CHINA’S WORLD

Volume 2, Issue 1, 2017

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Contents


CHINA’S WORLD

Several developments in the last twelve months illustrate the many complexities in the on-going interaction between China and globalisation. Just as the rapid growth of China’s manufacturing sector had numerous positive consequences for the global economy, such as lower prices, high demand for minerals and other raw materials, and substantial Chinese investment in Africa and elsewhere, so the slowing down and restructuring of the Chinese economy has had some negative consequences as Chinese demand for some goods fell, while its own over-production of steel and other goods led to a global glut, with serious impacts on steel producers in the UK and other countries. More generally, mining companies around the world had hugely increased their capacities to meet the booming demand from China, in some cases by going massively into debt, and are now left facing the ramifications.

In China itself there have been a number of developments that, to some, raise serious questions about what was once seen as China’s inexorable march towards an ever greater entrenchment within the global economy, while at the same time maintaining its distinct economic model of “state capitalism” through which it would gradually alter the nature of globalisation as a form of westernisation into something more closely resembling sinicisation.

The Beijing Consensus represents a philosophical movement towards an ultra-pragmatic view of conducting policy deliberation. Contrary to models of development which provide a subset of policy prescriptions for the policymakers’ disposal or a fundamentalist adherence to a particular economic tradition, the Beijing Consensus inherently recognises that each development scenario has a potential set of challenges that may require unique and/or experimental solutions factoring the current political, economic and social environments. This ultra-pragmatism will require the policymaker to engage in greater policy experimentation, and to have a larger risk-elasticity. Further, this philosophy is most aptly demonstrated by looking at the aggregation of practices and lessons learned using the recent policy experiences of China. Ironically, this leads to a potential confusion regarding the analytical distinction between the Beijing Consensus and the Chinese model of development. This article outlines this distinction, and further theorises the potential consequences of employing an ultra-pragmatic view of policy deliberation espoused by the intentionality of the Beijing Consensus.

China’s drive for globalisation and modernisation has resulted in a language policy that rigorously promotes Putonghua Mandarin as the national language and English as the first foreign language. This policy threatens the health both of Chinese languages other than Putonghua Mandarin such as Cantonese and Shanghainese and the minority languages of China such as Zhuang. At the same time, the focus on English coupled with a severing of the Chinese rhetorical tradition means that Chinese rhetoric and argument is becoming more direct and confrontational (or yang) and less indirect (or yin), and this has serious consequences for Chinese public discourse.

Global inequality is growing and the issue of tax havens for the super-rich has come to the fore, not least in China. This can be seen as a failure of globalisation. China could play a major role in reducing inequality and at the same time improving its global image through using its sovereign wealth funds to invest in infrastructure projects around the world.

China’s growing outward investment, no-strings-attached economic assistance and political support to resource-rich developing nations are strategies to sustain its expanding economy. While mainstream literature emphasizes the resource-oriented nature of most of China’s diplomacy, there are exceptions. Focusing on Cambodia as a case study, this paper argues that China charms Cambodia not for short term economic benefits but for long term strategic and political gains. China is indifferent to Cambodia’s limited resources but finds Cambodia’s strategic geographical location vitally significant to increase its influence in the region.

CHINA’S BUSINESS WORLD

On November 30, 2015, the International Monetary Fund confirmed that it was adding China’s currency to its Special Drawing Rights, the basket of currencies in which the Fund conducts its international financial business. The announcement was cause for celebration in Beijing, which had been lobbying for this decision as part of the effort to promote wider international use of its currency. Adding the renminbi as a fifth constituent of the SDR, along with the dollar, the euro, the pound sterling and the yen, was evidence of the success of that project. It showed that the renminbi was well on the way to becoming a first-class international and reserve currency.

Unfortunately, subsequent events have not developed as positively.

Back in 2014, China’s real estate market downturn triggered a sharp decline in the financial sector and then in the real economy. The shadow banking system, the financial system outside of the formal banking sector, took a plunge, leading real economic indicators into a downward spiral. Months later, real estate prices rebounded in first and second-tier cities, and it appears that the real estate market lives, sort of.

While it is a matter of ongoing debate whether it is China that will shake the world or the world that will shake China, there is little doubt that China has been skilfully riding the wave of, and taking benefits from, globalisation. (Armstrong 2015; Summers 2015) It is equally true that China’s accession to the World Trade Organisation (WTO) 15 years ago provided a golden opportunity for it to accelerate integration into the world economy. China is now set to celebrate its 15-year membership in the WTO on 11 December 2016.

Although China’s economy is now reported on in terms of emerging problems and slowdown, it had powered ahead to become the second largest economy in the world. This did not happen by ‘accident’. Rather, the earlier ‘Open Door’ policy was followed by a massive financial stimulus policy to counteract the 2008 Global Financial Crisis. This saw the biggest monetary and financial easing in history. However, as we are now seeing, this blistering performance hid some real dangers which are coming more to light. Here we will focus on some worrying long term labour market trends - labour shortages, of both factory and skilled workers

In March 2016 Apple released its 10th Supplier Responsibility Progress Report. “There’s a right way to make products,” proclaims Apple. “It starts with the rights of the people who make them.”[1] Currently Apple has 346suppliers in China alone, more than those in Japan (126 suppliers), the United States (69 suppliers), Taiwan (41 suppliers), Korea (28 suppliers), Malaysia (23 suppliers), Thailand (19 suppliers), the Philippines (19 suppliers), and Vietnam (18 suppliers) combined.[1] Are Chinese workers enjoying their rights in Apple’s supply chain? What is the responsibility of Apple to the workers who make its products 24 hours a day around the world?

CHINA’S WORLD

Since our first issue in July 2015 there have been a number of subtle but significant changes in the discourse surrounding China’s role in the world. These may, broadly, be assessed under three general headings: a possible hardening of the US position regarding China, increasing concern inside and outside China about a Chinese economic downturn and a more assertive, if not aggressive, Chinese posture towards its neighbours under Xi Jinping. Four of the articles in this issue discuss different aspects of these three problem areas while the remaining two consider China’s urbanization drive and the future prospects for NGOs in China.

CHINA’S WORLD

The perspective that will underpin the China’s World will be the interaction between ChinaDand the many forces and dynamics that go under the broad heading of “globalisation”. This much used term has many aspects: economic, financial, cultural, social, political, environmental. It relates to how we communicate, how we govern ourselves, what are our norms, values and institutions, how we identify ourselves and differentiate ourselves from others and what the future holds for us all. To some “globalisation” and “westernisation” are virtually indistinguishable –a viewpoint that leads some to resist globalisation, others to embrace it wholeheartedly. But China,with its own rich traditions, culture and history, together with its increasingly important place in the world economic, financial and geopolitical orders is unlikely simply to become “western”, as the imprisoned Nobel Peace Prize winner, Liu Xiaobo once demanded: “Modernization means whole-sale westernization, choosing a human life is choosing Western way of life. The difference between Western and Chinese governing system is humane vs in-humane, there’s no middle ground...

Westernization is not a choice of a nation, but a choice for the human race”. The improbability of China adopting this perspective is not simply because of the self-interest of its authoritarian government but derives from more fundamental factors.

Current and Previous Issues


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Volume 2, Issue 1, 2017

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Volume 1, Issue 2, 2015

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Volume 1, Issue 1, 2015