Saturday, December 22, 2018

Business Recorder Editorial Dec 22, 2018

China’s warning

In a speech to mark 40 years of China’s reform and opening up policy, President Xi Jinping delivered a warning that no one could dictate to his country, a reassertion of China’s confidence in its strength founded on its miraculous economic development. Observers interpret the warning as aimed principally at the US that increasingly under President Donald Trump is attempting to mount a stern challenge to the second largest economy after its own and a rising world power. Reinforcing staying the course on the economic reforms launched by China under Deng Xiaoping’s leadership in 1978, Xi Jinping disappointed those hoping for a peaceful evolution of China after embracing capitalism towards a bourgeois democracy by vowing to retain its one-party system under Communist Party rule. He went on to reiterate that China posed no threat to any country but would not be pushed around. It must be conceded that China’s patient peaceful recovery of Hong Kong and Macao from colonial rule and absence of serious conflict (except perhaps with neighbouring countries in the South China Sea) with any major world power is part of China’s approach to developing itself peacefully and without any aggressive intent abroad. Historically China saw itself as the Middle Kingdom or centre of the world and the Communist Party is committed to restoring it to pre-eminent status, which Xi Jinping underlined by saying his country is increasingly approaching the centre of the world stage. China’s reforms have pulled some 700 million of its people out of poverty in a relatively brief period, reducing poverty among the rural population from 97.5 percent 40 years ago to 3.1 percent today. While the western countries’ opening up their economies to China may have been predicated on thereby binding China politically to their vision of bourgeois democracy, this has failed to transpire. China quashed the Tiananmen Square protests demanding greater political liberalisation in 1989 but opened the ruling Communist Party’s doors to some of the highest number of billionaires in the world. It is China’s rapid economic development that has allowed it to acquire sufficient military muscle to deter any aggressor, a painful memory in Chinese history’s period of humiliation from the 19th century on till liberation in 1949. However, just as China has repeatedly stressed it has no aggressive intentions abroad, Xi Jinping once again asserted that China in turn opposes hegemonism and power politics.

China’s rapid economic rise over the last 40 years through opening its doors to capitalism under Communist Party rule reinforces the potential slumbering in the lap of capitalist development for pre-capitalist societies such as China’s. Of course from double-digit growth in the early years of the opening up to 6.9 percent last year and an expected 6.5 percent this year does pose some problems. Such rapid development almost inevitably was accompanied by class and regional inequality. While the US-led west may have watched for such differences to weaken if not overthrow the Communist Party’s monopoly on power, the Chinese rulers have planned for and tackled such issues in an incremental manner that has prevented unrest. The implied (and sometimes stated) social contract between the one-party state and its citizens rests on an ‘exchange’ of material prosperity in return for acquiescence in the Communist Party’s hegemony. China has some time ago reached the point of its export-led, state-of-the-art technological revolution where the export of capital becomes not just possible but a necessary component of maintaining high rates of growth. Hence the Belt and Road Initiative of which CPEC is a part, which promises not just connectivity to boost mutual trade but also is aimed at addressing its internal regional variations in economic development (CPEC will serve relatively backward Xinjiang in this respect). Whether China’s unique hybrid experiment of capitalist engagement with a globalised economic system under Communist Party rule will manage to avoid the historical path of confrontation between older world powers and a new rising one remains to be seen, as does the end result of a unique experiment with contradictions at the heart of the goals of unfettered capitalist wealth creation and the social equality that is the leit motif of communist ideology.

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