The age-old aphorism “if it isn’t broken, don’t fix it” can accurately describe China’s mentality towards both domestic matters and issues concerning cooperation with international partners. China’s model is one that transformed the world’s most populace nation from a place where at the turn of the 1980s 88% of all Chinese lived in poverty to a country where the current 2% national poverty rate (all in rural areas) is set to be eliminated in two years. The Chinese model has also transformed the country into one whose purchasing power parity (PPP) has outstripped that of the United States to become the largest in the world while China’s overall GDP is set to overtake that of the US before the year 2040. In this sense, not only is China the world’s largest single national market but China is also fast becoming a hub of world leading cutting edge innovation.
In 2013, China looked to help its traditional partners and new partners to harness the win-win spirit of sustainable economic development through the Belt and Road initiative. It is through understanding Belt and Road’s relationship with the wider world that one can clearly apprehend the foolishness of America’s policy of unilateralism and hostility directed towards China.
Belt and Road for international peace through prosperity
China follows a supremely flexible course of action both in its approach to domestic reforms and international partnerships. China’s reformist former leader Deng Xiaoping once said, “I do not care if a cat is black or white, so long as it catches mice”. It has been this attitude which prioritises problem solving over stagnant platitudes of inflexibility that has led China to take the best elements of a command economy and combine it with the best elements of a market economy in the context of Deng’s market socialism. This has led to China elevating more people out of poverty than any nation has ever accomplished in modern history.
When it comes to more narrow problem solving initiatives, China is also able to move with the times rather than go against the grain. While China has a long term goal of floating the Yuan on open currency markets which in the medium and long term would lead to the appreciation of the currency’s value, because of the present US trade war, China has allowed the value of the Yuan to slip against the US Dollar in order to rectify some of the short term set backs inherent in any unwelcome tariff war.
Likewise, in foreign relations, China is always willing to conduct agreements on a bilateral basis that makes each side feel contended. This win-win model differs from the ‘one size fits all’ zero-sum mentality which guides both American and most European trade deals. In particular, the US tends to couple trade agreements with security and diplomatic arrangements, thus transforming weaker trading partners into de-facto economic and military colonies of the US superpower. By contrast, China never combines security and economic relations unless this is specifically requested from a partner and likewise, China’s ability to offer bespoke solutions to the issues that arise during the course of trading relationships mean that when working with China, one is working with a superpower partner that is able to compromise based on the terms dictated by individual issues which require individuated solutions.
The problem inherent in partnerships with the United States is that the demands made on a partner nation far exceed the material benefits derived from such a partnership. By making harsh demands on how a partner nation runs its economy, its government, the style of governance a partner nation implements and which nations it can buy weapons from and make security agreements with, the United States enforcing a zero-sum mentality on its partners that runs contrary to the modern mentality of respect of a partner nation’s sovereignty and cultural characteristics.
By contrast, China helps to empower partner nations through the Belt and Road initiative which means that China’s partners are able to take a share of responsibility in all joint projects in exchange for a mutual share in such project’s dividends. While the US continues to flaunt a defamatory “debt trap” myth regarding Belt and Road, the truth is exceedingly different.
The “debt-trap” myth is flawed not only in terms of the fact that it is based on exceptions which prove the rule that most Chinese projects throughout Asia and Africa result in win-win outcomes for both parties, but the myth is also flawed in the sense that it fails to grasp real world realities beyond the ideological and purely theoretical. In life like in geopolitics there is no such thing as a free lunch. While China is more generous in terms of loans, investments and cash injections than most other wealthy nations, it is not in any nation’s interest to rebuild entire continents without getting anything in return.
In this sense, China is engaging in normal business practices that are international standards when it comes to expecting to be paid back on loans that it readily gives to nations aspiring to further develop their economies and infrastructure and does so at levels that are history making in terms of their forward thinking generosity. Of course, instead of offering loans and other investment schemes or otherwise giving away money for free, China could simply come to a foreign state, build infrastructure and keep 100% of the profits from such projects forever more. This however would totally exclude China’s partner nations from the project and would amount to little more than soft imperialism.
Instead, China seeks to cultivate win-win partnerships by including the partner nation in question at all stages of a joint project. In this sense, China is willing to share the benefits and the responsibilities as is normal in a genuine partnership of any kind. Implicit in such relationships is the reality that every now and then one side will negate some of its responsibilities. In the case of Sri Lanka, the government simply bit off more than it could chew and in agreeing to take over Hambantota port, Beijing actually saved Colombo both money and grief.
While Sri Lanka clearly did not think ahead before signing the final agreements regarding Hambantota, the fact is that the port is there and being run by Chinese operations means that it is nevertheless still bringing added value to the Sri Lankan economy. Even if for example China took operational control/ownership of Zambia’s international airport, China would still be working towards making Zambia’s airport more functional and attractive. It goes without saying that having a functional and attractive airport brings added value to any economy irrespective of who owns the airport. This is for example true of England’s Heathrow airport which is operated by a company originating in Spain.
The fact of the matter is whether a Chinese project in a foreign nation goes well (as such things typically do) or whether they require some sort of reassessment as many kinds of projects throughout the world do, China is always blamed by those sowing Sinophobic narratives when in reality China is engaging in normal business practices yet tends to be hated by those infected with a zero-sum mentality because China tends to have a larger success record in foreign infrastructure projects than do rivals including the US and India.
Another problem that arises is that when nations take a step back from deals with China to reconsider – something Sri Lanka clearly did not do though it very well could have done, China absolutely gets the blame here too from those who see the world through a zero-sum prism. When Malaysia’s Prime Minister Mahathir Mohamad looked to suspend some of the vanity projects that his corrupt predecessor Najib Razak agreed to begin building with Chinese companies, he was, according to some hyper-Sinophobic media outlets “Standing up to China”. In reality he was simply revising business deals the way the new head of a private company would do so with a partner company after taking over from a failed predecessor. There was no anti-China malice in Mahathir’s revisions of deals – just normal business practices.
In this sense, Belt and Road’s bespoke solutions involve not only evolving mutual understandings between partners but also involve mutual problem solving initiatives. It is this element of problem solving in the pursuit of win–win solutions that makes Belt and Road a vastly preferable mechanism for global connectivity that the American sovereignty trap model.
Globalism that respects national characteristics
The term “globalism” means many different things to many different people. The definitions vary as much due to cultural factors as ideological ones. When the word first appeared in the common vernacular it tended to have universally positive connotations which referred to the power of technology and the confluence of global trade to prevent world wars and bring nations closer together economically, culturally and diplomatically.
Since then, while the word has retained much of its original spirit in China and other Asian nations, in other parts of the world but particularly in Europe, the United States and the so-called “white (British) Commonwealth”, the word has taken on many negative connotations. For China, globalism is contrasted with economic insularity, competing nationalist and extremist geopolitical narratives and geo-economic caution. By contrast, in the west, globalism has become something of a catch all which can mean neo-liberal economics, so-called Cultural Marxist sociological programmes, elitism, so-called reverse racism and at more extreme levels it has become a code word for either a “vast Jewish conspiracy”, “vast global Illuminati” conspiracy or the “New World Order” as first articulated by US President George H.W. Bush in the early 1990s.
While everyone has the right to define categorically broad terms in the manner of their choosing, in reality insofar as geopolitical policy is concerned, today’s world has but two competing forms of globalism: A Chinese win-win model versus the western neo-liberal, zero-sum model.
China’s model of globalism when de-compartmentalised means the following:
–Promoting and advancing the cause of voluntary free trade and a general opening up of markets across a plethora of free trading zones and bilateral partnerships
–Working with partner nations on investment and development schemes which are tailored to the individuals needs and aspirations of any given individual partner
–Pursuing multilateral infrastructural and logistical development initiatives to make world trade easier, cheaper and faster. The Belt and Road initiative is emblematic of this drive for more open trade
–Actively pursuing trade and investment into poor or developing nations and offering reasonable loans as a means of the most effect path towards peace and conflict resolution
Crucially, Chinese globalism is equally defined by what it is not. Chinese globalism does not seek to force any nations into any binding agreements for free trade as a means of unilateral leverage wherein a strong nation forces an un-sustainable agreement onto a weaker partner. China is willing to pursue agreements with nations based on collective decision making which can result in investment without trade, trade without loans, an opening of markets that falls well short of free trade or free trade with various restrictions, red lines and quotas. Of course, any combination of the aforementioned possibilities or beyond is entirely possible.
The key to Chinese globalism is that a refusal of China’s initial offer in any bilateral or multilateral negotiation does not force China away from the table. China is willing and has proved itself able to make deals according to that which any partner is comfortable with.
A related concept is that for China, agreements to pursue free trade, open up financial markets, invest in a partner nation’s development or setting up a credit line are in no way related to security agreements (those with or without China) and are equally unrelated to the style of governance in a nation partnering with China. China does not force partner nations to change any part of their national characteristics as a pre-requisite to an agreement. On the contrary, China works to enhance relations based on an understanding of national and regional characteristics.
Put simply, China’s method of doing business is a global version of the kinds of unemotional transactions an individual makes in his or her daily life wherein one has a goal in mind and one negotiates this with a shopkeeper, loan officer at a bank or a fellow company. In these sorts of transactions, the future style of business a partner pursues, the corporate structure of the company one is buying something from or selling something to and the ideological concerns of the negotiating partner do not factor into a straight forward transactional discussion. China operates the same way both in terms of Chinese corporations and of Chinese sovereign trade and financial agreements. This contrasts sharply with the western model of globalism.
China’s model is ready for the artificial intelligence/robots revolution
As more and more industrial jobs are replaced by robotics and artificial intelligence (AI), the Chinese model is becoming the only sustainable one available. In China, the market socialist system means that the wealth created by AI will be circulated back into the national economy in the same way that wealth generated by the human hand has done. This will free up more Chinese people to go into other fields including research and development while the machines take care of the more monotonous task of production. This itself is helping China to achieve one of the central points of Xi Jinping Thought on Socialism With Chinese Characteristics for A New Era, specifically in respect of transforming ‘Made in China’ into ‘Created in China’. In neo-liberal economies, the profits made by AI will be subject to that familiar giant sucking sound and once again, the US and EU will only have themselves to blame for creating an economic model that prioritises short term thinking over long term sustainability.
One of the many ways China can use its excellence in AI to help the developing world is by exporting robots to developing nations while working cooperatively with national partners to develop market socialist systems with individual characteristics so that citizens in developing nations can pursue employment in new commercial sectors while the wealth generated by Chinese robots in Africa for example could help Africans to generate wealth while using the wealth to advance social development in societies still rocked by post-colonial exploitation. The same also applies to the rapidly developing economies of south east Asia, south Asia and Latin America.
China makes going green economically beneficial
Today, entire cities in China are powered by the most effective solar panel technology the world has known. Satellite images over these solar panel sites demonstrate the physical magnitude of the sustainable energy technology throughout China’s territory.
For China’s African partners in particular, the potential of having major urban centres become energy self-sufficient while doing so on an environmental friendly and long-term sustainable basis represents a truly revolutionary leap forward. This can also help to deliver consistent energy supplies to the remotest parts of the continent all the while saving money on having to lay electricity cables as small communities can potentially generate 100% of their energy needs using Chinese solar technology.
The other benefit of industrialising on a green model is that Africa’s own fossil fuel resources can now be reserved for the lucrative export market and as such can bring in added revenue to African states with oil and gas reserves.
Taken in totality, Africa is now set to benefit from China’s own experiences with pollution control and as such, modern green Chinese technologies designed to avert pollution over Chinese skies can help Africa to become more energy efficient and industrialise its economies without having to experience the increased pollution levels that have accompanied every previous industrial revolution.
What Africa needs more than anything is sustainable development. Put simply, this means that Africa needs to be given the modern tools to help African nations and peoples to generate their own wealth for decades and centuries to come without being reliant on a corrupt cash cycle whereby western loans and “aid” are simply a method of making the rich African elites richer while the condition of the poor remains largely the same. Africa also needs to cultivate new avenues to trade its existing goods while at the same time, African consumers need access to foreign finished goods to elevate their standard of living. Overall, African nations need to reduce their poverty rate and as a country that has great experience in reducing poverty among millions of people in a short period of time, China is able and willing to impart its own knowledge based on experience to its African partners.
China knows how to manage its currency with sustainability being favoured over short term gain
China is well aware that by the time its overall GDP eclipses that of the US (the IMF currently estimates that this will happen around the year 2040), the Renminbi will likely pivot its status to that of a primary global reserve currency. As the world’s most economically powerful nations have throughout history tended to automatically dictate that which is the global reserve currency, the perpetually strong Chinese economy will not be an exception.
However, until then, China seeks to avoid artificially pushing up the exchange rate (value) of Renminbi, not only because this would be bad for its export business but also because China is well aware of the troubles Japan got itself into by voluntarily allowing the Yen to over-appreciate after the 1985 Plaza accords. While the US today uses much the same rhetoric regarding an allegedly “undervalued” Renminbi as that which was used against Japan in the early 1980s, China does not plan to capitulate on any front, let alone in terms of caving to US pressure over the Renminbi. China has no plans to overvalue the Renminbi by allowing a free float which would likely lead to a higher value in the national currency. Likewise, China has no plans to artificially de-value the Renminbi either.
Instead, China aims for a stable national currency in order to avoid boom and bust cycles at home while also doing with the Renminbi what Japan could have never realistically done with the Yen – position itself to become the world’s future reserve currency. Furthermore, China’s managed float (which could easily be called a managed peg) of the Renminbi to other major currencies including the US Dollar, Korean Won, Japanese Yen, Euro and other less globally traded currencies will help the Renminbi to ease itself into its inevitable future position as the world’s major reserve currency.
At the same time, while not taking drastic moves to alter the value of its currency one way or another, China is working to gradually transform the Renminbi into the world’s de-facto reserve currency. As China’s overall GDP is set to overtake that of the US by 2040, as history indicates, the nation with the world’s largest economy will necessarily provide the world with it’s reserve currency. But far from siting and waiting for another forty years, China is already taking steps to entice other countries towards using its the Renminbi as a currency of bilateral international trade while the addition of Renminbi to the SDR currency basket in late 2015 has further underscored the role of China’s currency as a major player in international markets. This year’s launch of the so-called Petroyuan has further demonstrated that China is very serious about promoting its currency as an alternative to a US Dollar that while strong is increasingly volatile in terms of its reliability in international exchanges among nations targeted by sanctions and other economic pressures from Washington.
When good relations with China are favoured not only by a majority of developing nations but increasing in the European Union and among the American business community, the hostile tone that the US continues to take with China will be to no avail in the medium and long term. As the world’s most dynamic economy with an history making sustainable model, every nation on earth now requires positive win-win relations with China for their own benefit and for the collective benefit of a world shaped by the modern ethos of peace through prosperity as opposed to regressive notions of unilateral blackmail and geopolitical gangsterism.
While the US is likely strong enough to retreat into protectionism without facing economic collapse, the kind of economic dynamism that America once represented cannot be fostered in such an environment. When it comes to cooperation on a win-win basis and multilateral innovation based initiatives, the belts and roads of the wider world point to China. From the American private sector to the majority of the developing nations of Africa, Asia and even Latin America – the world as a whole now realises this. The US government therefore stands alone.
The United States has the right to reject a positive partnership with China but as the world moves on, such a reactionary mentality is out of step with the manifest realities of the world as a whole. Recent American rhetoric towards China only adds supreme insult to this self-harming injury.