New Internationalist

The big tree catches wind

Issue 371

In scenes reminiscent of the Cultural Revolution – or a motivation session for sales reps – thousands of young Beijingers wearing matching sky blue tracksuits sit in row after orderly row repeating with frightening enthusiasm the words of their evangelical English teacher, a well-dressed 30-something Chinese with an American accent: ‘I want to be somebody some day.’ ‘We will occupy the US, we will occupy Europe, we will occupy Japan. The three markets!!!’ ‘Make… money… internationally!’

For these privileged urbanites, the slogans of capitalism have long replaced the wisdom of Chairman Mao, and individual achievement – rather than collective endeavour – is the new path to reclaiming China’s lost glory.

Though it is now an economic powerhouse, China is also a political powder keg. In the vast rural hinterland – home to 800 million – the peasants and workers, too, have discarded their blue Mao jackets in favour of tracksuits. But the rural classes who symbolized the Chinese Revolution are suffering (see (http://www.newint.org/issue371/prairie-fire.htm)[A single spark]). In the past five years, annual growth has exceeded nine per cent, but there are signs that the economy is ‘slowing’ and the Government has warned of a ‘breakdown in public order’ if growth falls below seven per cent. Modern-day China is teetering on the edge of a social cataclysm as the Communist Party attempts to balance its warm embrace of capitalism and private property rights with the cold facts of rural poverty, mass unemployment and growing discontent in its own backyard. The Chinese Government knows this and so does the rest of the world.

China’s official aspirations are peace, prosperity, democracy and unity. It rejects ‘one value’ or being ‘led by one country’ and claims to base its foreign relations on mutual respect, sovereignty and co-operation between states: an emphasis clearly directed against the role assumed by the US as global leader.

Two-faced reflections Even though these elements are clearly visible in China’s international relations stance, the way that it is expressing itself both inside and outside the country is more schizophrenic. Partly, this is a realistic response to where the country finds itself. Within its borders, the developing and developed worlds live side by side. The US is pushing for China to have closer relations with the G8: the élite grouping of major industrial powers comprising the US, France, Canada, Japan, the UK, Germany, Russia and Italy. Yet China is also a leading member of the G20: the emerging coalition of developing countries within the World Trade Organization (WTO). It is an economic dynamo of capitalism – able to out-price and out-produce all competitors. Yet the Communist Party leadership explains that this free-for-all capitalism is a necessary step on the road to true socialism. Balancing these tensions – while advancing its own interests – are the hallmarks of China’s engagement in international affairs.

In 1997, Jiang Zemin – who was then the President and chair of the Chinese Communist Party (CCP) – announced that China would take a more active role in the world by ‘opening up in all directions… developing an open economy, enhancing our international competitiveness, optimizing our economic structure and improving the quality of our national economy’. This was the official signal that China was open for business.

It is now so integrated into the global economy that its economic health is a matter for global concern. With an economy the size of China’s, national interests can easily become international concerns. China now accounts for 48 per cent of Japanese exports – spurring Japan’s recovery after 10 years of recession. Any sign of a slow-down in China sends shivers through Tokyo’s financial markets. In March this year, the People’s Bank of China had a foreign exchange reserve of $439.8 billion: almost as much as the US foreign debt. In the past two decades, China has opened its doors to some $600 billion of foreign investment and almost 65 per cent of its exports are from ‘foreign-invested enterprises’ – Chinese subsidiaries of global transnational companies.

The transition to a market economy – which started in the late 1970s – culminated in 2001 when China joined the WTO after almost 15 years of negotiations. For the Chinese leadership, joining the WTO was a matter of pride: a sign that the country was ready to run with the ‘big boys’. Many developing countries welcomed its arrival in the WTO, hoping that it would stand up for the interests of the global South. China has joined with India and Malaysia in opposing the kind of far-reaching investment agreement the developed nations want. What’s more – in the WTO and elsewhere – China offers an important ‘demonstration effect’ for other developing countries because it vigorously defends its own interests. Last year, after the US accused China of dumping, it slapped duties on several Chinese products. China’s diplomatic retaliation was immediate: it cancelled a high-level mission to the US to sign orders for agricultural products.

Together with India, Brazil and South Africa, China is a leading member of the G20 – the group of Southern countries that built a common position on agriculture and stood up against the European Union (EU) and the US at last year’s ministerial meeting of the WTO in Cancun. With China on board, the G20 represents 60 per cent of the world’s farmers, giving it a powerful legitimacy in agricultural negotiations. China’s economic weight and enormous internal market also ensures that the US and the EU take the G20 seriously. Most importantly, though, China’s support for India in the G20 has been a critical factor in holding the group together, not because other developing countries disagree with India’s positions, but because many were politically too weak to withstand the combined pressures of the US and EU.

One Chinese analyst, Xu Weizhong, has predicted that ‘the spirit of unity demonstrated by the developing countries during the WTO talks will impact on the entirety of North-South relations.’

Mao Zedong, November 1964

Globalization’s embrace

Most developing countries try to defend their agricultural sector. However, few have the political weight to succeed. Historically, India has carried the torch for agriculture in the South, with some support from Kenya and the Philippines. With China on their side – even if its specific interests may differ – developing countries now have a better chance of holding their ground. What’s more, China has 70 staff in their Geneva mission working on trade issues alone and this provides a level of technical and negotiating expertise that even many Western countries would envy.

But China (like all nations) will stand up for the interests of the developing world only when these coincide with its own interests. In 2003, Thailand signed an agreement with China to eliminate trade barriers in fruit and vegetables. Six months into the agreement, Thai farmers were complaining that they couldn’t compete with Chinese produce: Thai longans (fruit similar to lychees) cost 35 baht (85 cents) a kilo, while Chinese longans reach the Thai market at 20 baht (49 cents) a kilo. The story is the same for other fruits, onions and garlic. Thais complain that China is creating obstacles – such as delays at the border and food safety checks – which make it impossible for their products to enter the Chinese market. In this respect, China’s approach to trade is no different from the US or the EU, both of which use WTO rules to maximize their own gains and back this with hefty economic weight.

Diplomacy rules

No-one is willing to put pressure on China to make trade or financial concessions that could jeopardize its continued growth. At the same time, the pressure on China to open up its trade even further will be a permanent feature of its WTO negotiations. For some Chinese critics, membership of the WTO is a disaster in the making. Predictions of a rural crisis and the decimation of Chinese industry (which have proved to be well-founded) have found their way into mainstream debates. Nevertheless the Government has continued its single-minded pursuit of international legitimacy.

Although China competes economically with many countries in East and Southeast Asia, it is showing leadership in trade, security and strategic affairs. Furthermore, Asian countries feel comfortable dealing with China, knowing that they are unlikely to be lectured about shortcomings in civil and political rights.

Unlike Japan, which even at the height of its economic power refused to assume political leadership, China has repeatedly responded to emerging situations in a way that guarantees it is now accorded the level of respect usually reserved for the US. For example, China has backed the ‘ASEAN+3’: an Asian regional trade agreement. This is a long-term strategy to build a regional trade block that could one day counter the Free Trade Area of the Americas (FTAA) and the EU.

China is also playing an important diplomatic role in the ‘Six party talks’ on South Korea and mediating between its traditional rival India and its traditional ally Pakistan. No doubt, China’s present assessment is that regional stability – rather than ideological point scoring – serves its interests best.

Its ‘engagement’ in international relations now goes beyond the obvious spheres of the Security Council, the WTO and the UN, as it seeks to influence other international debates. This could be viewed as a strategy of China defining its own problems in the international arena rather than leaving the field open to its competitors and critics.

In April this year, China applied to join the Nuclear Suppliers Group and attended for the first time a meeting of the Missile Technology Control Regime: two groups it previously dismissed as US-dominated cartels controlling access to nuclear technology. By joining these small clubs, China is strengthening its relations with the US, Europe and Japan, and at the same time guaranteeing access to state of the art nuclear energy technology.

China also lobbied hard for a vice-presidency in the International Labour Organization – a move derided by labour rights activists who suspect its motive is to control the debate on international labour standards while at the same time deflecting criticism from its own labour conditions.

Officially, China denies any hegemonic or global leadership ambitions; yet economically and politically, it is positioning itself to be the rising power of the 21st century. So far, China’s only voice on the international stage is the official voice of the Government. However, it is obvious that the impacts of rapid economic transformation are creating social divisions and dissent. Clearly, important things are happening in China that are not being reported either by the Communist Party or by the business press. While the ‘conditions’ may not be right for the growth of a democratic movement inside China, in the new era of the internationalization of the anti-war and anti-globalization movements, Chinese workers and peasants are the missing voices that still need to be heard.

Nicola Bullard works with Focus on the Global South, an activist research NGO based in Bangkok, Thailand.

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