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Japan’s soft power: View from Russia

Darya Gribkova

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Authors: Darya Gribkova & Viktoria Ivanchenko*

According to Joseph Nye, the pioneer of soft power concept, Japan’s attractiveness potential is one of the highest in the world. But at the same time Japan faces obstacles to its comprehensive implementation. First of all, it is a policy towards preservation of internal values ​​and the way of life, Tokyo’s aggressive policy in the first half of the 20th century still not forgotten by its milieu, demographic problems, successful competition by the rapidly developing neighbors, especially Republic of Korea and China, in the field of soft power. Today Japan’s desire to revive the status of military power makes the situation more complicated.

Japan is a convincing example of promoting the positive image by a non-great power without engaging military means. Economic success, urban development, high quality of education, futuristic technologies, mysterious culture which burst into information space by anime and manga created perception of Japan as a smart and advanced country. Demonstrative disregard of geopolitical ambitions helped Japan to keep up its stable position in the international arena for a long time.

But what components does Japan’s soft power include now? What role does the state play in it? Which regions of the world are priority-driven when choosing the directions of the Japanese soft impact? What are the prospects for Japanese soft power and which countries can compete with Japan? Let us try to examine the system carefully.

State, “soft power” and cultural diplomacy

Traditional spheres the state is in charge of are economic and military because they both guarantee state’s survival. In case of the state’s participation in public diplomacy space for activity of special-purpose funds, NGOs, media and large corporations occurs. In today’s world, one way or another, states are limited in the use of hard powerand it is soft power that becomes an instrument for creating favorable environment for foreign policy.

Japanese soft power developed independently of the state and rose from Japanese culture, national traditions, aureole of mystery and inaccessibility and later rose from modernization success and model of economic development. But at which stage did the state get involved and soft power become considered as a means of winning leading positions in the world economy, policy and culture for Japan?

After World War II Japanese government faced necessity not only to recover economy and reform governance system in the state but as well to overcome the image of aggressor in the international arena. Spheres of culture and public diplomacy offered Japan wide opportunities for such activity.

Today implementation of Japan’s soft power is under control of Foreign Affairs Ministry. In 1972 the Japan Foundation was established under the Ministry’s management for development of cultural exchange, promotion of Japanese studies abroad, researching activity of Western institutions and international cultural exchange standards and programs. In October 2003 the Foundation became an independent institution and now it has 24 offices around the world, its activity covers more than 190 countries. The main directions of Foundation’s activity are exchange programs for outstanding specialists in the field of cross-cultural communication, science and culture as well as sport exchange programs and participation of Japanese scientists in international conferences, preservation of Japanese cultural monuments by Japanese specialists , cooperation on realization of joint projects with UNESCO.

Japan International Cooperation Agency (JICA) regulates the issues related to the official development assistance; its goals are the reduction of poverty, increase of effectiveness of management systems, ensuring human security and stimulation of educational and cultural exchange.

In 1988 Japan’s Foreign Affairs Ministry began to publish the monthly journal on foreign affairs “Gaiko Forum”, which also covered issues related to Japanese popular culture and public diplomacy.

In 2005 the Advisory Committee  led by Tamotsu Aoki, professor of Hosei University, was formed to conceptualize the elements of Japan’s soft power. In Diplomatic Blue Book 2004 a section of the 3rd chapter dedicated to the soft power concept and public diplomacy, improvement of image of the state abroad, students exchange programs, cooperation in the cultural sphere. One of the most important part is about “Cool Japan”, public diplomacy program aimed at the promotion of Japanese popular culture. By 2014 the government’s spending for promotion of Japanese pop-culture reached almost $883 million. In 2004, ex-prime minister Aso Taro in his speech about Japan’s strategic development stressed soft power as one of the most perspective direction and Japan’s attractiveness promotion in the world as one of the resources of growth.

There is a departure in the MOFA structure, that realizes Japanese film festivals, painting exhibitions, Japanese cuisine days. The MOFA’s internet-page provides links to resources related to public relations abroad, cultural and people-to-people exchange, cooperation with international organizations (UNESCO, UNU) including WebJapan (available in Chinese, English, Arabic, Russian, Spanish, Korean, Portuguese, Danish and French) which provides information on trends in Japanese fashion, cuisine, nature, Japan’s  achievements in the field of economy, education, environmental protection and so on.

Also it is worth to note that neither the Prime Minister nor the Minister of Foreign Affairs, nor the Japanese Ambassadors refuse to give comments to the major national and foreign media on such seemingly acute issues as territorial disputes with neighbors. This looks like demonstration of Tokyo’s willingness to discuss these issues openly and confidence in the legitimacy of the territorial claims.

The state invests a lot in support of external economic activity of Japanese enterprises. In the sphere of economy attractiveness of the state and national culture are valuable as they bring significant dividends to business. At the same time the country’s economic success is already a powerful tool of positive influence which forms the attraction of Japanese corporate culture. In the Intellectual Property Strategic Program 2006 cultural and economic aspects were identified as complementary, and also there were measures proposed to improve the image of the country through the use of rich cultural potential, through support of Japanese business and promotion of Japan brand all over the world. The brand “Made in Japan” around the world is associated with the quality and reliability of Japanese products and despite the high price it is in great demand.

In 2004 the Ministry of Economy, Trade and Industry launched the “Japan Brand” program, aimed at promoting certain products produced in Japanese regions at the foreign markets. This program became a part of a strategy for stimulating external economic activity of small and medium-sized enterprises.

Japan became the first state in Asia which realized the opportunities that opens up the proper use of soft power as a powerful instrument of influence in the world. After the World War II Japan was a defeated aggressor, which in order to restore its economy and position in the international community needed to achieve normal relations, primarily with the countries of Asia Pacific, which suffered the most during the war.

But active state involvement and directive approach to soft power produce some serious risks. Usually, the private sector evokes more trust abroad as more independent and free in its actions.

Here other players come, for example, transnational companies. One of the strongest soft power instruments they engage is corporate social responsibility. Such big companies like Mitsubishi and Toyota take part in various projects related to the social sphere in Russia. For instance, Mitsubishi Corporation supports the Center of Japanese language and culture in Moscow State Linguistic University. As well in 2017 on the base of Far Eastern Federal University Mitsubishi Corporation and Far Eastern Federal University established the Center for study of Russian-Japanese relations. Mitsubishi’s employees visit boarding schools, organize educational and leisure activities. In December 2015 Furusawa Minoru, CEO of Mitsubishi Corporation Russia, was awarded as a “Maecenas of the year” at the St. Petersburg Cultural Forum.

Vectors of dissemination

After the World War II Japan managed to solve an extremely difficult task: in a short period of time the country not only earned the reputation of a peace-loving country and a reliable economic partner but still continues to support it successfully.

Japan’s cautious, non-assertive policy and economic assistance to the countries of Asia Pacific after the World War II played a key role. In 1954 Japan became a participant of the Colombo Plan for the joint economic and social development of Asia and the Pacific. From that moment, directly or through participation in international projects, Japan began to provide official development assistance, grants without requiring their return and long-term loans on preferential terms. Today speaking of lending Japanese banks keep a leading position in the Asia Pacific region.

The construction of Japan’s infrastructure projects is another significant area, however today Japan faces strong competition from China. Tokyo invests in the construction of schools, hospitals, purchase of equipment, construction of roads. In May 2015 Shinzo Abe announced the launch of the “Partnership for Quality Infrastructure” project which should embrace South, Southeast and Central Asia countries. Next five years Tokyo intends to invest 110 billion dollars for the project implementation. Despite the recession that has continued since the 1990s, Japan remains the main donor of economic assistance and lender in Asia, one of the founders of the Asian Development Bank and the largest contributor to infrastructure development projects.

Assistance for developing countries, financing of development programs, provision of preferential long-term loans, training of personnel and sending Japanese specialists to developing countries allows to form the positive image of the country and favorable environment for Japanese business.

During the recovery period after the World War II the cautious Tokyo’s policy, the emphasis on the provision of economic means, loans, grants, and investments in infrastructure project played an important role in spreading the so-called soft influence of Japan in North Asia and Southeast Asia – closest Japan’s neighbours. Thus, after the beginning of reforms in the People’s Republic of China in the late 1970s Japan was one of the main trading partners and still one of the main investors.

Because of geographical proximity and close historical ties China and South Korea became the first countries which felt Japanese soft power influence through the popular culture. In late 1990s Japan faced a strong competitor: South Korea film production, music (K-pop) and  tourism to Korea, Korean ethnic cuisine, electronics intercepted interest in Japan. Korean pop culture first captured China and Japan, then Vietnam, Cambodia, Taiwan, Thailand, Russia, Mongolia, European, Central Asian, Middle Eastern and African countries, America. Nevertheless, 99% of the exports of the Korean cultural industry go to Asian countries.

To some extent Japan nurtured its competitor itself: it was the Republic of Korea that was the largest consumer of the products of the Japanese popular industry, and then the imitator, subsequently adding its national flavor to the most popular samples of Japanese pop culture.

In Southeast Asia Singapore became a kind of reference point for distribution of Japanese popular culture. In November 2009 the Japan Creative Center was opened in Singapore to introduce traditional and modern Japanese culture, technological achievements, cuisine, anime, crafts, cinema and music.

In Central Asia the basis of Japanese soft power is Japan’s Asian identity, similarity. Diplomatic relations with the countries of the region Tokyo established in the 1990s, but they won attention much earlier and today they are spurred by Tokyo’s interest in energy potential and transit opportunities of these countries.

The undeniable advantage of Japan in the Central Asian region is the absence of military aggression in the past and, as a result, the absence of negative memory of the peoples regarding Japan. “Residents of Central Asia remember tens of thousands of Japanese prisoners of war on the territory of Kazakhstan, Uzbekistan and Tajikistan after the World War II. Until now buildings built by their hands have been preserved, for example, the Central Telegraph and the Ministry of Culture in Tashkent, the Academy of Sciences in Almaty, the Farhad Hydropower Station in Tajikistan”, notes Olga Dobrinskaya, Research Officer at the Department of Japanese Studies, Institute for Oriental Studies of the Russian Academy of Sciences.

In the 1990s Central Asian countries had to choose the way for further development including economic model. The Japanese case with the leading role of the state seemed very attractive, as well as the fact that Japan acted as a carrier of Western values of democracy with some Eastern specificity.

Ryutaro Hashimoto’s concept of the “Eurasian diplomacy” meant revitalization of Japan’s relations with Central Asia, the Caspian Sea region and China. In 2004, Japan initiated the launch of the “Central Asia plus Japan” Dialogue to strengthen mutual understanding between countries. In 2006 Central Asia along with the South Eastern and Central Europe, the Caucasus, the Middle East, South, Southeast and Northeast Asia were inserted in the concept of the “Arc of Freedom and Prosperity”. Shinzo Abe’s visits to the countries of Central Asia in November 2015 became a demonstration of serious interest in cooperation with the countries of the region.

Among the examples of Japan’s soft power in Central Asia, it is significant to mention programs of official assistance to the development of the Central Asian states, projects in the field of ecology, green and energy-saving technologies, in the spheres of agriculture, education, health. Successes in these fields have strengthened Japan’s image as a state that promotes and develops non-military security.

Japan is interested in Central Asia’s transit routes and energy resources, and that’s why the Japanese government is interested in the stability of the region including environmental dimension, political, economic and social spheres.

Difficulties and prospects

In the Soft Power 30 global index of Portland in 2017 Japan ranks sixth while in 2015 it was located on the eighth position. Despite the high indices there are factors which contain the further realization of the potential of Japan’s soft power.

The most important one is related to the perception of foreign influence. Soft power becomes an unattainable ideal wherever different identities, ideologies, views collide. It becomes effective only if the ‘recipient’ of soft power shares the notions of the way of life, worldview, culture of the soft power ‘projector’. Concerning effectiveness of Japanese soft power the following question arises: how much is Japan’s soft power viable in Northeast Asia given the growth of nationalist sentiments in Asia including those in China and Korea, and Japan’s implementation of military reforms policy? Can it cope with competition from the Chinese cultural heritage which is much older than Japanese one?

Another issue concerns weakness of soft power in overcoming hostility and rivalry rooted back far in the past and kept in memory of several generations. It is evident within long-lasting memory of Japan’s militaristic and colonial policy in Asia in the first half of the 20th century.

Today in Japan military component as an invariable attribute of great power gradually displaces the ‘soft’ component, which is absolutely important in the world of international technologies and free information flows. Nevertheless, soft power cannot be disregarded, since it is one of the most important elements shaping the image of the state, which strives for a more weighty position among powerful actors and in dealing with global issues.

Moreover, the longest life expectancy results in a high rate of aging; the desire to preserve the culture, way of life, business ethics appears in rigid migration legislation, which exacerbates demographic problems. The migration legislation provides a facilitated regime for obtaining visas and citizenship for “unique” specialists, however, a language barrier remains a strong obstacle. Japanese popular culture is experiencing serious competition from the Korean one. Competition with China in Southeast Asia and Central Asia is increasing and India is rising a a new vigorous rival in the economic field.

So the question is if it is possible in the current conditions to give a new impetus to the Japanese soft power. In case Abe’s government is able to cope with domestic economic problems, Japan will be able to maintain its status as a reliable economic partner and one of the main creditors in the international community.

An important but hardly feasible step could be Japan’s willingness to discuss the issues related to its militaristic past, which the present government is trying to forget with all its might.

In cultural diplomacy Japan relies on pop-culture, the brand of anime and manga, which should promote a deeper interest in the country’s rich culture. But maybe today the world needs things which fascinated foreigners in the XIX-XX centuries? For example, traditional, authentic cultural heritage?

Today military reforms can eradicate the government’s efforts to project its soft power and their further implementation will require much more effort and resources to maintain Japan’s attractiveness in the world. A great opportunity to put life into Japanese soft power can be the 2019 Rugby World Cup and the 2020 Olympic Games which will be held in Japan.

As well 2018 is a cross-cultural Russian-Japanese year. For both countries it is a great opportunity to better understand each other, to make people interact more often and find more common points for cooperation. Despite the Kuril issue, which is yet to be resolved, current stable and friendly relations between Russia and Japan provide great potential for dialogue and collaboration. Within the Pivot to the East Russia now makes an attempt to establish close ties with promising and highly developed Asian countries, and 2018 grants Japan a more privileged position at least in terms of people-to-people contacts.

Japan`s cultural events are warmly welcomed in Russia. For instance, in Autumn 2017 just three big events took place in Moscow: 7th Moscow Biennale, exhibitions by Takashi Murakami “There will be a gentle rain” and Keichi Tanaami “Country of mirrors”.

But opportunities granted to Japan by international large-scale sports and cultural events have temporary effects although they give a good chance to show the country at its best. Japan as an influential soft power actor requires a long-term strategy which would work in accordance with other state policies. Otherwise, Japanese government run risks to lose its positions as one of soft power leaders if it chooses hard power instruments for projecting its influence and will have to fully revise its soft power strategy.

Original pre-revised text in Russian

*Viktoria Ivanchenko, PICREADI (Creative Diplomacy) editor-in-chief, researcher at Higher School of Economics, Moscow

PICREADI (Creative Diplomacy) project coordinator; Higher School of Economics, Moscow

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East Asia

It’s when not if China’s Middle Eastern tightrope snaps

Dr. James M. Dorsey

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China is manoeuvring to avoid being sucked into the Middle East’s numerous disputes amid mounting debate in Beijing on whether the People’s Republic will be able to remain aloof yet ensure the safety and security of its mushrooming interests and sizeable Diaspora community.

China’s challenge is starkest in the Gulf. It was compounded when US President Donald J. Trump effectively put China on the spot by implicitly opening the door to China sharing the burden of guaranteeing the security of the free flow of energy from the region.

It’s a challenge that has sparked debate in Beijing amid fears that US efforts to isolate Iran internationally and cripple it economically could lead to the collapse of the 2015 international agreement that curbed Iran’s nuclear program, accelerate Iran’s gradual breaching of the agreement in way that would significantly increase its ability to build a nuclear weapon, and potentially spark an unwanted military confrontation.

All of which are nightmare scenarios for China. However, Chinese efforts so far to reduce its exposure to risk are at best temporary band aid solutions. They do little to address the underlying dilemma: it is only a matter of time before China will have no choice but to engage politically and militarily at the risk of surrendering its ability to remain neutral in regional conflicts.

Israeli intelligence reportedly predicted last year that Iran’s gradual withdrawal from an agreement that Mr. Trump abandoned in May 2018 would ultimately take Iran to a point where it could create a nuclear military facility within a matter of months. That in turn could provoke a regional nuclear arms race and/or a pre-emptive military strike.

That is precisely the assessment that Iran hopes will persuade China alongside Russia and the European Union to put their money where their mouth is in countering US sanctions and make it worth Iran’s while to remain committed to the nuclear accord. 

The problem is that controversy over the agreement is only one of multiple regional problems. Those problems require a far more comprehensive approach for which China is currently ill-equipped even if it is gradually abandoning its belief that economics alone offers solutions as well as its principle of no foreign military bases.

China’s effort to reduce its exposure to the Gulf’s energy supply risks by increasing imports from Russia and Central Asia doesn’t eliminate the risk. The Gulf will for the foreseeable future remain a major energy supplier to China, the region’s foremost trading partner and foreign investor.

Even so, China is expected to next month take its first delivery of Russian gas delivered through a new pipeline, part of a US$50 billion gas field development and pipeline construction project dubbed Power of Siberia.

Initially delivering approximately 500 million cubic feet of gas per day or about 1.6 percent of China’s total estimated gas requirement in 2019, the project is expected to account with an increased daily flow of 3.6 billion cubic feet for 9.5 percent of China’s supply needs by 2022.

The Russian pipeline kicks in as China drastically cuts back on its import of Iranian liquified petroleum gas (LPG) because of the US sanctions and is seeking to diversify its supply as a result of Chinese tariffs on US LPG imports imposed as part of the two countries’ trade war.

China is likely hoping that United Arab Emirates efforts to stimulate regional talks with Iran and signs that Saudi Arabia is softening its hard-line rejection of an unconditional negotiation with the Islamic republic will either help it significantly delay engagement or create an environment in which the risk of being sucked into the Saudi-Iranian rivalry is substantially reduced.

Following months of quietly reaching out to Iran, UAE minister of state for foreign affairs Anwar Gargash told a recent security dialogue in Abu Dhabi that there was “room for collective diplomacy to succeed.”

Mr. Gargash went on to say that “for such a process to work, it is essential that the international community is on the same page, especially the US and the EU, as well as the Arab Gulf states.” Pointedly, Mr. Gargash did not put Russia and China on par with Western powers in that process.

The UAE official said the UAE envisions a regional order undergirded by “strong regional multilateralism” that would provide security for all.

Mr. Gargash made his remarks against the backdrop of a Chinese-backed Russian proposal for a multilateral security arrangement in the Gulf that would incorporate the US defense umbrella as well as an Iranian proposal for a regional security pact that would exclude external players.

Presumably aware that Gulf states were unlikely to engage with Iran without involvement of external powers, Iran appeared to keep its options open by also endorsing the Russian proposal.

The various manoeuvres to reduce tension and break the stalemate in the Gulf put Mr. Trump’s little noticed assertion in June that energy buyers should protect their own ships rather than rely on US protection in a perspective that goes beyond the president’s repeated rant that US allies were taking advantage of the United States and failing to shoulder their share of the burden.

Potentially, Mr. Trump opened the door to an arrangement in which the United States would share with others the responsibility for ensuring the region’s free flow of energy even if he has given no indication of what that would mean in practice beyond demanding that the United States be paid for its services.

 “China gets 91 percent of its oil from the Straight, Japan 62 percent, & many other countries likewise. So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships…,” Mr. Trump tweeted.

China has not rejected Mr. Trump’s position out of hand. Beyond hinting that China could escort Chinese-flagged commercial vessels in the Gulf, Chinese officials have said that they would consider joining a US-backed maritime security framework in the region that would create a security umbrella for national navy vessels to accompany ships flying their flag.

Chinese participation would lay the groundwork for a more comprehensive regional security arrangement in the longer term.

China’s maritime strategy, involving the development of a blue water navy, suggests that China already de facto envisions a greater role at some point in the future.

Scholars Julia Gurol and Parisa Shahmohammadi noted in a recent study that China has already “decided to take security concerns in the (Indian Ocean) into its own hands, instead of relying on the USA and its allies, who have long served as the main security providers in this maritime region… If tensions continue to escalate in the Persian Gulf, Beijing may find it has no other choice but to provide a security presence in the Middle East.”

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Implications of French President’s Visit to China on the International Arena

Mohamad Zreik

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French President Emmanuel Macron pursues a policy of opening up to China and solving problems that may arise peacefully and diplomatically. France and Germany are the main pillars of the European Union, and the French opening to China is a European recognition of the importance of China’s role internationally.

Last Monday, the French president paid a three-day official visit to China amidst the US-China trade war. The French president has previously promised to visit China once a year throughout his term. These official exchanges between China and France strengthen China’s international standing, and prove the theory that China is a peaceful country seeking cooperation and opening up to the world.

Fifty-five years after the establishment of diplomatic relations between China and France, a bilateral relationship based on respect and friendship despite some differences in regimes or strategic alliances. The Chinese model is mainly based on people-to-people communication and peaceful cooperation, and these are the main pillars of the Belt and Road Initiative launched by Chinese President Xi Jinping in 2013.

Despite Washington’s withdrawal from the Paris climate agreement in 2015, Beijing and Paris have kept their promises to contain global warming, a positive point in the bilateral relationship. The French president considered that China and France should lead the climate agreement. Cooperation between the two countries has emerged considerably in the industrial sector, such as the development of nuclear energy, aerospace, and the automotive industry. Academic cooperation between the two countries has also been boosted through student exchange programs and the high demand for Chinese language learning in France, which was previously rare.

Commenting on the importance of trade exchanges between China and the EU, the Chinese Ministry of Commerce showed that trade between China and the EU exceeded 322.5 billion US dollars in the first half of 2018, up 13 percent year on year. Chinese Ambassador to France Zhai Jun recently expressed that China and France are to expand cooperation in agriculture, energy, advanced manufacturing and artificial intelligence.

From the ancient city of Xi’an, the French president announced that an alliance between Beijing, Europe and Paris should be established for a better future for the world, and Macron stressed the need for a balanced relationship between China and Europe. The French president praised the Belt and Road Initiative and called for its activation in order to enhance the trade role of Asia and Europe.

France was the first Western country to recognize the People’s Republic of China. In a meeting with French ambassadors, the French president stressed that the West is in a moment of decline and China is progressing at a tremendous speed. During his visit to China, the French president took advantage of the trade war between the United States and China and worked to develop France-China trade relations, increase French trade partners to China, and promoting the French tourism, agriculture and services sectors.

France is seeking to strengthen Sino-European relations because of its great benefit to the European economy, but it is contrary to the Western orientation. China is also a beneficiary of good relations with France, because France has influence in Africa and many regions in the world and is a permanent member of the Security Council and it is a developed country at the military, technological and technical levels. China’s cooperation with a powerful country like France will bring many benefits and opportunities.

China’s great economic, technological and military progress indicates that China has become an important country in international relations, and it is in the interest of any country in the world to establish good relations with China. The best evidence is that France is seeking to establish good relations with China, as well as the European Union countries to make their relationship with China distinctive.

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Tension in Hong Kong

Giancarlo Elia Valori

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After about three months of riots, often particularly violent and destructive, on October 23, 2019 the Chief Executive of Hong Kong, Carrie Lam, aliasChen Yuet-Ngor, withdrew the bill on mandatory extradition to China, which had sparked protests in the former British colony.

 Never evaluate a mass protest on the basis of the reason triggering it, which can often be irrelevant.

 The extradition bill, announced in September, was withdrawn a few days after the resumption of works in Hong Kong’s Parliament.

With a view to partially repressing the insurgency, the now former Chief Executive of the city-state resorted to emergency legislation, by mainly using the colonial law of 1922, which prohibits the use of masks and disguises during public demonstrations.

 The protesters were and still are approximately one million, out of about eight million inhabitants.

 The subsequent riots, designed to last well beyond the bill withdrawal, strained the always tense relations between the former British colony and China, with the result of throwing into crisis also the Chinese governance of the city-State and, in particular, the traditional Chinese model of “One Nation, Two Systems”.

 If this model fails, the formula devised by Deng Xiaoping will not even apply to Taiwan, or possibly to the North Pacific islands, and it will anyway undermine the current Chinese idea of peaceful expansion and win-win collaboration between the Chinese motherland and all the bordering areas both in the Pacific and in Central Asia.

Since 1977 – when the Fragrant Harbour came under Chinese control – all riots in Hong Kong have been triggered by strong dissatisfaction with the Chinese motherland.

The deep economic and social dissatisfaction has always been targeted against China and never towards local power elites. In psychoanalysis, this phenomenon is called transference.

 In 2003 many thousands of people living in the former British colony had protested against a law that, in their opinion, would make it difficult to express opinions and feelings defined as “anti-Chinese” and the law was postponed indefinitely.

Further riots broke out in 2012, when a clearly pro-Chinese school program was proposed and once again the local authorities (upon direct instructions from the national government) avoided implementing that law.

In 2014, there were the sit-in street protests of the Occupy Central movement, the so-called “Umbrella Revolution”, which lasted three months to ask – this time unsuccessfully – for the Chief Executive of Hong Kong to be elected by universal suffrage.

Currently, however, the real reason underlying the protests in Hong Kong is not so much the request for implementing – in the former British colony – democratic mechanisms typical of the Western culture, but rather the tension resulting from great economic inequalities.

 Not to mention the broken social elevator, which is  probably the real trigger of the youth rebellion in the Fragrant Harbour.

 People, especially the skilled workers, cannot be ensured acceptable wages and salaries. This is the reason why many inhabitants of the old city-state migrate to Canada or Taiwan. Another blow to China.

Young graduates’ wages and salaries have dropped by at least 10% compared to 25 years ago. There is a very severe housing crisis, but anyway the choice to create a local oligarchy that tries to convince the other inhabitants is an old British idea.

 In Hong Kong an oligarchy of very few families dominates the local economic system, which is worth a GDP of 343.5 billion US dollars.

 The five most powerful families are still those led by Li Ka-shing, Kwong Siu-hing, Lee Shau-kee, Henry Cheng and Joseph Lau.

 These five families alone control 70% of the entire Hong Kong market, including real estate and telecommunications, as well as TV channels.

 The 21 leading families in Hong Kong control a wealth equal to 1,893 billion US dollars.

Obviously in China no family controls such a huge amount of wealth. In the People’s Republic of China the five major real estate operators put together control only 9% of the entire Chinese construction market.

China, however, has tried to gain support in Hong Kong,  especially among entrepreneurs, with the Greater Bay Area plan, i.e. the new megalopolis on the Pearl River Delta between Hong Kong, Guangdong and Macao.

This is, in fact, Hong Kong’s infrastructure aggregation to the  Autonomous Economic Zone of the Pearl River Delta, between Guangzou, Shenzhen, Zhuhai, Foshan, Zhongshan amd Jiangmen, which are the most dynamic economic areas in China.

Taxes are very low in Hong Kong, as in all business-friendly countries but, coincidentally, there is no inheritance tax.

 The administrative machinery is therefore very simple: Hong Kong’sgovernment does not gain sufficient revenue from taxation and hence has no funds to invest in schools, hospitals and infrastructure.

 A city like Hong Kong, with over seven million inhabitants, provides for a statutory minimum wage of 4.82 US dollars per hour. Almost all flats are illegal and, considering the cost of rents and properties, they are so small that they are about half of the “tiny apartments” in large U.S. cities, which are already very small.

 The average size of Hong Kong flats per inhabitant is 16 square metres, while in Shanghai the average size per inhabitant is 36 square metres.

 45% of Hong Kong’s inhabitants live in state-owned or subsidised apartments, while 90% of the Chinese people own at least their own houses.

 Hong Kong’s tax reserves are at least 147 billion US dollars, but the local political system is too fragmented – even from the viewpoint of the complex electoral system – to mediate between different interests and to really solve the main problems of the city-state, namely housing, health and education costs.

 Those who are ill must wait an average of 150 weeks before being examined, with 43 public hospitals that, however, employ  40% of the doctors available, since the private sector attracts many of the best professionals.

 The solution of employing doctors from abroad is not very practicable, considering the low attractiveness of Hong Kong’s wages and salaries and the poor quality of health facilities.

 One in six people living in Hong Kong suffers from mental disorders due to social, economic and health conditions.

 The graduates’ average wages and salaries in the former British colony have fallen by over 10% compared to a decade ago. Nowadays graduates are easily paid the best salaries and wages of workers without university qualifications.

As already said, there is no social elevator.

 The cost per square metre is much higher in Hong Kong than the average price in a central neighbourhood of  New York.

 As happens also in the West, the career prospects of young graduates in Hong Kong are very limited. They never have a house of their own and their prospects are much worse than those of their colleagues who lived in Hong Kong a few decades ago.

In Hong Kong the Gini Index, which is used as a gauge of economic inequality, is 5+, one of the highest and most unequal indexes in the world.

 This is the real political core of the issue: for those who protested in Hong Kong – as currently happens everywhere in the world – “democracy” in the Euro-American sense means above all greater social equality, many opportunities and efficient public services.

 This is obviously not true, but it is the model that took to the streets the crowds of the Arab Spring, the Euromaidan citizens in Ukraine and the “colourful” rebellions in Georgia.

 Paradoxically, just when Western democracies are turned into  States based on unearned income and the extent and quality of their Welfare diminish, they are mythicized as efficient and open.

In this case, Vilfredo Pareto would have spoken of “residues”, i.e. memories of a time that no longer exists, but that are still in action in the crowds’ deep psyche.

 In 1997, at the time of unification based on the “One Country, Two Systems” model, Hong Kong’s GDP accounted for 18% of  whole China’s GDP.

Currently, after China’s fast growth, the importance of the Fragrant Harbour is the same as the relevance of Guangdong or Shenzhen.

 The current protests, however, have also put Hong Kong’s business community in severe difficulty.

The majority of Hong Kong’s leading companies do most of their  business with China. It is not by chance that last August the Chinese authorities gathered 500 of the most important businessmen and political leaders in Shenzen to support the Hong Kong government and, possibly, sufficiently improve the social situation of the city-state, which, however, remains explosive.

 Hong Kong’s financial market has suffered the greatest damage.

The Chinese company Alibaba has postponed its listing on the local Stock Exchange until the uprising has finally abated, while Fitch has lowered Hong Kong’s rating.

Pending a systemic integration with the regulatory network of  mainland China.

 Another problem that the riots in the Flagrant Harbour may cause  is migration.

 Last year 24,300 highly-skilled young people left the country and the rate of  migration requests has risen by 15% per year.

Where do they go? To Canada, Australia, New Zealand and Taiwan.

 On the other hand, the number of Chinese people migrating to Hong Kong has decreased by 14,000 per year.

Furthermore, this November there will be the Hong Kong District Council elections and it is very likely that youth discontent will find a way to assert itself in the polls.

 A fragmented society under crisis creates many problems for those planning business cycles and Hong Kong is likely to see its growth rate decrease by at least 3%.

Where will capital go? Obviously in the Chinese area bordering on Hong Kong, with an expected investment growth of almost 6.5%, largely consisting of capital outflows from Hong Kong.

 The differences between Hong Kong and China, however, are much wider than those shown with violence during the recent long protests, which often followed the same tactics of the color revolutions organized by the US Services, according to the old model developed by the Einstein Institute.

 For China, Deng Xiaoping’s criterion “One Country, Two Systems” means that China takes over Hong Kong despite the differences in political and economic systems, which will eventually tend to overlap. Conversely, for Hong Kong leaders the “Country” is just lip service paid in view of maintaining the separation from China, both from a cultural as well as an economic and political viewpoint.

 China has so far controlled Hong Kong with the same logic with which it has supervised its “dangerous” territories, namely Tibet, Xinjiang and Manchuria.

 The current Chinese centralization stems from the analysis of the inglorious collapse of the almost federalist Soviet Union. In this regard, suffice to recall the ironic smiles that welcomed Gorbachev on his visit to China, just when the Tiananmen Square protests had reached their climax.

 It does not matter that the right to secession was established in Lenin’s Sacred Texts. The fact is that, for the Chinese leadership, the unity of the Country and the repression of every regionalist secession is fundamental to the permanence of the State – and of  the Party.

 China, however, still depends on the financial hub of Hong Kong, the only one completely open to the world capital flows.

According to 2018 data, the Hong Kong Stock Exchange capitalizes 29.9 trillion local dollars.

 Shenzhen and Shanghai cannot replace Hong Kong in this respect.

 Therefore, China could not intervene in Hong Kong because otherwise it would have destroyed on its own the way connecting China to international capital flows.

 Furthermore, the repression of the Hong Kong movements would have destroyed the model “One Country, Two Systems”, which is exactly the one that will be applied to Taiwan, at the right time.

 Nor should we forget that, pending the New Silk Road promoted by China, the Western Powers are conceiving political mechanisms for disrupting and possibly stopping the “Road”, by organizing rebellions and anti-Chinese parties and movements in the various countries where the passage of the Chinese One Belt One Road (OBOR) is planned.

Obviously China does not stand by and wait to see.

From this viewpoint, the Hong Kong uprising is a model that will soon be imitated and that China will oppose exactly with the same political tactics.

As is recommended in the Thirty-Six Stratagems, “Befriend a distant State and strikes a neighbouring one”.

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