The meeting between the leader of the Democratic People’s Republic of Korea, Kim Jong-Un, and the President of the United States, Donald J. Trump, will be held in Hanoi, Vietnam, on February 27-28, 2019.
The primary aim, as stated by both Heads of State, is the solution of the North Korean and US nuclear issue in South Korea.
The news of the meeting had initially been delivered by President Trump, in his speech on the State of the Union, but also in a long series of now inevitable Twitter messages.
Indeed, after the Singapore Summit between Kim Jong-Un and Trump, in the first half of June 2018, the negotiations between the two countries had clearly stalled.
The results reached in Singapore, however, were very significant: the US Armed Forces’ cessation of the joint exercises with South Korea’s military structures; the certainty – as stated by President Trump – that Kim Jong-Un would dismantle his nuclear system “very quickly”, but also the continuation of US economic sanctions against North Korea, unless “quick and new” choices were made by Kim Jong-Un.
It should also be noted that the decision to suspend the joint military exercises with South Korea was a real bolt from the blue for the country, above all while President Trump enabled North Korea to use the nuclear and conventional IAEA “safety measures” – an unavoidable and necessary factor of a future and quick disarmament.
Since the Singapore Summit the denuclearization of the whole Korean peninsula has been the aim of both Heads of State, but with a too generic approach on the procedures and time schedule of the checks on disarmament.
For the time being, however, while from the beginning of its autonomous negotiations with South Korea, North Korea has always avoided carrying out nuclear or missile exercises and tests, certainly no one has declared or shown interest in really endeavouring for denuclearization in both Koreas.
However, why has Hanoi been chosen as venue of the meeting?
The choice has been made precisely by President Trump because the capital of Vietnam, which is still a painful symbol for the United States, has managed to become a great pole of international economic development, after its reunification with the Communist North Vietnam.
In a Twitter message President Trump wrote: “Under Kim Jong-Un’s leadership, North Korea will become the great economic powerhouse of Southeast Asia, considering that I have gotten to know Kim and fully understand how capable he is as a politically rational leader”.
It is not just flattering. Probably President Trump has been fascinated by this young North Korean leader, heir to an extraordinary ancestry, who studied in Switzerland, followed his cursus honorum in the true control rooms of North Korea’s power, and was modest while he was learning and is now assertive, without rhetoric, when he rules.
Pending his visit to Vietnam, the North Korean leader will visit the factories of the Bac Ninh Province, northeast of Hanoi, with a view to probing the concrete possibility of building a smartphone factory jointly with the South Korean company Samsung.
Most likely, there will also be a visit by the North Korean leader to Ha Long Bay, a popular tourist area near Haiphong.
If we do not think about quality tourism, we cannot properly imagine the future development of North Korea, which will also fit very well in the new global food chains.
It should also be noted that this visit by Kim Jong-Un is the first one he pays to Vietnam.
It is also worth recalling that North Korea sent some of its air forces to fight alongside the VietMihn of the Vietnamese Communist “resistance”, as well as Russia and China. Currently, however, Vietnam’s primary economic partner is, coincidentally, South Korea and this has certainly not contributed to preserve good relations between North Korea and Vietnam.
The meeting between the Head of US negotiators, Stephen Biegun, with his North Korean counterpart, Kim Hyok-Chol, has already taken place in Hanoi and Pyongyang – a meeting always focused on topic number 1, namely denuclearization.
Before this assignment in relation to North Korea, Stephen Biegun was responsible for Ford Motor Co’s international relations.
He knows Russian and Moscow’s economic and political circles very well. He is member of the Board of the U.S. Russia Foundation and of Ford Sollers, the joint venture of Ford Motor Co.in the Russian Federation.
Kim Hyok-Chol had met Biegun also in Pyongyang, where they had already talked about “complete denuclearization”.
The denuclearization that will probably emerge in its already final form at the end of the Hanoi talks between the two leaders.
We can already predict it will envisage the dismantling of the Yongbyon reactor and some funds to support North Korea’s economic growth, with a very “long-term” loan for funding the nuclear decommissioning of the Democratic People’s Republic of Korea.
In fact, the latest satellite images of the North Korean reactor Yongbyon show a still active and well-maintained site, while the main structures of the reactor seem to be still unused to date.
Kim Jong-Un has already decided that Yongbyon will be the start of the great North Korean denuclearization process.
Both symbol and substance.
An image to be shown the world and a credible subject of negotiation.
Kim Jong-Un has always said – also to his South Korean counterpart – that it would be Yongbyon to be closed down, at the beginning of negotiations, “if there were corresponding actions by the United States”.
It is easy to imagine them: the “sincere” measures envisaged by Kim Jong-Un, in his last New Year’s speech, are the removal from South Korea of the US military and nuclear structures that can allow a response to the first nuclear attack from the North.
In 2018 alone, North Korea also destroyed both a nuclear base and a missile structure, but the United States said that these operations had not been fully accomplished and, in any case, they could be easily reversed.
According to some US nuclear disarmament experts, Kim Jong-Un could reach a level just at the limit of complete nuclear disarmament, but such measures would be such as to clearly regionalize North Korea’s nuclear (and hence missile) threat.
In short,Kim Jong-Un “rescues” the United States from its missiles.
This also means that, in a military or geopolitical regional crisis, Kim Jong-Un could also “involve” both China and Japan in the negotiations, thus multiplying both the effect of his threat and the strength of his final resigning to continue the attack.
The other factor will be the “new and soft phase” of relations between North and South Korea, with a significant reduction in the number of guard posts and internal weapons within the Demilitarized Zone.
For the North Korean leader the next step will be to almost completely put an end to the old alliance between South Korea and the United States which, in his opinion, is always a harbinger of dangerous military (and, in the future, also economic) presences that would push a de facto unified Korea to get out of the triangle which will effectively replace the North Korean nuclear system, i.e. the North Korean strategic integration with China and the Russian Federation.
Even the planned dismantling of Yongbyon, however, would leave North Korea with a substantial amount of nuclear weapons, and the possibility of producing enriched uranium elsewhere.
Nevertheless, there would anyway be a definitive stop to the production of plutonium by North Korea, which is a very important political and strategic result.
It should be recalled, however, that even the sole dismantling of Yongbyon is a remarkable technological, financial and political operation.
A stable connection would be needed between the United States, the Russian Federation, China and, probably, South Korea, and even the now residual European Union.
In addition to IAEA, of course.
It will take many years and huge funds to achieve this result. Needless to cherish the fond hope.
Just to give an example, the Rocky Flats US headquarters used for storing plutonium, was dismantled in 14 years at a cost of 9 billion US dollars.
In Belgium, Eurchemic was decommissioned and dismantled in 25 years at a cost of 333.75 million US dollars.
Probably the most rational and quick choice will be to entrust the decommissioning of Yongbyon to a joint political and financial organization between the United States and North Korea.
Nevertheless, how will North Korea afford it? Obviously it will not want to have external support – and rightly so – but, hence, how can the issue be solved?
The huge cost of decommissioning the site must anyway be shared by a sufficient number of actors. North Korea cannot materially bear 50% of all costs.
Hence support will be inevitably needed from South Korea, the Russian Federation and China, but also from Japan and, probably, an axis between Vietnam and Thailand, for example.
It is impossible for the United States and North Korea alone to bear all the costs.
We could also think about an ad hoc investment bank which, at international level, would be entrusted with the task of funding the operation, at least partly, so as to later organize business projects in North Korea, in full agreement with Kim Jong-Un’s leadership.
Once clarified the financial framework, the technical operations of decommissioning could also be very quick: reinforced concrete “containers” to be filled with nuclear N materials would be used. Then the reactor (and the iodine selector filters) cells would be emptied, but what is left would be covered again with much reinforced concrete, without further removals that could be postponed to economically better times.
The plasma torches and all the other current techniques could almost immediately stop the action of radioactive materials, but with a maximum amount of staff that could be about 150 technicians and at least 70 elements, all selected among North Korean experts.
In short, if all this can happen in the future, the solution for Yongbyon will be found in less than a year and at a predictable cost of 6 million US dollars.
The 5 MWe reactor defueling is a further problem.
This is the primary source of plutonium.
The defueling would cost approximately 3 million US dollars, all inclusive, while the real dismantling would cost about 30 million US dollars.
Hence the total cost for dismantling the plutonium and uranium networks, the centrifuges and the reactor will range between 300 million US dollars, in an initial and scarcely effective phase, and as many as 1.6 billion US dollars.
Under IAEA sole control, the dismantling of all North Korean facilities will last at least twenty years, at the aforementioned cost of 1.6 US dollars, but without IAEA supervision it will take at least ten years and almost one billion US dollars.
Why confining the negotiations for peace and inclusion of the Democratic People’s Republic of Korea into the world market only to the nuclear issue?
It is most likely that the North Korean chemical weapon warehouse is “old”, but there are certainly still VX and CW agents, G-series and V-series nerve agents that are certainly not negligible in any confrontation capable of endangering North Korean stability and political identity.
What about discussing it in the Summit, at least in an initial phase? What about establishing a rational military balance between the United States, Russia and China in the whole Asian continent?
Kim Jong-Un could – and certainly will- be a fully rational actor, who will know how to evaluate the best potential for the defence of his country, but without the silly memories of the Cold War.
This also applies to North Korea’s chemical weapons, which Kim Jong-Un will deal with the necessary flexibility, but also with a compensatory criterion with respect to his nuclear system.
Hence the prospects for the North Korean leadership could be the following:
a) keeping a minimum share of chemical, bacteriological and even nuclear weapons to effectively react to any North Korea’s political crisis. The calculation of the Minimum that a statesman must always be able to do. A possible solution could be an official statement, just before or even during the forthcoming Hanoi Summit, that there will be a mutual and official recognition between the United States and North Korea – a definitive document dealing with borders, the political personality, the regular exchange of ambassadors and cultural, commercial and financial relationships.
b) An agreement for the transfer of nuclear and bacteriological-chemical stocks to a third country, under the supervision of the international Agencies responsible for the operations. An already possible agreement could be separating and dividing stocks between China, the Russian Federation, South Korea, Japan, the United States and even the irrelevant EU.
c) Support to the military police and security forces of the Democratic People’s Republic of Korea for monitoring staff, stocks and their political use by unreliable elements of Kim Jong-Un’s regime. A relationship between intelligence services that is unavoidable, considering the future commitments.
Hence North Korea must know very well that if there is someone interested in the stability of the regime, this is precisely the axis of Western powers that are accepting Kim Jong-Un’s openings, with laborious rationality.
It will therefore be essential to envisage – with the figures and costs already mentioned above, as well as the respective allocations and breakdowns – a refinancing project, especially in the short term, of the Democratic People’s Republic of Korea which shall mainly concern:
1) the prevention of humanitarian disasters, also with the same UN Agencies that have been supporting North Korea on these issues for over 23 years. Once again, there is no problem in this regard. Apart from China that, in fact, currently supports – almost alone – North Korea against international sanctions, it will be necessary to stabilize aid and organize it in a different way, considering the costs of the large nuclear decommissioning.
2) How can it be done? It is simple, after all. It could be done by immediately establishing an International Bank for Korea and Asia in the South-West, which would collect aid, deal with investment in North Korea, support the population and, above all, submit to the North Korean government the new industrialization projects, mainly in the tourist, environmental and food chain sectors, but also in fine technologies. The entry of a great country, such as North Korea, into the world market will be the real great deal of the century and the true and stable guarantee for future peace. It will be good to jump at the chance, without making a fuss about it.
3) Finally we should help North Korea to become what it already is, namely a rich country. Certainly, with its “parallel” liberalizations, North Korea’s current leadership has already done much, but here very strong liquidity injections will be needed, as well as new and effective projects to be quickly submitted to Kim Jong-Un’s government.
4) The origin of this North Korean small economic boom is still bilateral trade with China. Hence we need to preserve and strengthen it. Indeed, as has already been envisaged in China, we need to imagine a rational inclusion of North Korea in the Chinese Belt and Road Initiative towards the West. The maritime networks, currently already present in an eminently maritime country, such as North Korea, would be perfect for managing the Chinese networks that already start from Gwadar.
5) It would therefore be silly to do what some US leaders suggest, i.e. to force North Korea to choose between nuclear weapons and economic support. Kim Jong-Un has studied Marx very well, when he was in Switzerland, and knows all too well that aid never comes “without strings attached”.
6)Hence the real costs of the great nuclear decommissioning must be calculated accurately, with an initial dismantling of the chemical and bacteriological arsenal, to which the evaluation of social and economic impact shall be added. Finally, this shall also be matched by an initial, rational and credible support for starting a new industrialization of the North Korean economy, which cannot obviously be only the result of South Korean investments.
Hence, besides defining a good policy line for intervening on nuclear decommissioning, we shall also do a rational and economic calculation of future costs and investments.
This is needed to make Kim Jong-Un’s relinquishment of his nuclear system not coincide with an economic crisis and a weak integration of the country in the future world market, which will however be very different from the current one.
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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