Anyone who has at least some idea about the theory of international relations should remember the oft-quoted formula put forward by the father of British geopolitics, Halford Mackinder: “Who rules the Heartland commands the World-Island; who rules the World-Island commands the world.” For those who are sceptical about geopolitical constructs and terminology, this logical chain may seem like a meaningless shamanic incantation. Over the course of a century, “Mackinder’s formula” was repeatedly criticized, corrected, repudiated, anathematized, parodied and ridiculed. And yet, strange as it may seem, not only has this formula survived an entire century, but it is also perhaps more relevant today than it was a hundred years ago.
Of course, the question hinges on how we understand the concept of Heartland. Mackinder interpreted it as the geographical centre of Eurasia, or, more precisely, as the massive central and north-eastern part of the Asian continent, which on the whole coincided with the Asian areas ruled by the Russian Empire and the Soviet Union. Today, it seems obvious that the “Eurasian core” must be sought south of the harsh, poorly developed and scarcely populated Siberian plains and barren deserts of Central Asia. Just like in the days of Mackinder, Siberia and Central Asia remain repositories of raw materials and energy resources. Just like before, these lands may be considered the “great natural fortress” of the land peoples, adjusted for the new arsenal of means of projecting military power that appeared in the 20th century. However, these lands did not become a true “axis of history”: contrary to Mackinder’s prophecies, their transport infrastructure remained incomplete and disconnected, while their role in the development of the Eurasian continent over the past 100 years has shrunk rather than grown.
At the risk of incurring the righteous indignation of the current geopolitical orthodox, let us postulate that the Eurasian Heartland of the 21st century is actually what Mackinder saw as the “inner crescent.” Primarily China and India, in relation to which the rest of the Eurasian massif – Russia, Central Asia, Southeast Asia, the Middle East and even the extended European peninsula of the Asian mainland – act as continental limitrophe states. Despite the undeniable significance of these border states to European history, politics, economics and security, the fate of Europe depends primarily on how relations in the new Heartland (that is, between China and India) unfold. And the future of the whole world to a great degree depends on the fate of Eurasia. This is one of Mackinder’s main points, and it is by no means outdated.
The Prerequisites for Consolidation
It would seem that there are no fundamental obstacles to the consolidation of the Heartland: the interests of Beijing and New Delhi coincide on most major international issues. China and India have much in common. Both countries are, in their own way, historically stable and internally cohesive alternatives to Atlantic civilization. China and India are, along with the Arabic East (and to a lesser extent Tropical Africa south of the Sahara), the two most important points of the crystallization of “non-western” ideals. The fact that China and India are growing stronger is the most significant indicator that the “western” stage in the development of the system of international relations has drawn to a close.
As powerful drivers of economic growth both in Eurasia and around the world, both China and India are currently experiencing a stage of long-term economic, cultural and civilizational upheaval. Neither has fully overcome the deep trauma of national consciousness caused by their status as outsiders in global politics in the 19th and 20th century, and this trauma continues to have an impact on the historical narratives that dominate China and India and the foreign policy ambitions that emanate from these narratives. Beijing and New Delhi are “revisionist” players on the global stage in the sense that both China and India are interested in revising the old rules of the game that serve the interests of the “collective West.” China is leading a broad economic and financial offensive – from Central Europe to Latin America. India, lagging behind China in terms of foreign economic expansion, is focusing instead on closing the political gap by laying claim to a permanent seat on the UN Security Council.
The two countries are exposed to all the standard “growing pains” – the negative side effects of rapid economic and social growth. Both China and India suffer from severe environmental problems, a shortage of natural resources, growing social inequality and widespread corruption. In addition to this, there are pockets of separatism and terrorism in both countries. China and India are also witnessing a conflict between modernization and traditionalist forces. The concept of “national sovereignty” is paramount in both states, and any attempt to interfere in their domestic affairs is met with hostility. People in both countries question the stability of the current model of socioeconomic development, and many fear or predict inevitable crises and upheavals in the future.
Historically, relations between India and China have always been less conflict-ridden than, say, the relations between the Islamic and Christian worlds in the west of the Eurasian continent. In a sense, it is fair to speak not only of the economic, cultural and spiritual compatibility of these two ancient civilizations, but also of the fact that these aspects have penetrated the other country and even complement one another. There are numerous examples of this – from the epic history of the Great Silk Road to the equally impressive chronicle of how Buddhism spread across Eastern Asia. In essence, the consolidation of a China–India Heartland would not mean the creation of something fundamentally new, but simply the natural reunification of a torn Eurasia, the restoration of a recently lost continental unity.
Hence, there are objective prerequisites for the consolidation of a new Heartland. It is worth adding here that, while recognizing all the difficulties and tactical losses, such a consolidation would serve the long-term interests of both countries. The implementation of the joint China–India project would contribute to the stabilization of the geopolitical situation in the entire Eurasian space and open up fundamentally new opportunities for transcontinental cooperation in various fields.
It would not be out of place to draw a parallel with post-War Western Europe here, when the reconciliation between France and Germany led to the launch of European integration processes. In turn, it was ultimately France and Germany that benefitted most from this process: the political will and the willingness to compromise demonstrated by the leaders in Paris and Bonn paid off time after time in the following decades.
The numerous benefits of consolidating the Eurasian heartland are too obvious to not be a subject of contemplation on both sides of the Himalayas. Relations between Beijing and New Delhi have, for at least the past six decades, developed more along the lines of a rivalry than cooperation – and this rivalry has on more than one occasion turned into direct confrontation. Why is this the case? Could it be the subjective mistakes of the leadership? Personal ambitions of leadership? The underhand practices of internal forces? The tragic accidents of history? Or perhaps there are some objective “ force majeure circumstances” that stand in the way of a new Heartland coming together?
The Dimensions of the Eurasian Schism
Let us start with what everyone already knows – the two countries represent very different types of government. The differences between China and India today are greater than those between France and Germany 50 years ago. While China is much farther away from Europe than India, it is, on the whole, considerably closer in terms of being a nation state in the European mould. Despite the fact that there are a significant number of national minorities in China and substantial regional differences, ethnic Chinese (Han Chinese) are a single people and make up more than 90 per cent of the country’s population. Of the 34 Chinese provinces, including the autonomous regions and cities of central subordination, only Taiwan falls outside the vertical power system of governance, for obvious reasons.
India does not have a dominant national people. In terms of its ethnocultural and linguistic diversity, the Indian subcontinent does not resemble a separate European state or China, but rather the European Union as a whole. And in terms of religious diversity, the multi-structural nature of the economy and the regional disparities, India goes way beyond the whole of Europe put together. India is made up of 29 states and seven union territories, which exist in a state of complex political interaction. India is essentially a grandiose integration project in South Asia that is primarily turned inwards rather than outwards. If we stretch the analogies somewhat further, we can say that, as a single state, China has the same problems in its dialogue with the eclectic and insulated India that centralized Russia has in its interactions with the amorphous and insulated European Union.
Evidently, the historical trajectories of the two countries have also diverged greatly, especially over the past 250 years. India was a British colony, and the nearly 200 years of British rule left an indelible imprint not only on the country’s political system, but also on its culture. China, on the other hand, has never been colonized by a foreign country. While British democracy was a “system-forming” factor for independent India, communist China regarded the Soviet Union of the 1950s as a model to be emulated. Despite the fact that both countries have moved far from their original models of the mid-20th century, there are no grounds to suggest that their political or economic systems have drawn any closer.
In theory, the China–India partnership could even benefit from the fact that their political systems are so different: China would assume the main role in its interaction with various authoritarian regimes, while India would take the lead when it comes to developing ties with western liberal-democratic regimes. In practice, however, the dissimilarity of the systems hinders cooperation and, more importantly, mutual understanding. In is noteworthy that Beijing has found it far easier to establish relations with Moscow in the 21st century than with New Delhi, although the history of China–Russia relations is far more dramatic and controversial than the history of China–India relations.
Since China and India are the two largest countries in continental Asia, competition for natural resources, foreign markets, control of transport corridors and influence over common neighbours is inevitable. The close proximity of the two major powers gives rise to border disputes: the countries share 4000 km border, and the problem right now is not even about resolving territorial disputes, but merely about preserving the territorial status quo and preventing an escalation. The sides feel tempted to support various instruments of influence in each other’s territories. What is more, the question of what best meets the development needs of other Asian countries – Chinese socialism or Indian democracy – remains open.
Trade between China and India is growing at a rapid pace; however, both India and China are more focused on global markets than they are on each other. And for decades they have been purchasing the main resources needed for modernization – investments and modern technologies – from the West, often competing directly with each other for them. Bilateral trade remains asymmetrical, with Chinese exports to India far outweighing its imports from that country. Moreover, Chinese economic activity in India is far from always seen by the latter in an exclusively positive light.
A stable balance of powers between China and India in Asia is hindered by the fact that, right now, China is stronger than India both economically and militarily, and this asymmetry is likely to persist for the foreseeable future. A consolidated Eurasian Heartland would be less of an equal partnership than that of France and Germany in the second half of the 20th century.
India is still dogged by painful memories of the 1962 Sino–Indian Border Conflict. The model of Asia and a “closed” system is thus advantageous for Beijing, with China’s dominance in this system being in no doubt. For the same reason, New Delhi is interested in an “open” Asia, in which the asymmetry in the balance of powers between China and India could be compensated by introducing external players (who are, of course, on India’s side) into the mix.
The Interests of External Players
The interests of the United States in Asia are obvious and depend very little on the change of administration in the White House, although Donald Trump’s team has articulated these interests more clearly and more gruffly than its predecessors. Washington cannot but fear the consolidation of the European Heartland and will therefore continue to capitalize on the deepening contradictions in China–India relations. Naturally, it is trying to manage this process somehow without steering it towards a large-scale military conflict with unpredictable consequences.
Today we are witnessing an attempt by the United States to replicate the successful approaches of Henry Kissinger taken in the 1970s and to build a Eurasian geopolitical triangle. The difference is that the USSR is replaced by China, and China is replaced by India. This explains the increased attention of the United States to New Delhi and the persistent attempts to involve India in multilateral groupings that include allies of the United States that are located on the island periphery of the Eurasian continent, namely Japan and Australia (the concept of a “democratic Indo-Pacific”). If Washington had succeeded in achieving the sustainable institutionalization of these groupings in the form of a military-technical alliance similar to NATO, this would have created long-term guaranteed preventing the consolidation of the Heartland. However, at this juncture, any format of allied relations with Washington is politically unacceptable for the Indian elite, which is pushing for the preservation of the country’s strategic independence. What is more, India cannot sacrifice its continental Eurasian partners (primarily Moscow and Tehran) – not even for the sake of friendship with Washington.
The European Union is less interested in the preservation, much less the exacerbation, of the confrontation between China and India. Of course, the consolidation of the Heartland would present a serious challenge for Europe too, but one that is more to do with economics than geopolitics. The formation of a single Eurasian economic space would undoubtedly speed up the displacement of Europe as the economic centre of activity in Eurasia to Asia and reduce the role of the European Union in the Eurasian and global economies. On the other hand, China and India are two of the most promising foreign markets for the European Union, and the further development of these markets in line with the strategic interests of Brussels.
As far as the European Union is concerned, the main question is: On what basis can the consolidation of the Eurasian Heartland take place? Of course, Brussels would like to see Eurasian consolidation based on European standards, in compliance with European procedures and in line with European standards. The worst option for Brussels would be the gradual “economic absorption” of India by China and the implementation of the Eurasian integration process based on something that is entirely different from the European vision (for example, on the implementation of the One Road, One Belt initiative).
Russia’s interests in the various development scenarios for China–India relations are the subject of heated debates within the country’s expert community. On the one hand, it is often argued that maintaining tension in relations between Beijing and New Delhi makes Moscow a more valuable partner for both sides. Right now, Russia’s relations with China and India are better than those between China and India, meaning that it occupies the most advantageous position in this triangle. Based on this logic, we can assume that the consolidation of the Eurasian Heartland around the China–India axis would entail a further shift in the Eurasian centre of gravity towards the south of Russia’s borders. This would marginalize Russia even further as a participant in the Eurasian community.
On the other hand, it is safe to predict that attempts to capitalize on the contradictions between China and India will inevitably raise suspicions both in Beijing and in New Delhi, cause them to doubt the sincerity of Russia’s actions, etc. It is easy to imagine a situation in which Moscow will be unable to maintain its neutral position and be forced to choose between its two most important partners in Asia, and whatever choice it makes will inevitably entail major losses. Let us not forget that the escalation of the confrontation between China and India – a factor that stands in the way of the consolidation of the Heartland – would leave the door wide open for the United States, which is not likely to be among Moscow’s friends any time soon. Moreover, such an escalation is fraught with the risk of a major military conflict breaking out on the continent, and this would inevitably affect Russia’s security. To summarize the advantages and disadvantages of consolidation for Russia, the only reasonable conclusion is that the expected benefits of a consolidated Heartland clearly outweigh the potential costs.
Let us make it clear right away – whatever Russia’s role in the consolidation of the Eurasian Heartland, it will by no means be decisive. China–India relations have their own internal logic and their own dynamics that no external player (be it the United States, the European Union or Russia) can change. It would appear that, as the stronger party in these bilateral relations, China should go the extra mile to reduce suspicion and gain New Delhi’s trust. We could argue about what steps need to be taken and in what order, but this, strictly speaking, is not an issue for Russian foreign policy. However, this does not mean that Russia does not have a role in this most important issue.
On December 1, 2018, an attempt was made on the side-lines of the G20 Summit in Buenos Aires to step up the activities of the mechanism of tripartite cooperation between Russia, China and India (the RIC countries) and resume the practice of regular high-level meetings after a 12-year hiatus. According to Vladimir Putin, these meetings should focus on various aspects of security and the fight against protectionism and politically motivated restrictions in international trade. Developing these ideas, Prime Minister of India Narendra Modi identified four possible areas for cooperation: regional and global stability, economic prosperity, the exchange of experience in areas of mutual interest, and cooperation on how to respond to emerging challenges. Similar thoughts were expressed by the President of the People’s Republic of China, Xi Jinping, who stressed the special responsibilities of the three powers to support regional and global stability.
In recent years, the RIC format has remained in the shadow of the more representative five-party cooperation structure that includes Brazil and South Africa (together, the five countries make up the BRICS association). Without belittling the significance of the latter two countries, it is worth noting that the geographical expansion of RIC into BRICS entailed certain institutional costs: the two non-Eurasian countries had their own tasks and priorities that differed from the agenda of the original Eurasian members. The fact that the last presidential election was won by Jair Balsonara, a far-right congressman, the so-called “Donald Trump of Brazil” raises a number of questions about the future of the five-party structure. In any case, it would surely be a grave miscalculation for Russian policy to “dissolve” RIC into BRICS completely.
In all likelihood, in the near future, tripartite summits will be held on the side-lines of larger multilateral events (G20 summits, BRICS, the Shanghai Cooperation Organisation, the Asia–Europe Meeting, etc.). However, if everything is limited to brief and infrequent interactions between leaders, statements of coinciding positions or even the signing of general political declarations, then this will do little in terms of the consolidation of the Heartland. It is necessary to articulate, in a frank manner, the existing differences with regard to the most serious problems facing Eurasia. The leaders of the three countries should focus on the problems that are standing in the way of consolidation of the Eurasian space.
At the same time, considering the fact that these trilateral meetings are inevitably short, the issues raised should be studied thoroughly beforehand by experts and the relevant ministries in the track 1.5 and track 2 formats and with a view to developing specific “road maps.” It is precisely the specifics that have traditionally been lacking in joint statements adopted at the end of the annual meetings of RIC foreign ministers. Another urgent task that could help solve the problem of trust between the Chinese and Indian militaries is the creation of a permanent tripartite mechanism for military consultations and the holding of regular military exercises.
A practical political trialogue could begin with an open discussion of such issues as the future of Syria and Afghanistan, which are of great importance for all three participants. Equally significant are the development of individual functional dimensions of the Eurasian Heartland – joint initiatives in the fight against terrorism, managing migration flows, food and energy security, issues of international information exchange and the development of artificial intelligence. It is from the widest possible set of such functional regimes, not from old or new rigid institutional blocs, that the new Eurasian Heartland should be built.
India and China are Arctic Council observer states. As one of the leading members of this organization, Russia could suggest to its partners that they discuss Arctic issues together so that none of them could have any suspicions about Moscow possibly harbouring a position on these issues that could be considered “pro-China” or “pro-India.”
And, of course, more active trilateral interaction on issues that go beyond the geographical boundaries of the Eurasian continent would serve as a powerful incentive for the consolidation of the Heartland. The future of multilateral arms control. The reform of the United Nations, the World Trade Organization and other global organizations. The development of international public law in the 21st century. Climate change and environmental issues. The management of technological progress. If Russia, China and India develop a united position on these and many other issues, it will carry far greater weight on the international arena than the individual opinions of each of these countries.
Ultimately, the Eurasian Heartland of the 21st century is not just a geopolitical, or a geo-economic concept. It represents, to a certain extent, common or similar views of leading Eurasian states on the future of the world order and a strategy for restoring manageability to a world that is coming apart at the seams. It is a joint sense of global stability and a common readiness to look beyond the narrow horizons of immediate national interests. It is only in the presence of such a community that the new Heartland can become the “axis of history” the illustrious father of British geopolitics and member of the Privy Council of the United Kingdom Halford Mackinder wrote about, albeit in an entirely different context and according to a completely different logic.
First published in our partner RIAC
South Korea should go with the United States
Now, previous success won’t guarantee same success in future in the age of the Fourth Industrial Revolution, We are expecting generation that ability to create new and missing things is more important than keeping existing assets.
The economic survival strategy also changes.
There is no longer continuous growth in this new era, even for a major growing corporation. For example, an automobile can be a mobile computer with value added on software and electronics. Every industry becomes IT related company, not only food and pharmaceuticals industry, but also construction and banking business as well. Now, a company own by person who counts the money in front of the vault and calculates the stock number can’t be survived. Although the South Korean economy has global competitiveness in mobile phone semiconductors and some industries, South Korea is facing huge challenges.
South Korean companies must challenge upcoming new business in order to servive. South Korea has strong engineering system. But even Germany which has world’s most powerful engineering system is having difficulties in developing new business areas. South Korea has no resources and can’t be self-sufficient. It is the fate of South Korea to look out for the world.
The US and China trade wars of two axis of the global economy are becoming reality.
As the United States imposed a $ 60 billion tariff in retaliation for China`s breach of intellectual property rights, the Chinese Department of Commerce immediately launched a counterattack by imposing a $3 billion tariff on 128 U.S. products.
Global stock markets plummeted dramatically and The WSJ reported that world was horrified by the terrible of uncontrolled commerce war. This trade war is a step in keeping the United States ” Economic security “on the rapid growth of China’s high-tech sector.
China, once called the “World Factory” by cheap labour put their hand to rebellion. To take an instance from smartphone, Huawei, Oppo, Vivo’s superiority in Apple designed by California and produced by China is striking. Oppo and Vivo are focused on advanced technologies, not only low-price.
China is moving from ‘Made in China’ to ‘Created in China’ through the ‘China Manufacturing 2025’ plan for the manufacturing powerhouse. By the manufacturing 2025 project has an ambition to boost China’s competitiveness to surpass the US, Germany, and Japan levels and to become the world’s No.1 in 2049.
According to Financial Times that the Trump government emphasized “economic security is the security of the country,” that is meaning the United States to take aim at the Chinese manufacturing 2025.
It is not so simple in terms of South Korea reality.
In South Korea, China and USA are first and second market highly dependent on exports of Korea that counts 25 percent of China and 12 percent of US market.
If the market shrinks due to the friction between the U.S. and China, South Korea could be caught in the middle of the market and not be able to choose either
But The true global leader in today is the United States and Unites States is really strong.
South Korea should go with the United States.
Power Projection of China
A coin has always two faces, an analyst is ought to analyze the both sides.
China is considered as flag holder of soft power with a global agenda of peaceful rise. At moment, the world is facing a new emerging global order by the rise of multiple actors in the international arena. Now there are two school of thoughts who are proposing contradictory views like one wing regarded it as optimistic Sino rise who believes that China’s rise is peaceful. Its foreign policy is viewed as one of the most harmonious policy ever structured. They believe in the mutual cooperation and peaceful coexistence. Rise of China is an optimistic opportunity which is justified by different aspects. As African states were facing a massive number of problems at all levels, many super powers came and ruled the world but they didn’t bothered the prosperity of third world countries.
China started invested in African region and assured the chances of prosperity over there. Due to this economic integration of China in Africa, a demise of Indian influence in that has been observed as well. Their economic cooperation is based on model of helping underdeveloped countries by initiating the projects like Belt and Road Initiative. They are extending the helping hand to developing countries by selling products at cheaper rates. They respect the ideologies of other countries, for example, China didn’t celebrated Pig year in Muslim countries. Regarding Pakistan, here the optimistic view is prevailed at higher context. Pakistan’s policy makers favor Chinese investment in Pakistan, as it will help Pakistan in economic prosperity. China helps Pakistan at almost all of the international forum. Friendship of china and Pakistan is the strongest one to be observed. Pakistan can learn a lot from them. The proper use of diplomacy, image building, projection of soft power and individualism in ideologies and beliefs. Long term planning strategies can be learned from them. China is all weather friend of Pakistan but self-skills are significant, as there is a famous Chinese saying, “to serve a guest by fish is a good way but to teach them how to catch fish is the best way to serve them.”
On the other hand, there are supporters of pessimistic Sino rise who believe that China’s rise is threat for globe. This pessimism is oftenly prevailed by western analysts. They think that rise of China can disturb the existing world order. For example, China is competing with American economy in the international market. Balance of power is coin of international politics, so other actors are emerging now. But the rise and demise of powers after a certain time period is one of the laws of nature. Specially America is feeling threatened by this emergence of China as a super power which can be seen through events like Huawei issue over 5G technology, its sensitization, trade war between china and America, claim of copyrights by America etc. increasing influence of China in majority of states is posing the seriousness of issue. Chinese model of Confucianism is spreading as it has started practices in South Korea as well which is predicted through their cultural stimulus. Pessimistic school of thought deny the authenticity of foreign policy of China, they consider that it is a mere framework which has nothing to do with reality.In reality China’s behavior is like relations having towards Taiwan, South China Sea etc. Interest of states are very important which may differ from each other. Lensing through these views, this unpredictable situation leaves a humans mind into a chaos, whether the rise of China is peaceful or just a myth?
The origin of the Four Modernizations and President Xi Jinping’s current choices
On September 13, 1971 Lin Biao tried to flee to the USSR with all his family, aboard a Trident plane of civil aviation, which had left with little fuel and no active radio contact.
The crash of the aircraft in Mongolia, where both Lin and his whole family died, was caused by the order given directly by Mao to shoot down the plane.
What had happened, obviously in political and not in personal terms?
The answer is simple: Lin Biao was very strongly opposed to the new agreement between China and the United States and hence had organized a military coup. For Lin Biao all the room for US geopolitics was to be found in what the Third International’s forces traditionally defined as “imperialism”.
For Mao Zedong, imperialism was vital for both the USSR and the USA- and considering that he was far from the continent that was the prize for which of the two won the Cold War, namely Europe-he refused to make too many differences between the two.
As a man of Tao and Zen, Mao treated an evil with another evil.
Mao Zedong, however, also knew that a new economic relationship with the United States was needed, after the long economic crisis and the factional instability within the Chinese regime. The Soviet Union could certainly not give it economic stability and hence the “Great Helmsman” turned to the distant enemy rather than to the near quasi-friend.
Nothing can be understood about China, including current China, if geopolitical choices are separated from economic, financial and industrial ones which, however, are subjected to the strategic “policy line” defined by the Party – a policy line that is cultural and always based on a very long term.
On September 29, 1972 the diplomatic relationship with Japan were resumed, along with those with the United States. An evident overlapping of different geopolitical lines which, however – in the minds of the Chinese decision-makers -were similar also from the symbolic viewpoint.
In 1973 Deng Xiaoping reappeared in public, upon direct order by Mao Zedong.
Those were also the years of the late definitive success of the “policy line” of Zhou Enlai, who had successfully gone through the Great Cultural and Proletarian Revolution, which had partly overwhelmed him, and led the 10thCPC Congress.
That was the compromise which held the Party together, after Lin Biao’s elimination. An unstable agreement between the reformist “Right” (Zhou had spoken of “four modernizations” many years before, exactly in 1965) and the Left, silenced by Mao, that had crossed the red line of the Cultural Revolution and the failed communization of rural areas.
In those years, also the Party’s Left lacked mass management of the people and the Party and had to agree with the other factions, while Mao mediated and also created “third wheels”.
Create something from nothing – one of the Thirty-Six Stratagems of the Chinese Art of War.
In 1973, just before the equilibrium between Zhou and the old CPC apparata broke again, Deng Xiaoping was fully rehabilitated and also became member of the Chinese regime’s deep axis, namely the Central Military Commission.
In 1975 Deng was elected vice-President of the Central Committee and member of the Politburo Standing Committee.
The connection between the reformists – if we can call them so – siding with Zhou Enlai, and the “centre” of the Party’s apparatus – that regained its roles and posts by ousting the Armed Forces -prevailed once again.
Again in 1975, the National People’s Congress praised the “Four Modernizations” already proposed by Zhou and, in its final statement, hoped “that China would be turned into a modern and powerful Socialist country in the approximately twenty years before the end of the century”.
Political transformation through the new economy, as well as preservation of the regime through political transformation itself.
We could call it “the Tao of geoeconomics”. Acceleration of industrialization and modernization, but without creating the disaster of rural masses, who were objectively unable of providing the start-up capital for implementing any of the Four Modernizations. This was the real difference with the USSR of the 1930s.
That capital had to be produced in innovative companies and be attracted from outside.
At the time, however, the CPC was not yet firmly in the hands of any factions. In September 1975, the national Agriculture Conference saw the harsh clash between Deng Xiaoping and the old “Shanghai group” of the Cultural and Proletarian Revolution that, however, no longer controlled most of the Party.
Zhou Enlai died in January 1976 and shortly afterwards, in Tiananmen Square, there were severe incidents, albeit with the constant presence of many wreaths reminding of Zhou.
Later there were also strikes and unrest, until the capture and trial of the “Gang of Four” in Shanghai. It had inspired the “Cultural Revolution” and was then directly accused by Hua Guofen – the man appointed by Mao to lead the transition- of having prepared a coup.
China’s transformation, however, began again from rural areas: at the second Agriculture Conference in Dazhai, in December 1976 – where various cases of corruption and “social polarization” were described and stigmatized- the discussion focused on the First Modernization, namely that of rural areas.
When you regulate too much, a parallel and illegal market is created. This always happens.
Obviously this also happens when total communization is applied to the economic cycle of rural areas.
Certainly those were residues of Sovietism in the CPC’s doctrine, but also of the a-dialectical implementation of Marxism-Leninism in historical and social contexts in which the analysis of the founder of “scientific Communism” had never focused.
In fact, when you read the works and correspondence that Marx dedicated to the Russian agricultural issue, you note that the author of “Capital” foresaw a direct Socialist social transformation stemming from the maintenance of the social and community networks in traditional villages. It may seem strange, but it is so.
This system operates only with a non-industrialized State that is scarcely widespread in the territory. Otherwise, the problem is that of capitalism in rural areas to generate the surplus of urban and industrial investments.
Even in the Second Volume of “Capital”, Marx’s model is essentially this one.
It is precisely on the agricultural issue that the stability and success of many Communist regimes isdefined and, not surprisingly, the first of Zhou’s and later Deng’s Four Modernizations was precisely that of agriculture.
The topic characterized all Party’s organizations, but it was in late December 1978 that the Third Plenary Session of the 11th CPC Central Committee decided to decentralize the economy – another factor strongly different from the Leninist tradition – and even to liberalize it, in addition to a process of ideological revision, namely Gaige Kaifang that roughly means “reform and opening”.
That was also related to the request for opening international trade based on the criterion of “mutual benefit” and equality between the various countries.
Hence, also from the ideological viewpoint, Deng became the Supreme Leader of the Party – as well as of the State apparatus – and announced the Open Door policy.
An extremely important fact was also the separation of the Bank of China from the People’s Bank of China, so as to serve as single State body for foreign exchanges.
That was the start of the “Long March” towards the Four Modernizations, with an unusually united Party, and currently towards “Socialism with Chinese characteristics” , as well as – at geopolitical level -President Xi Jinping’s New Silk Road.
In January 1980, the “four freedoms” – of work, people, goods and capital – were abolished.
The new planning needed to manage all aspects of productive forces.
That was explained by a covert war of the Chinese economy against the penetration of foreign capital and joint ventures, which in fact were immediately regulated by specific legislation enacted the previous year.
The great British operation of economic control over the South-Chinese coasts was resumed from Hong Kong, but the Chinese government eliminated the possibility of such an action by Great Britain (and by the USA, at least partly).
Hence the Party’s unity had to be reflected in a new context and, to some extents, in the whole society, so as to prevent the liberalized Chinese economy from taking the Party and Socialism away. A new rationale for the CPC’s Leninist unity.
The new Act on contract law was enacted in March 1981, and in 1982 also the new civil procedure law was enacted, which became effective on October 1, 1982.
In September 1983, at the 12th CPC Congress, there were three groups within the Party: the nostalgic Maoists, a small and narrow majority for Deng Xiaoping; the Orthodox group that still wanted a nationally planned economy, as in USSR -hence probably the heirs to Lin Biao; finally the real reformists.
Deng won with a clear, but not overwhelming majority.
Hence, everyone was waiting for the Four Modernizations to fail, so as to go back to the old routine of the Plan.
As also happened in the USSR, it was often fully imaginary compared to the actual reality of the things done and produced.
It was in 1983, however, that the Third Front strategy was implemented, i.e. Mao’s directive – drawn up as early as 1962 – according to which the national strategic industries had to be moved from the coasts – militarily and politically difficult to defend – to the internal areas. Without said Mao’s directive, the New Silk Road could not be understood even currently.
Hence 14 open coastal cities that were declared so in 1984, but with a new law on profits that served as mainstay of Modernizations: companies were asked to pay a certain share of profits to the government, but they could withhold some profits if they matched and exceeded the requirements of the contract with the State.
In 1985 a new regulation also involved government bonds. The seventh Five-Year Plan began, underlining a “scale” approach, in which the coastal areas – gradually freed from traditional strategic companies – were driving the economic development, which later spread like wildfire even in the internal areas.
It was the Hong Kong model that Deng Xiaoping’s executives copied and adapted.
For a short lapse of time, Chinese analysts and Party planners also looked to the Singapore model, with the (single) Party of Lee Kuan Yew.
It isby no mere coincidence that Shenzen was close to the former British colony, and often the Chinese attracted and favoured the companies of the British area towards the new Chinese coastal areas also characterized by free-market economy.
Advanced and high-tech services in coastal areas, and lower value-added, but still inevitable, productions in internal regions.
A new dualism, where rural overpopulation had to be gradually absorbed by inland strategic companies.
A double geopolitical status of inland areas which, in many cases, is repeated also in the current Belt and Road Initiative.
In 1986, the “open-ended” contracts for the manpower working in State-owned companies came to an end.
In October 1987,the 13th CPC Congress was held, in which – for the first time – there was talk about the “commodity economy”, i.e. a two-tier mechanism, in which the market is matched and also “corrected” by the old national planning.
A sort of re-edition, for internal use, of the formula “one country, two systems” implemented by China with the agreements for Macao and Hong Kong.
In 1988, however, the 7thNational People’s Congress officially legitimized the private initiative (not the mere ownership) and enabled private individuals to buy State-owned companies.
The term “People’s ownership” was also deleted, while individuals and groups, even non-Chinese ones, could buy land with a system similar to that of the British real estate leasing.
Profits, wherever made, had to be reinvested in the company that originated them, before requesting any financing from the People’s Bank.
The Special Economic Zones, modelled again on the Hong Kong system, became five.
Hence innovation on the coasts and strategic companies in the central regions – mainly public ones, which still remained almost completely public.
In April 1989, Jiang Zemin rose to power.
Student demonstrations also began in Tiananmen Square, where, year after year, the various anti-regime organizations gathered: Falun Gong, the networks of many illegal parties, unrecognized union organizations and many “spontaneous” groups.
And some old “Red Guards”.
Zhao Ziyang, the Party leader already defenestrated by Jiang Zemin, was in fact at the centre of “spontaneous” organizations.
The various Autonomous Federations of Workers -spread by location and not by industry – were legally created.
Gorbachev’s visit took place in May 1989.
That was the key moment of a long series of doctrinal, practical, cultural and historical differences that – from the very beginning – divided the two great Eastern heirs to the Marxist-Leninist Third International.
What really mattered to the Chinese leadership was that the Russian crisis did not overwhelm the Chinese Communists: that was the meaning of the declaration signed by Gorbachev, which regarded the “peaceful coexistence” of the two Communist regimes.
The leader of the Soviet Party was made fun of – not even so elegantly – not because he had reformed the Soviet economic system – in a way, however, that the Chinese deemed wrong – but for one reason only: he had relinquished the Party’s role in the reformist process, which the CPSU had to lead and guide for China, from the very beginning.
An “economicist” mistake, as the CPC’s ideologues said – yet another proof of the Marxist roughness of the “Northern enemy”, as Deng Xiaoping called Russia.
Sarcastic sniggers on the lips of Chinese leaders. Then Gorbachev explained again his perestrojka and glas’nost, but the Chinese leaders, whose power was based on Party’s bayonets, kept on not taking him seriously.
Days before the arrival of the Soviet leader, at least one million people had gathered in Tiananmen Square.
The problems that the Chinese leadership had to solve in a short lapse of time were radical: the “hard” wing that was previously a minority prevailed and managed to convince Jiang Zemin.
The Party and its authority – the basis of any transformation, even the most radical one – were re-established without much talk. It was impossible to think about a heir to the “Long March” that dissolved the Party within “society”.
On May 19, the CPC decided to follow the hard line and the military forces reached the areas near the Square, from the outskirts of Beijing.
Few hours later, the Square was completely cleared, but that was done the hard way.
Shortly afterwards, at the 4th CPC Plenum, Jiang Zemin – also following the experience of Tiananmen Square – returned to one of his old theories and developed the “Three Represents” model, i.e. the idea that the CPC’s power was based on its “vast representation” of the Chinese productive forces, of the cultural and technological avant-gardes and of the wide strata of population.
In other words, the Chinese society – and its economy, in particular – was reformed by bringing the elites together, part of whom were in Tiananmen Square, but also the large crowds still organized by the Party.
A Confucian middle way that was particularly successful.
Hence, Zhao Ziyang definitively lost the game within the Party that, however, was also inside the Tiananmen Square insurgency.
Once the crisis was over, Deng Xiaoping left also the last very strong power in Jiang’s hands: the leadership of the Central Military Commission.
Shortly afterwards – and there was nothing more symbolic than that event – the Stock Exchange of Shanghai reopened. A reopening that had been expected since the 1930s.
Later also the Shenzhen Securities Exchange opened. In both of them, any securities – including those issued by the State – were traded, but there was only one deep logic: to acquire productive capital to generate strong and self-sustained development of the coasts and of the high value-added industries that had to compete on the world free market, without granting protection and aid that would go to the detriment of the deep productive structures of the internal regions.
In 1992, Deng’s journey to Southern borders had a clear route, although the CPC’s leadership had always had some doubts about the “free economic zones”. The core of the issue was that the GDP had to be increased in the lapse of time between the 1990s and the beginning of the Third Millennium.
It had to be rapidly increased from 6% to 10%.
Without that “quantitative” assessment – just to use the old Communist jargon – there could be no “qualitative” transformation of Chinese society.
Everything had to be done soon – well, but soon. That was the characteristic of Deng Xiaoping’s years – extraordinary years, in some respects.
In a short lapse of time, the Party developed the concepts of “Socialism with Chinese characteristics” and of “market Socialism”, which are so important also in President Xi Jinping’s current policy line.
There were also other changes that, in a few years, led to the current Socialism with Chinese characteristics, as advocated by President Xi Jinping. However, everything could be done from a legal view point began in those years.
The transformation process of the Chinese economy is long, powerful and complex, but – unlike what is often said in the West – it is never a mere market mechanism or a naive adaptation of the Party or the State to the absolute Western rules of globalization.
As early as the 1990s, China has decided to govern market globalization and not just being a part of it. It wants to lead the process so as to be – now that the end of the century about which Deng thought has long been over – the axis of globalization and the centre of the new global hegemonies.
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