Deal­ing with the Dragon: The China Dream of Xi Jin­ping

Policy - - In This Issue - Thomas S. Ax­wor­thy

For the past two decades, China’s ris­ing eco­nomic lever­age, broad­en­ing geopo­lit­i­cal al­liances and global in­fra­struc­ture im­pe­ri­al­ism have shifted the bal­ance of power between democ­ra­cies and non-democ­ra­cies in ways that have only been ex­ac­er­bated by the Amer­i­can pres­i­dency of Don­ald Trump. As long-time Lib­eral pol­icy maker and aca­demic Tom Ax­wor­thy writes, Prime Min­is­ter Justin Trudeau got a taste of Bei­jing’s post-Trumpian swag­ger in De­cem­ber.

On Jan­uary 17, 2017 Chi­nese Pre­mier Xi Jin­ping gave the key­note speech at the World Eco­nomic Fo­rum in Davos on the theme of “Jointly shoul­der­ing the re­spon­si­bil­ity for our times.” In a pol­ished ad­dress sprin­kled with Western and Chi­nese lit­er­ary al­lu­sions, Xi spoke about glob­al­iza­tion, us­ing a line of a Chi­nese poem that “honey mel­ons hang on bit­ter vines; sweet dates grow on this­tles and thorns,” in declar­ing “no one will emerge as a win­ner in a trade war.”

Three days later, in his in­au­gu­ral ad­dress, Don­ald Trump pro­claimed that

“from this day for­ward, it’s go­ing to be only Amer­ica first,” then promptly with­drew the United States from the Trans-Pa­cific Part­ner­ship. A few months later, in June 2017, Trump also with­drew the U.S. from the Paris Cli­mate Ac­cord. With Trump turn­ing his back on the post-war in­ter­na­tional struc­ture that the U.S. had done so much to con­struct, fu­ture his­to­ri­ans may well write that it was in Jan­uary 2017 that the in­ter­na­tional com­mu­nity be­gan to look to China for global lead­er­ship, rather than the U.S. For the Chi­nese, Trump is the gift that keeps on giv­ing.

A new era is cer­tainly upon us as the for­mer great power of China reemerges. The late Lee Kwan Yew, the found­ing prime min­is­ter of Sin­ga­pore known for his strate­gic in­sight, had it right when he said: “The size of China’s dis­place­ment of the world bal­ance is such that the world must find a new bal­ance. It is not pos­si­ble to pre­tend that this is just an­other big player. This is the big­gest player in the his­tory of the world.”

Canada has been more adroit than many states in re­al­iz­ing the mag­ni­tude of this shift in the world or­der. Pierre Trudeau, in his great­est for­eign pol­icy achieve­ment, ini­ti­ated ne­go­ti­a­tions with the Peo­ple’s Re­pub­lic of China in 1968 that led to the es­tab­lish­ment of diplo­matic re­la­tions in October 1970. This was two years be­fore Richard Nixon’s landmark trip to China. Con­tin­u­ing the fam­ily tra­di­tion, Justin Trudeau has pro­moted deep­en­ing trade ties with China and in his De­cem­ber visit to Bei­jing it was an­tic­i­pated that free trade talks could well be­gin with the Asian gi­ant. To this day, his fa­ther’s recog­ni­tion of China nearly half a cen­tury ago still opens doors for the son in Bei­jing.

Pierre Trudeau’s 1968 open­ing to China was risky: China was in the midst of the chaos of Mao’s Cul­tural Revolution and the Cana­dian ini­tia­tive could eas­ily have been re­buffed. But wor­ried about clashes with the Soviet Union, the Com­mu­nist party lead­er­ship was con­sid­er­ing a turn to the West. The mo­ment and the ini­tia­tive met: Canada was ahead of the mo­men­tous change that even­tu­ally led to Nixon be­ing in­vited to China.

Justin Trudeau, how­ever, is con­tem­plat­ing a China-Canada Free Trade Agree­ment at a dif­fer­ent mo­ment in Chi­nese his­tory. China is more pow­er­ful than it has been for two cen­turies and with the spec­tac­u­lar de­cline in Amer­i­can pres­tige un­der Trump, China is en­joy­ing max­i­mum global in­flu­ence. A free trade pact with China is an in­tel­li­gent Cana­dian re­sponse to the like­li­hood that Trump will rip up NAFTA but Trudeau wants more than that: Canada seeks Chi­nese as­sur­ances on labour, gen­der and the en­vi­ron­ment, thereby in­ject­ing pro­gres­sive val­ues into the trade agenda.

China will have none of it. Trudeau is still big news in China. I was in the coun­try dur­ing Trudeau’s visit and the China Daily News had a pic­ture of Pres­i­dent Xi and the Prime Min­is­ter on its front page un­der the head­line “Co­op­er­a­tion is Com­ple­men­tary”. Pres­i­dent Xi’s mes­sage was po­lite but clear: the two coun­tries, he said, should set aside dis­agree­ments aris­ing from their dif­fer­ent po­lit­i­cal sys­tems and co­op­er­ate on prac­ti­cal mat­ters like en­ergy. The ra­bidly na­tion­al­ist Com­mu­nist party-run Global Times was less po­lite har­rumph­ing that China “is also not in a rush to de­velop its re­la­tions with Canada. Let it be”. The ex­pected an­nounce­ment on for­mal free trade ne­go­ti­a­tions between the two coun­tries did not oc­cur. Justin Trudeau is learn­ing what it is like to deal with China’s great power syn­drome.

De­pend­ing on the specifics, a free trade agree­ment with China could cer­tainly be in Canada’s na­tional in­ter­est, es­pe­cially with Trump threat­en­ing to with­draw from NAFTA. But as Lee Kwan Yew ad­vised, deal­ing with China is not stan­dard state diplo­macy. China is dif­fer­ent: it is a 5,000-year-old civ­i­liza­tion with a strate­gic and his­tor­i­cal tra­di­tion that Chi­nese lead­ers con­tinue to ap­ply.

One of its tra­di­tions is that Chi­nese Em­per­ors claimed a “Man­date from Heaven,” whereby the Chi­nese lan­guage, cul­ture and po­lit­i­cal in­sti­tu­tions were the hall­marks of civ­i­liza­tion, with China’s neigh­bours be­ing vas­sal states. China’s power has waxed and waned over the cen­turies, but its sense of be­ing “the Mid­dle King­dom” has al­ways re­mained con­stant. That is why China’s clash with the Western pow­ers in the mid-19th cen­tury was such a shock. Tellingly, the name given by the Chi­nese to the treaties signed by the Qing Dy­nasty with western states and Ja­pan from 1839 to 1901, was the “Unequal Treaties.” The 19th cen­tury “Cen­tury of Hu­mil­i­a­tion” and Ja­pan’s in­va­sion of China in 1931, are the twin fires which con­tinue to stoke Chi­nese na­tion­al­ism to this day. The ul­ti­mate ob­jec­tive of mod­ern day China is to never be hu­mil­i­ated again.

The 2008 Olympics was an in­ter­na­tional com­ing-out party for China. The greed of western bankers had cre­ated a deep re­ces­sion in Europe and North Amer­ica, which China avoided. China’s re­luc­tance to play a lead­ing role in­ter­na­tion­ally be­gan to weaken given China’s suc­cess in man­ag­ing its own econ­omy. Then the times met the man. Xi Jin­ping is the son of a prom­i­nent com­mu­nist rev­o­lu­tion­ary and de­spite his fam­ily be­ing sub­jected to the hor­rors of the cul­tural revolution, Xi joined the party at age 20 and rapidly moved up

With Trump turn­ing his back on the post-war in­ter­na­tional struc­ture that the U.S. had done so much to con­struct, fu­ture his­to­ri­ans may well write that it was in Jan­uary 2017 that the in­ter­na­tional com­mu­nity be­gan to look to China for global lead­er­ship, rather than the U.S.

the party lad­der, be­com­ing Gov­er­nor of Fu­jian Prov­ince from 1999-2002 and Gov­er­nor, then Party Sec­re­tary, of Zhe­jiang Prov­ince from 20022007. In the mid-1980s Xi spent a week in Iowa as a mem­ber of an agri­cul­tural del­e­ga­tion. He sub­se­quently sent his daugh­ter to Har­vard. He has spo­ken warmly of his time in the U.S. and re­turned to Iowa in 2012 to visit the fam­ily he lodged with in 1985. In Novem­ber 2012, he be­came Gen­eral Sec­re­tary of the 80-mil­lion-mem­ber Com­mu­nist Party and it was ev­i­dent right from the start that Xi was no longer con­tent to hide his ca­pac­i­ties or bide his time.

In a visit to the Na­tional Mu­seum of China just af­ter be­com­ing Gen­eral Sec­re­tary, Xi an­nounced the phrase that has be­come the hall­mark of his ad­min­is­tra­tion: “The China Dream,” he said is “the great re­ju­ve­na­tion of the Chi­nese Na­tion.” Xi soon be­gan to fill in the specifics in how he wants to cel­e­brate the 100th an­niver­sary of the Com­mu­nist party in 2021 and the 100th an­niver­sary of the Peo­ples’ Re­pub­lic in 2049. By 2021, per capita Gross Na­tional Prod­uct is to dou­ble. By 2049, he wants China to be a fully-de­vel­oped mod­ern state. The key to achiev­ing th­ese goals is Xi’s anti-cor­rup­tion cam­paign, which is wildly pop­u­lar with the pub­lic. Over 100,000 in­di­vid­u­als have been con­victed of cor­rup­tion charges as of 2015.

Chi­nese lead­ers prior to Xi had posited sim­i­lar eco­nomic and mod­ern­iza­tion goals. What is strik­ing about Xi, how­ever, is that a clearly ar­tic­u­lated part of his dream in­cludes China be­ing the fore­most power in Asia and com­mand­ing the re­spect of other great states in the coun­cils of the world, es­pe­cially the U.S. He be­gan by cre­at­ing the Cen­tral Na­tional Se­cu­rity Com­mis­sion, chaired by him­self, in Novem­ber 2013. In October 2014, Xi said the goal of this body is “ma­jor power diplo­macy with Chi­nese char­ac­ter­is­tics.” This was the first time in many decades that Chi­nese leader had de­scribed China as a ma­jor power. Xi’s in­ter­na­tional travel sched­ule has been as ex­pan­sive as his rhetoric: In his first 30 months, he vis­ited 33 coun­tries on four con­ti­nents. Xi’s sta­tus as the most pow­er­ful Chi­nese leader in decades was con­firmed in the October 2017 party congress when his “thought” was en­shrined in the con­sti­tu­tion, an hon­our only pre­vi­ously given to Mao Ze­dong.

Xi wants to re­turn China to the pre­dom­i­nance it en­joyed in Asia be­fore the West in­truded in the 19th cen­tury. He seeks to do this by en­sur­ing con­trol over the ter­ri­to­ries the Com­mu­nist Party con­sid­ers to be greater China, re­cov­er­ing its his­toric sphere of in­flu­ence along its bor­ders and in the ad­ja­cent seas, so that its neigh­bours give it the def­er­ence that China has tra­di­tion­ally de­manded. Power re­sources to achieve th­ese aims are grow­ing.

Both the World Bank and the In­ter­na­tional Mon­e­tary Fund now iden­tify China’s as the world’s largest econ­omy based on pur­chas­ing power par­ity and it is rapidly catch­ing up to the U.S. based on nom­i­nal GDP. By any mea­sure, China’s eco­nomic growth in the last gen­er­a­tion has been spec­tac­u­lar. Com­par­ing China to the U.S, Har­vard pro­fes­sor Gra­ham Al­li­son writes:

“In 1980, China’s econ­omy was smaller than that of the Nether­lands. Last year, the in­cre­ment of growth in China’s GDP was roughly equal to the en­tire Dutch econ­omy … In 1980, China had 10 per cent of Amer­ica’s GDP as mea­sured by pur­chas­ing power par­ity; 7 per cent of its GDP at cur­rent U.S.-dol­lar ex­change rates; and 6 per cent of its ex­ports. The for­eign cur­rency held by China, mean­while, was just one-sixth the size of Amer­ica’s re­serves. By 2014, those fig­ures were 101 per cent of GDP; 60 per cent at U.S.-dol­lar ex­change rates; and 106 per cent of ex­ports. China’s re­serves to­day are 28 times larger than Amer­ica’s.”

Pres­i­dent Xi has used this vast wealth for some very bold moves in eco­nomic diplo­macy. In 2013, Xi pro­posed a new “Silk Road Eco­nomic Belt” dur­ing a visit to Kaza­khstan and since then the ini­tia­tive has be­come one of the largest in­fra­struc­ture projects in the world. The “Project of the Cen­tury,” said Xi as he wel­comed 26 heads of state for a two­day sum­mit in May 2017. The project in­volves China un­der­writ­ing for ports, roads and rail­ways along the old Silk Road link­ing China with Europe. China is spend­ing $150 bil­lion a year in the 68 coun­tries that have signed up for the scheme. Noth­ing has been seen like this since the Mar­shall Plan.

Xi soon be­gan to fill in the specifics in how he wants to cel­e­brate the 100th an­niver­sary of the Com­mu­nist party in 2021 and the 100th an­niver­sary of the Peo­ples’ Re­pub­lic in 2049. By 2021, per capita Gross Na­tional Prod­uct, is to dou­ble. By 2049, he wants China to be a fully-de­vel­oped mod­ern state.

Don­ald Trump’s with­drawal from the Paris Cli­mate Ac­cord also cre­ates an op­por­tu­nity that China is happy to fill. In 2014 Xi and Pres­i­dent Obama jointly an­nounced an agree­ment to slash green­house gas emis­sions. This US-China ac­cord, many com­men­ta­tors agree, paved the way for the 2015 Paris agree­ment; a pact en­dorsed by nearly 200 gov­ern­ments. Xi told the World Eco­nomic Fo­rum that the Paris Ac­cord was “a hard-won achieve­ment … all sig­na­to­ries should stick to it rather than walk away.” This is no empty rhetoric: China has enor­mous en­vi­ron­men­tal prob­lems, but it is mak­ing rapid progress to­ward its Paris goal of stop­ping emis­sions growth by 2030. China now gen­er­ates a fifth of its elec­tric­ity from re­new­able sources, and plans to in­vest $360 bil­lion in green en­ergy projects. China now owns five

of the world’s six largest so­lar man­u­fac­tur­ing firms and the largest wind tur­bine man­u­fac­turer.

China’s wealth has al­lowed it to in­vest heav­ily in the tra­di­tional power as­set of mil­i­tary ca­pa­bil­ity. China spends about 2 per cent of its GDP ($146 bil­lion in 206), on de­fence—sec­ond only to the U.S., which spent $604 bil­lion. China has ac­tive mil­i­tary per­son­nel of 2.3 mil­lion, nearly 3,000 air­craft and the fleet of 714 ves­sels in­clud­ing one air­craft car­rier. (The U.S., how­ever, has 19 car­ri­ers). A strong mil­i­tary is also an ex­plicit part of Xi’s “China Dream.” Since the U.S. is a global power, by con­cen­trat­ing its forces in Asia, mil­i­tary par­ity between the United States and China at least in the Western Pa­cific is draw­ing closer. A study by the Rand Cor­po­ra­tion found that by the end of 2017, China would have ap­prox­i­mate par­ity in four of nine ar­eas on con­ven­tional ca­pa­bil­ity crit­i­cal in a po­ten­tial con­flict in the South China Sea.

China has used its new mil­i­tary ca­pa­bil­ity to make un­prece­dented mar­itime claims in the South China Sea. With the ex­cep­tion of China, all the claimants to the South China Sea base their case on the United Na­tions Con­ven­tion on the Law of the Sea (UNCLOS). China re­lies on a mix of his­toric rights and has pro­duced a “nine-dash line” around the South China Sea. In 2012, China forcibly seized con­trol of the pre­vi­ously un­oc­cu­pied Scar­bor­ough Shoal and has con­structed artificial is­lands in the Spratly ar­chi­pel­ago. In 2014, China de­ployed a deep-sea oil rig in Viet­nam’s 200mile nau­ti­cal exclusive eco­nomic zone, lead­ing to Chi­nese and Viet­namese ships ram­ming each other. In 2016, the UN Per­ma­nent Court of Ar­bi­tra­tion ruled that the Philip­pines had exclusive sovereignty over the West Philip­pines Sea and that there was no le­gal ba­sis for China to claim his­toric rights to re­serves within the sea ar­eas fall­ing within the ninedash line. China im­me­di­ately an­nounced that it would not ac­cept the de­ci­sion of the Tri­bunal putting it at odds with most of its neigh­bours.

For 5,000 years, China has been one of the most sig­nif­i­cant civ­i­liza­tions on our planet. It has re-emerged from the Unequal Treaties of the 19th cen­tury and the hor­rors of in­va­sion and civil war in the 20th cen­tury, to take its tra­di­tional place as a great power. Napoleon fa­mously said, “Let the China lion sleep.” Pres­i­dent Xi re­ferred to this state­ment when he told a meet­ing in Paris in 2014. “To­day the lion has wo­ken up, but it is peace­ful, pleasant and civ­i­lized.” For the fu­ture of the planet, let’s hope Pres­i­dent Xi is right.

Adam Scotti photo

Prime Min­is­ter Trudeau meets with Pre­mier Li at the Great Hall of the Peo­ple in Bei­jing. De­cem­ber 4, 2017.

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