Monday, June 3, 2019

China -- The Good, the Bad, and the Ugly

China -- The Good

After the death of Mao and since 1979, there has been spectacular economic development in China. This has been based on the incorporation of many parts of a capitalistic economic system into a very authoritarian communist political system.  Forty years ago 95% of the Chinese people were in poverty. The Chinese government defines poverty as earning less than $416 (2,800 yuan) a year or around $1.10 a day -- a lower benchmark than the World Bank poverty line of $1.90 a day, or just under $700 a year. Today they say that only 5% of the people are in poverty.  Since 1979 more than 700,000 people in China have been lifted out of this extreme poverty. China has a goal to eliminate poverty by 2020.  

China is the country with the second highest GDP, but its gross domestic product per capita is about $17,000. It is a remarkable story. China has been the low cost producer for much of the world and much of the growth is a result of what has been a very positive trade balance with the United States. This supply of cheaper goods has improved the standard of living in the United States, but it has also caused the loss of much of our manufacturing base and the associated knowledge and jobs.
The World Economic Forum reported that China had 4.7 million STEM graduates in 2016  while the U.S. had 568,000. China had produced 351 thousand graduated engineers and the USA 137 thousand.  In the United States 60% of engineering degrees go to foreign students with 30% of those being Chinese. At the beginning of the century, only one in 10 Chinese students returned to China after studying abroad. In 2017, it was eight in 10.

In 2018 China accounted for 51.3% of global steel production and the United State only 4.8%.  China produced 32 thousand metric tons of aluminum and the USA less than one thousand tons. In the three years from 2012 to 2015, China poured more cement than the US did in the entire 20th century.

In 2015 China released its “Made in China” ten year plan to become the global leader in ten high tech industries. These include electric cars and other new energy vehicles, next-generation information technology (IT) and telecommunications, advanced robotics and artificial intelligence. Other major sectors include agricultural technology; aerospace engineering; new synthetic materials; advanced electrical equipment; emerging bio-medicine; high-end rail infrastructure; and high-tech maritime engineering. For some time the objective has been to make China great again.

What is of concern is that China plans to use its advanced technology to become the leading economic and military power by 2050 and to create a new international order more compatible with its authoritarian regime.

China is now the global leader in exports, value added manufacturing, retail, e-commerce, luxury goods and both electrical and luxury cars.  China leads in renewable power, artificial intelligence, smartphones, 5G, supercomputers, high speed rail, and skyscrapers. It is the major trading partner for 130 countries.

The Belt and Road Initiative (BRI) is a global infrastructure policy which began in 2013.  The project promises to build ports, roads and railways to create new trade corridors linking China to Asia, Africa and Europe.

China’s remarkable economic growth has been is large part the result of the industry of the Chinese people and their focus on education. It has also been the result of a national pride and a stable but also authoritarian government.  Most of the people in China are grateful for the improvement in their living conditions and the political stability. They are rightfully proud of what they have accomplished.

China -- The Bad

Communist Party Office Document 9 (April 22, 2013)   
Seven areas which should not be publicly discussed:
Western constitutional government
Universal values
Civil society
Individual rights
Freedom of the press
Historical nihilism -- (discussion of the severe Maoist period)
Economic liberalism

The global population is 7.7 Billion and 18.4% of the global population is in mainland China.  China has a population of 1.4 Billion and 91.5% of the population is Han Chinese.  The Chinese Communist Party has 90 million members which is about 6% of the population.  There are 370 members of Central Committee, 25 members of Politburo, and 7 members of the standing committee of the Politburo.  In 2012 Xi Jinping became the CCP general secretary, chairmen of the Military Affairs Committee, and the President. He has also assumed leadership of a National Security Commission and the Central Leading Group on Comprehensively Deepening Reform which directs economic affairs.  Xi also consolidated his power with an anti-corruption campaign which he also used to purge his politics enemies. In March of 2018 the Constitution which had limited the President to two five-years terms was amended to have no term limits for the president. President Xi Jinping can remain in power after 2022.  Xi has been developing a personality cult as the supreme leader. This is of concern because we have seen in history the destruction of universal values and individual rights by authoritarian regimes under the ideology of one people, one state, one leader.

China politics today is full of ambiguities and complexity.  The CCP promotes nationalism based on the five-thousand-year history of Chinese civilization.  This also ties into an ethnic Han culture which in many ways considers itself to be superior. On the other hand, the ban on “historical nihilism” is to prevent any open discussion of the severe first 30 years of Communist rule under Chairman Mao during which 40 to 70 million people died. This controlled historical narrative also promotes a Chinese nationalism to redress historical wrongs and “a century of humiliation.”  There is thus an antipathy toward the West and Japan.

The legitimacy of the CCP and the communist revolution, however, is also based of the political ideology of Marxism-Leninism and its incorporation into Mao Zedong Thought.  This is an ideology and history which is thus also foundational. The legitimacy of the communist regime is not to be questioned. It is enforced by the People’s Liberation Army as in the massacre of the demonstrators in Tiananmen Square in 1989. Mao’s is still revered as the founding father of the People's Republic of China.  His portrait and mausoleum are in Tiananmen Square. In December 2013, a poll from the state-run Global Times indicated that roughly 85% of the 1045 respondents surveyed felt Mao's achievements outweighed his mistakes.  

Yet. while the CCP relies on an ideology of  Marxism-Leninism for the legitimacy of its authoritarian rule, China’s enormous success in the last forty years has been the result of incorporating significant aspects of capitalism into its economy.

China now also has global ambitions. China, however, is based on a Han ethnic nationalism, which has not tolerated ethnic minorities and an ideology that does not tolerate religious groups and suppresses discussion of universal and human rights. China may, however, still achieve its goals by way of economic and military power which are associated with its growing control of technology and infrastructure.

It was hoped that by bringing China into the World Trade Organization in 2001 that it would change into a more liberal state and play by the rules of an open market economy.  That has not happened.

China has made many of its technological advances by requiring the transfer of intellectual property by companies wanting to do business in China, the use of cyber espionage and spying, and the use of government subsidies and tariffs to help create a very large trade imbalance. China, for example, has military planes, based on known stolen files, that look to be of the same design as the Boeing C-17 transport craft and the Lockheed-Martin F-35 fighter jet. The Office of the US Trade Representative estimates that the United States loses up to $600 billion per year in intellectual property and that China may be responsible for most of those loses.  

What is of greatest concern is that China plans to use its advanced technology to become the leading economic and military power by 2050 and to create a new international order more compatible with its authoritarian regime.  

China -- The Ugly

The supreme art of war is to subdue the enemy without fighting.”
Sun Tzu -- The Art of War

After the tragedies of two world wars and the ominus development of nuclear weapons, there was an attempt to create a more stable world order based on the Western liberal tradition.  This included the founding of the United Nations and NATO. The United Nations Declaration of Human Rights in the Preamble begins as follows:

Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,
Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people,

This post WWII world order is now being challenged by the autocracies of China, Russia, and Iran and their proxies in North Korea, Syria, and Venezuela.  What is telling is that China, Russia, and Iran have significant historical and Ideological conflicts, but these are superseded by their common bond of autocratic control of power.  Their common desire is to replace the Western liberal tradition with a new type of world order and to remake the global balance of power.

China does not seek a direct military conflict with the United States, but seeks to use its technological advances to achieve a global economic hegemony.  This control of infrastructure in communication, transportation. artificial intelligence, aerospace, biomedicine, renewable energy, and advanced weapons systems as well as a global leadership in manufacturing and trade all can be used to achieve a predominant military position as well. Iran and Russia have energy and military resources with which to make other countries dependent.  The common objective that they share is to replace the world order based on the Western liberal tradition of individual freedom and equality. Their tactics also show a disregard for ethical constraints as demonstrated by their support of North Korea, Syria, Venezuela, and terrorist groups and well as their own abuse of human rights and the persecution and extermination of opposition.  

Circumstances change. We now live a pluralistic global community which has relatively easy access to weapons of mass destruction. Power still corrupts and absolute power corrupts absolutely. Some societies don’t have the historical and institutional background to avoid a civil war without an authoritarian control. We are also by human nature intensely tribal. A hierarchical form of government can also be very efficient. Autocracies, however, can also easily descend into the type of totalitarian tyrannies that created so much individual and communal tragedy in the 20th Century. The technology of individual surveillance now makes the crushing of the individual spirit as described in George Orwell’s dystopian novel 1984  even more possible.

Re-education, deportation to a forced labor camp, murder, massacre, or official execution in addition to terrorism and war are often used to obtain and maintain the power of a tyranny.  These overt uses of power are less needed, however, when one also controls where a person can live or even travel, their educational and job opportunities, and their ability to freely assemble or to freely express their opinion or religion.

In 1795, Fisher Ames, a congressman from Massachusetts and orator, said this when comparing a monarchy to a republic:
A monarchy is a merchantman which sails well, but will sometimes strike a rock, and go to the bottom; a republic is a raft which will never sink, but then your feet are always in the water.

See also: Donald Trump's China Trade War is Not About Trade
Trump's High-Wire Act of Reestablishing Deterrence Without War