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Xi Jinping’s future China

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap]he fifth session of the National People’s Congress and the Fifth Session of the 12th National Committee of the Chinese People’s Political Consultative Conference are two epochal moments in the evolution of “Xi Jinping’s policy line” and China’ great transformation from great economic locomotive of the world into a multi-faceted and global power.

While, in the past, the People’s Republic of China could be considered an “Asian tiger” which, unlike the other smaller ones, had recorded large and stable economic development, currently – under Xi Jinping’s leadership – time has come to turn mere steady economic development into clear and firm international power living up to China’s new strategic role, namely being a major and fully-fledged world power.

The “tigers” which had led to the Asian booming economies had been undermined by the manoeuvres they did on the dollar. China saved itself also because it did not dollarized itself, but rather bought US public debt securities, thus becoming a “silent partner” of its main competitor.

Hence the support for globalization expressed by Xi Jinping at the recent Davos Conference.

Xi Jinping’s China does not want to reduce the globalization rate, because only the world market, as a whole, can sustain its harmonious development, without producing internal inflationary imbalances or productive crises. In the traditional Marxist thinking, the overproduction crises that Xi Jinping fears are typical of real capitalistic crises.

Those who win the Darwinian struggle between nations and strengthen their economies tend to spread their success and, hence, eliminate possible competitors.

Conversely, those who lose always want the closure of their markets, as well as protectionism and control of world economic flows.

It was also the idea of Adam Smith in his “The Wealth of Nations”, the book which is at the core of modern political economy.

Furthermore, in 1776 – namely the year of the American Revolution – Smith’s England wanted free-trade and liberalism in distant markets, but it kept its market tightly closed. Those who win are liberal (for the others), while those who lose the world economy game only want to avoid greater damage, thus becoming even more protectionist.

Therefore Xi Jinping’s China will conquer a large share of world economy, thus becoming leader of the unavoidable future globalization and outsourcing some of its assets, as well as replacing the old Western powers, which are no longer able to guide and direct economic, financial and cultural globalization.

Efficiency and representation do not often go hand in hand: the West is in the grip of “vested interests” which – through Parliamentary legitimate representation – distort and block economic, productive, financial and cultural reforms.

Thanks to its political structure, China can avoid these Western constraints and reach Xi Jinping’s goals quickly and effectively.

Incidentally, the People’s National Assembly (or Congress) is the highest State institution and the sole legislative body of the People’s Republic of China.

Unlike other Western representative institutions and structures, the current organization of Chinese representation is highly functional, considering that it provides for one single legislative House (namely the Assembly) which institutionally supervises the Presidency, the Council of State, the Supreme Court, the Army and the eight non-Communist smaller parties which, however, have pledged allegiance to the Republic founded by Mao Zedong.

In one single annual meeting, always held in March, the Congress ratifies the decisions often already taken by the Party bodies and basically discusses the “policy line” of legislation and, hence, of China’s future policy.

The Political Consultative Conference, too, is a body of the Chinese State and represents the various political parties present in the People’s Republic of China, which have accepted the direction and leadership of the Nation by the Communist Party.

It is an institution also made up of members from other non-directly political associations and includes members of political parties and many associations from Hong Kong, Macao and Taiwan.

The Conference also includes major personalities, independent from the various parties.

Later the Communist Party of China (CPC) will elect a new Party’s leadership during its National Congress scheduled early next year.

Therefore this is the phase in which Xi Jinping is definitely strengthening his power over the Party and hence his specific policy line. Five of the seven members of the Politburo Internal Committee shall leave office at the beginning of 2018, and only Xi Jinping and Prime Minister Li Kekiang will remain in office.

Some outgoing members of the Politburo Standing Committee will be likely investigated on corruption charges.

Also the Armed Forces will change radically when the Communist Party of China is fully in Xi Jinping’s hands.

The four general headquarters of China’s Armed Forces have already been cut down to size and merged into the Central Military Commission.

The second military reform implemented by Xi Jinping – of which we will soon see the results – is designed to place the four Armed Forces on an equal footing, by putting an end to the primary role played by Ground Forces.

Obviously, today China is no longer a regional power that must be defended mainly from ground invasions – which are the most geopolitically likely invasions – but a global and globalist power that must protect its new status with a large Air Force and a strong “blue-water Navy”, as experts call it.

Hence separate Commands also for the ground forces that previously led the whole Chinese military structure.

Basically, Xi Jinping wants to cut the Armed Forces down to size (300,000 soldiers and officers have been dismissed), but he wants them to be always “combat ready”, namely capable of combined operations and, above all, suitable for operating outside the traditional Chinese scenarios.

Furthermore, Xi Jinping knows the structural weaknesses still threatening China’s development: corruption, which has taken huge liquidity away from China’s productive economy, through one million officials investigated to date on severe corruption charges; technological innovation so as to avoid China remaining the old “world factory”, as the dollarized “tigers”, but excluded from the new production trends; finally agriculture and, above all, the stable growth of people’s wellbeing.

China runs the risk of experiencing the “middle income trap”, as economists call it, namely that development stops when everyone has reached a satisfactory income.

It happened to most Eastern developed economies. After the “middle income trap”, another trap inevitably comes, namely the “poverty trap”, as in current Latin American economies.

In Xi Jiping’s mind, this project includes the State reform, streamlining and simplification, which go hand in hand with China’s full entry into the group of economies recording the highest rate of innovative technologies, which – in many respects – is the economic face of the State political reform that Xi Jinping has undertaken.

This project also includes a financial market with private equity and the other forms of cash and private debt management; the increase in competition between companies; a skilled workforce capable of moving between different technologies and factories; the readjustment of the hukou traditional agricultural welfare; finally, the entry of traditional rural overpopulation into the urban labour force.

As Mao Zedong accelerated China’s development, often with mixed results, Xi Jinping wants the “Fifth Modernization”, the modernization not written by Deng Xiaoping but the most important one – namely the State Modernization, which will inevitably drive the modernization of civil society and the economy.

The relationship between rural and urban areas is the issue which is at the core of Mao Zedong’s thought and the best Marxism – the issue that General Marshall took into due account in his famous Harvard speech in which he outlined the “Marshall Plan” for Europe in the aftermath of the Second World War.

If Xi Jinping succeeds in reducing corruption – and so far he has managed to do so – but particularly in reforming the State to eliminate the old protectionist privileges and near monopolies of the centralized economy, China will not fall into the “middle income trap” and will still have huge development opportunities that Xi Jinping will focus on the technological innovation of products and processes.

As often happened in the history of Socialism, if the State preserves large pockets of unproductive income, inefficiency and unnecessary costs – all problems that we Italians know all too well – Xi Jinping’s fight, which is the only one currently possible in China, will take too long to be won.

Nevertheless the current rationale of the Chinese leadership – that will also deal with pollution (which is a serious obstacle to globalization, not its natural by-product), as well as with manageable and livable cities on a human scale, with the coordination, wanted by Xi Jinping, between Beijing, Tianjin and Hebei for investment in infrastructure – is still the traditional, Confucian and Taoist one.

Everything is based on the link between “Minyi”, namely public opinion, and “Minxin”, namely people’s hearts and minds.

Xi Jinping is undoubtedly a global leader beloved by the Chinese people, but certainly the impact of the old apparata, privileges and near monopolies will still be felt.

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

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East Asia

Importance of peace in Afghanistan is vital for China

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image source: chinamission.be

There are multiple passages from Afghanistan to China, like Wakhan Corridor that is 92 km long, stretching to Xinjiang in China. It was formed in 1893 as a result of an agreement between the British Empire and Afghanistan. Another is Chalachigu valley that shares the border with Tajikistan to the north, Pakistan to the south, and Afghanistan to the west. It is referred to as the Chinese part of the Wakhan Corridor. However, the Chinese side of the valley is closed to the public and only local shepherds are allowed. Then there is Wakhjir Pass on the eastern side of the Wakhan corridor but is not accessible to the general public. The terrain is rough on the Afghan side. There are no roads along the Wakhjir Pass, most of the terrain is a dirt track. Like other passages, it can only be accessed via either animals or SUVs, and also due to extreme weather it is open for only seven months throughout the year. North Wakhjir Pass, also called Tegermansu Pass, is mountainous on the border of China and Afghanistan. It stretches from Tegermansu valley on the east and Chalachigu Valley in Xinjiang. All of these passages are extremely uncertain and rough which makes them too risky to be used for trade purposes. For example, the Chalagigu valley and Wakhjir Pass are an engineering nightmare to develop, let alone make them viable.

Similarly, the Pamir mountain range is also unstable and prone to landslides. Both of these routes also experience extreme weather conditions. Alternatives: Since most of the passages are risky for travel, alternatively, trade activities can be routed via Pakistan. For example, there is an access road at the North Wakhjir that connects to Karakoram Highway.

By expanding the road network from Taxkorgan in Xinjiang to Gilgit, using the Karakoram Highway is a probable option. Land routes in Pakistan are already being developed for better connectivity between Islamabad and Beijing as part of CPEC. These routes stretch from Gwadar up to the North.

The Motorway M-1, which runs from Islamabad to Peshawar can be used to link Afghanistan via Landi Kotal. Although the Karakoram highway also suffers from extreme weather and landslides, it is easier for engineers to handle as compared to those in Afghanistan.

China is the first door neighbor of Afghanistan having a common border. If anything happens in Afghanistan will have a direct impact on China. China has a declared policy of peaceful developments and has abandoned all disputes and adversaries for the time being and focused only on economic developments. For economic developments, social stability and security is a pre-requisite. So China emphasizes peace and stability in Afghanistan. It is China’s requirement that its border with Afghanistan should be secured, and restrict movements of any unwanted individuals or groups. China is compelled by any government in Afghanistan to ensure the safety of its borders in the region.

Taliban has ensured china that, its territory will not use against China and will never support any insurgency in China. Based on this confidence, China is cooperating with the Taliban in all possible manners. On the other hand, China is a responsible nation and obliged to extend humanitarian assistance to starving Afghans. While, the US is coercing and exerting pressures on the Taliban Government to collapse, by freezing their assets, and cutting all economic assistance, and lobbying with its Western allies, for exerting economic pressures on the Taliban, irrespective of human catastrophe in Afghanistan. China is generously assisting in saving human lives in Afghanistan. Whereas, the US is preferring politics over human lives in Afghanistan.

The US has destroyed Afghanistan during the last two decades, infrastructure was damaged completely, Agriculture was destroyed, Industry was destroyed, and the economy was a total disaster. While, China is assisting Afghanistan to rebuild its infrastructure, revive agriculture, industrialization is on its way. Chinese mega initiative, Belt and Road (BRI) is hope for Afghanistan.

A peaceful Afghanistan is a guarantee for peace and stability in China, especially in the bordering areas. The importance of Afghan peace is well conceived by China and practically, China is supporting peace and stability in Afghanistan. In fact, all the neighboring countries, and regional countries, are agreed upon by consensus that peace and stability in Afghanistan is a must and prerequisite for whole regions’ development and prosperity.

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Shared Territorial Concern, Opposition to US Intervention Prompt Russia’s Support to China on Taiwan Question

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image credit: kremlin.ru

The situation around the island of Taiwan is raising concerns not only in Chinese mainland, Taiwan island or in the US, but also in the whole world. Nobody would like to see a large-scale military clash between China and the US in the East Pacific. Potential repercussions of such a clash, even if it does not escalate to the nuclear level, might be catastrophic for the global economy and strategic stability, not to mention huge losses in blood and treasure for both sides in this conflict.

Earlier this week, Russian Foreign Minister Sergey Lavrov stated that Moscow continued to firmly support Beijing’s position on Taiwan as an integral part of China. Moreover, he also underlined that Moscow would support Beijing in its legitimate efforts to reunite the breakaway province with the rest of the country. A number of foreign media outlets paid particular attention not to what Lavrov actually said, but omitted his other remarks: the Russian official did not add that Moscow expects reunification to be peaceful and gradual in a way that is similar to China’s repossession of Hong Kong. Many observers of the new Taiwan Straits crisis unfolding concluded that Lavrov’s statement was a clear signal to all parties of the crisis: Russia would likely back even Beijing’s military takeover of the island.

Of course, diplomacy is an art of ambiguity. Lavrov clearly did not call for a military solution to the Taiwan problem. Still, his remarks were more blunt and more supportive of Beijing than the standard Russia’s rhetoric on the issue. Why? One possible explanation is that the Russian official simply wanted to sound nice to China as Russia’s major strategic partner. As they say, “a friend in need is a friend indeed.” Another explanation is that Lavrov recalled the Russian experience with Chechnya some time ago, when Moscow had to fight two bloody wars to suppress secessionism in the North Caucasus. Territorial integrity means a lot for the Russian leadership. This is something that is worth spilling blood for.

However, one can also imagine that in Russia they simply do not believe that if things go really bad for Taiwan island, the US would dare to come to its rescue and that in the end of the day Taipei would have to yield to Beijing without a single shot fired. Therefore, the risks of a large-scale military conflict in the East Pacific are perceived as relatively low, no matter what apocalyptic scenarios various military experts might come up with.

Indeed, over last 10 or 15 years the US has developed a pretty nasty habit of inciting its friends and partners to take risky and even reckless decisions and of letting these friends and partners down, when the latter had to foot the bill for these decisions. In 2008, the Bush administration explicitly or implicitly encouraged Georgian leader Mikheil Saakashvili to launch a military operation against South Ossetia including killing some Russian peacekeepers stationed there. But when Russia interfered to stop and to roll back the Georgian offensive, unfortunate Saakashvili was de-facto abandoned by Washington.

During the Ukrainian conflicts of 2013-14, the Obama administration enthusiastically supported the overthrow of the legitimate president in Kiev. However, it later preferred to delegate the management of the crisis to Berlin and to Paris, abstaining from taking part in the Normandy process and from signing the Minsk Agreements. In 2019, President Donald Trump promised his full support to Juan Guaidó, Head of the National Assembly in Venezuela, in his crusade against President Nicolas when the government of Maduro demonstrated its spectacular resilience. Juan Guaido very soon almost completely disappeared from Washington’s political radar screens.

Earlier this year the Biden administration stated its firm commitment to shouldering President Ashraf Ghani in Afghanistan in his resistance to Taliban advancements. But when push came to shove, the US easily abandoned its local allies, evacuated its military personal in a rush and left President Ghani to seek political asylum in the United Arab Emirates.

Again and again, Washington gives reasons to conclude that its partners, clients and even allies can no longer consider it as a credible security provider. Would the US make an exception for the Taiwan island? Of course, one can argue that the Taiwan island is more important for the US than Afghanistan, Venezuela, Ukraine and Georgia taken together. But the price for supporting the Taiwan island could also be much higher for the US than the price it would have paid in many other crisis situations. The chances of the US losing to China over Taiwan island, even if Washington mobilizes all of its available military power against Beijing, are also very high. Still, we do not see such a mobilization taking place now. It appears that the Biden administration is not ready for a real showdown with Beijing over the Taiwan question.

If the US does not put its whole weight behind the Taiwan island, the latter will have to seek some kind of accommodation with the mainland on terms abandoning its pipe-dreams of self-determination and independence. This is clear to politicians not only in East Asia, but all over the place, including Moscow. Therefore, Sergey Lavrov has reasons to firmly align himself with the Chinese position. The assumption in the Kremlin is that Uncle Sam will not dare to challenge militarily the Middle Kingdom. Not this time.

From our partner RIAC

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Russia-Japan Relations: Were Abe’s Efforts In Vain?

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Expanding the modest elements of trust in the Japan-Russia relationship, talking through reciprocal concerns before they lead to conflict, avoiding bilateral incidents, and engaging in mutually beneficial economic cooperation is the way forward.

One year after the end of Shinzo Abe’s long period of leadership, Japan has a new prime minister once again. The greatest foreign policy challenge the new Japanese government led by Fumio Kishida is facing is the intensifying confrontation between its large neighbor China and its main ally America. In addition to moves to energize the Quad group to which Japan belongs alongside Australia, India, and the United States, U.S. President Joe Biden’s administration has concluded a deal with Canberra and London to provide Australia with nuclear-powered submarines which in future could patrol the Western Pacific close to Chinese shores. The geopolitical fault lines in the Indo-Pacific region are fast turning into frontlines.

In this context, does anything remain of the eight-year-long effort by former prime minister Abe to improve relations with Russia on the basis of greater economic engagement tailored to Moscow’s needs? Russia’s relations with China continue to develop, including in the military domain; Russia’s constitutional amendments passed last year prohibit the handover of Russian territory, which doesn’t bode well for the long-running territorial dispute with Japan over the South Kuril Islands; and Russian officials and state-run media have been remembering and condemning the Japanese military’s conduct during World War II, something they chose to play down in the past. True, Moscow has invited Tokyo to participate in economic projects on the South Kuril Islands, but on Russian terms and without an exclusive status.

To many, the answer to the above question is clear, and it is negative. Yet that attitude amounts to de facto resignation, a questionable approach. Despite the oft-cited but erroneous Cold War analogy, the present Sino-American confrontation has created two poles in the global system, but not—at least, not yet—two blocs. Again, despite the popular and equally incorrect interpretation, Moscow is not Beijing’s follower or vassal. As a power that is particularly sensitive about its own sovereignty, Russia seeks to maintain an equilibrium—which is not the same as equidistance—between its prime partner and its main adversary. Tokyo would do well to understand that and take it into account as it structures its foreign relations.

The territorial dispute with Russia is considered to be very important for the Japanese people, but it is more symbolic than substantive. In practical terms, the biggest achievement of the Abe era in Japan-Russia relations was the founding of a format for high-level security and foreign policy consultations between the two countries. With security issues topping the agenda in the Indo-Pacific, maintaining the channel for private direct exchanges with a neighboring great power that the “2+2” formula offers is of high value. Such a format is a trademark of Abe’s foreign policy which, while being loyal to Japan’s American ally, prided itself on pursuing Japanese national interests rather than solely relying on others to take them into account.

Kishida, who for five years served as Abe’s foreign minister, will now have a chance to put his own stamp on the country’s foreign policy. Yet it makes sense for him to build on the accomplishments of his predecessor, such as using the unique consultation mechanism mentioned above to address geopolitical and security issues in the Indo-Pacific region, from North Korea to Afghanistan. Even under Abe, Japan’s economic engagement with Russia was by no means charity. The Russian leadership’s recent initiatives to shift more resources to eastern Siberia offer new opportunities to Japanese companies, just like Russia’s early plans for energy transition in response to climate change, and the ongoing development projects in the Arctic. In September 2021, the annual Eastern Economic Forum in Vladivostok did not feature top-level Japanese participation, but that should be an exception, not the rule.

Japan will remain a trusted ally of the United States for the foreseeable future. It is also safe to predict that at least in the medium term, and possibly longer, the Russo-Chinese partnership will continue to grow. That is no reason for Moscow and Tokyo to regard each other as adversaries, however. Moreover, since an armed conflict between America and China would spell a global calamity and have a high chance of turning nuclear, other major powers, including Russia and Japan, have a vital interest in preventing such a collision. Expanding the still very modest elements of trust in the Japan-Russia relationship, talking through reciprocal concerns before they lead to conflict, avoiding bilateral incidents, and engaging in mutually beneficial economic cooperation is the way forward. The absence of a peace treaty between the two countries more than seventy-five years after the end of the war is abnormal, yet that same unfinished business should serve as a stimulus to persevere. Giving up is an option, but not a good one.

From our partner RIAC

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