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The new prospects of the Communist Party of China

Giancarlo Elia Valori

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The Communist Party of China (CPC) – in the phase in which it is governed by Xi Jinping and by Prime Minister Li Kekiang – is changing rapidly. This is a geopolitical and strategic factor of great importance also for Europe and the United States.

 Just a few years before its centennial, the Party founded in Shanghai in 1921 is still a “hircocervus”, both for the Communist tradition resulting from the Third International and for the evolution and, sometimes, the disappearance of the Communist Parties in power in the Soviet Union, in its Eastern European satellite countries and in many Asian countries.

 Indeed, the CPC is both a large mass Party and a political organization that, following the Third International’s tradition, presides over the State and defines its political direction.

 Lenin thought of a small Party of militants and officials who developed the policy line and, through the State, imposed it on society.

 In fact, in the Soviet Union, the CPSU destroyed itself by entering civil society. Conversely, in China, the CPC grows stronger by acquiring and selecting the best elements of society and representing the great masses inside and above the State.

 We can here recall the sarcastic smiles and the biting jokes that the CPC leaders –  and, at the time, the Deng Xiaoping of the “Four Modernizations” was already in power – reserved for Gorbachev paying an official visit to China while the “Tien An Mien” rebellion of the students who wanted “democracy” was underway.

 As is well-known, the repression was very harsh. The CPC does not delegate to others the power to reform the Chinese society.

 Hence a Party like the CPC, which is fully traditional in its relationship with the State and the masses, appears to be completely new in turning itself into a mass organization, thus also remaining the source for legitimacy of the Chinese State.

 The Chinese official sources tell us that, when it was founded in 1921, the Party counted only fifty members.

 Today – considering that the CPC has been able to understand the new phase of globalization – it counts 87.7 million members, one every sixteen Chinese citizens.

 More than the population of the whole Germany.

 75% of the current members are male; 43% have at least a high school diploma; 30% are farmers, shepherds and fishermen; 25% are employed, 18% are retired, but only 8% are civil servants.

 On the contrary, the 50 or more probably 57 founding members of the CPC in Shanghai were all members of the ruling classes, with 27 students, 11 journalists and 9 professors.

 In 1949, when the Chinese Communist Party was already controlled by Mao Zedong and took power by wiping out the nationalists, the members were almost four millions.

 From the outset the CPC has chosen the best of the Chinese society, by changing its targets year after year: sometimes intellectual elites or, in other years, rural masses and working classes.

 The traditional dilemma of “Red” versus “Expert” that the CPC would never solve, not even in the harshest moments of the “Great Cultural and Proletarian Revolution”.

 With Deng Xiaoping, who put an end to the phase of the “Red Guards”, by often sending them to terrible work camps, the CPC reached a 50% of technicians, specialists, teachers and “experts”.

 Currently the university students are 40% of the Party’s new recruits.

 A CPC that does not renounce at all to be a mass Party, but also organizes the elites: it is one of the most significant traits of what the Chinese leaders called “Socialism with Chinese characteristics”.

 Furthermore, Xi Jinping no longer wants a Party “taking everyone on board” or joining militants without qualifications, but he tends to gradually turn the CPC into a more selective organization than it currently is.

 The selection is always conducted silently by the Party that listens to the candidates’ friends and colleagues and asks them whether they are “frugal”, “honest” and “correct”.

  For the sources of the CPC inspectors, silence and secrecy are a must.

 Otherwise, the Party will “not forget this.”

All State companies and all foreign companies have a Party unit inside them and this allows better relations between companies and State power.

 Hence if we were to analyze the CPC according to Giovanni Sartori’s modern theory of political Parties, we should say that the Chinese Communist Party is both a “social brokerage body” and a “mechanism of representation”.

 The Soviet Communist Party (CPSU) collapsed because it played only a social brokerage role, but was not representative, while the CPC is expanding because it plays both roles effectively.

 The goal set by Xi Jinping is to create a “moderately prosperous society”.

 It is the evolution of Xi Jinping’s theory of the “Four Comprehensives” announced in early 2015.

 The Four-pronged Comprehensive Strategy is based on the following Four Comprehensives: “comprehensively build a moderately prosperous society”; “comprehensively deepen reform”; “comprehensively govern the nation according to law” and “comprehensively strictly govern the Party”.

 It is worth recalling that moderate prosperity is a fully Confucian concept. Said moderation is that of the equilibrium of man’s faculties and of the relationship between mind and desire. It is not an anti-Epicurean “moderation” in the Western sense.

 Hence the primary factor is prosperity.

  According to the usually reliable Chinese official statistics, over the past thirty years 700 million Chinese have come out of poverty.

 Currently this happens mainly in rural areas, after Deng Xiaoping’s dismantling of rural communes – indeed, the First Modernization was the agricultural one.

 Chinese farmers, however, account for 56-68% of the total population or for 12-14% of the world’s population.

 Nevertheless Deng’s modernization of rural areas did not fully work and, in the early 1990s, the Chinese rural society was still stratified, impoverished and characterized by low productivity, while the cities grew disproportionately and weighed ever more on rural resources.

 Cities and rural areas, the two terms of Mao Zedong’s theory both within Communist China and in foreign policy – the two extreme of the Third International’s eternal dilemma, from the 1932-33 rural crises in Ukraine until Stalin’s famine of 1950.

 Hence Xi Jinping, who knows that the crisis of the Chinese rural world has certainly not disappeared with the semi-privatization of land and prices, has sent 770,000 officials and Party leaders to Chinese rural areas to eradicate poverty and hence stabilize said areas even politically and socially.

 This avoids the excess of rural population reforming a kind of Lumpenproletariat in the urban suburbs.

 With terrible effects on China’s political and social stability.

 A society with excessive income differences is never “harmonious” – just to use a Confucian concept that has now become typical of the CPC.

 And the operation has worked – at least for the time being.

 In fact, from 2013 to 2016, other 56 million people living in rural areas  came out of poverty – and the process to which Xi Jinping attaches particular importance is going on.

 With a view to having a CPC functioning as a backbone of the State and, at the same time, of civil society, corruption must be eradicated – as we have seen since Xi Jinping has been in power.

 Approximately one million Party officials punished, in various ways, for corruption until 2016 and as many as 210,000 already punished in 2017 alone.

 Currently Xi Jinping is the ultimate arbiter of the Party and its members’ careers – perhaps even Mao Zedong never had such power.

 However, instead of destroying all his competitors, Xi Jinping is creating a new blood of young executives, all coming from the CPC, who will quickly replace the old satraps of bureaucracy.

 Besides repressing corruption however, the mechanism of political scrutiny needs to be renewed and strengthened, as the CPC is doing.

 Created when the CPC was founded, the Central Commission for Discipline Inspection (CCDI) has always had very strong power, but it was abolished in 1969 following the Party’s well-known internal struggles.

 It was revived in 1977 and – as happened since 1949 – it has been included  in the Party Constitution.

 Even before Xi Jinping’s rise to power, from 1982 to 1986 the Central Commission for Discipline Inspection expelled 25,000 Party members and imposed a series of disciplinary sanctions on other 67,000 CPC members.

 A structure that has never reduced its specific powers and is the arbiter of the main careers inside the Party and the State.

 In Xi Jinping’s mind the fight against corruption – which, with his leadership, has reached unimaginable levels and has hit high-ranking executives, such as Bo Xilai and Ling Jihua – the cleansing inside the Party combines with the refoundation of the Party’s working style and the strengthening of internal discipline.

The Politburo’s “Eight Guidelines” of December 2012 already pointed to a sober and modest lifestyle for all officials and leaders. Furthermore, Li Keqiang has imposed new standards for the transparency of public budgets and reduced the number of government approvals and authorization for spending, thus eliminating evident possibilities of generating bribes.

 Currently the CPC inspectors are included – often secretly – in all government bodies and in all regional and local structures.

 The system is such that the inspectors are directly responsible for the mistakes or “oversights” of the various Party and government members’ behaviours.

 Before Xi Jinping’s rise to power (and before Wang Qishan, his anti-corruption Chief) the incentives to national or local officials and leaders were based on reaching specific economic targets. Nowadays the granting of cash prizes or of career advances is linked to the overall behaviour of officials and, above all, to their honesty – which overlaps with loyalty and  obedience to the Party, the Central Committee and, obviously, Xi Jinping’s line.

 Moreover the inspections have the strictly political purpose of safeguarding the Central Committee’s joint and centralized authority and leadership.

 Xi Jinping knows all too well that any corruption activity is a de facto form of secession from the “political centre” – as demonstrated by the studies on organized crime in the South of Italy.

 Hence return to the Party’s centralism, without the “federalist” nonsense that is destroying Europe; maintenance of the CPC leadership role on the whole Chinese society and of Xi Jinping’s role as undisputed leader of the  Communist Party of China.

 Three factors which are closely interwoven.

 So far there have been 12 cycles of inspections within the Party – inspections regarding the CPC organizations at all levels, State companies, banks and financial companies, as well as  universities.

 The revision of part of the Constitution has started from this process of  political and moral restructuring.

 The next 19th National Congress will constitute the last and final Sinicization of Marxism.

  A stronger and more authoritative CPC, but, above all more integrated in civil society – and here is the novelty compared to the Third International’s Western tradition.

 Hence development of Socialism “with Chinese characteristics”, which  means Socialism in a society that has not been industrialized by the national bourgeoisie, but by foreigners – a society which is largely rural,  while Marxism thinks above all of industrial workers (that is highly traditional), while Western socialism has inherited the most radical aspects of the bourgeois Enlightenment.

 The aim of this CPC exercise – made authoritative by the struggle against corruption – is that of Xi Jinping’s “moderately prosperous” society, namely a balanced progress of the economy and of political organization, as well as of the cultural, social and environmental evolution.

 Hence self-control of the Party, and – for the first time in the CPC history – reaffirmation of a typical concept of the Western political tradition, namely the “rule of law”.

 As recently stated by Xi Jinping at the Interpol General Assembly in Beijing on September 26 last, China’s inclusion in Interpol is a tool for building a world integrated collective security system both strategically and for the repression of personal crimes and offences.

 The new security – and here Xi Jinping spoke of international policy between the lines – shall be common, global, cooperative and sustainable in the future.

 Hence support for the security of developing countries and perception by all actors of the others’ interests.

 We could speak here of Confucian geopolitics.

 Thinking also of the others is not a difficult process. The issue lies in changing the thinking style and putting ourselves in other people’s shoes, to avoid excessive reactions and, above all, dangerous for the best interest of nations, i.e. world stability.

Hence, stability and security at internal level, with the centralization and moralization of the CPC; security and stability in the international context, with Xi Jinping vigorously defending globalization in Davos, against the resurgence of economic nationalism in the United States; security and centralization of the Chinese interests in Central Asia, which will soon become the launching pad of China as great global power, far beyond its already significant economic potential.

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

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Freedom, Sovereign Debt, Generational Accounting and other Myths

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“How to draw the line between the recent and still unsettled EU/EURO crisis and Asia’s success story? Well, it might be easier than it seems: Neither Europe nor Asia has any alternative. The difference is that Europe well knows there is no alternative – and therefore is multilateral. Asia thinks it has an alternative – and therefore is strikingly bilateral, while stubbornly residing enveloped in economic egoisms. No wonder that Europe is/will be able to manage its decline, while Asia is (still) unable to capitalize its successes. Asia clearly does not accept any more the lead of the post-industrial and post-Christian Europe, but is not ready for the post-West world.” – professor Anis H. Bajrektarevic diagnosed in his well-read ‘No Asian century’ policy paper. Sino-Indian rift is not new. It only takes new forms in Asia, which – in absence of a true multilateralism – is entrenched in confrontational competition and amplifying antagonisms.  The following lines are referencing one such a rift.

At the end of 2017, Brahma Chellaney, a professor with the New Delhi-based Center for Policy Research, wrote an article titled “China’s Creditor Imperialism” in which he accused China of creating a “debt trap” from Argentina, to Namibia and Laos, mentioning its acquisition of, or investment in the construction of several port hubs, including Hambantota in Sri Lanka, Piraeus in Greece, Djibouti, and Mombasa in Kenya in recent years.

These countries are forced to avoid default by painfully choosing to let China control their resources and thus have forfeited their sovereignty, he wrote. The article described China as a “new imperial giant” with a velvet glove hiding iron fists with which it was pressing small countries. The Belt and Road Initiative, he concluded, is essentially an ambitious plan to realize “Chinese imperialism”. The article was later widely quoted by newspapers, websites and think tanks around the world.

When then United States Secretary of State Rex Tillerson visited Africa in March, he also said that although Chinese investment may help improve Africa’s infrastructure, it would lead to increased debt on the continent, without creating many jobs.

It is no accident that this idea of China’s creditor imperialism theory originates from India. New Delhi has openly opposed China’s Belt and Road Initiative, especially the China-Pakistan Economic Corridor as it runs through Pakistan-administered Kashmir, which India regards as an integral part of its territory. India is also worried that the construction of China’s Maritime Silk Road will challenge its dominance in South Asia and the Indian Ocean. Based on such a judgment, the Indian government has worked out its own regional cooperation initiatives, and taken moves, such as the declaration of cooperation with Vietnam in oil exploration in the South China Sea and its investment in the renovation of Chabahar port in Iran, as countermeasures against the Chinese initiative.

Since January, India, the United States, Japan and Australia have actively built a “quasi-alliance system” for a “free and open Indo-Pacific order” as an alternative to the Belt and Road Initiative. In April, a senior Indian official attending the fifth China-India Strategic Economic Dialogue reiterated the Indian government’s refusal to participate in the initiative.

The “creditor imperialism” fallacy is in essence a deliberate attempt by India and Western countries to denigrate the Belt and Road Initiative, which exhibits their envy of the initial fruits the initiative has produced. Such an argument stems from their own experiences of colonialism and imperialism. It is exactly the US-led Western countries that attached their political and strategic interests to the debt relationship with debtor countries and forced them to sign unequal treaties. China’s Belt and Road Initiative is proposed and implemented in the context of national equality, globalization and deepening international interdependence, and based on voluntary participation from relevant countries, which is totally different from the mandatory debt relationship of the West’s colonialism.

It is an important “Chinese experience” to use foreign debts to solve its transportation and energy bottlenecks that restrict its economic and social development at the time of its accelerated industrialization and urbanization. By making use of borrowed foreign debts, China once built thousands of large and medium-sized projects, greatly easing the transportation and energy “bottlenecks” that long restrained its social and economic development. Such an experience is of reference significance for other developing countries in their initial stage of industrialization and urbanization along the Belt and Road routes.

In the early stage of China’s reform and opening-up, US dollar-denominated foreign debt accounted for nearly 50 percent of China’s total foreign debts, and Japanese yen close to 30 percent. Why didn’t Western countries think the US and Japan were pushing their “creditor imperialism” on China?

Some foreign media have repeatedly mentioned that Sri Lanka is trapped in a “debt trap” due to its excessive money borrowing from China. But the fact is that there are multiple reasons for Sri Lanka’s heavy foreign debt and its debt predicament should not be attributed to China. For most of the years since 1985, foreign debt has remained above 70 percent of its GDP due to its continuous fiscal deficits caused by low tax revenues and massive welfare spending. As of 2017, Sri Lanka owed China $2.87 billion, accounting for only 10 percent of its total foreign debt, compared with $3.44 billion it owed to Japan, 12 percent of its total foreign debt. Japan has been Sri Lanka’s largest creditor since 2006, but why does no foreign media disseminate the idea of “Japan’s creditor imperialism”?

In response to the accusation that China is pursuing creditor imperialism made by India and some Western countries, even former Sri Lankan president Mahinda Rajapaksa wrote an article in July using data to refute it.

Most of the time, the overseas large-scale infrastructure construction projects related to the Belt and Road Initiative are the ones operated by the Chinese government and Chinese enterprises under the request of the governments of involved countries along the Belt and Road routes or the ones undertaken by Chinese enterprises through bidding.

It is expected that with the construction of large-scale infrastructure projects and industrial parks under the Chinese initiative, which will cause the host country’s self-development and debt repayment ability to constantly increase, the China’s creditor imperialism nonsense will collapse.

An early version of this text appeared in China Daily

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Arrogance of force and hostages in US-China trade war

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Even before the ink on the comments made by those who (just like the author of these lines) saw the recent meeting between US President Donald Trump and his Chinese counterpart Xi Jinping in Buenos Aires as a sign of a temporary truce in the trade war between the two countries had time to dry, something like a hostage-taking and the opening of a second front happened. The recent arrest in Canada under US pressure of Meng Wanzhou, the chief financial officer of China’s telecommunications giant Huawei, is unfolding into a full-blown international scandal with far-reaching consequences.

Meng Wanzhou faces extradition to the United States where she is suspected of violating US sanctions against Iran, namely by making payments to Tehran via the UK branch of the US bank HSBC. The question is, however, how come someone is trying to indict a Chinese citizen according to the norms of American law, and not even on US territory to boot?

China’s reaction was extremely tough with Deputy Foreign Minister Le Yucheng summoning the Canadian and US ambassadors in Beijing and demanding the immediate release of the detainee, calling her detention “an extremely bad act.” First of all, because this is yet another arrogant attempt at extraterritorial use of American laws.

Other countries, above all Russia, have already experienced this arrogance more than once; suffice it to mention the cases of Viktor Bout and Konstantin Yaroshenko, or of the alleged “Russian hackers,” who, by hook or crook, were taken out to the United States to face US “justice”.

Enough is enough, as they say. Russia’s Foreign Minister Sergei Lavrov, who is usually careful in his choice of words, said that while Russia is not involved in the US-China trade war, it still regards Meng’s arrest as “another manifestation of the line that inspires a rejection among the overwhelming majority of normal countries, normal people, the line of extraterritorial application of their [US] national laws.”

“This is a very arrogant great-power policy that no one accepts, it already causes rejection even among the closest allies of the US,” Lavrov said. “It is necessary to put an end to it,” he added.

One couldn’t agree with this more. But first, I would like to know who really is behind this provocation, even though China’s reaction would have been much anticipated. The arrest of Meng Wanzhou sent US markets into a tailspin and scared investors, who now expect an escalation of the trade war between the United States and China.

The point here, of course, is Washington’s displeasure about Huawei’s activities, with The Wall Street Journal reporting that the US Justice Department has long been conducting a probe into the Chinese company’s alleged violation of US sanctions against Iran.

There is more to this whole story than just sanctions though. The US accuses Huawei (as it earlier did the Chinese ZTE) of the potential threats the company’s attempts to use tracking devices could pose to the security of America’s telecommunications networks. The United States has demanded that its closest allies (primarily Canada, the UK, Australia and New Zealand, with whom it has set up a system for jointly collecting and using Five Eyes intelligence) exclude 5G Huawei products from their state procurement tenders.

I still believe, however, that the true reason for this is not so much security concerns as it is a desire to beat a competitor. Huawei has become a world-renowned leader in the development and application of 5G communications technology, which looks to the future (“Internet of Things”, “Smart Cities”, unmanned vehicles and much more.)

Since technology and equipment are supplied along with standards for their use, there is a behind-the-scenes struggle going on to phase out the 5G standard developed by Huawei from global markets.

As for the need “to put an end to this,” the big question is how. Formally, detainees are extradited to the United States in line with national legislation, but at Washington’s request (which often comes with boorish and humiliating pressure from the US authorities and is usually never mentioned in public).

Add to this the US Congress’ longstanding practice of changing, unilaterally and at its own discretion, already signed international treaties and agreements as they are being ratified – another example of “arrogance of power” as mentioned before.

The question could well be raised at the UN Security Council, but its discussion is most likely to be blocked by the US representative. However, there is also a moral side to the assessment of any political practice the work on international legal norms usually starts with.

If China and Russia, as well as other countries equally fed up with the “arrogance of power” submit a draft resolution “On the inadmissibility of attempts at extraterritorial use of national legislation by UN member states” to the UN General Assembly, it would most likely enjoy the overwhelming support by most of the countries of the UNGA, maybe save for just a dozen or so of the most diehard advocates of Washington’s policy…

First published in our partner International Affairs

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Will China Save the Planet? Book Review

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Barbara Finamore has been involved in environmental policy in China for decades.  Her new book, Will China Save the Planet?,is a succinct report (120 pg.) on the short, yet promising history of China’s actions to address climate change and pollution.

Chapter 1 is about the recent global leadership role that China has taken in the fight against climate change.  At first, the PRC was hesitant to commit to specific pollution-reduction benchmarks.  After experiencing increasingly devastating bouts of industrial smog in the 1990s however, China began to take its environmental commitments more seriously.  It has set out to become the de facto leader in combatting climate change through ambitious domestic action and sponsoring international conferences.  The Trump Administration’s withdrawal from the Paris Climate Agreement has only furthered China’s dominance.

Chapters 2-4 give in-depth analysis on China’s efforts to wean itself off of coal, develop its renewable energy capacity and become a global leader in electric vehicle production.  China has long used coal to fuel its unprecedented rate of industrialization.  In recent years, it has pledged to wean itself off of coal dependency by enforcing coal plant efficiency standards, enacting a cap-and-trade program, managing grid output, promoting local politicians based on their success in implementing green policies and supporting green energy developments.  China is now home to many of the world’s top manufacturers of solar panels, wind turbines and commercial & private electric vehicles.

There is much to applaud China for in its efforts.  Finamore writes that, “After growing by an average of 10% annually from 2002-2012, China’s coal consumption leveled off in 2013 & decreased in each of the following three years… Largely because of the dip in China’s coal consumption, global CO2 emissions growth was basically flat between 2014-2016.”  By moving away from coal, China has been able to, “Every hour… erects a new wind turbine & installs enough solar panels to cover a soccer field.” As of last year, “Chinese solar manufacturers accounted for about 68% of global solar cell production & more than 70% of the world’s production of solar panels.”

Chapter 5 focuses on China’s mission to export its green initiatives around the world, particularly through its Belt and Road Initiative (BRI).  The BRI is shaping up to be the largest international infrastructure plan in history, investing trillions of dollars in 65 countries in Asia, Europe, Africa and the Middle East.  China thus has a golden chance to help much of the developing world to adopt clean energy goals and foster economic growth.  The Chinese government is encouraging its citizens to invest in renewable energy initiatives in the BRI countries by implementing a “green finance” system.  Through its pivotal role in the G20, China can also help to lead the developed world by spearheading reports and policies among the 20 member nations.

Barbara Finamore has written a highly readable and informative overview of China’s role in the global climate change battle.  She lists the Chinese government policies that have led the world’s largest nation to meet and exceed many of the green benchmarks that it set for itself.  It would have been helpful if Finamore had written more about China’s water instability and how that ties to the Tibetan occupation, as access to drinking water is one of the top environmental issues in the world today.  As a whole, Will China Save the Planet?is a good primer for environmental policy analysts and anyone else interested in studying feasible solutions to climate change, humanity’s greatest threat.

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