CHINA’S WORLD

Volume 3, Issue 1, 2018

Issues 1
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Contents


CHINA’S WORLD

08

Editorial

David Armstrong

In many respects this issue of China’s World may be seen as a continuation of the discussion we began in the previous issue, where we considered the underlying motives of China’s foreign policy: hegemony or global partnership. One –fairly easy- conclusion there was that its ultimate objectives will only become clear in the course of time. Here we shift the debate towards factors that are more immediate in their development and consequences –although no less complex. The first concerns the overall context of China’s –and all other countries’- foreign relations: the increasing uncertainty about developments, dynamics and probable outcomes in many parts of the world. The second considers China’s use of ‘soft power’, a term coined by Joseph Nye to contrast with the coercive methods of ‘hard power’.

12

China, ASEAN, and the Re-centering of Asia

Brantly Womack

China’s centrality in Asia is founded on three realities: its location, its population, and its productivity. While its productivity has varied over time, especially in relative terms, the three factors together justify its name, 中国, the central state. Despite China’s continuing centrality, however, its internal cohesion and its connectivity to the rest of Asia has varied tremendously. And because China is central to Asia, Asia’s overall connectivity has also varied.

26

China and the Internet: a world wide web “with Chinese characteristics”

David Scott

48 hours in Beijing. On December 25 (Christmas Day) 2017, the official Chinese state press agency Xinhua ran an article titled “China aims to become world-leading cyber power”. The following day the Central Commission for Integrated Military and Civilian Development (CCIMCD) announced the setting up China’s first Cybersecurity Innovation Center, the “security” involving domestic supervision and external military applications. This “strong cyber power strategy” (qiangda de wangluo zhanlue) is at the centre of China’s drive for ‘informatization’ (xinxihua), which is seen as underpinning China’s economic (and military) modernization, its push for an e-economy, and indeed its embrace of globalization.

45

China’s Aid to Africa - Influence on the Global Development Cooperation Landscape

Tongyu Meng

Development cooperation or the previously called development assistance has long been considered a product of colonial power relations from Britain’s Colonial Development and Welfare Act in 1940 until the domination by the donor’s club Development Assistance Committee (DAC) established within the Organisation for Economic Co-operation and Development (OECD). For over half a century, developed countries have dominated development cooperation, while emerging economies led by China, which has substantially scaled up its foreign aid to Africa and other poorer countries, have put pressure on the transformation of the established development cooperation regime. Under the recent One Belt One Road Initiative, China is reinforcing its aid to Africa ambitiously with stronger political backing. This paper examines the changes in post World War II development cooperation, focusing on the role of China’s aid to Africa and the growing relevance of its influence on recipient countries and established donors over the last three decades. It offers the nuanced perspective that China’s development cooperation in Africa today is an externalization of China’s own modernization experiences and the leadership’s foreign policy.

61

Taiwan is not isolated! Cross Strait Multiple Interactions in an Era of No High-level Contacts

Jean-Pierre Cabestan

Since Taiwan President Tsai Ing-wen came to office in May 2016, the Peoples’ Republic of China (PRC) has decided to suspend all high-level contacts with Taiwan. The reason is well-known: Madame Tsai and her Party, the Democratic Progressive Party (DPP) have kept refusing and are unlikely to endorse the so-called “92 Consensus”, according to which both sides of the Taiwan Strait accepted in Hong Kong in November 1992 that there is “one China”, but its content remains undefined (in the eyes of Beijing) or “each side keeps its own interpretation” (for the Kuomintang, KMT). In addition, to isolate Tsai, the PRC has intensified its military intimidations of the island-state.

83

Killing Two Birds with One Stone? Reconsidering China- Singapore Relations in the Strategic Triangles

Christina Lai

In September 2017, Singapore Prime Minister Lee Hsien Loong made a three-day visit to China. His meeting with Chinese President Xi Jinping and Chinese Premier Li Keqiang signaled a “warm-up” of their bilateral relations after a stand-off of detained troop carriers. Previously, in China’s Belt and Road summit, Beijing’s “non-invitation” to Singapore’s Prime Minister Lee Hsien Loong signaled that the two countries were still under previous diplomatic spats.1 Although Singapore’s foreign minister indicated support for China’s ideas and areas of cooperation, whether it will truly be more active and involved in those China- led initiatives remains to be seen.

CHINA’S BUSINESS WORLD

95

China’s energy companies go global to secure long term power supplies

Bob Savic

China’s energy companies have been enthusiastic backers of Chinese President Xi Jinping’s Belt and Road Initiative “BRI”, since its inception in 2013. This was particularly evident in 2017, when up to 34 Chinese energy sector enterprises were invested in overseas oil and gas projects by that date. The majority of those companies investing abroad, up to 23 of them, are privately-owned operators. Even so, the value of overseas equity ownership is dominated by China’s principal state-owned energy companies, namely; Sinopec, China National Petroleum Corporation and PetroChina. The three energy giants account for 94% of overall Chinese equity held in offshore energy investments.

99

US-China Trade Tensions Are Bad For Business

Sara Hsu

The US and China continue to experience trade tensions, as a recent trip by top Trump administration officials to China ended without a trade agreement. In the ongoing drama, Vice Premier Liu He is expected to travel to the US to continue the negotiations, following the visit by Wang Shouwen, a senior Chinese commerce ministry official. There is a considerable gap between what the US demands are, and what China is willing and able to concede, and this is likely to be the unmaking of these trade talks. In the meantime, the trade standoff is dampening business sentiments in the US and abroad.

102

The Educational Implications of the UK’s Brexit For China Professor

Chris Rowley

We could argue that for those with an interest in China and Asia-UK relations, one of the most important events in recent history occurred on 23 June 2016. This was the totally unexpected result of the referendum on the UK’s EU membership with what has come to be called’ Brexit’, the desire to end 40 years in the bloc. This tumultuous event has wide scale implications for globalisation and especially Asia and in particular China.

109

China Is Not the Answer to North Korean

Crisis J. Berkshire Miller

Last year, there were several provocations from North Korea, highlighted by numerous long-range ballistic missile tests and a thermo- nuclear test last September. The international community, led by the US, Japan and South Korea, has responded with increased deterrence moves, additional missile defense deployments and the imposition of heavier sanctions against the Kim regime – all with the consistent policy objective of de-nuclearization on the Korean peninsula. This policy of “maximum pressure” – as described by the US administration of President Donald Trump – has looked to bring Pyongyang to its knees through blistering sanctions and vociferous claims of the potential use of military force if diplomacy fails.

CHINA’S WORLD

07

Editorial

David Armstrong

2017 has so far been an intriguing but perplexing year for students of Chinese foreign relations. While North Korea’s conduct is unquestionably dangerous and China’s response crucial, in many ways some of China’s foreign policy initiatives in other areas are both more interesting and, potentially, of much greater long term significance for the region and for China’s relations with the US. The “perplexing” element here concerns China’s underlying intentions, 'given the sometimes significant degree of contrast between words and deeds. The message China has been trying to send is one of its embrace of globalisation and its willingness to assume an increasingly important leadership role in pursuit of globalisation –especially in an era when Donald Trump’s rhetoric seems to promise the opposite for the US. In China’s rhetoric a ‘win-win’ outcome for all is offered but others see much darker long term goals.

12

China’s Dream of Great Rejuvenation: Deconstructing its historical myth

Maria Adele Carrai

Xi Jinping’s current rhetoric of China’s Dream of Great Rejuvenation uses history as an asset for the future, linking its natural progress as a global power with a selective rereading of its millennial civilization. The aim of this article is to contextualize the rhetoric of China’s rejuvenation in connection to its history. There is an attempt to forecast the future of China and its international relations on the ground of Chinese and Asian pre-modern and early modern history. But, to what extent is this possible? The official use of history in the discourse of China’s great rejuvenation tends to objectify it and reduce it into one monolith; the causal connection between the past and the future has strong limitations and Chinese national identity can be considered as a constructed myth. After having discussed Xi Jinping’s rhetoric of Great Rejuvenation in the light of Chinese cyclical vision of history and having analysed it through the tripartite lenses of chosen trauma, the chosen glory, and the chosen amnesia, this paper attempts to deconstruct the historical myth that supports Xi’s dream.

24

Confucianism and Politics

Quansheng Zhao

The paper seeks to understand the role Confucianism has in affecting China’s domestic and foreign policy which is accomplished by looking at historical trends and contemporary developments and arguments posed by leading scholars. This paper finds that Confucianism has had a significant impact on current Chinese politics, however, it has been a selective application. In particular, the Chinese government has focused on the traditional Confucian moral framework and the mandate to rule, which has allowed the Chinese government to work towards further securing their right to rule and enhance a more assertive foreign policy abroad.

36

China’s “Belt and Road Initiative” – resetting the system

David Scott

A four-fold structure is followed in this article. Firstly, the Belt and Road Forum held in May 2017 is considered, particularly with scrutiny over patterns of participation by other countries. Secondly, the broader Belt and Road Initiative that China has pushed so noticeably since 2013 is outlined and linked to various geoeconomic and geopolitical nuances. Thirdly the Belt and Road Initiative is put into a comparative/wider regional context through considering China’s prominence in other related initiatives like the BOAO Forum for Asia (BFA), the Asian Investment and Infrastructure Bank (AIIB), and the Comprehensive Regional Economic Partnership (RCEP). Fourthly, such initiatives are put into a still wider political context. The conclusion considers whether the Belt and Road initiative reflects an embrace of open globalisation or is actually a positioning by China in a geoeconomic-geopolitical framework of extended regional opportunity taking?

54

The Belt Road Initiative, Britain and Brexit – an Example of Global China

Kerry Brown

The Belt and Road Initiative is the first real example of a China in an era in which it is increasingly prominent as a global power outlining the kind of relationship it is seeking with the world around it. Despite discussion, summits, and much speculation, the BRI remains a work in progress, but it has at least posed the question to countries even as far away from the region as the UK about what kind of trading and investment relationship they might want to seek with China. For the UK, this question has an added intensity because of the unknown impact of withdrawal from the European Union on its economy. The BRI is the most high profile example of China telling a story about itself for the outside world to engage with. That is why it merits deeper attention and focus.

68

Is China Really an Unfair Trader?

Steven Suranovic

The purpose of this article is to assess the charges of unfair trade against China to see if they are well-founded. To do that we must look beyond the superficial arguments that are often made to see the underlying motivations for certain policies and to understand their fuller implications and effects. It is also important to compare China’s trade actions with those of other countries to see if what they do is different from what other countries do. We will show that although China is surely an unfair trader with respect to some definitions, the countries who are offended by China’s trade actions often engage in similar practices themselves. In addition, the rhetorical attack against China is being promoted by a small segment of special interests who stand to gain from trade protections, while most consumers within these countries would actually lose if these protections and expected retaliations ever took place.

86

Reforming the Global Order: China and the US under President Trump

Suisheng Zhao

Taking advantage of President Trump’s isolationism, China has stepped in to play an increasingly important role in global governance, raising the question if China is to assert itself in its region and further afield to undermine or even replace the US-led world order. This article argues that although China is not a status quo power content to preserve and maintain the existing order, it is not a revolutionary power discontented with and ready to replace the US-led order. While President Trump’s isolationism presented an opportunity for China to pick up some of the slack in the global system left by a retreating US, taking a leadership role is a challenge to China not only because it is always easier to be a follower than a leader but also because leadership builds on both hard and soft power. Not only is China far from the position to overtake the US hard power, it cannot effectively deploy soft power to underwrite the world order.

CHINA’S BUSINESS WORLD

108

China’s Banks Invest In One Belt One Road

Sara Hsu

China’s Big Four state-owned banks are raising funds for investment in One Belt One Road (OBOR), China’s flagship infrastructure program for building up railways, ports, highways, and manufacturing zones across Asia, Europe, and Africa. The announcement comes with the State Council’s promotion of investment in OBOR and in the throes of a crackdown by China’s government on overseas investment. Will bank investment in OBOR benefit China’s economy in the long run?

111

China-Japan Relations Adapt to Geopolitical Change

J. Berkshire Miller

There has been some reason for optimism recently in the strained relationship between Tokyo and Beijing, notably some speeches by Japanese premier, Shinzo Abe. There has also been a flurry of diplomacy behind the scenes with key advisors to Abe paying visits to Beijing with suggestions of resuming bilateral summitry with Chinese leader Xi Jinping.Unfortunately however, despite these moves, strong geopolitical headwinds and structural impediments continue to cast doubt on the idea of a meaningful détente between Beijing and Tokyo in the coming months.

114

EU-China Economic Relations: trade and investment tensions persist despite climate cooperation

Paul Irwin Crookes

The EU-China economic partnership continues to under-perform with no easy solutions in sight. The failure of the 19th EU-China Summit in June 2017 to issue an agreed final communique points to deep-seated areas of ongoing tension linked to economic disagreements that remain unresolved. There had been hopes that the notification by the US government of its intention to withdraw from the Paris Climate Agreement could give China’s relationship with the European Union (EU) much-needed impetus to build on their strategic partnership by acting as a stimulus for both sides to come together. However, such optimism appears to have been misplaced.

118

Apple and Foxconn in the Trump Era

Jenny Chan and Mark Selden

“Designed by Apple in California, Assembled in the USA” — is a recent company slogan. But few Apple products have been assembled, still less built, in the US in recent decades. In 2013 Apple began building small numbers of its Mac Pro computers through partnering with Flextronics in Austin, Texas. However, the operation is small and is likely at best to remain so. In common with many other American firms whose products are produced by low-wage workers overseas, Apple has faced heavy criticism from the President Donald Trump administration and demands that it create jobs in the US. This article looks at Apple’s response to such criticism.

CHINA’S WORLD

07

Editorial

David Armstrong

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.

12

White Cat, Black Cat or Good Cat? The Beijing Consensus as an Alternative Philosophy for Deliberation

Reza Hasmath

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.

25

Globalisation, Modernisation, the Languages of China and English

Andy Kirkpatrick

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.

38

Fighting global inequality with Chinese characteristics: the role of the sovereign wealth funds (SWFs)

Gordon C. K. Cheung

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.

52

China’s Strategic Liaison with Cambodia: a beyond resource diplomacy

Heidi Dahles & Heng Pheakdey

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

70

Renminbi Internationalization: The Pause that Refreshes

Barry Eichengreen

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.

74

China’s Real Estate Market Lives, Sort of

Sara Hsu

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.

80

Implementing WTO Rulings: Fifteen Years of China in the WTO

Weihuan Zhou

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.

84

Labour Market Challenges in China

Chris Rowley

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.

89

The Apple Way to Make Products: Response to Apple’s 10th Supplier Responsibility Progress Report, 2016

Jenny Chan

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

04

Editorial: Is conflict Inevitable?

David Armstrong

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.

09

China’s Rise is Designed in America, Assembled in China

Sean Starrs

21

The Strategic Rivalry between China and the US: Neither Containment nor Regional Dominance Viable

Suisheng Zhao

30

China’s Foreign Policy Adjustment Under Xi Jinping

Kevin G. Cai

42

Aspects of China’s Foreign and Security Policy

Angela Stanzel

49

China’s Urbanization Drive in Global Perspective

Fu Jun

57

Future Prospects for NGOs in China

Jennifer Hsu

CHINA’S WORLD

04

Editorial: Will China Shake the World or the World Shake China?

David

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.

09

Managing the Controversies over Chinese Foreign Investment: Lessons from Australia

Jeffrey D. Wilson

22

China’s Economy: Changed by and Changing Globalisation

Michael Dauderstadt

32

China and Globalisation

Tim Summers

42

China, Australia and Globalisation: the Limits to Interdependence

Mark Beeson and Wang Yong

56

China’s Misperception of a US anti=China Conspiracy

John W. Garver

Current and Previous Issues


Issues Image

Volume 3, Issue 1, 2018

Issues Image

Volume 2, Issue 2, 2017

Issues Image

Volume 2, Issue 1, 2017

Issues Image

Volume 1, Issue 2, 2015

Issues Image

Volume 1, Issue 1, 2015