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What will China do next?



“China ate your lunch, Joe,” was Donald Trump’s one-liner in his televised debate last month against challenger Joe Biden.

As the temperature rises in the run-up to the US presidential election on November 3, the world can expect more of such taunts. Trump’s view is clear: China is a global villain that has visited a “plague” upon the world while stealing US jobs and intellectual property. Biden, for his part, has called Xi Jinping, China’s leader, “a thug”.

What is lost as China is used as a blunt rhetorical instrument to win American votes is any sense of how Beijing sees its own historical mission as the world’s emerging superpower. These three books, each of which is excellent in its own way, help to redress this imbalance. 

Two of the books — China’s Good War by Rana Mitter and Superpower Interrupted by Michael Schuman — are about history or, more pertinently, the potency of history in shaping China’s self-image and strategic posture. The other book — The Emperor’s New Road by Jonathan E Hillman — is about how China is projecting its power across the world.

The three are reviewed together because — as each author shows in different ways — in China there is little daylight between historical resonance and future soundings. Echoes and rhymes from the past are played out in the present with an insistence so startling that it can be eerie.

Michael Schuman, a foreign correspondent in Asia for 23 years, makes much of this. He identifies the founder of the Ming dynasty (1368-1644 AD), the Hongwu emperor, as the spiritual kin of Xi Jinping. Not only did both introduce a more personalised rule to the collegial model that prevailed before them, they also nursed a sense of victimhood to fuel fierce nationalism.

The Hongwu emperor, Zhu Yuanzhang, portrayed his dynasty as a renewal of native Chinese rule after a century of discrimination under the Mongols. Xi characterises himself as the champion of the Chinese nation after humiliations brought by western powers. “The narrative of Chinese history that Xi’s propaganda machine drills into the minds of his modern subjects is a tale of national renewal that could easily have been scrawled in a Hongwu edict,” Schuman writes.

The “us versus them” mentality that Xi espouses — and applies increasingly to China’s dealings with the outside world — was clearly stated at a speech he gave in 2014 at Peking University. 

“Since the Opium War of the 1840s the Chinese people have long cherished a dream of realising a great national rejuvenation,” Xi said in his speech. “China used to be a world economic power. However, it missed its chance in the wake of the Industrial Revolution and the consequent dramatic changes, and was thus left behind and suffered humiliation under foreign invasion . . . we must not let this tragic history repeat itself . . . China has stood up. It will never again tolerate being bullied by any nation.”

But is China now turning inward again, just as it did in the Ming? It is as if, Schuman says, the country has transitioned from the type of openness seen in the Tang Dynasty (618-907 AD) — when foreigners, their ideas, customs and trade were generally welcome — to a more Ming-esque xenophobia in the space of the past four decades.

While Deng Xiaoping, the architect of China’s free-market reforms in the late 1970s, set in train a period of unprecedented openness and commercial interaction with the outside world, Beijing in recent years has cooled considerably toward the west. Just as the Ming demonstrated its suspicion toward Mongols and other “barbarians” by building the Great Wall, Xi has erected a “Great Firewall” of online censorship to block foreign influences from infiltrating China over the internet. Economic policy has followed; Beijing now openly champions state actors over private enterprises and has imposed a more restrictive regime for foreign investors.

The drawbacks inherent in this mentality become abundantly clear in Jonathan E Hillman’s book. The “Emperor’s New Road” in the title refers to China’s Belt and Road Initiative (BRI), a programme launched in 2013 to build roads, railways, bridges, ports, networks of power cables and other forms of infrastructure costing in excess of $1tn in more than 100 countries. The aim of this grand endeavour is to boost China’s international influence and win overseas markets for Chinese companies.

As Hillman notes, the ambition behind the BRI is unprecedented. Adjusted for inflation, it is set to cost roughly seven times more than the Marshall Plan, through which the US helped rebuild Europe after the second world war. It is also five times more than the Trump administration proposed and failed to persuade Congress to provide for infrastructure within the US.

But size is by no means everything. As the reader follows Hillman on a journey to several countries participating in China’s grand scheme, it becomes clear that the wheels are falling off the BRI. Corruption is rife. Fiascos are piling up. A China so vaunted for planning its own extraordinary development is revealed as largely unable to pull off the same feat abroad. 

“Since leaving the station, China’s BRI has become a gravy train without a conductor,” writes Hillman, who works at CSIS, a Washington-based think-tank. “Its fevered pace has already exceeded China’s ability to accurately measure, let alone manage, these activities. Corruption and rent-seeking are thriving in the chaos.”

Overall, the book points up a central, unresolved paradox of China in the world. While Chinese companies are now at the forefront of global technology and its construction giants lead the world, its governance models have progressed little since the Ming dynasty. BRI projects are conceived in secrecy, bankrolled mostly by big state banks and subjected to little or no social, environmental or financial scrutiny by the people of recipient countries.

Hillman’s book is at its most beguiling when he recounts his traveller’s tales. At one point, he finds himself in Aktau, a port on the Kazakhstan side of the Caspian Sea. This is a crucial link for the BRI, a place from which cargo and people cross the huge inland sea on ships that connect Asia with Europe.

But Aktau, it seems, did not get the memo about the BRI’s importance. The place seems to operate according to its own concept of time and with little heed for commerce. At the Caspian Shipping Company, which has a local monopoly on ferry tickets, Hillman asks when the next boat may leave.

“Tomorrow, the day after or maybe the day after that,” he is told.

To be sure, not all BRI projects have failed and many are still under construction — such as a 6,617km high-speed railway from south-west China to Singapore and a $5.8bn hydropower dam in Nigeria. But Hillman’s book highlights a glaring reality: China has yet to find a way to project its influence beyond its borders in a way that enhances its national prestige. For all its grand ambition, the BRI so far has succeeded in demonstrating to the world that its governance model does not travel.

This point is crucial because as long as the BRI goes ahead unreformed it will continue to undercut efforts by China to burnish its image in the world and bolster its claims to be a great power. Rana Mitter, a professor at Oxford university and one of the world’s leading Sinologists, investigates such claims in China’s Good War

The title of the book, he says, is intended to be somewhat ironic. In human terms, China’s losses fighting Japan in the second world war are estimated to amount to at least 10m Chinese civilians and some 4m Chinese and Japanese soldiers. But the sense in which the war was “good” resides in the fact that China prevailed, allowing Beijing to participate in creating the postwar order.

“Beijing now argues that China was a creator of the order that emerged in 1945, and that the threat to that order comes from the United States, not China,” Mitter writes. “China is creating a circuit of memory to enhance its standing and authority domestically and internationally, as well as to compete with the long-established circuit of memory that nurtures the narrative of the United States liberating the Asia-Pacific.”

Such a narrative represents a rephrasing of China’s recent history and foreshadows potentially big shifts in China’s strategic posture. Until recently, the war years had been a much-neglected aspect of China’s own historical experience, eclipsed by the glow of the Communist party’s founding myth, which coincided with the same period. 

But now Beijing is going full throttle to bring back the war into its idea of nationhood. In movies, seminars, mass parades and television documentaries, the second world war is claiming a new significance. Xi himself has amplified the discourse with his statement that China was the first signatory to the UN charter, “essentially defining China as the heir to, and protector of, the post-1945 order”, Mitter writes.

The move also has a very modern strategic purpose. By highlighting its wartime role — and seeking international recognition for its huge sacrifices — Beijing is setting itself up to reinforce territorial claims made by the Nationalist government, which did much of the wartime fighting, to vast tracts of the South China Sea and elsewhere.

“In the future, we will hear more about China’s claims to a greater role in the construction of order in Asia and globally,” Mitter writes. “Some of those claims will undoubtedly be coercive. China is unafraid to wield its power in profoundly nonliberal, noncooperative ways, as in its militarisation of the South China Sea and use of economic boycotts to damage Taiwan’s economy.”

Every country channels its own history in its dealings with the outside world. But China’s history is so long and varied that it can be tricky to know which echoes are sounding the loudest in Beijing at any one time. These three books allow the reader — and the next US administration — to prepare for what China may do next.

Superpower Interrupted: The Chinese History of the World, by Michael Schuman, Public Affairs, RRP$18.99/£25, 384 pages

The Emperor’s New Road: China and the Project of the Century, by Jonathan Hillman, Yale, RRP$28/£20, 304 pages

China’s Good War: How World War II Is Shaping a New Nationalism, by Rana Mitter, Harvard, RRP$27.95/£22.95, 336 pages

James Kynge is the FT’s global China editor

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Emerging Markets

Regulators close ranks on crypto




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Regulators are continuing to step up their scrutiny of cryptocurrencies, with central banks and South Korea’s tax authorities demonstrating fresh concerns.

In a report published on Wednesday, the Bank for International Settlements, the global body for central banks, argues that digital tokens such as bitcoin have few redeeming features and “work against the public good”. It also dismissed stablecoins — a link between crypto and conventional assets — as an “appendage” to traditional money.

Perhaps unsurprisingly, the BIS did endorse the development of digital currencies backed by central banks, saying they could be a tool to achieve greater financial inclusion and lower the high costs of payments. “Central bank digital currencies . . . offer in digital form the unique advantages of central bank money: settlement finality, liquidity and integrity,” it said.

In contrast, bitcoin wasted energy and cryptocurrencies were “speculative assets rather than money, and in many cases are used to facilitate money laundering, ransomware attacks and other financial crimes”.

South Korea has acted against the financial crime of tax evasion, with more than Won53bn ($47m) of bitcoin, ethereum and other cryptoassets confiscated from 12,000 people. Officials said it was the largest “cryptocurrency seizure for back taxes in Korean history” and noted that local exchanges had allegedly been used to conceal assets because they did not collect the resident registration numbers of account holders. Many of South Korea’s 60 crypto exchanges are battling to meet regulatory conditions to operate beyond September.

This week’s #techAsia newsletter asks whether the death knell is being sounded for cryptocurrencies. That could be the case in China, where it is scaling up tests of its official digital renminbi, and appears serious about stamping out the crypto industry on its soil. Bitcoin fell below $30,000 on Tuesday following the latest regulatory crackdown, but it has recovered to be worth more than $34,000 today.

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China bolsters ties with Myanmar junta despite international condemnation




Trade and diplomatic ties between Myanmar and China are normalising in the face of intense domestic opposition and international condemnation of the military junta that seized power in February.

Beijing has strengthened relations with Myanmar’s military leaders despite a series of violent attacks against Chinese business interests in the country after Aung San Suu Kyi’s government was toppled.

Yun Sun, an expert on Myanmar-China relations with the Stimson Center, a US think-tank, said Beijing had already made a “fundamental assessment” that Myanmar was moving into another prolonged period of military rule.

“I think the Chinese can see that this military coup is successful and is here to stay,” she added.

The resumption of state-level engagements and economic activity signals that Myanmar is reverting to its traditional economic reliance on China. The country has used its larger neighbour as a buffer against international sanctions and divestment by foreign investors, who have announced plans to quit the country or shelved projects.

Since the coup, 875 people have been killed by the junta and 6,242 arrested, according to the Assistance Association of Political Prisoners (Burma), a human rights group. The country’s economy and public services were severely disrupted by mass protests in the three months that followed the putsch, and have only partially recovered.

The resumption of bilateral trade will fuel the widespread suspicion among anti-coup resistance groups that China was prepared to support the new military regime.

The cumulative value of China’s imports from Myanmar for the first five months of the year was $3.38bn, up from $2.43bn in 2020 and $2.56bn in 2019, before the coronavirus pandemic, according to official Chinese customs data.

Exports to Myanmar for the same period have not recovered to the same extent, however. By the end of May, goods valued at $4.28bn had been shipped to Myanmar, compared with $4.56bn and $4.79bn in the two previous years.

In a further sign of strengthening diplomatic relations, Chen Hai, China’s ambassador to Myanmar, met coup leader and military commander-in-chief Min Aung Hlaing in Naypyidaw, the capital, in June. In a subsequent statement, Chen referred to Min Aung Hlaing as the leader of Myanmar.

China was among the countries that abstained in a UN general assembly vote last week calling on the international community to halt the flow of arms to Myanmar and release Aung San Suu Kyi and other political detainees. 

Beijing had good relations with the government of the deposed leader, who is in detention facing multiple criminal charges. However, it has refrained from criticising the military, fanning anger among the mass protest movement that sprang up after the coup. 

Beyond being Myanmar’s biggest trading partner, China also has strategic infrastructure investments in the country, including energy pipelines that give Beijing a critical link to the Indian Ocean.

James Char, a Myanmar expert at the S Rajaratnam School of International Studies in Singapore, said many people in Myanmar still blamed the Chinese government and business interests for complicity in supporting the military’s decades of rule before the transition to democracy.

“The Chinese, themselves, are very clear about [public sentiment in Myanmar],” Char said.

Attacks on China-linked businesses in the wake of the coup culminated in an explosion at a Chinese-backed textile factory west of Yangon on June 11, according to reports from local Myanmar media, as well as junta-controlled information services and Chinese state media.

Beijing’s wariness of inflaming Myanmar protesters would probably slow Chinese direct investments and the resumption of planned larger-scale developments that formed part of President Xi Jinping’s Belt and Road Initiative, analysts said.

Additional reporting by Sherry Fei Ju in Beijing

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Australia calls Great Barrier Reef warning politically motivated




Australia has labelled a draft decision by the UN’s World Heritage Committee to include the Great Barrier Reef on its “in danger” list as politically motivated.

The committee, which is chaired by Tian Xuejun, China’s vice-minister for education, and selects Unesco World Heritage sites, proposed adding the world’s largest collection of coral reefs to the danger list because of the damaging impact of climate change and coastal development.

The designation could ultimately lead to the reef losing its World Heritage status, although officials said listing was intended to prompt emergency action to safeguard a living structure that stretches 2,300km along Australia’s eastern coast.

But Sussan Ley, Australia’s environment minister, said the government had been “blindsided” by the committee’s finding and alleged there was a lack of consultation and transparency. She added that Canberra would challenge the draft decision.

“When procedures are not followed, when the process is turned on its head five minutes before the draft decision is due to be published, when the assurances my officials received and indeed I did have been upended, what else can you conclude but that it is politics?” she said.

That the World Heritage Committee is chaired by a senior Chinese official has stoked suspicions in Canberra that it had been singled out over its diplomatic and trade clash with Beijing.

China-Australia relations have soured following Canberra’s call last year for an inquiry into the origins of Covid-19 and Beijing’s imposition of tariffs on Australian wine and barley imports.

Ley said she and Marise Payne, Australia’s foreign minister, had already spoken with Audrey Azoulay, Unesco director-general, to complain about the draft decision.

But scientists downplayed the suggestion that the “in danger” listing was politically motivated. Three mass bleaching events in five years demonstrated the need for the government to do more to tackle climate change, they said.

“I’m seeing some press coverage saying this is all a plot by China not to buy wine, lobsters and to screw the Barrier Reef. I think that’s pretty far-fetched given that the draft decision released overnight will be voted on by 21 countries,” said Terry Hughes, professor of marine biology at James Cook University.

The controversy will heap further international pressure on Canberra, which has been pressed by the US, UK and others to commit to a national target of net-zero emissions by 2050.

In a draft decision due to be voted on next month, the committee urged Canberra to “provide clear commitments to address threats from climate change, in conformity with the goals of the 2015 Paris Agreement, and allow to meet water quality targets faster”.

It noted the loss of almost one-third of shallow-water coral cover following a “bleaching” event in 2016 — a process linked to warmer than normal water that can lead to a mass die-off of coral.

The row over the “in danger” listing occurred at a difficult time for Australia’s conservative coalition, which is embroiled in internal squabbling over climate policies.

On Monday, Barnaby Joyce, a climate sceptic and supporter of coal mining, ousted Michael McCormack to become leader of the National party, the junior coalition partner to the Liberal party, and Australia’s deputy prime minister. Joyce is expected to oppose any move to commit to net zero by 2050.

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