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Page added on September 6, 2016
China Aims For Superpower Status
China mobilises for a big event like nowhere else.
Hangzhou on the eve of the G20 is a certain kind of awesome. A city rebuilt.
Filled with brand new security kit and locked down manhole covers, it has been emptied of a third of its population.
The switch was flicked to off in factories for hundreds of miles around, the pollution haze dispersed and the sky turned ‘G20 blue’.
This weekend’s G20 is a demonstration that the one party state decides on a goal, it can call the country to attention and command its people to get behind it.
The G20 really matters to China. Since the first such summit in Washington in late 2008, these occasions have mostly been forgettable.
But that year was a watershed for the Chinese leadership.
With the global financial crisis, Beijing stopped believing there was something immutable and dependable about the way the western powers had wired the global economy.
As others floundered, China began its lightning move up the GDP hierarchy to second place, and simultaneously launched a campaign to move from outsider to central player in global economic governance.
Despite the slower growth of recent months, Chinese purpose has not wavered.
In fact, events since have only strengthened the conviction that economic power is moving east, and that this, if not the Asian century, is at least China’s century.
The list of evidence for this faith is long and conveniently includes Hangzhou’s own global brands.
Eight years ago, most foreigners would have been hard pressed to name any Chinese company, but now this city alone is home to several giants, including Alibaba.
They are among China’s corporate miracles which have worked out how to leverage an immense domestic market, hungry workforce and almost limitless capital, while absorbing abroad whatever growth nutrients they are missing at home.
So this week’s PR narrative around the G20 host city is a Hangzhou which balances a glorious imperial past with a glorious innovative future.
The sharper strategic narrative around China’s G20 moment is about the decline of the West, which began with the 2008 financial crisis, but is now gathering pace amid the distractions of a US presidential election and the disarray in Europe over Brexit, migrants and recession.
In this triumphal narrative, only China is a reliable engine of growth, its politics less populist, its leadership farsighted.
And according to the official New China News Agency, it is now time to take that leadership global.
The host is ready to share its time-honoured wisdom and up-to-date solutions with the world.
Put bluntly, China hopes the world will look back and identify the Hangzhou G20 as the moment when China looked like a better guardian of global economic governance than a US paralysed by poisonous politics at home and handicapped by distractions abroad.
China’s dilemma
But will the Hangzhou summit be remembered like that? Will it be remembered at all?
After all, leaders have to lead and this is hard for China on economic issues, let alone security.
At a time of struggling growth and protectionist backlash across the world, President Xi will try to present himself in Superman pants, urging his guests to defend free trade for the sake of all our futures.
But talk is cheap. Many of those in President Xi’s audience have been complaining of Chinese protectionism for decades, the joke among their trade negotiators that for China the slogan win/win means heads I win, tails you lose.
Certainly China has been a great beneficiary of globalisation and the commitment of others to free trade.
It would have much to lose if the rest of the world started closing its markets.
But both the German ambassador to China and the European Union Chamber of Commerce complained only this week that their companies face an unlevel playing field in China and that some feel ever less welcome.
There is no sign of a last minute Superman-style intervention that might translate Chinese talk about free trade into spectacular action.
Meanwhile the theme for China’s summit is “Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy”.
But as well as being the master of top down mobilisation, China is often the master of meaning-light slogans.
What would really help an innovative and invigorated global economy is fundamental structural reform from China, the dismantling of large parts of the sclerotic and monopolistic state owned economy.
A dramatically freer Chinese economy with fair access to key sectors for private enterprise and foreigners would enormously enhance China’s credibility as a leader on global governance.
It stands to reason that if you play by fair rules, you have got a better chance of being invited to set them.
But it will not happen or will not happen fast because of perceived political risk.
A freer economy would get in the way of the Party’s number one objective, political control.
And this desperate political fragility has other painful consequences for China’s dream of leadership.
Exactly a year ago, the last huge international set piece in China was a giant military parade to commemorate the 70th anniversary of the defeat of Japan in WWII.
Many of the world leaders now gathering in Hangzhou were invited to attend that too, but most stayed away because the exercise was framed in a narrative of China’s historical victimhood and 21st century return to greatness.
It was a hard power message calculated to unite the domestic audience firmly behind the Communist Party.
But by moving towards an increasingly strident nationalism complete with territorial ambitions and military build up, Beijing has placed itself in a zero sum leadership dilemma.
It can either lead at home or it can lead abroad but without a more liberal political agenda, it cannot do both.
In a region, where so many nations still have wounds from history, China’s nationalist politics are toxic to its hopes to lead internationally.
In July, Beijing’s furious denunciation of an international court ruling on the South China Sea put it on the wrong side of international law.
And if there are no accepted rules of the game, then the game is not about leadership but about my will against yours and ultimately about brute force.
When you resort to that game, Superman pants can only be worn in the privacy of your own home.
All those gathered for the G20 are keenly aware of these realities. They will note the slogans, the songs and the speeches.
But when we look back in years to come and remember the Hangzhou summit, I suspect we will still be remembering the awesome mobilisation involved.
China has not yet found the language to lead a troubled world.
54 Comments on "China Aims For Superpower Status"
Cloggie on Fri, 9th Sep 2016 3:25 am
@joe: “The EU is in trouble because the UK vastly supports it financially.”
There is no way that the UK benevolently “supports” the EU. Yes Britain is a net payer, but there is a counter balance to that: free access to EU markets with weaker economies. If UK withdraws, a big if, the EU made it clear there will be no free access to continental markets.
Fiscal union is far away, Brussels wants it but in the current climate the EU has lost a lot of goodwill and there is no way EU citizens will be paying direct taxes to Brussels any time soon.
Member states contributions to Brussels are still fairly thin, a few % per year. If you look at net contributions:
GE – 9.5B
FR – 5.9B
UK – 4.9B
IT – 4.4B
NL – 2.1B
Peanuts really.
When it comes to money, national states still rule. The most important upshot of the EU are the coordinated policies, single market and single currency and a sense of togetherness that prevents war, a situation that the UK of course would want to destroy, like in 1914 and 1939.
The UK wants the US to rule now that the UK can’t dominate the world any more like in the 19th century, based on the policies initiated in 1891 in London based on the perceived “superiority of the Anglo-Saxon race” (NWO). Brits like joe, ghung, plant all support that.
And yes, the Anglos had their two centuries of global dominance, based on coal c.q. oil and a ruthless war strategy aimed at the destruction of continental Europe and an alliance with Russia/USSR.
Meanwhile not much is left of that perceived superiority since the Anglo-Saxons have been degraded to the water carriers of the Sanhedrin, that has ordered that the Anglo-Saxons should destroy themselves by opening their border for the hordes of the third world.
The sudden meteoric rise of China, the rebirth of Russia, the Eurasian SCO alliance (Mackinder Heartland alert!)…
https://en.wikipedia.org/wiki/The_Geographical_Pivot_of_History
…as well as European-American despair with mass immigration means the end of the global dominance of the Anglo-Saxons.
Within the US there is a divide Britain-continental Europe. It was continental Europe that played a decisive role in US independence from Britain (1776). Hundred years later the British fought themselves back into the US with the concept of Anglo-Saxons (Churchill: “English seaking peoples”) and managed to instrumentalize the US for its purposes and win WW1 via the Balfour deal, illustrating that a certain group had taken over the US.
What we are going to see with the rise of Trump and his European-American followers is the real possibility that continental European influence, like in 1776, will gain the upperhand again over British-Zionist influence and that the 640 million of Paris-Berlin-Moscow will succeed in helping free the Americans once again, not from the British but from the Sanhedrin and its oligarchs.
@Davy – you love to point at the economic weaknesses of China, but I must remind that in the thirties the US similarly had an enornous economic depression for a decade but that the US nevertheless arrived at planetary pole position in 1945. It is not all what it seems. I think that 1300 million people with an IQ of 100 plus an alignment with Russia, has the potential to become the first economy on earth and that this circumstance alone will force the EU and Russia to combine forces. And that combined continental European force will be strong enough to draw a substantial part of the US (mid-West) into Eurosphere.
Davy on Fri, 9th Sep 2016 6:24 am
Clog, get back to me when you check into China’s largest trading partners then tell me how financially and physically this transition will occur in the time needed. I want to know how 1300 million people will attain the economic level necessary to force anything other than collapse. It is well know the earth cannot support a China at developed nation status. There are not enough resources. China is an export nation that will fall apart without export markets. It is stuck in a brittle global system that can no longer adapt but must break.
You live in denial of limits and diminishing returns of consumption and population. You acknowledge them but where you are in denial is with the location of these systematic limits. You want to believe we have another age to transition to when the reality is there is no new age of an adapted status quo. We have similar understandings that are diametrically opposed conclusions. This disagreement is on scale. The scale is of timing and systematic location. You believe we are not near limits and you believe erroneously technology and innovation will continue progress. You then want to use this existential continuity to map out a social, political, and economic transition to a new world order. This new world order is a white racist one sacred shitless of nonwhites.
I am not going to argue your view of where civilization could go. My argument is with scale and the lack of continuity. Continuity would mean adaptive growth. My argument is devolving is in order not evolution. We are facing systematic bifurcations from the breach of thresholds many and varied. In this case all your speculations evaporate. I am speculating myself to some extent. What else is talking about the future? My point is my speculation is based upon clearly manifested trends. Anyone who denies or diminishes depletion, physical decline, economic deflation, overpopulation, ecological failures, and climate instability is creating a narrative of hopium. You want to believe these limits are not enough inertia to slow the momentum of human growth. I am saying these forces are overpowering human growth and will fundamentally change human history.
You believe history is an adaption of the previous century. I am saying the last century was the end of human evolution of growth. We are now in a century of devolution of human growth that will be characterized by the failure of globalism, technological based modernism, and tradition social and economic traditions of market capitalism and liberal democracy. We are in effect turning an earth epoch and a human age. I do not know the time frame so some of your predictions may occur but they will be irrelevant once these very near turnings occur. Your new world order will be swept out to the sea of change.
There are no historical precedence to draw on. We are in uncharted waters of a global civilization without a new planet to move to. We consumed this one and are now consuming ourselves. You are living a dream of exceptionalism of humans. I am facing the reality of the power of Nature in her earth ecosystem. Civilization only lives by geologic acquiescence. Civilization only lives by stable climate. Civilization can only be civilization with social development and organization. It stops being a civilization once it has lost its basic structure. We are close to this and you think we are far from it. The reality is you believe in the immortality of man. Sure you acknowledge the end someday but it is the unnatural “someday” that creates this immortality trap. The immortality trap is disregarding and dismissing our place within a greater ecosystem of Earth and life. This greater Earth ecosystem will not allow humans to progress much further. I do not know that timeline but I feel we are close to it. You feel we have another age to enter that conveniently will see out your natural life. I call that the denial of death.
Cloggie on Tue, 13th Sep 2016 4:02 am
Despite the gloom and doom reports about the Chinese economy… it is growing like in the old days: 6.1%
http://www.spiegel.de/wirtschaft/soziales/chinas-wirtschaft-waechst-ueberraschend-stark-a-1112043.html
How are we are going to tell this to shortonoil, who claims that economic growth is no longer possible for advanced economies?
Davy on Tue, 13th Sep 2016 6:39 am
Clog, first you can’t believe what you read out of China. All nations are messaging their data but China is the worst. The authorities in the US would love to message the data more but they can’t. These are different systems. China’s stats are inflated and people who have a financial background know this. You’re a smart guy on many things but you have not impressed me on the financial side. When you look at what growth China does have how much of that is real and productive. Even if their growth is inflated there is still a lot of it. My question is how much of that is real? Productive real returns are different than mal-investment. There is bad debt and good debt. There is extended and pretended debt that is even worse. China is the king of extend and pretend.
China currently is supporting an obsolete huge heavy industry sector to avoid social unrest. Is that productive? China built out a huge new infrastructure in the last 15 years. How much of that is real and useful today. Ghost cities and highways to nowhere are but a few examples. Huge housing blocks that serve little more than Ponzi investment vehicles without much occupancy is typical. There are so many examples of bad investments in China. There is multiple examples of rehypothecation of assets that are leveraged. If China was so great why are the rich Chinese flocking to the west with their money.
China is doing absolutely the wrong thing by depopulating the country side and focusing on mega-cities in industrialization. That industrialization is destroying China and the world. The west played its part but China must make its bed. She made the decision to industrialize not the West. Something is very wrong in China. I would say something is very wrong in all of Asia. There are limits to growth of both population and consumption. Asia is there now in the extreme.