion and its practices, needs to be repudiated and jettisoned as so much obscurantism and primitivism. Here is where Jacques’ theory of multiple modernities could have been useful but he fails to carry the notion to its proper conclusion and opts to side with those who believe that China’s destiny in the 21st century is somehow inevitable and written in stone.

Nevertheless, the concept of multiple modernities which refuses to reject religion as mere superstition has been argued by influential modern philosophers such as Whitehead and Habermas and various others (the inquisitive reader may wish to consult in this regard the article I wrote on Habermas’s philosophy of multiple modernities some four years ago in Ovi magazine at the following link: http://www.ovimagazine.com/art/4225), philosophers these who have convincingly argued that multiple modernities are not only possible but desirable in the EU, the West at large as well as more traditional religious communities such as India and other Asian places.

Unfortunately that kind of hard look is found unappetizing by Western man bent on finding truth via science and ignoring a simple fundamental question such as that posed by Heidegger: why is there something rather than nothing? Since Voltaire’s age of reason and Galileo’s age of science that question appears slightly ridiculous to modern “enlightened” man, but I would submit one more time that it remains an imperative to achieve a modicum of cultural identity and a definition of what it means to be a European or a Western man in order to be then in a position to confront other cultures and other traditions and find a modus vivendi with them. As I have repeatedly in previous articles: the Enlightenment has still to enlighten itself.

So, once again let me submit to the attentive reader, and at the same time urge the inattentive reader to consider the fact that the flaw in the Western approach to modernities lies exactly in the failure to perceive that religion and faith, independent of its intrinsic spiritual value for human nature which seems to have arisen within it, can be a powerful cultural glue, a centripetal force, a center to keep disparate cultures with different languages together in any sort of planned political union. This political insight was certainly not lost on an emperor Constantine, or a Charlemagne, two political geniuses whatever their overt or covert views on religion per se.

For some strange reason this political genius which refuses to jettison religion from the body politic seems to be lost on many current intellectuals and politicians who think of themselves as moderns or post-moderns and conceive logical positivism as the non plus ultra of modernity. Alas, it seems to also have been lost on the present Communist leadership of China, bent on a Machiavellian grabbing and exercise of power and on distracting the people from their real needs with material prosperity. As already argued they tend to lose sight that Communism is an imported Western phenomenon. But then, to their credit, one must consider that they do not consider themselves Westerners and do not wish to become such, nor should they; they just need to get better informed about the West and what they have ideologically bought from it.

A concluding modest proposal: as the 21st century progresses let’s keep watching carefully those two continental nations by which I don’t mean China and the US, which will surely continue their obsessive competition for power, rather I mean India, which even more than the US honors its religious heritage and accepts multiple modernities, and China which, in embracing the the imported Western Communist ideology has jettisoned its religious heritage and accepted a modernity based on materialistic entrepreneurship and the accumulation of wealth proclaiming, via ideology if nothing else, that by bread alone does man live and democracy and freedom are mere unnecessary frosting on the cake, not really that relevant for the achievement of prosperity. In the final analysis history will tell. It always does, sooner or later, and what it reveals about the past and the future is often surprising, even miraculous. It has happened before in the West and it was called Rinascimento which translates as “rebirth.” A new Renaissance may be needed, one that places less emphasis on mere political power and consumerism and focuses on the common good. As Einstein aptly put it: when modern man will have reached the positivistic pinnacle of scientific rationality, he may be greatly surprised to find out that the philosopher and the theologian are already there waiting for him. Food for thought!

Professor Paparella has earned a Ph.D. in Italian Humanism, with a dissertation on the philosopher of history Giambattista Vico, from Yale University. He is a scholar interested in current relevant philosophical, political and cultural issues; the author of numerous essays and books on the EU cultural identity among which A New Europe in search of its Soul, and Europa: An Idea and a Journey. Presently he teaches philosophy and humanities at Barry University, Miami, Florida. He is a prolific writer and has written hundreds of essays for both traditional academic and on-line magazines among which Metanexus and Ovi. One of his current works in progress is a book dealing with the issue of cultural identity within the phenomenon of “the neo-immigrant” exhibited by an international global economy strong on positivism and utilitarianism and weak on humanism and ideals.

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East Asia

Will China bubble burst owing to authoritarianism?

Amjed Jaaved

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In his book The Age of the Economist, Daniel R. Fusfeld tells how economics governs our life today. In today’s market or quasi-market economies, no country can live in economic isolation (sakoku). India, USA and their `satellites’ are trying to isolate China in economic field. Already, they have hung isolationist Financial-Action-Task-Force Sword of Damocles over China’s all-weather ally Pakistan’s head. Through its economic relations and defence purchases, India scuttled Pakistan’s effort to draw world’s attention to Kashmiris in prison. India’s defence ministry approved purchase proposals amounting to an estimated Rs 38,900 crore. Heretofore is a bird’s-eye view of her shopping itinerary. Procurement of 36 Rafales and 12 Su-30 MKI aircraft and 21 MiG-29.  Upgrading Indian Air Force’s existing MiG-29 aircraft. The MiG-29 procurement and upgradation from Russia will cost Rs. 7,418 crore. Producing the Su-30 MKI at the Hindustan Aeronautics Limited will cost Rs. 10,730 crores.

In Sri Lanka, india, through its underhand machinations, managed to remove Mahinda Rajapaksa from office 2015. Rajapakse had leased out strategic Hambantota port to China and allowed docking Chinese submarines in in Sri Lanka.   Now Sri Lanka has handed over control of Humbantota to India. India gave Sri Lanka $45.27 million aid to develop KKS harbour (Jan 12, 2018).

India extended 2.1-billion Nepalese Rupee (NR) aid to Nepal as reimbursement of the first tranche of housing support to 42,086 governments of India- supported beneficiaries in Nuwakot and Gorkha districts. It pledged Nepal US $1 billion aid and soft loan (25%) for Nepal’s post-earthquake. India bears pension liability of Gorkhas equivalent to Nepal’s annual budge. But, offended at occupation of Kala Pani territory by India, Nepal enacted law to affirm its territorial sovereignty. Nepalese prime minister Oli  is tottering because of India’s underhand effort to topple him.

India has no border at Doklam with China.yet it, like a super power jumped in `at Bhutan’s request’ to stop China from constructing a road there. It  pledged to contribute Rs 4,500 crore to Bhutan’s twelfth five-year plan (2018 to 2023). It completed Mangdhechu Hydroelectric project and Ground Earth Station for South Asia Satellite and launch of RuPay card in Bhutan. Besides, it committed assistance of Rs 4,500 crore for implementation of development projects and Rs 400 crore for transitional Trade Support Facility during Bhutan’s 12th Five Year Plan (2018 – 2023). Under the 12th 5-Year Plan, 51 large and intermediate projects and 359 Small Development Projects (SDPs)/High Impact Community Development Projects (HICPDs) are being carried out. India’s commitment to the 12th Plan constitutes about 14.5 per cent of the Plan outlay which is around 38.75 per cent of the capital outlay and 71 per cent of the total external assistance.

To Bangladesh, India extended three $8 billion loans. A total of 1.16 Gigawatts of power is now being supplied by India to Bangladesh. The increase, in the reckoning of the Prime Minister, signifies a “quantum jump from megawatts to Gigawatts and is symbolic of a golden era” in bilateral ties. Markedly, Mamata Banerjee has pledged to raise the power supply to Bangladesh to 1,000 MW. Though electricity will not be a substitute for Teesta water, the plan to boost power supply is on anvil.Bangladesh is however annoyed at dillydallying at Teesta Accord, and India’s inability to brief her about Glawan situation (rebutted by India).

Launching the ‘Act Far East’ policy, India’s Prime Minister Narendra Modi announced (September 5, 2019) that India will give a line of credit worth US$ 1 billion to Russia for the development of the Far East.India provided Lines of Credit worth $ 96.54 million to Niger for projects in transport, electrification, solar energy and potable drinking water. It granted $15 million to Niger for organising African Union Summit.

India and Japan have launched their own joint initiative in the shape of Asia-Africa Growth Corridor (AAGC) vis-a-vis China’s Belt-Road Initiative for undertaking development and cooperation projects in the African continent.

India’s knee jerks to Malaysia and Turkey: Malaysian prime minister Mahathir Mohammad had said in September last that India had “invaded and occupied” Kashmir. He was joined by Turkey’s President Recep Tayyip Erdogan, who said that India had virtually imposed “a blockade” on Kashmiris.Their views on Kashmir and the Citizenship (Amendment) Act (CAA) irked India.India punished

Turkey by not allowing it to bid for construction contracts. Import of palm oil from Malaysia was truncated.

Will China’s economic bubble burst for lack of institutions and authoritarianism: The spectacular economic growth in China in the past four decades has inspired a large strand of research to understand China’s unconventional growth path.  China is expected to suffer a sudden economic collapse because of lack of inclusive institutions, debt policies, and authoritarianism.  Daron Acemoglu and James A. Robinson in their book Why Nations Fail argue that without economic institutions particularly private property , and competition, nations fail to promote economic growth and alleviate poverty. Powerful people should not seek to grab complete  control over government  undermining broader social progress. It is freedom that makes people rich. Without political change, even sensible economic ideas and policies are doomed to fail.

To strengthen his rule, Xi Jinping has allegedly assumed an absolute control over all the institutions of country in guise of national rejuvenation and reforms.

Norwegian political scientist stein Ringen in his book “The perfect dictatorship: China in the 21st Century calls XI’s rule as “Controlocracy”.  Xi chairs, roughly, eight of the leading small groups including national security commission. He also handles internal security directly, thereby reducing any possible chance of mutiny.Tai Ming Cheung a professor at the school of global policy and strategy at UC San Diego alleges “No other Chinese Communist Party leader, not even Mao Zedong, has controlled the military to the same extent as Xi does today. Mao had to share power with powerful revolutionary-era marshals.” To show how “hands-on” he is, Xi has taken the new post of commander-in-chief of the PLA Joint Battle Command.

This view is debatable. Discussion papers are included in in Allen, Franklin & Qian, Jun & Qian, Meijun, 2018. “A Review of China’s Institutions,” CEPR Discussion Papers 13269. Their paper focuses on the recent development of China’s institutions, financial markets, innovations and government-business relations in the context of their roles in supporting China’s growth. Alternative financing channels and governance mechanisms, rather than the markets and banks, continue to promote growth in the most dynamic sectors of the Chinesed economy.

Pro-China view: Tom Orlik, chief economist – Bloomberg Economics and David Dollar, senior Fellow, Foreign Policy, Global Economy and Development, John L. Thornton China Center, do not agree. They trust China would tide over economic crises through out-of-box thinking and ingenuity of mind. Klaus  Muhlhahn in aking China Modern: From the Great Qing to Xi jinping highlight role of institutions in China’s rise. During the nineteenth century, China suffered humiliation of defeats in the Opium Wars at the hands of Western imperialists. Like a sphinx, China rose from ashes to baffle the world, we live in, through its flabbergasting if not unprecedented economic growth and participation on the geo-political state as a powerful player.

Charismatic leaders (Sun Yat Sen, Mao to Xi Jinping) did contribute their effort in transforming China. China’s rise, per official line began with Deng Xiaoping’s rule in 1978. But a dispassionate look at history reveals that China’s recovery was in the making for about a century. Historical legacy, cumulative experience a desire to see a better tomorrow and resilience in overcoming adversity contributed to China’s emergence as a conundrum or a miracle during twentieth or twentieth century.

China’s rise is not an overnight exploit or legerdemain of some leaders. Its present status is cumulative product of its institutions in early modernity or late imperial period (mid-seventeenth through eighteenth century). Beginning in 1644 during the Qing dynasty reign, many core institutions were developed and the empire achieved its zenith. The social and cultural institutions of this period account for China’s brilliant trajectory into nineteenth and twentieth century. The institutions of yesteryears, about three centuries , relate to key areas of government economy sovereignty, border security and exploitation of natural resources.

Inference: In cahoots with USA, India wants to get China declared a pariah state. The aim is to impose economic sanctions, or aid or trade embargo on China. The USA uses a flexible format to dub or delete a country as axis of evil, money-laundering conduit, sponsor of terrorism or pariah (Tamil paraiyar, outcastes), or rogue (Iran, Sudan, North Korea, Cuba, Venezuela). Ottoman Empire was persecuted as an outcast by European States since the Treaty of Westphalia in 1648 until the nineteenth century on a religious basis’.

Deon Geldenhuys. points out multifaceted criteria for declaring a state pariah_ having ‘artificial borders’ (Iraq), siege mentality, anti-West sentiments and desire to subvert the international status quo, or not being a considerable `world power’(“Pariah States in the Post-Cold War World: A Conceptual Exploration,  March 5, 1997).  So far, China has eluded pariah label proving it to be a `world power’.

Why India is hostile to China? Indian prime minister Modi himself told an all-party conference, “Neither have they [Chinese] intruded into our border, nor has any post been taken over by them (China)”. Even former defence minister AK Antony and former foreign secretary Shyam Saran denied China had taken over 640 sq km of Ladakh territory. Even, “The Indian army denied that Ladakh had shrunk. Change in the river course was cited as a reason for the loss of 500-1,500 meters of land annually”. Then, why the storm in a teacup.

Talk of Chinese bubble bursting appears to be a propaganda tip.

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East Asia

China’s new strategic positioning

Giancarlo Elia Valori

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 While China is “narrowing” its production lines at national or international levels, a very important signal is the new relationship established between Turkey and the United States to replace China as a supply chain.

 Obviously the new “cold war” between China and the United States cannot but create good opportunities for countries such as Turkey which aspire to establish their hegemony over Central Asia and hence to reduce China’s weight both in global and regional trade.

 This is the price that Turkey pays happily and without particular problems to the United States for affording its autonomous policy in the Maghreb region, in the Eastern Mediterranean, in the Balkans and in Central Asia, up to supporting the Xinjiang Muslims in China above all to nip the Chinese Belt & Road Initiative in the bud.

 Meanwhile Botas, the state-owned distributor of Turkish natural gas, has proposed the construction of a pipeline from its Northern Turkish coast to Nakhicevan, Armenia, so as to reduce Armenia’s imports from Iran and thus slowly distancing from Iran. This is music to American ears.

 Therefore, Erdogan’s Turkey also bets on the new “cold war” between the United States and China, thus proposing itself as a third wheel and hence as the basis for the technical and commercial replacement of the production networks from China itself to the area controlled by Turkey.

There is a “but”, however: Turkey has a public deficit of 5.6 billion U.S. dollars (according to April 2020 data), but so far only Chinese capital and funds have arrived to support a 400 million swap between the renmimbi and the Turkish Lira.

 A Chinese company bought the Kumport Terminal, on the Sea of Marmara, for 940 million, and in November 2019 Turkey saw the first train arriving from Xi’an, through the Maramay tunnel built and funded by China, which allows to have a non-stop line from China to Europe. An asset not to be overlooked.

 The Turkish e-commerce platform, Trendyol, was later acquired by Alibaba but, as all Turkish finance experts say, it would require a further and probably strong devaluation of the Turkish lira which, however, needs substantial “fresh” investment from abroad.

Therefore, it is unlikely for an economy such as Turkey’s to take harsh and definitive action against Chinese interests.

Nevertheless, what does Donald J. Trump’s America really want from China?

 The US Presidency’ Strategic Approach to China, published on May 26, 2020, maintains that the threat posed by the CPC to U.S. economic, military and strategic interests, as well as to its “values” is a primary danger.

 If we look at the history of such statements, only in the days of the harshest “Cold War” with the USSR were such terms used.

As to economic competition, the United States accuses not the State, but directly the CPC, of overtly “protectionist State policies that have harmed American workers and businesses”.

 With damage caused also to global markets, the environment and global trade law. Nevertheless,the sanctions imposed by China on U.S. goods in 2019 were anyway adopted by the WTO, whose negotiation system has been called into question by the United States itself.

 In fact, Trump’s America accuses particularly the CPC of “taking advantage of its WTO membership to become the world’s largest exporter, but systematically and harshly protecting its domestic market”.

What is the United States doing? The U.S. real and deep accusation is against the Belt & Road Initiative: the United States interprets this great commercial-strategic operation as an attempt to reshape the world market according to the internal needs of the Communist regime in China.

 Moreover, as the United States always maintains, China wants to use not the international networks, but its own courts, as arbitration courts. Is it true or false? Obviously there is the ICC, but other courts of reference are also formally possible, based on UN-type commercial law.

As to the Chinese challenge to American values, the U.S. document states that “China is engaged in an ideological competition with the West”.

The U.S. current idea is based on President Xi Jinping’s old statement (dating back to 2013) whereby China must prepare for a “long phase of cooperation and conflict” with the capitalist West, and it is always stated that “capitalism is dying and Socialism will triumph”. It could not be otherwise considering his Marxist background and ideas.

 Obviously so, since President Xi does not certainly come from a salon in Manhattan.

Moreover, the United States never wants China to project itself as a world leader and a country of great global influence. Here again it wants the fight against corruption to stop, since for the United States it was only and exclusively a way to eliminate president Xi’s opponents.

Is it true? Yes, but obviously not only so. One and a half million corrupt people punished by the State, but many of them are real, while others are certainly “enemies” of President Xi’s policy line.

The U.S. Presidency, however, is mainly afraid of the Chinese Military-Civil Fusion and hence of the commercial-security blockade that, in the very long run, could put an end to the traditional U.S. hegemony in the Pacific.

 Moreover, the two military games made by the RAND Corporation, about a year ago, concerning a clash in the South Pacific between U.S. and Chinese-Russian forces, demonstrated that the United States would soon be defeated.

Hence, as usual, for the United States once again it is primarily a matter of “protecting the People, the Homeland, the American way of life”. There is great fear for Chinese “propaganda” in the United States, as if it could not be opposed at all. A sweeping analysis was made for Chinese students, the largest foreign community in the United States, and a regulation called Foreign Investment Risk Review Modernization Act was enacted. In January 2020 the United States and China signed also the “Phase One” of a major trade agreement that, according to the United States, is expected to change Chinese business practices significantly. In fact, the agreement provides that the CPC cannot force or orient foreign companies to transfer their technology to keep on producing or selling in China. It also strengthens the rules on the protection of intellectual data in China and finally opens up Chinese markets to U.S. agricultural products, on which it has much relied for its foreign policy.

 On the military level, the U.S. Administration (and it would be anyway the same if there were another President) wants a new relationship with “similar” and “friendly” countries so as to counter the Chinese military build-up and develop the Indo-Pacific Strategy Report. In other words, obviously the U.S. block of every “One China Policy”, but hence implicit support to internal factionalism, in Hong Kong and Taiwan, as well as proposing a stop to the Chinese expansion between Xinjiang and Pakistan’s maritime network.

Furthermore, as to the ideological struggle, support for Religious Freedom, the usual fight for “human rights”, the U.S. protections for “minorities’ liberties”. That is all. But we do not think it will be enough.

 Certainly, Chinese infrastructural investment is currently designed to competing with the United States and better controlling civil society.

 The 55-kilometre bridge going from Hong Kong to Macao, with two artificial islands that allow the road to sink 7 kilometres into a very long underwater tunnel is an eminently political and strategic project.

 Obviously, it is in fact a matter of building a Unified Commercial Zone, like the one in New York or Tokyo.

 But it is also a matter of creating a strategic control zone to currently protect those coasts, which are currently more economically important than China. However, it is precisely in this area that as much as 4% of the regional and national GDP is dedicated to the construction of quantum computer networks and encryption. The classic civil-military dual objective.

 Currently China is already a leading country in quantum communications between Space and Earth. It has already built a Quantum Computing Laboratory in Hefei, Anhui Province, with 10 billion U.S. dollars, while the China-U.S. Economic and Security Commission has established that, as early as 2000, China had bridged the technological gap with the United States with regard to quantum computing.

Is it true? We do not know for sure, but this is certainly where the real economic and intelligence war between China and the United States is developing.

As Krugman maintained in an old article for Foreign Affairs, nations are not corporationsand they do not compete one another as companies always do. Nations, however, certainly compete for market outlets, for financial resources, for technologies and for cultural or influence operations.

 There is nothing else. Nevertheless, we must never forget that the major countries’ strategic “policy line”, to which Italy adapts in a sheep like way, envisages variables – also for the small and medium countries – which are not at all negligible.

Also at military level, China’s operations in Ladakh and Tibet are an example of the interest – dating back to Mao Zedong’s times – in using Tibet as “the palm of the Chinese hand” to expand China’s influence throughout South Asia, which is a primary strategic axis.

 It is a matter of encircling India and later stable geo-economic blocs are built, just against India, with the Chinese expansion in Myanmar, Sri Lanka and Pakistan.

 There must always be a spatial logic – we would classically define as geopolitics – which follows the definition of a country’s primary interest. When it knows how to evaluate it,however, which certainly does not happen currently in Italy.

In any case Tibet would have been India’s first natural defence line, if China had not already taken itas early as 1950.

Hence Tibet, with its strategic “five fingers”, i.e. Ladakh, Sikkim, Nepal, Bhutan and Arunachal Pradesh, will be China’s checkpoint from the South, and we do not believe it will be easily opened by India’s collaboration with other countries, such as the United States.

Without Tibet available, economic, military and intelligence operations against the Belt&Road Initiative will be largely blocked.

Furthermore, President Xi Jinping – who knows the Party and State apparatus very well – has recently launched a campaign of “Security Apparatus Clean-up”. Since November 2012, President Xi Jinping has also marginalised the old leader of the Chinese security apparatus, Zhou Yongkang, directly acquiring an assignment from Politburo and not from Politburo Standing Committee.

Nowadays, China’s security apparatus budget is officially estimated at 183,272 million yuan, equivalent to 26.6 billion U.S. dollars.

While Zhou Yongkang, a man of Hua Guofeng and later of Deng Xiaoping, was arrested in 2012, Hu Jintao himself sent as many as 3,000 Intelligence Service executives to re-education camps.

 3,000 executives in a total of 1.97 million officials and operatives.

Nevertheless, this year the turning point has been the establishment of the Safe China Construction Coordinating Small Group, now led by Guo Shengkun.

Later Lin Rui came. President Xi Jinping still trusts him and, however, he is a computer engineer.

Nevertheless, the “clean-up of the security apparatus”in Xi Jinping’s hands will most likely be completed next year.

 A new “Yan’an Rectification Movement”, like the one that Mao Zedong promoted.

Rectification campaigns, collection of Xi Jinping’s sayings to “set the policy line”, with the collection of the “four consciences” (ideology, the whole country, principles and policies) and the four trusts (Socialism with Chinese characteristics; trust in a system that proposes the nature of Chinese Socialism; trust in its own culture and values).

Hence this will be the intellectual and operative scenario with which Xi Jinping will fight against the United States. A fight which will not be easy, but not even with a predictable result.

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East Asia

Here is How China Responds to US in Indo-Pacific

Jannus TH. Siahaan

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Trump administration recognizes the Chinese style of war with the term of  “Unrestricted Warfare,” unlimited war on all fronts, not merely a matter of arms war. Therefore, Trump continues to try to bulldoze China from various sides, the economy, corporation, media, education, the military, etc. How China sees war is not a new things. James Burnham in his book “The War  We Are In“, half a century ago, has very clearly been explained. I argue, in addition to continuing to enjoy the “Thucydides trap” theory, the way how China has been looking at war is also crucial in determining the Chinese style of facing America in the South China Sea. China clearly hopes to play with a long-term strategy, given its very long leadership period. Unlike the American President, who will always be threatened by his position once every four years.

So China most likely will not fight America openly in the South China Sea, but continue to increase its power. While on the other hand, China begin to undermine America’s strategic partners one by one. Such as, South Korea, Japan, India and Australia. That’s why, China certainly needs North Korea to disrupt. Why? Based on the American “island line” strategy, South Korea is the center of the first “island line”. There are approximately 28,000 more American troops in South Korea. Moreover, North Korea’s nuclear warhead can reach Japan, even reaching the center of America’s second “island line” on Guam. Providing dangerous threats in America’s first and second “island line” circles will make Taiwan easier to seize and then disrupting the coordination lines of American power in South China Sea with its closest partners

While in the East, China continues to press and is ready to have a military dispute with India on the Line of Actual Control. Without much public attention, China has surrounded India for the past several years. China already has military bases in Djibouti and possibly in Gwadar Pakistan, both thanks to the cooperation of the Road and Belt Initiative, where Djibouti was finally unable to pay debts, then its port was diverted to China and made a military base. The same thing happened with Gwadar. And most likely, China will be very able to convince Russia not to get involved by offering economic benefits from the war between India and Russia, because both countries –China and India — are consumers of Russian weapons.

On the other hand, China will continue to wreak revenge on trade war with America to Australia, to the maximum extent that losses can be received by the land of Kangoroos. Especially after the involvement of the Australian Frigate in the American international navigation convoy on South China Sea and after Australia reacted on China about covering up Covid 19. China is Australia’s biggest trading partner. China seems to be quite sure, with the application of high tariffs for many Australia’s export commodities will weaken the country’s economic capabilities. And all the shock therapy will give a bad signal to the countries around the South China Sea.

The same way will be played with Canada that has imprisond Meng Wanzhou, CFO Hua Wei, at the request of American extradition law. And don’t forget, slowly but surely, the Belt and Road Initiative has also divided Europe, Africa, and slowly in the Middle East. Now, when it comes to Chinese matters, the European Union does not all agree that China is a threat (just competitor even after Covid 19 and Hong Kong Case), since the fast train line and any infrastructure projects have split the blue continent.

Then at the American domestic level itself, China will probably continue to intervene and infiltrate elections, ride various issues that have the potential to weaken Trump’s position. Although China said, it is very happy if Trump was re-elected because Trump has the potential to damage the American alliance with many countries. But, it’s pretty sure to translate that China really  want Joe Biden to win. It’s easier for China if democrats are enthroned.

Is America likely to lose? I still believe, the Chinese war is not for today. Today, militarily and economically, America still has the upper hand. However, Xi is a marathon runner, Xi may be the president for life. But the signals of the threat of Unrestricted War are already visible. Today, on the other hand, geostrategically America has long made an alliance to surround China. In South China Sea, America still has Taiwan, Vietnam, the Philippines, Malaysia, Singapore (maybe Indonesia) even though South Korea and Japan are intimidated  by North Korea. Also in economic side, for example, though China stay growing 6 percent stably and America is only 1-2 percent stably, China still needs decades to catch up to America’s GDP per capita.

Therefore, China will play long and pay in instalments one by one the target. China will probably not focus on South China Sea with hard power, but on Taiwan first, after Hong Kong was successfully acquired without war, by continuing to spread threats in the South China Sea to divide American concentration. After Tse Ing Wen came to the power, peace unification with China had failed. The offer of “one country two systems” was rejected by Tse Ing Wen and the people of Taiwan. As a result, China will boast more power around Taiwan, while preoccupying South Korea and Japan with North Korea’s actions, and still looks aggressive at South China Sea.

This is one form of “Omni-dimensional war” of China, as Burnham wrote. But China will really need a lot of energies and patience to play long, more over after pandemic which has been throwing them to the corner of international order. Meanwhile, in short, US will be more aggressive in South China Sea to get more attention from Trump’s domestic supporter till the next election day. So, the more successful Trump in making Americans angry (hate) at China is one of the keys to Trump getting a majority of votes in the elections later. I’m pretty sure, Trump will continue to play this Chinese card in the next few months ahead, until the election comes. And the medium term result is that South China Sea will just be provocative theater for both.

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