Martin Jacques, who holds academic posts at the London School of Economics and Tsinghua Universtiy in Beijing, as well as being a former journalist and founder of the left leaning Demos think-tank has produced a fascinating book about how the world’s political and economic power has been shifting in the early twenty-first century and what is likely to happen next.
Jacques finishes his book with an unexpected flourish (which I am just about to ruin for you) in which he makes a good case for China’s predicted world dominance to become a reality sooner rather than later. Through much of the book he refers to a Goldman Sachs prediction that China’s economy will overtake the United States (US) in 2025. The reader is left to assume that this is the date on which the new world order will be finalised. However, in this final section he points to the rapid implosion of all things American, suggesting that the impact of the 2007/2008 financial crisis on the US (and the Europe Union), together with US foreign policy which has had a myopic focus on the middle-east for the last decade, has left the field wide open for China. He names 2008 as the year that marked the end, or at least the beginning of the end, of a period of US world dominance that has lasted since 1945 and has been unchallenged since the collapse of the Soviet Block in 1989-1991.
Geopolitics, politics, economy, world trade, strategy, China
The book is packed full of information about Chinese and East Asian history (from Qin to Qing dynasties through the Mao Zedong era in the mid twentieth century through to the present day) the Chinese economy, society and China’s growing influence in all the world’s emerging economies. For example tables identify that China is the biggest trading partner for a startling number of countries around the world including Brazil, South Africa as well as nearly all its South and East Asian neighbours in including those in the Association of South East Asian Nations (ASEAN).
Despite his contract at Tsinghua, Jacques is not afraid to tackle difficult issues like the three Ts. Taiwan, Tibet and the Tiananmen Square protests (although to be honest he doesn’t say much about the latter) and difficult neighbourly relations with Japan, North and South Korea, Vietnam and India. On Taiwan, Tibet and Japan in particular he goes into great detail about the thinking behind Chinese diplomacy which never loses sight of long term goals. In fact one of the most interesting aspects of the book for me is the detailed explanation of Chinese foreign policy. The pragmatic Chinese approach he argues is more economically driven than politically focussed, in contrast to current US and European foreign policy which governed by political ideology and the perceived need to establish western models of democracy even where that model leads to disconnects and conflict with deep seated religious requirements and beliefs. Whilst the US has got bogged down in several protracted international disputes, China has been making startling in-roads into South America, the middle-east (where it deals with oil rich countries the west will not, like Iran) and above all Africa, where China has already become the dominant world power.
Prior to world leadership, China is currently the world’s leading emerging nation and as such seems to be a voice for emerging nations at the top table. Along with other emerging countries, China does not feel that the World Bank, the International Monetary Fund, G8, UN Security Council or even the European Union are or even try to act like they are democratic institutions that truly represent the world’s countries. Instead the emerging country view is that these institutions were designed by powerful western countries and are skewed in their favour. Institutions like the Chinese Development Bank, the strength of the Chinese economy and the opportunity to develop trading links with China are beginning to undermine the influence of these institutions. Countries in Africa, South America and even the struggling economies of Southern and Eastern Europe, no longer have to go to the IMF for a bail-out with ideological strings attached. Instead they can ask the Chinese to cover their debts, they can develop stronger trading links with China and work with Chinese companies if they need to develop new infrastructure (railways, dams and urban rapid transit systems etc). As we have seen in recent years with UN discussions about Iran, Syria, Myanmar, North Korea, and Bahrain, China does not agree with imposing western style democracies, instead it wants to negotiate what it believes to be fairer representation for emerging countries within the supra-national institutions.
So what will the world be like when China is the world’s super-power? Jacques provides us with few indicators. Firstly the wielding of economic power is demonstrated by a series of examples of how China uses the strength of its economy to lever change. When France’s President Sarkozy indicated he might boycott the Beijing Olympics, because of the situation in Tibet, French companies in China, in particular Carrefour and PSA were plunged into great difficulties. It was not long before President Sarkozy backtracked. Similarly, few nations now formally recognise Taiwan as an independent nation, because to do so would put at risk economic ties with China. Jacques predicts that this economic power will eventually be used by China to resolve the Taiwanese issue to Beijing’s satisfaction and to sort-out the current territorial disputes with Japan.
A second predicted major change will be the pattern of nation states and spheres of economic influence. Jacques sets out an alternative pattern of civilisation states and tributary nations. He suggests that Chinese people have an alternative way of conceiving of their country, so they do not just see themselves as citizens of the Peoples Republic of China, but also as part of the Chinese civilization an entity with influence that extends over all the Confucian heritage countries of south and east Asian and all the ethnic Chinese living around the world. Tributary countries were in the past those Asian states which did not challenge Chinese supremacy and chose instead to work as subordinate countries trading with China and accepting Chinese leadership. Jacques suggest that this type of pattern of middle kingdom and tributary states may re-emerge later in the twenty-first century and cover a much greater part of the world with much of South America and Africa as well as the ASEAN countries all becoming tributaries of China. Part of a Chinese grouping, not too different to the way that western European, and the Anglophone countries operated as subordinates of the US in the cold war era. In the future it may be the Europeans or the Japanese who feel that they no longer have much say in international disputes.
One slightly worrying issue that Jacques highlights is the Han Chinese attitude to other racial groups. Previous superpowers, including the European colonialists of the 19th century and the US and USSR in the 20th century, do not have got a good track record on this type of issue and China may not do too well either. Jacques suggests that the Han Chinese consider themselves superior to many other racial groups and this gives him particular concern, especially as China increases its dominance in Africa and the Han Chinese population spreads into an ever greater part of South and East Asia.
The book suggests it is more difficult to predict how the relations will develop with India, the other great emerging power (especially as China has become so influential in Pakistan of late) and what about Australia? Will Australia extricate itself from the western grouping and for economic reasons align itself with China or will that be just too difficult a cultural shift for the majority of Australian’s to accept?
Finally he predicts a change in the world order with China gradually reforming institutions like the UN from within or finding ways to make them irrelevant. On this basis the World Bank and IMF are already beginning to look vulnerable.
This is not a quick read, (well over 600 pages) but it is well worth the effort for anyone who wants to prepare themselves for a changing world order that may arrive sooner than most of us think.
Martin Jacques on Chinese supremacy
Senior Teaching Fellow
Durham University Business School
Prior to entering academic life Philip spent 17 years working as a manager in the National Health Service (NHS) in Yorkshire and the north east of England. While still a manager in the NHS he studied for a part-time MBA at Durham Business School. In 2000, he joined the University of York, where he stayed until moving to Durham in autumn 2012.
Philip has two main areas of research interest and activity, public sector strategy and internationalisation and the scholarship of teaching and learning. His public sector strategy interest encompasses health service management and university management, in particular the international business in higher education, which is the subject of his doctoral research. Much of his work in the field of teaching and learning also relates to internationalising teaching and learning, making teaching and learning more appropriate and relevant to an international audience.
Two news stories grabbed my attention over the last few days. In my opinion both are indicative of a where we are with globalisation and the shifting powerbases of the global economy. First, Apple apologised for the perception that they showed arrogance to their Chinese customers. Secondly, The Indian Government refused to extend the patent of a cancer drug made by Swiss Pharmaceutical giant, Novartis.
BOOK REVIEW: “How Countries Compete: Strategy, Structure, and Government in the Global Economy” by Richard Vietor (2007)
How Countries Compete is a political and economic strategic analysis of 11 different countries around the world. The book is divided into 12 new chapters, which deal with one country per chapter. In China, for example, technology transfer and know-how has been encouraged through the use of FDI. In Singapore, workers are required to save as much as 50% of their gross income for their retirement plan.
This week China will quietly commemorate the anniversary of the death of Mao Zedong. On the 9th September 1976, the founder of the Chinese Communist Party died at the age of 82. During that time, Chinese universities have followed the modernization movement within the country in their goal to become world-class institutions.